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10 Contents

Definitions, Characteristics, and Benefits 222
▶ ApplicAtion cAse 5.2 Harnessing Analytics to Combat Crime:
Predictive Analytics Helps Memphis Police Department Pinpoint Crime
and Focus Police Resources 226
How Data Mining Works 227
Data Mining Versus Statistics 230
5.3 Data Mining Applications 231
▶ ApplicAtion cAse 5.3 A Mine on Terrorist Funding 233
5.4 Data Mining Process 234
Step 1: Business Understanding 235
Step 2: Data Understanding 235
Step 3: Data Preparation 236
Step 4: Model Building 238
▶ ApplicAtion cAse 5.4 Data Mining in Cancer Research 240
Step 5: Testing and Evaluation 241
Step 6: Deployment 241
Other Data Mining Standardized Processes and Methodologies 242
5.5 Data Mining Methods 244
Classification 244
Estimating the True Accuracy of Classification Models 245
Cluster Analysis for Data Mining 250
▶ ApplicAtion cAse 5.5 2degrees Gets a 1275 Percent Boost in Churn
Identification 251
Association Rule Mining 254
5.6 Data Mining Software Tools 258
▶ ApplicAtion cAse 5.6 Data Mining Goes to Hollywood: Predicting
Financial Success of Movies 261
5.7 Data Mining Privacy Issues, Myths, and Blunders 264
Data Mining and Privacy Issues 264
▶ ApplicAtion cAse 5.7 Predicting Customer Buying Patterns—The
Target Story 265
Data Mining Myths and Blunders 266
Chapter Highlights 267 • Key Terms 268
Questions for Discussion 268 • Exercises 269
▶ end-of-chApter ApplicAtion cAse Macys.com Enhances Its
Customers’ Shopping Experience with Analytics 271
References 271

Chapter 6 techniques for Predictive Modeling 273
6.1 Opening Vignette: Predictive Modeling Helps Better
Understand and Manage Complex Medical
Procedures 274
6.2 Basic Concepts of Neural Networks 277
Biological and Artificial Neural Networks 278
▶ ApplicAtion cAse 6.1 Neural Networks Are Helping to Save Lives in
the Mining Industry 280
Elements of ANN 281

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