QUESTION 1 25 MARKS
With reference to the above case, answer all of the following questions:
- a) Based on the business challenges that Auto Finance Ltd. is facing, list and
explain a segmentation problem and a classification problem respectively.
- b) Select an analytics model for each problem you have identified in Q1a and justify
- c) Outline relevant variables for each analytics
model you have identified in Q1(b). Justify your choice of these variables.
QUESTION 2 15 MARKS
Explain how each of your proposed modelling techniques in Question 1 b) can help
Auto Finance Ltd. generate insights about a potential customer defaulting on a loan.
QUESTION 3 10 MARKS
With reference to the above case, describe the pros and cons of using a metric
accuracy vs. recall vs. Area-Under-Curve for your classification modelling. Justify
which metric is the best based on the context of the case.
QUESTION 4 15 MARKS
There are concerns about the ethical issues involved in scoring a customer’s credits.
Identify three ethical issues that Auto Finance Ltd. could face. Provide your
recommendations to mitigate each ethical issue identified.