Part 1 of 3: Building/Loading/Scoring Against Predictive Models in R

In this first installment, I'm going to focus on:

• Building/evaluating a predictive model with partitioned data
• Saving the predictive model to disk
• Loading the predictive model from disk
• Scoring data against a predictive model (within R)

This installment is really foundational but it's amazing how little coverage saving/loading models in R gets so I thought I would share some code.

The example used throughout this 3 part series is centered around an eCommerce site. We are going to look at the spend associated with promotions. The mix of promotions (expressed as percent of total promotional spend) is the input to the model. The outputs of the model are AOV (average order value), gross margin % and conversion rate.  The goal is to maximize AOV, gross margin % and conversion rate with the best mix of promotional spend.

Let's look at the code:

# load the data from a CSV
SRC_PATH <- '/analytics/margin_model/'
data <- read.csv(file=paste(SRC_PATH,'margin_modeling.csv',sep=''), header=TRUE)

# split the data 80% train/20% test
sample_idx <- sample(nrow(data), nrow(data)*0.8)
data_train <- data[sample_idx, ]
data_test <- data[-sample_idx, ]

# create a linear model using the training partition
gm_pct_model <- lm(GROSS_MARGIN_RATE ~ PROMO_AFFILIATE_UNITS + PROMO_COMP_SHOP_ENGINES_UNITS + PROMO_DISPLAY_ADS_UNITS + PROMO_EMAIL_UNITS + PROMO_LOCAL_SEM_UNITS + PROMO_SEARCH_ENG_MKT_UNITS + PROMO_TELESALES_UNITS + PROMO_UNPAID_UNITS, data_train)

# save the model to disk
save(gm_pct_model, file=paste(SRC_PATH,'gm_pct_model.model',sep=''))

# load the model back from disk (prior variable name is restored)
load(paste(SRC_PATH,'gm_pct_model.model',sep=''))

# score the test data and plot pred vs. obs
plot(data.frame('Predicted'=predict(gm_pct_model, data_test), 'Observed'=data_test$GROSS_MARGIN_PCT))

# score the test data and append it as a new column (for later use)
new_data <- cbind(data_test,'PREDICTED_GROSS_MARGIN_PCT'=predict(gm_pct_model, data_test))

# score an individual row
predicted_gm_rate <- predict(gm_pct_model, data_test[1,])

It's amazing how little code it takes to automate the modeling and scoring process.  Next, I'll show you how to perform non-linear optimization of these predictive models to determine the optimal promotional mix.