Data Mining Using Recursive Partitioning

Peter WestfallWith some help from

Dr. Barry Macy, Dr. Seul-Hee Yoo, and TTU Institutional Research

Business Intelligence

= Transforming Business Data into Action

What Data?Lots of data.http://www.pcworld.com/news/article/0,aid,113170,00.asp

Text, numeric, sound, pictures, video.

Old and New Learning Paradigms

Old:

THEORYData

Analysis THEORY

New:Theory

DATAANALYSIS

DATAANALYSIS

Typical Data Mining Methods

• Clustering (eg, customer segmentation)

• Affinity (eg, what items do people buy together)

• Exception analysis (eg, credit card fraud, terrorism)

• Predictive Modeling (eg, deciding loans, predicting employee turnover, predicting likely customers)

Recent Horizons in Data Mining

• Visualizations

• Text mining

• Audio mining

• Video mining

Requirements of DM Tools

• Simple (even an MBA can use it)

• Actionable results

• Flexible, open-ended (“Analysis at the speed of thought”)

• Scale-Up: Can handle massive data sets

• Drill-Down: Ability to investigate sub-units

Recursive Partitioning

• A predictive modeling tool• Also called “Decision Trees”, “CART”• Works by recursively splitting data set• Software:

– SAS Enterprise Miner– SPSS Clementine– SPLUS– Lots of Freeware– Demo: “Partitionator” of Eureka! Technologies.http://www.eurekatechnologies.com/MoreDetails.aspx

Example 1: Survey of Innovative Organizations

• Action Orientation: Which management levers lead to better performance?

• V24=earned profit in last 5 years: – 1=all five – 2=most of 5 – 3 = some of five – 4 = none of 5

Interesting Variables

• V617B = Number of years that elimination of perks for certain groups of people has been in effect

• V894A = Percent of workforce involved in SPC/SQC/TQC training– 1=None – 2=1-20%– …– 7=100%

Example 2:Texas Tech University Ratings

By Thesis Students

• Who is satisfied? Who is not satisfied?

• Action Orientation – – Improve pockets where students are

dissatisfied.– Emulate pockets where students are satisfied.

Example 3: Business Dress Styles Rated

Lower Rated Dress Types

Final Tree – Dress Ratings

Questions?

Comments?

Poison-tipped darts?