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BRM

The document outlines data preparation and processing techniques, including data cleaning, transformation, and feature engineering, as well as exploratory data analysis and dimensionality reduction. It also discusses cluster analysis, its types, steps, and evaluation metrics, along with applications in marketing, HR, finance, and operations for tasks such as customer segmentation, risk analysis, and inventory management. Overall, it emphasizes the importance of clustering and data processing in various business contexts to enhance decision-making and operational efficiency.

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shantanudev679
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5 views4 pages

BRM

The document outlines data preparation and processing techniques, including data cleaning, transformation, and feature engineering, as well as exploratory data analysis and dimensionality reduction. It also discusses cluster analysis, its types, steps, and evaluation metrics, along with applications in marketing, HR, finance, and operations for tasks such as customer segmentation, risk analysis, and inventory management. Overall, it emphasizes the importance of clustering and data processing in various business contexts to enhance decision-making and operational efficiency.

Uploaded by

shantanudev679
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Data Analysis - Data Preparation & Processing

Data Preparation:
1. Data Cleaning:
o Removing duplicates and correcting inconsistencies.

o Handling missing data using techniques like imputation


(mean/median/mode) or deletion.
2. Data Transformation:
o Standardization: Scaling data to have a mean of zero and a
standard deviation of one.
o Normalization: Rescaling data to a fixed range, typically [0,1].

o Encoding categorical data into numerical formats (e.g., one-hot


encoding).
3. Feature Engineering:
o Creating new variables or modifying existing ones to improve model
performance.
o Example: Converting timestamps into day, month, or year.

Data Processing:
1. Exploratory Data Analysis (EDA):
o Visualizing data using graphs and charts to understand distributions
and relationships.
2. Dimensionality Reduction:
o Techniques like Principal Component Analysis (PCA) to reduce
features while retaining critical information.
3. Data Partitioning:
o Splitting data into training, validation, and testing sets for modeling
and evaluation.

Cluster Analysis
1. Definition: A technique to group data points into clusters with similar
characteristics.
2. Types of Clustering:
o K-Means Clustering: Divides data into k predefined clusters based
on centroids.
o Hierarchical Clustering: Creates a tree-like structure
(dendrogram) to visualize clusters.
o Density-Based Clustering: Groups data based on density,
separating noise from meaningful clusters.
3. Steps in Cluster Analysis:
o Selecting variables for clustering.

o Calculating distances using metrics like Euclidean or Manhattan


distance.
o Assigning data points to clusters iteratively.

4. Evaluation Metrics:
o Silhouette score: Measures how similar a point is to its cluster
compared to others.
o Davies-Bouldin Index: Assesses compactness and separation of
clusters.

Applications in Marketing
1. Customer Segmentation:
o Clustering customers based on purchasing behavior, demographics,
and preferences.
o Example: Differentiating between high-value customers and
occasional buyers.
2. Campaign Targeting:
o Personalizing promotional offers and advertising to specific
customer groups.
o Example: Targeting students for back-to-school campaigns.

3. Market Basket Analysis:


o Identifying product bundles frequently purchased together.

o Example: Promoting chips and soft drinks as a combo offer.

4. Product Positioning:
o Clustering market data to identify unmet customer needs and
launch new products.

Applications in HR
1. Employee Segmentation:
o Clustering employees based on performance metrics, tenure, and
satisfaction levels.
o Example: Identifying high-potential employees for leadership
development programs.
2. Retention Strategies:
o Analyzing clusters of employees likely to leave and addressing their
concerns.
o Example: Introducing flexible work arrangements for millennials.

3. Skill Gap Analysis:


o Clustering workforce data to identify gaps and plan training
sessions.
o Example: Upskilling employees for digital transformation roles.

4. Recruitment Insights:
o Targeting clusters of candidates who align with job requirements.

o Example: Using clustering in LinkedIn profiles to identify top talent.

Applications in Finance
1. Risk Analysis:
o Segmenting customers based on credit history, income, and
repayment behavior.
o Example: Identifying low-risk customers for pre-approved loans.

2. Fraud Detection:
o Clustering unusual patterns in transaction data to flag potential
fraud.
o Example: Identifying transactions made from unusual locations or
times.
3. Portfolio Optimization:
o Grouping investments into clusters based on risk-return
characteristics.
o Example: Diversifying funds into low-risk and high-return clusters.

4. Customer Lifetime Value (CLV):


o Segmenting customers by their lifetime value to prioritize marketing
efforts.

Applications in Operations
1. Inventory Management:
o Grouping products based on demand variability and sales frequency.
o Example: Using ABC analysis for prioritizing high-value inventory
items.
2. Supplier Segmentation:
o Categorizing suppliers based on cost, reliability, and delivery speed.

o Example: Identifying strategic suppliers for critical components.

3. Process Optimization:
o Clustering operational data to identify bottlenecks and streamline
workflows.
o Example: Analyzing production cycle times to improve efficiency.

4. Predictive Maintenance:
o Clustering machine data to identify patterns before breakdowns
occur.
o Example: Using sensor data to plan timely equipment maintenance.

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