Watch the video series: https://salford-systems.wistia.com/medias/khutf815bh A question we hear time and again is "how does your data mining software determine the best model?" In order to shed some light on this, a well as provide an in-depth analysis for those who want to take it a step farther, we have created a detailed video analysis of how the 'best model' is chosen. The simple answer is: it depends. What are cost functions? Cost functions (a.k.a loss functions) are a way to help the data modeler solve a supervised learning problem, either classification or regression. The 'fit' of the response surface on the data available will associate a cost of the event that occurs. In an optimization example, you would want to minimize your cost.

1. With Cost Functions
A question we hear time and again is "how does your data mining software determine the
best model?" In order to shed some light on this, a well as provide an in-depth analysis
for those who want to take it a step farther, we have created a detailed video analysis of
how the 'best model' is chosen. The simple answer is: it depends.
What is a cost function?
Helps the
A
K
A
DATA ANALYST (YOU)
Loss
SOLVE A
SUPERVISED LEARNING
FUNCTION
PROBLEM
Used
In
classification
Used in
9
Regression
8
7
6
5
4
3
2
1
2009
2010
2011
2012
COST FUNCTIONS
ARE ASSOCIATED WITH
MODEL PERFORMANCE
IN OPTIMIZATION EXAMPLES
YOU WANT
TO MINIMIZE
YOUR COST
KEY
TAKEAWAYS:
1. Cost functions are important because there are
many ways to design a machine learning algorithm,
as well as interpret its performance.
2. Understanding cost functions will help you, the
analyst, discover the underpinnings of the
algorithms and usefulness of each algorithm’s
functionality.
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COST FUNCTIONS
ARE EXPLAINED VIA
VIDEO