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Decisiontrees-Joe S Factory

This document provides an overview of decision trees, including their definition as a model that uses conditional logic to classify instances and make predictions, key terms like root nodes, branches, and leaf nodes, and examples of how they are constructed. Decision trees are widely used because they can handle both classification and regression problems, and classify instances by sorting them from the root to a leaf node. The document discusses calculating entropy to determine the optimal split at each node, pruning trees to avoid overfitting, and common algorithms like C4.5.

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Shivangi Thakker
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61 views7 pages

Decisiontrees-Joe S Factory

This document provides an overview of decision trees, including their definition as a model that uses conditional logic to classify instances and make predictions, key terms like root nodes, branches, and leaf nodes, and examples of how they are constructed. Decision trees are widely used because they can handle both classification and regression problems, and classify instances by sorting them from the root to a leaf node. The document discusses calculating entropy to determine the optimal split at each node, pruning trees to avoid overfitting, and common algorithms like C4.5.

Uploaded by

Shivangi Thakker
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

DECISION TREES

BY

International School of
Engineering
{We Are Applied Engineering}

Disclaimer: Some of the Images and content have been taken from multiple online sources and thi
presentation is

OVERVIEW
DEFINITION OF
DECISION TREE
WHY DECISION TREE?
DECISION TREE TERMS
EASY EXAMPLE
CONSTRUCTING A
DECISION TREE
CALCULATION OF
ENTROPY
ENTROPY

TERMINATION CRITERIA
PRUNING TREES
APPROACHES TO PRUNE
TREE
DECISION TREE ALGORITHMS
LIMITATIONS
ADVANTAGES
VIDEO OF CONSTRUCTING A
DECISION TREE

DEFINITION OF DECISION TREE'


A decision tree is a natural and simple way of inducing following kind of
rules.
If (Age is x) and (income is y) and (family size is z) and (credit card
spending is p) then he will accept the loan
It is powerful and perhaps most widely used modeling technique of all
Decision trees classify instances by sorting them down the tree from the
root to some leaf node, which provides theclassicationof theinstance

WHY DECISION
TREE?
Decision
Trees

To Classify

Response
variable has only
two categories
Use standard
classification
tree

To Predict

Response variable
has multiple
categories
Use c4.5
implementatio
n

Response variable
is continuous
Linear
relationships
between
predictors and
response
Use standard
Regression
tree

Nonlinear
relationships
between predictors
and response
Use c4.5
implementatio
n

Source: http://www.simafore.com/blog/bid/62482/2-main-differences-between-classication-and-regression-trees

DECISION TREE
TERMS
Root Node
Branc
h

Condition
Check

Branc
h

Condition
Check

Leaf Node(Decision
Point)
Leaf Node(Decision
Point)

EASY EXAMPLE
Joes garage is considering hiring another mechanic.
The mechanic would cost them an additional $50,000 / year in salary
and benets.
If there are a lot of accidents in Iowa City this year, they anticipate
making an additional $75,000 in net revenue.
If there are not a lot of accidents, they could lose $20,000 off of last
years total net revenues.
Because of all the ice on the roads, Joe thinks that there will be a 70%
chance of a lot of accidents and a 30% chance of fewer accidents.
Assume if he doesnt expand he will have the same revenue as last
year.

continued

Joes Garage
Hiring a
mechanic

Hire a new
mechanic
Cost = $50,000
Dont hire a
mechanic
Cost = $0

70% of an
chance increase
in accidents
Prot = $70,000
30% of a chance
decrease in
accidents
Prot = -$20,000

Estimated value of Hire Mechanic =


NPV =.7(70,000) + .3(- $20,000) - $50,000 =
- $7,000
Therefore you should not hire the mechanic

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