DATA MINING
What is Data Mining?
Data mining is the process of analyzing data to mine from it useful information which is further used to aid decision making through inference. To be more specific, data mining leads to identifying patterns or trends in given sets of data to make useful conclusions. Data mining tools and softwares makes use of elaborate algorithms to sift through large data sets to automatically segregate data and evaluate the probability of future events. Hence, data mining is aptly referred to as Knowledge Discovery in Data (KDD).
Where is it used? What are the most common applications?
Nowadays, all kinds of businesses are using data mining tools to identify trends and patterns conducive to the growth of their corporation.
For example, large supermarket chains like WalMart and Cosco rely on knowledge discovery techniques to identify numerous consumer factors that affect management processes. Factors such as identifying the products that have higher demands, effects of seasonal changes in purchasing patterns, effect of the location of the store, etc. are just a few of the many inferences that can be made by analyzing the massive amount of data being generated at these stores on an everyday basis.
Another very important application of data mining is that in Univerisities and educational institutions. Data mining in education plays a huge role by making information available for devising new lesson plans, improved teaching methodology and drawing strategies to improve the overall performance of students. Data mining operations on class quizzes, surveys, assignments and other evaluation work reveals surprising amount of information that helps educationalist rethink the approach to quality education.
Data mining is also important when it comes to industries dealing with supply chain management and production, service enterprises and basically any type of industry dealing with consumer goods. Using data mining and analytics, industries and policy makers are able to better understand consumer behavior and predict future purchasing trends. By altering production and other processes to suit the needs of the future, industries are able to up their game and eliminate competition.
Another area of the spectrum where data mining plays an important role is that of the banking and finance sector. By examining customer data, data generated by the interactions between the company and consumers and other data generated within the company, a bank or insurance company is able to identify a demographic which when targeted with the suitable approach can maximize the prospects of increasing profits. This may be in terms of getting more and more people to open accounts with their bank or issue a policy from their firm, etc.
Thus, data mining has a wide range of applications and can find respectable place in almost all industries. Can you think of any other applications of data mining? Let us know in the comments below.
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