Customer churn prediction model.
One common capstone project is building a predictive model to identify customers who are likely to churn, or stop doing business with a company. For this project, you would work with a large dataset of customer transactions, demographics, service records, surveys, etc. from a company. Your goal would be to analyze this data to develop a machine learning model that can accurately predict which existing customers are most at risk of churning in the next 6-12 months.
Some key steps would include: exploring and cleaning the data, performing EDA to understand customer profiles and behaviors of churners vs non-churners, engineering relevant features, selecting and training various classification algorithms (logistic regression, decision trees, random forest, neural networks etc.), performing model validation and hyperparameter tuning, selecting the best model based on metrics like AUC, accuracy etc. You would then discuss optimizations like targeting customers identified as high risk with customized retention offers. Additional analysis could involve determining common reasons for churn by examining comments in surveys. A polished report would document the full end to end process, conclusions and business recommendations.
Customer segmentation analysis.
In this capstone, you would analyze customer data for a retail company to develop meaningful customer segments that can help optimize marketing strategies. The dataset may contain thousands of customer profiles with demographics, purchase history, channel usage, response to past campaigns etc. Initial work would involve data cleaning, feature engineering and EDA to understand natural clustering of customers. Unsupervised learning techniques like K-means clustering, hierarchical clustering and latent semantic analysis could be applied and evaluated.
The optimal number of clusters would be selected using metrics like silhouette coefficient. You would then profile each cluster based on attributes, labeling them meaningfully based on behaviors. Associations between cluster membership and other variables would also be examined. The final deliverable would be a report detailing 3-5 distinct and actionable customer personas along with recommendations on how to better target/personalize offerings and messaging for each group. Additional analysis of churn patterns within clusters could provide further revenue optimization strategies.
Fraud detection in insurance claims.
Insurance fraud costs companies billions annually. Here the goal would be to develop a model that can accurately detect fraudulent insurance claims from a historical claims dataset. Features like claimant demographics, details of incident, repair costs, eyewitness accounts, past claim history etc. would be included after appropriate cleaning and normalization. Sampling techniques may be used to address class imbalance inherent to fraud datasets.
Various supervised algorithms like logistic regression, random forest, gradient boosting and deep neural networks would be trained and evaluated on metrics like recall, precision and AUC. Techniques like SMOTE for improving model performance on minority classes may also be explored. A GUI dashboard visualizing model performance metrics and top fraud indicators could be developed to simplify model interpretation. Deploying the optimal model as a fraud risk scoring API was also suggested to aid frontline processing of new claims. The final report would discuss model evaluation process as well as limitations and compliance considerations around model use in a sensitive domain like insurance fraud detection.
Drug discovery and molecular modeling.
With advances in biotech, data science is playing a key role in accelerating drug discovery processes. For this capstone, publicly available gene expression datasets as well as molecular structure datasets could be analyzed to aid target discovery and virtual screening of potential drug candidates. Unsupervised methods like principal component analysis and hierarchical clustering may help identify novel targets and biomarkers.
Techniques in natural language processing could be applied to biomedical literature to extract relationships between genes/proteins and diseases. Cheminformatics approaches involving property prediction, molecular fingerprinting and substructure searching could aid in virtual screening of candidate molecules from database collections. Molecular docking simulations may further refine candidates by predicting binding affinity to protein targets of interest. Lead optimization may involve generating structural analogs of prioritized molecules and predicting properties like ADMET (absorption, distribution, metabolism, excretion, toxicity) profiles.
The final report would summarize key findings and ranked drug candidates along with discussion on limitations of computational methods and need for further experimental validation. Visualizations of molecular structures and interactions may help communicate insights. The project aims to demonstrate how multi-omic datasets and modern machine learning/AI are revolutionizing various stages of drug development process.