Lennox Industries: Attrition Probabilities Diana Batten and Maddie Kamp.
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Transcript of Lennox Industries: Attrition Probabilities Diana Batten and Maddie Kamp.
Lennox Industries: Attrition ProbabilitiesDiana Batten and Maddie Kamp
Presentation OverviewCompany InformationThe OpportunityProject ObjectiveOur ApproachDeliverablesTest CasesRecommendations
Company Information Residential & commercial heating and air-conditioning
Seasonality of industry
13-15% market share
Have business in 80 countries
Manufacturer & distributer Direct relationship to customer Customer is contractor
The OpportunityEnable sales force to predetermine attrition of
customers About 1,000 customers drive about 60% of revenue Relations between data transactions and customer
attrition
2008-2010 transaction level data
“Proof of Concept”
Project ObjectiveDetermine a type of predictive model and
analysis to predict attrition
Use the older historical data given to test and create our model
Address seasonality in sales
Our Approach
Data Mining T-Tests Seasonalit
yMarkov Process
Sorting and
Automating
Deliverables T-Tests
Excel spreadsheets – Attrition Predictors Automation “Plug and Chug” Transition Probabilities Percent Correct & Test Cases Regional and Order Type Data
Entering Data
Transition Probabilities
Conditionals for Decile Drops
Percent Correct
Red/Orange Attrition
Drop From and To Attrition
(Purple)Count of
Customers Labeled as Attriting:
3367 88
Count If Attrition: 2017 70
Percent Correct Assesment: 59.9050% 79.5455%
Example for 2010 Monthly Data
Test CasesTest Case #
Number of Decile Drops
Percent Correct – Number of Decile Drops
Drop From
Drop To Percent Correct – Drop from and to
#1(2 Periods)
2 66.65% 8 4 78.77%
#2 (3 Periods)
2 76.74% 8 4 88.40%
#3 (2 Periods)
3 47.55% 9 2 58.71%
#4(3 Periods)
3 59.91% 9 2 79.10%
Entering Data – Order Type and Geographic Location
Summary of Data
Looking at Order Type - ZMPO
Variability Did Not Decrease
Recommendations & FunctionalityAbility for expansionPercent correctness
Use Three Period Outlook Use red/orange to red/orange analysis
Allows for user to define attrition
Questions?