Data Mining By Minh Osborne

Overview What is data mining? What can data mining do for you? The technologies involved with data mining.

What is Data Mining? Data Mining is a tool that businesses use to help them increase revenue by understanding their consumer. It helps find relationships and patterns in a database that were previously unknown to a business.

What can Data Mining do for you? Businesses are always looking for ways to increase profits. Cut costs Cut labor Increase productivity Understand customer

What can Data Mining…… cont’d By knowing your customer, you can better tailor goods and services to them. Targeted sales promotions. Selectively sway the right type of people. Understand consumer buying habits. What’s hot and what’s not.

What can Data Mining…… cont’d By knowing your customer and your business, you can create better business models and steer the company to successful profitability.

What it can’t do Like any tool, data mining is only useful when use correctly within the right context. It can’t produce miracle results and boost revenues overnight. Data mining allows you to analyze huge databases and from the results, you can make your own judgment on how useful it is.

Technology of Data Mining Data Mining and data warehousing Cleansing data Creating a subset database of cleansed data

Technology of Data Mining cont’d Data Mining vs OLAP OLAP – on-line analytical processing E.g. Let’s say you work at toy company and you see that more non electronic toys are being sold. You formulate a hypothesis that the reason for this is because the non electronic toys are cheaper. You query the database and analyze the numbers.

Technology of Data Mining cont’d This doesn’t explain why so you formulate another hypothesis saying that it’s the age group of the toys, there are more younger children than older children. You query the data base again and check your results. OLAP is basically used to verify hypothesis by querying the database. Data Mining is different in that is uses the data itself to uncover patterns.

Technology of Data Mining cont’d Data classification methods Statistical Algorithm Neural Networks Genetic algorithms Nearest neighbor method Rule induction Data visualization

Pitfalls of Data Mining Data mining doesn’t solve all problems. It can only give you what patterns and relationships it finds. You must analyze the outcome for yourself and produce models to see if to see if they fit in the real world.