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The document provides an introduction to data mining and predictive modeling, outlining its purpose, processes, and applications across various industries. It emphasizes the importance of data mining in uncovering patterns for better decision-making in business. Key operations discussed include predictive and descriptive methods, as well as specific applications in banking, marketing, medicine, and more.

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3 views14 pages

L 1

The document provides an introduction to data mining and predictive modeling, outlining its purpose, processes, and applications across various industries. It emphasizes the importance of data mining in uncovering patterns for better decision-making in business. Key operations discussed include predictive and descriptive methods, as well as specific applications in banking, marketing, medicine, and more.

Uploaded by

kritikamishra4000
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Data Mining

and
Predictive Modelling

Lecture 1: Introduction to Data Mining, Purposes, and Procedures


Components Percentage
Mid-Term 15
End-Term 35
Tentative
Evaluation Assignment 10
Components
Quiz 10
Lab Continuous Evaluation 10
End Term Lab Examination 20

17-01-2022 Lecture-1: Data Mining and Predictive Modeling 2


Data mining is the process of discovering
interesting patterns and knowledge from
large amounts of data.

Data The data sources include databases, data


warehouses, the web, other information
repositories, or data that are streamed into
Mining the system dynamically.

It is one of the steps in the knowledge


discovery process, but the essential one
because it uncovers hidden patterns for
evaluation.

17-01-2022 Lecture-1: Data Mining and Predictive Modeling 3


To identify the insights and visions of the data.

Purpose of To analyze the data and then covert that data into
meaningful information, which helps the business to
take accurate and better decisions in an organization.
Data Helps to develop smart market decision, run accurate
Mining campaigns, make prediction and more.

Analyze customer behaviors and their insights that


leads to great success and data-driven business.

17-01-2022 Lecture-1: Data Mining and Predictive Modeling 4


Data Mining Process

Requirement Gathering

Data exploration

Data preparations

Modeling

Evaluation

Deployment

17-01-2022 Lecture-1: Data Mining and Predictive Modeling 5


Applications
Banking: Loan/Credit card approval

• Predict good customers based on old customers

Customer relationship management

• Identify those who are likely to leave for a competitor

Targeted marketing

• Identify likely responders to promotions

Fraud detection: telecommunications, financial transactions

• From an online stream of event identify fraudulent events

Manufacturing and production

• Automatically adjust knobs when process parameter changes

17-01-2022 Lecture-1: Data Mining and Predictive Modeling 6


Applications
Medicine: disease outcome, effectiveness of treatments

• Analyze patient disease history: find relationship between diseases

Molecular / Pharmaceutical: identify new drug

Scientific data analysis

• Identify new galaxies by search for sub clusters

Web site/store design and promotion

• Find affinity of visitor to pages and modify layout

Manufacturing and production

• Automatically adjust knobs when process parameter changes

17-01-2022 Lecture-1: Data Mining and Predictive Modeling 7


Basic Operations

Predictive Descriptive
Regression Clustering/similarity matching
Classification Association rules and variants
Collaborative Filtering Deviation detection

17-01-2022 Lecture-1: Data Mining and Predictive Modeling 8


Classification
• Given old data about customers and payments, predict new
applicant’s loan eligibility.

Previous customers Classifier Decision rules


Salary > 5 L
Age Good/
Salary Prof. = Exec bad
Profession
Location
Customer type
New applicant’s data

17-01-2022 Lecture-1: Data Mining and Predictive Modeling 9


Clustering or Unsupervised Learning
Unsupervised learning when old data with class labels not available e.g., when
introducing a new product.

Group/ cluster existing customers based on time series of payment history such
that similar customers in same cluster.

Key requirement: Need a good measure of similarity between instances.

Identify micro-markets and develop policies for each.

17-01-2022 Lecture-1: Data Mining and Predictive Modeling 10


Applications (Unsupervised Learning)
Customer segmentation e.g., for targeted marketing

• Group/cluster existing customers based on time series of payment history such that
similar customers in same cluster.

Collaborative filtering

• Group based common items purchased

Text clustering

Compression

17-01-2022 Lecture-1: Data Mining and Predictive Modeling 11


Association Rules

Given set T of group of items

Example: set of item sets purchased

Goal: find all rules on item sets of the form a→b such that

Example: Milk → bread

Purchase of product A → service B

17-01-2022 Lecture-1: Data Mining and Predictive Modeling 12


Application Areas

Industry Application
Finance Credit Card Analysis
Telecommunication Claims, Fraud Analysis
Transport Call record analysis
Consumer goods Logistic management
Data Service providers Promotion Analysis
Utilities Value added data
Power usage analysis

17-01-2022 Lecture-1: Data Mining and Predictive Modeling 13


Thank You

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