Introduction To Data Mining: Dr. Hany Saleeb

Introduction to Data Mining
Dr. Hany Saleeb
Why Data Mining? Potential Applications

Direct Marketing
identify which prospects should be included in a mailing list
Market segmentation
identify common characteristics of customers who buy same products
Market Basket Analysis

Identify what products are likely to be bought together
Insurance Claims Analysis

discover patterns of fraudulent transactions compare current transactions against those patterns
What Is Data Mining?

Combination of AI and statistical analysis to discover information that is hidden in the data
associations (e.g. linking purchase of pizza with beer) sequences (e.g. tying events together: marriage and purchase of furniture) classifications (e.g. recognizing patterns such as the attributes of employees that are most likely to quit) forecasting (e.g. predicting buying habits of customers based on past patterns) Expert systems or small ML/statistical programs
What can data mining do?

Classification
Classify credit applicants as low, medium, high risk Classify insurance claims as normal, suspicious
Estimation
Estimate the probability of a direct mailing response Estimate the lifetime value of a customer
Prediction
Predict which customers will leave within six months Predict the size of the balance that will be transferred by a credit card prospect
What can data mining do? (contd)

Association
Find out items customers are likely to buy together Find out what books to recommend to Amazon.com users
Clustering
Difference from classification: classes are unknown!
Market Analysis and Management

Where are the data sources for analysis?
Credit card transactions, loyalty cards, discount coupons, customer complaint calls, plus (public) lifestyle studies Target marketing
Find clusters of model customers who share the same characteristics: interest, income level, spending habits, etc.
Determine customer purchasing patterns over time Conversion of single to a joint bank account: marriage, etc.
Cross-market analysis
Associations/co-relations between product sales Prediction based on the association information
Data Mining: Confluence of Multiple Disciplines

Database Technology Statistics
Machine Learning
Data Mining
Visualization
Information Science
Other Disciplines
Data Mining: On What Kind of Data?

Relational databases Data warehouses Transactional databases Advanced DB and information repositories Object-oriented and object-relational databases Spatial databases Time-series data and temporal data Text databases and multimedia databases Heterogeneous and legacy databases WWW
Data Mining Process

Learning
Collecting relevant data Model building
Understanding of business Problem identification
Business strategy and evaluation
Action
Requirements/challenges in Data Mining

User interface Mining methodology Performance Data source Social and Security
Requirements/challenges in Data Mining(2)

User interface
- Data Visualization
Understandability and interpretation of results Information representation and rendering Screen real-estate
- Interactivity
Manipulation of mined knowledge focus and refine mining tasks Focus and refine mining results

Mining Methodology
Mining different kinds of knowledge in databases Interactive mining of knowledge at multiple levels of abstraction Incorporation of background knowledge Query languages Expression and visualization of results Handling noise and incomplete data Pattern evaluation
Requirements/challenges in Data Mining (4)

Performance
Efficiency and scalability of data mining algorithms
Linear algorithms needed
Parallel and distributed methods

Incremental methods Divide and conquer?

Data Source
Diversity of data types
Handling complex types of data Mining information from heterogenous data bases or information repositories Can we expect a DM algorithm to do well on all types of data ?
Data glut
Are we collecting the right data for the right answer? Distinguish between important and unimportant data

Social and Security -Social Impact
Private and sensitive data is gathered and mined without individuals knowledge and/or consent Appropriate use and distribution of discovered knowledge
- Regulations
Need for privacy and DM policies
Data Mining Tools
Summary
The benefits of knowing ones business is critical; technologies are coming together to support data mining. Data mining is the process and result of knowledge production, knowledge discovery and knowledge management.

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Introduction To Data Mining: Dr. Hany Saleeb

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Introduction to Data Mining

Dr. Hany Saleeb

Why Data Mining? Potential Applications

Market Basket Analysis

Insurance Claims Analysis

What Is Data Mining?

What can data mining do?

What can data mining do? (contd)

Market Analysis and Management

Data Mining: Confluence of Multiple Disciplines

Data Mining: On What Kind of Data?

Data Mining Process

Understanding of business Problem identification

Business strategy and evaluation

Requirements/challenges in Data Mining

Requirements/challenges in Data Mining(2)

Requirements/challenges in Data Mining(3)

Requirements/challenges in Data Mining (4)

Parallel and distributed methods

Requirements/challenges in Data Mining(5)

Requirements/challenges in Data Mining(6)

Data Mining Tools

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