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A Hitchhiker’s Guide to Mixture Density Networks

Assessing the uncertainty of predictions is elementary for business decisions. Mixture density networks help you to better understand the uncertainty you are facing in the real world.

Dr. Oliver Borchers
Towards Data Science
14 min readFeb 15, 2019

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Introduction

Uncertainty is a key element in every decision we make. In business, however, managers regularly face decisions entailing a wide variety of unforeseeable consequences. A manager might deal with the following questions:

  • “How do we set the price for XYZ based on the product attributes?”
  • “How many website visits will the advertisement generate?”
  • “What is the expected customer-lifetime value of customer Z-A137?”
  • “How much should we spend on advertising, given the market situation?”

Each of these questions implies a decision, which is ideally well informed and considers (or at least acknowledges) the underlying uncertainty. For example: Setting prices wrong leads to lower revenues, which in turn might cause the necessity of cost savings.

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Towards Data Science
Towards Data Science

Published in Towards Data Science

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Dr. Oliver Borchers
Dr. Oliver Borchers

Written by Dr. Oliver Borchers

CTO @ Oxolo | Tech Manager | AI Expert | Programmer | OPs Engineer | API First

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