Please do help me with which option is recommended for me - Option-1,Option-2 or Option-3 in my case ? If Option-3, then is it recommended to use a oversampling rate of either 2% or 3% in order to increase the number of records to be modeled to something above 6487 ?
I don't know that one could say in most situations let alone a specific situation which approach will be most effective since this could differ depending on the data and the way in which the relationships among the variables might be changing over time. The one that performs the best on the data you train on is less important than the one that works best in practice. It is common to build multiple models and to pick which is the champion and which are the challengers based on their performance in practice. I would typically say build multiple models and use your business judgement, needs for interpretation, statistical metrics of interest (each modeler might prefer different ones for different reasons), and go with it. Over time, you should find yourself knowing which approach is best for your modeling situation and refitting a new model can occur more quickly. Given the speed at which models can be built on modern software, you really shouldn't have to choose in advance.
Hope this helps!
Doug
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