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© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 1
 Lots of data is being collected
and warehoused
– Web data, e-commerce
– purchases at department/
grocery stores
– Bank/Credit Card
transactions
 Computers have become cheaper and more powerful
 Competitive Pressure is Strong
– Provide better, customized services for an edge (e.g. in
Customer Relationship Management)
Why Mine Data? Commercial Viewpoint
Why Mine Data? Scientific Viewpoint
 Data collected and stored at
enormous speeds (GB/hour)
– remote sensors on a satellite
– telescopes scanning the skies
– microarrays generating gene
expression data
– scientific simulations
generating terabytes of data
 Traditional techniques infeasible for raw data
 Data mining may help scientists
– in classifying and segmenting data
– in Hypothesis Formation
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 3
Mining Large Data Sets - Motivation
 There is often information “hidden” in the data that is
not readily evident
 Human analysts may take weeks to discover useful
information
 Much of the data is never analyzed at all
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
1995 1996 1997 1998 1999
The Data Gap
Total new disk (TB) since 1995
Number of
analysts
From: R. Grossman, C. Kamath, V. Kumar, “Data Mining for Scientific and Engineering Applications”
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 4
What is Data Mining?
 Many Definitions
– Non-trivial extraction of implicit, previously
unknown and potentially useful information from
data
– Exploration & analysis, by automatic or
semi-automatic means, of
large quantities of data
in order to discover
meaningful patterns
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 5
 Draws ideas from machine learning/AI, pattern
recognition, statistics, and database systems
 Traditional Techniques
may be unsuitable due to
– Enormity of data
– High dimensionality
of data
– Heterogeneous,
distributed nature
of data
Origins of Data Mining
Machine Learning/
Pattern
Recognition
Statistics/
AI
Data Mining
Database
systems
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 6
Data Mining Tasks
 Prediction Methods
– Use some variables to predict unknown or
future values of other variables.
 Description Methods
– Find human-interpretable patterns that
describe the data.
From [Fayyad, et.al.] Advances in Knowledge Discovery and Data Mining, 1996
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 7
Data Mining Tasks...
 Classification [Predictive]
 Clustering [Descriptive]
 Association Rule Discovery [Descriptive]
 Sequential Pattern Discovery [Descriptive]
 Regression [Predictive]
 Deviation Detection [Predictive]
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 8
Classification: Definition
 Given a collection of records (training set )
– Each record contains a set of attributes, one of the
attributes is the class.
 Find a model for class attribute as a function
of the values of other attributes.
 Goal: previously unseen records should be
assigned a class as accurately as possible.
– A test set is used to determine the accuracy of the
model. Usually, the given data set is divided into
training and test sets, with training set used to build
the model and test set used to validate it.
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 9
Classification Example
Tid Refund Marital
Status
Taxable
Income Cheat
1 Yes Single 125K No
2 No Married 100K No
3 No Single 70K No
4 Yes Married 120K No
5 No Divorced 95K Yes
6 No Married 60K No
7 Yes Divorced 220K No
8 No Single 85K Yes
9 No Married 75K No
10 No Single 90K Yes
10
categorical
categorical
continuous
class
Refund Marital
Status
Taxable
Income Cheat
No Single 75K ?
Yes Married 50K ?
No Married 150K ?
Yes Divorced 90K ?
No Single 40K ?
No Married 80K ?
10
Test
Set
Training
Set
Model
Learn
Classifier
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 10
Classification: Application 1
 Direct Marketing
– Goal: Reduce cost of mailing by targeting a set of
consumers likely to buy a new cell-phone product.
– Approach:
 Use the data for a similar product introduced before.
 We know which customers decided to buy and which
decided otherwise. This {buy, don’t buy} decision forms the
class attribute.
 Collect various demographic, lifestyle, and company-
interaction related information about all such customers.
– Type of business, where they stay, how much they earn, etc.
 Use this information as input attributes to learn a classifier
model.
From [Berry & Linoff] Data Mining Techniques, 1997
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 11
Classification: Application 2
 Fraud Detection
– Goal: Predict fraudulent cases in credit card
transactions.
– Approach:
 Use credit card transactions and the information on its account-
holder as attributes.
– When does a customer buy, what does he buy, how often he pays on time,
etc
 Label past transactions as fraud or fair transactions. This forms
the class attribute.
 Learn a model for the class of the transactions.
 Use this model to detect fraud by observing credit card
transactions on an account.
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 12
Classification: Application 3
 Customer Attrition/Churn:
– Goal: To predict whether a customer is likely
to be lost to a competitor.
– Approach:
Use detailed record of transactions with each of the
past and present customers, to find attributes.
– How often the customer calls, where he calls, what time-of-the
day he calls most, his financial status, marital status, etc.
Label the customers as loyal or disloyal.
Find a model for loyalty.
From [Berry & Linoff] Data Mining Techniques, 1997
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 13
Classification: Application 4
 Sky Survey Cataloging
– Goal: To predict class (star or galaxy) of sky objects,
especially visually faint ones, based on the telescopic
survey images (from Palomar Observatory).
– 3000 images with 23,040 x 23,040 pixels per image.
– Approach:
 Segment the image.
 Measure image attributes (features) - 40 of them per object.
 Model the class based on these features.
 Success Story: Could find 16 new high red-shift quasars,
some of the farthest objects that are difficult to find!
From [Fayyad, et.al.] Advances in Knowledge Discovery and Data Mining, 1996
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 14
Clustering Definition
 Given a set of data points, each having a set of
attributes, and a similarity measure among them,
find clusters such that
– Data points in one cluster are more similar to
one another.
– Data points in separate clusters are less
similar to one another.
 Similarity Measures:
– Euclidean Distance if attributes are
continuous.
– Other Problem-specific Measures.
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 15
Illustrating Clustering
 Euclidean Distance Based Clustering in 3-D space.
Intracluster distances
are minimized
Intercluster distances
are maximized
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 16
Clustering: Application 1
 Market Segmentation:
– Goal: subdivide a market into distinct subsets of
customers where any subset may conceivably be
selected as a market target to be reached with a
distinct marketing mix.
– Approach:
 Collect different attributes of customers based on their
geographical and lifestyle related information.
 Find clusters of similar customers.
 Measure the clustering quality by observing buying patterns
of customers in same cluster vs. those from different
clusters.
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 17
Clustering: Application 2
 Document Clustering:
– Goal: To find groups of documents that are
similar to each other based on the important
terms appearing in them.
– Approach: To identify frequently occurring
terms in each document. Form a similarity
measure based on the frequencies of different
terms. Use it to cluster.
– Gain: Information Retrieval can utilize the
clusters to relate a new document or search
term to clustered documents.
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 18
Illustrating Document Clustering
 Clustering Points: 3204 Articles of Los Angeles Times.
 Similarity Measure: How many words are common in
these documents (after some word filtering).
Category Total
Articles
Correctly
Placed
Financial 555 364
Foreign 341 260
National 273 36
Metro 943 746
Sports 738 573
Entertainment 354 278
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 19
Association Rule Discovery: Definition
 Given a set of records each of which contain some
number of items from a given collection;
– Produce dependency rules which will predict
occurrence of an item based on occurrences of other
items.
TID Items
1 Bread, Coke, Milk
2 Beer, Bread
3 Beer, Coke, Diaper, Milk
4 Beer, Bread, Diaper, Milk
5 Coke, Diaper, Milk
Rules Discovered:
{Milk} --> {Coke}
{Diaper, Milk} --> {Beer}
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 20
Association Rule Discovery: Application 1
 Marketing and Sales Promotion:
– Let the rule discovered be
{Bagels, … } --> {Potato Chips}
– Potato Chips as consequent => Can be used to
determine what should be done to boost its sales.
– Bagels in the antecedent => Can be used to see
which products would be affected if the store
discontinues selling bagels.
– Bagels in antecedent and Potato chips in consequent
=> Can be used to see what products should be sold
with Bagels to promote sale of Potato chips!
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 21
Association Rule Discovery: Application 2
 Supermarket shelf management.
– Goal: To identify items that are bought
together by sufficiently many customers.
– Approach: Process the point-of-sale data
collected with barcode scanners to find
dependencies among items.
– A classic rule --
If a customer buys diaper and milk, then he is very
likely to buy beer.
So, don’t be surprised if you find six-packs stacked
next to diapers!
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 22
Association Rule Discovery: Application 3
 Inventory Management:
– Goal: A consumer appliance repair company wants to
anticipate the nature of repairs on its consumer
products and keep the service vehicles equipped with
right parts to reduce on number of visits to consumer
households.
– Approach: Process the data on tools and parts
required in previous repairs at different consumer
locations and discover the co-occurrence patterns.
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 23
Sequential Pattern Discovery: Definition
 Given is a set of objects, with each object associated with its own timeline of events, find rules that predict strong sequential dependencies among different events.
 Rules are formed by first disovering patterns. Event occurrences in the patterns are governed by timing constraints.
(A B) (C) (D E)
<= ms
<= xg >ng <= ws
(A B) (C) (D E)
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 24
Sequential Pattern Discovery: Examples
 In telecommunications alarm logs,
– (Inverter_Problem Excessive_Line_Current)
(Rectifier_Alarm) --> (Fire_Alarm)
 In point-of-sale transaction sequences,
– Computer Bookstore:
(Intro_To_Visual_C) (C++_Primer) -->
(Perl_for_dummies,Tcl_Tk)
– Athletic Apparel Store:
(Shoes) (Racket, Racketball) --> (Sports_Jacket)
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 25
Regression
 Predict a value of a given continuous valued variable
based on the values of other variables, assuming a
linear or nonlinear model of dependency.
 Greatly studied in statistics, neural network fields.
 Examples:
– Predicting sales amounts of new product based on
advetising expenditure.
– Predicting wind velocities as a function of
temperature, humidity, air pressure, etc.
– Time series prediction of stock market indices.
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 26
Deviation/Anomaly Detection
 Detect significant deviations from normal behavior
 Applications:
– Credit Card Fraud Detection
– Network Intrusion
Detection
Typical network traffic at University level may reach over 100 million connections per
day
© Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 27
Challenges of Data Mining
 Scalability
 Dimensionality
 Complex and Heterogeneous Data
 Data Quality
 Data Ownership and Distribution
 Privacy Preservation
 Streaming Data

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Draws ideas from machine learning/AI, pattern recognition, statistics, and database systems

  • 1. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 1  Lots of data is being collected and warehoused – Web data, e-commerce – purchases at department/ grocery stores – Bank/Credit Card transactions  Computers have become cheaper and more powerful  Competitive Pressure is Strong – Provide better, customized services for an edge (e.g. in Customer Relationship Management) Why Mine Data? Commercial Viewpoint
  • 2. Why Mine Data? Scientific Viewpoint  Data collected and stored at enormous speeds (GB/hour) – remote sensors on a satellite – telescopes scanning the skies – microarrays generating gene expression data – scientific simulations generating terabytes of data  Traditional techniques infeasible for raw data  Data mining may help scientists – in classifying and segmenting data – in Hypothesis Formation
  • 3. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 3 Mining Large Data Sets - Motivation  There is often information “hidden” in the data that is not readily evident  Human analysts may take weeks to discover useful information  Much of the data is never analyzed at all 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 1995 1996 1997 1998 1999 The Data Gap Total new disk (TB) since 1995 Number of analysts From: R. Grossman, C. Kamath, V. Kumar, “Data Mining for Scientific and Engineering Applications”
  • 4. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 4 What is Data Mining?  Many Definitions – Non-trivial extraction of implicit, previously unknown and potentially useful information from data – Exploration & analysis, by automatic or semi-automatic means, of large quantities of data in order to discover meaningful patterns
  • 5. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 5  Draws ideas from machine learning/AI, pattern recognition, statistics, and database systems  Traditional Techniques may be unsuitable due to – Enormity of data – High dimensionality of data – Heterogeneous, distributed nature of data Origins of Data Mining Machine Learning/ Pattern Recognition Statistics/ AI Data Mining Database systems
  • 6. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 6 Data Mining Tasks  Prediction Methods – Use some variables to predict unknown or future values of other variables.  Description Methods – Find human-interpretable patterns that describe the data. From [Fayyad, et.al.] Advances in Knowledge Discovery and Data Mining, 1996
  • 7. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 7 Data Mining Tasks...  Classification [Predictive]  Clustering [Descriptive]  Association Rule Discovery [Descriptive]  Sequential Pattern Discovery [Descriptive]  Regression [Predictive]  Deviation Detection [Predictive]
  • 8. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 8 Classification: Definition  Given a collection of records (training set ) – Each record contains a set of attributes, one of the attributes is the class.  Find a model for class attribute as a function of the values of other attributes.  Goal: previously unseen records should be assigned a class as accurately as possible. – A test set is used to determine the accuracy of the model. Usually, the given data set is divided into training and test sets, with training set used to build the model and test set used to validate it.
  • 9. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 9 Classification Example Tid Refund Marital Status Taxable Income Cheat 1 Yes Single 125K No 2 No Married 100K No 3 No Single 70K No 4 Yes Married 120K No 5 No Divorced 95K Yes 6 No Married 60K No 7 Yes Divorced 220K No 8 No Single 85K Yes 9 No Married 75K No 10 No Single 90K Yes 10 categorical categorical continuous class Refund Marital Status Taxable Income Cheat No Single 75K ? Yes Married 50K ? No Married 150K ? Yes Divorced 90K ? No Single 40K ? No Married 80K ? 10 Test Set Training Set Model Learn Classifier
  • 10. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 10 Classification: Application 1  Direct Marketing – Goal: Reduce cost of mailing by targeting a set of consumers likely to buy a new cell-phone product. – Approach:  Use the data for a similar product introduced before.  We know which customers decided to buy and which decided otherwise. This {buy, don’t buy} decision forms the class attribute.  Collect various demographic, lifestyle, and company- interaction related information about all such customers. – Type of business, where they stay, how much they earn, etc.  Use this information as input attributes to learn a classifier model. From [Berry & Linoff] Data Mining Techniques, 1997
  • 11. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 11 Classification: Application 2  Fraud Detection – Goal: Predict fraudulent cases in credit card transactions. – Approach:  Use credit card transactions and the information on its account- holder as attributes. – When does a customer buy, what does he buy, how often he pays on time, etc  Label past transactions as fraud or fair transactions. This forms the class attribute.  Learn a model for the class of the transactions.  Use this model to detect fraud by observing credit card transactions on an account.
  • 12. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 12 Classification: Application 3  Customer Attrition/Churn: – Goal: To predict whether a customer is likely to be lost to a competitor. – Approach: Use detailed record of transactions with each of the past and present customers, to find attributes. – How often the customer calls, where he calls, what time-of-the day he calls most, his financial status, marital status, etc. Label the customers as loyal or disloyal. Find a model for loyalty. From [Berry & Linoff] Data Mining Techniques, 1997
  • 13. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 13 Classification: Application 4  Sky Survey Cataloging – Goal: To predict class (star or galaxy) of sky objects, especially visually faint ones, based on the telescopic survey images (from Palomar Observatory). – 3000 images with 23,040 x 23,040 pixels per image. – Approach:  Segment the image.  Measure image attributes (features) - 40 of them per object.  Model the class based on these features.  Success Story: Could find 16 new high red-shift quasars, some of the farthest objects that are difficult to find! From [Fayyad, et.al.] Advances in Knowledge Discovery and Data Mining, 1996
  • 14. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 14 Clustering Definition  Given a set of data points, each having a set of attributes, and a similarity measure among them, find clusters such that – Data points in one cluster are more similar to one another. – Data points in separate clusters are less similar to one another.  Similarity Measures: – Euclidean Distance if attributes are continuous. – Other Problem-specific Measures.
  • 15. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 15 Illustrating Clustering  Euclidean Distance Based Clustering in 3-D space. Intracluster distances are minimized Intercluster distances are maximized
  • 16. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 16 Clustering: Application 1  Market Segmentation: – Goal: subdivide a market into distinct subsets of customers where any subset may conceivably be selected as a market target to be reached with a distinct marketing mix. – Approach:  Collect different attributes of customers based on their geographical and lifestyle related information.  Find clusters of similar customers.  Measure the clustering quality by observing buying patterns of customers in same cluster vs. those from different clusters.
  • 17. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 17 Clustering: Application 2  Document Clustering: – Goal: To find groups of documents that are similar to each other based on the important terms appearing in them. – Approach: To identify frequently occurring terms in each document. Form a similarity measure based on the frequencies of different terms. Use it to cluster. – Gain: Information Retrieval can utilize the clusters to relate a new document or search term to clustered documents.
  • 18. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 18 Illustrating Document Clustering  Clustering Points: 3204 Articles of Los Angeles Times.  Similarity Measure: How many words are common in these documents (after some word filtering). Category Total Articles Correctly Placed Financial 555 364 Foreign 341 260 National 273 36 Metro 943 746 Sports 738 573 Entertainment 354 278
  • 19. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 19 Association Rule Discovery: Definition  Given a set of records each of which contain some number of items from a given collection; – Produce dependency rules which will predict occurrence of an item based on occurrences of other items. TID Items 1 Bread, Coke, Milk 2 Beer, Bread 3 Beer, Coke, Diaper, Milk 4 Beer, Bread, Diaper, Milk 5 Coke, Diaper, Milk Rules Discovered: {Milk} --> {Coke} {Diaper, Milk} --> {Beer}
  • 20. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 20 Association Rule Discovery: Application 1  Marketing and Sales Promotion: – Let the rule discovered be {Bagels, … } --> {Potato Chips} – Potato Chips as consequent => Can be used to determine what should be done to boost its sales. – Bagels in the antecedent => Can be used to see which products would be affected if the store discontinues selling bagels. – Bagels in antecedent and Potato chips in consequent => Can be used to see what products should be sold with Bagels to promote sale of Potato chips!
  • 21. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 21 Association Rule Discovery: Application 2  Supermarket shelf management. – Goal: To identify items that are bought together by sufficiently many customers. – Approach: Process the point-of-sale data collected with barcode scanners to find dependencies among items. – A classic rule -- If a customer buys diaper and milk, then he is very likely to buy beer. So, don’t be surprised if you find six-packs stacked next to diapers!
  • 22. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 22 Association Rule Discovery: Application 3  Inventory Management: – Goal: A consumer appliance repair company wants to anticipate the nature of repairs on its consumer products and keep the service vehicles equipped with right parts to reduce on number of visits to consumer households. – Approach: Process the data on tools and parts required in previous repairs at different consumer locations and discover the co-occurrence patterns.
  • 23. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 23 Sequential Pattern Discovery: Definition  Given is a set of objects, with each object associated with its own timeline of events, find rules that predict strong sequential dependencies among different events.  Rules are formed by first disovering patterns. Event occurrences in the patterns are governed by timing constraints. (A B) (C) (D E) <= ms <= xg >ng <= ws (A B) (C) (D E)
  • 24. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 24 Sequential Pattern Discovery: Examples  In telecommunications alarm logs, – (Inverter_Problem Excessive_Line_Current) (Rectifier_Alarm) --> (Fire_Alarm)  In point-of-sale transaction sequences, – Computer Bookstore: (Intro_To_Visual_C) (C++_Primer) --> (Perl_for_dummies,Tcl_Tk) – Athletic Apparel Store: (Shoes) (Racket, Racketball) --> (Sports_Jacket)
  • 25. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 25 Regression  Predict a value of a given continuous valued variable based on the values of other variables, assuming a linear or nonlinear model of dependency.  Greatly studied in statistics, neural network fields.  Examples: – Predicting sales amounts of new product based on advetising expenditure. – Predicting wind velocities as a function of temperature, humidity, air pressure, etc. – Time series prediction of stock market indices.
  • 26. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 26 Deviation/Anomaly Detection  Detect significant deviations from normal behavior  Applications: – Credit Card Fraud Detection – Network Intrusion Detection Typical network traffic at University level may reach over 100 million connections per day
  • 27. © Tan,Steinbach, Kumar Introduction to Data Mining 4/18/2004 27 Challenges of Data Mining  Scalability  Dimensionality  Complex and Heterogeneous Data  Data Quality  Data Ownership and Distribution  Privacy Preservation  Streaming Data