DAV CHAP 6

Question 1

Data mining definition

Answer 1

Process of Discovering new and meaningful correlations patterns trends by “mining” large amount of stored data using pattern recognition tech and statistical and mathematical techniques

known as knowledge discovery, data surfing, data harvesting

Question 2

What is driving data mining

Answer 2

1. Change in technology - increase use of internet and computing power + data warehouses + better modelling approaches
2. Change in customer behavior - more informed, demanding, willing to switch to competitor, harder to satisfy needs as it gets more complex
3. Change in competition - Evolution of strategy like one to one marketing and mass marketing, more competition, faster pace, niche players.

Question 3

Crisp DM model

Answer 3

1. Business understanding - understand business objective
2. Data understanding - collect, identify, describe data
3. Data preparation - select, clean data
4. Modelling - select modelling technique, build model and assess
5. Evaluation - Evaluate results and review
6. Deployment - plan deployment + presentation + review

Question 4

Decision tree

Answer 4

Supervised learning method - classification method that uses value of input variable to predict value of categorical variable

Question 5

Decision tree benefits

Answer 5

1. Make readily understandable rules to predict customer behavior
2. Evaluate values of different outcomes and probability to reach them
3. Produce graphical representation of how different factors affect the outcome
4. Make segmentation scheme based on decision tree results

Question 6

Clustering

Answer 6

Creates groups of records that are similar to each other within a particular group and very different across different groups
Association between members determined by characteristics specified in the analysis
Explore large amount of data and organize it

Question 7

Define data understanding

Answer 7

identify source of data, collect, describe explore and verify data quality

Question 8

Data preparation

Answer 8

select data to clean, integrate the data and format it

Question 9

Modelling

Answer 9

Select modelling technique, build, fine tune and assess

Question 10

Business understanding

Answer 10

understand business objective, and goal of data mining, work with stakeholders to produce project plan

Question 11

Decision tree practical applications

Answer 11

1. Reduce customer fraud
2. Who is likely to stop buying from us
3. Who’s likely to be a credit risk