Customer churn prediction is becoming an increasingly important business analytics problem for telecom operators. In order to increase the efficiency of customer retention campaigns, churn prediction models need to be accurate as well as compact and

The interest for data mining techniques has increased tremendously during the past decades, and numerous classification techniques have been applied in a wide range of business applications. Hence, the need for adequate performance measures has become more important than ever. In this paper, a cost-benefit analysis framework is formalized in order to define performance measures which are aligned with the main objectives of the end users, i.e., profit maximization. A new performance measure is defined, the expected maximum profit criterion. This general framework is then applied to the customer churn problem with its particular cost-benefit structure. The advantage of this approach is that it assists companies with selecting the classifier which maximizes the profit. Moreover, it aids with the practical implementation in the sense that it provides guidance about the fraction of the customer base to be included in the retention campaign.

Software testing is a crucial activity during software development and fault prediction models assist practitioners herein by providing an upfront identification of faulty software code by drawing upon the machine learning literature. While especially the Naive Bayes classifier is often applied in this regard, citing predictive performance and comprehensibility as its major strengths, a number of alternative Bayesian algorithms that boost the possibility of constructing simpler networks with fewer nodes and arcs remain unexplored. This study contributes to the literature by considering 15 different Bayesian Network (BN) classifiers and comparing them to other popular machine learning techniques. Furthermore, the applicability of the Markov blanket principle for feature selection, which is a natural extension to BN theory, is investigated. The results, both in terms of the AUC and the recently introduced H-measure, are rigorously tested using the statistical framework of Demšar. It is concluded that simple and comprehensible networks with less nodes can be constructed using BN classifiers other than the Naive Bayes classifier. Furthermore, it is found that the aspects of comprehensibility and predictive performance need to be balanced out, and also the development context is an item which should be taken into account during model selection.