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ML Academy

Introduced on day 20

Break-even precision

The share of treated cases that must be true positives for an action to return its cost, equal to cost divided by (success probability x value kept).

In detail

For an offer costing c that saves a would-be churner with probability s and keeps margin v, the average offer returns precision x s x v. Setting that equal to c gives c / (s x v). The success probability is a causal quantity that a randomized holdout measures; a risk model alone does not supply it.