Regression Analysis Is Increasingly Being Used in Business Applications, Often

question 107

Essay

Regression analysis is increasingly being used in business applications, often called "business analytics" (or "predictive analytics"), in which a company studies its customers to gather information that can be used to make each customer more profitable.Companies that do this include Harrah's and eHarmony, among many others.
Required:
(1) Briefly explain how a company could use regression to improve customer profitability.
(2) Do you see any ethical issues involved in the use of business analytics? Explain.

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Definitions:

Noncompetition Agreements

Contracts restricting a person's ability to work in a competing business or industry for a specified period after leaving an employer.

Trade Secrets

Confidential information, practices, or processes used by a company that provide it with a competitive advantage.

Employment Relationship

The legal and practical connection between an employer and an employee.

Lanham Act

The primary federal statute that governs trademarks, service marks, and unfair competition in the United States.