When a business decision consists of choosing between different options, the solution requires estimating the impact of each of them. This chapter shows how machine learning techniques predict future events depending on the options, and how we can measure the accuracy.
If we have to choose between different options, we estimate the impact of each alternative and choose the best. In order to illustrate this, the example is a big supermarket that plans to start selling a new item, and the business decision consists of choosing its price.
In order to choose the best price, the company needs to know: