Question 4: Bike Data – Prediction (4a) 2 pts – Predict bike…

Question 4: Bike Data – Prediction (4a) 2 pts – Predict bikes for the test set (bike_data_test) using model1. Display the first six predicted values. (4b) 2.5 pts – Calculate and display the mean squared prediction error (MSPE) for model1. List one limitation of using this metric to evaluate prediction accuracy. (4c) 1 pt – Refit model1 on bike_data_full, and call it model2. Display the summary table for the model. (4c.1) 3 pts – Estimate the 10-fold and leave-one-out cross validation mean prediction squared error (MSPE) for model2. Display these values. Hint: cv.glm() from the boot package uses MSPE as the default cost function. (4c.2) 1 pt – How do these two MSPEs compare to the model1 MSPE from 4b? 

BONUS QUESTION: Sears, one of the most popular mass merchant…

BONUS QUESTION: Sears, one of the most popular mass merchants in the past, has been experiencing market share losses for a quite long time. What kind of retailing innovations would you suggest to the top management of Sears after you took a course that emphasizes radical innovations? Please suggest a couple of ideas and briefly describe them in few sentences each. (3 points) 

For Xiaomi, positioning with a right pricing strategy is cri…

For Xiaomi, positioning with a right pricing strategy is critical given its relatively latecomer status. Especially, understanding the concept and factors of price elasticity in the market is critical in developing a successful pricing strategy.   Please define price elasticity. (4 points) Please discuss at least five factors that decrease price elasticity (or consumer price sensitivity) in general and briefly describe what they are. (10 points)

Question 8: Wine Data – Prediction (8a) 6 pts – Using model3…

Question 8: Wine Data – Prediction (8a) 6 pts – Using model3, all_subsets_model, stepwise_model, and ridge_model, give a binary classification to each of the rows in wine_data_test, with 1 indicating a good quality wine. Use 0.5 as your classification threshold.  (8b) 2 pts – For each model, display its accuracy. Hint: Remember that accuracy is the proportion of all responses in the test set that are correctly classified. (8c) 1 pt – Based on 8b, which model performed the best?  (8d) 1.5 pt – If you were to consider other metrics such as sensitivity or specificity, should sensitivity or specificity matter more in the context of this problem? Explain. Note: Don’t calculate these metrics. Hint: Remember that sensitivity is the proportion of all 1s in the test set that are correctly classified as 1s, while specificity is the proportion of all 0s in the test set that are correctly classified as 0s.

Question 7: Wine Data – Regularized Regression (7a) Using wi…

Question 7: Wine Data – Regularized Regression (7a) Using wine_data_train, conduct ridge regression with quality as the binary response variable and all other variables in wine_data_train as the predicting variables. (7a.1) 3 pts – Use 10-fold cross validation on the misclassification error to select the optimal lambda value. What optimal lambda value did you obtain? Hint: Make sure to set type.measure=”class” in order to perform cross validation on the misclassification error. If needed, you can take a look at the help file by typing ?cv.glmnet. (7a.2) 1.5 pts – Fit a glmnet object with nlambda = 100. Call it ridge_model.  (7a.3) 1 pt – Display the estimated coefficients at the optimal lambda value.