The Supervised Approach To Machine Learning - AI Summary

The toy company uses a further classification algorithm specifically for toys that fall under Class A to break down those toys into additional classes. They use a regression algorithm to match categories of toys with customer profiles to produce probabilities of certain types of customers purchasing certain types of toys. Historical customer transaction data is used to determine the types of toys a customer previously purchased, how frequently those types of toys were purchased and how much, on average, the customer spent on those types of toys. For example, the algorithm determines that a customer who had previously purchased action figure toys five times over the past six months and who spent an average of $80 on each purchase is 71% likely to purchase a new action toy of the same type that is priced at $40. The purchase probability of other toys is also assessed and compared, and the promotional email sent to that customer is customized to highlight the new toys with at least a 60% purchase probability at the toy's current price.