Data Mining Applications Customer Relationship Management Maximize return on marketing campaigns Improve customer retention(churn analysis) Maximize customer value(cross-, up-selling Identify and treat most valued customers Banking Other Financial Automate the loan application process Detecting fraudulent transactions Maximize customer value(cross-, up-selling) Optimizing cash reserves with forecasting Copynight@ 2014 Pearson Education, Inc Slide 4-16
Copyright © 2014 Pearson Education, Inc. Slide 4- 16 Data Mining Applications ▪ Customer Relationship Management ▪ Maximize return on marketing campaigns ▪ Improve customer retention (churn analysis) ▪ Maximize customer value (cross-, up-selling) ▪ Identify and treat most valued customers ▪ Banking & Other Financial ▪ Automate the loan application process ▪ Detecting fraudulent transactions ▪ Maximize customer value (cross-, up-selling) ▪ Optimizing cash reserves with forecasting
Data Mining Applications Retailing and Logistics Optimize inventory levels at different locations Improve the store layout and sales promotions Optimize logistics by predicting seasonal effects Minimize losses due to limited shelf life Manufacturing and Maintenance Predict/prevent machinery failures Identify anomalies in production systems to optimize the use manufacturing capacity Discover novel patterns to improve product quality Copynight@ 2014 Pearson Education, Inc Slide 4-17
Copyright © 2014 Pearson Education, Inc. Slide 4- 17 Data Mining Applications ▪ Retailing and Logistics ▪ Optimize inventory levels at different locations ▪ Improve the store layout and sales promotions ▪ Optimize logistics by predicting seasonal effects ▪ Minimize losses due to limited shelf life ▪ Manufacturing and Maintenance ▪ Predict/prevent machinery failures ▪ Identify anomalies in production systems to optimize the use manufacturing capacity ▪ Discover novel patterns to improve product quality
Data Mining Applications Brokerage and Securities Trading Predict changes on certain bond prices Forecast the direction of stock fluctuations Assess the effect of events on market movements Identify and prevent fraudulent activities in trading Insurance Forecast claim costs for better business planning Determine optimal rate plans Optimize marketing to specific customers Identify and prevent fraudulent claim activities Copynight@ 2014 Pearson Education, Inc Slide 4-18
Copyright © 2014 Pearson Education, Inc. Slide 4- 18 Data Mining Applications ▪ Brokerage and Securities Trading ▪ Predict changes on certain bond prices ▪ Forecast the direction of stock fluctuations ▪ Assess the effect of events on market movements ▪ Identify and prevent fraudulent activities in trading ▪ Insurance ▪ Forecast claim costs for better business planning ▪ Determine optimal rate plans ▪ Optimize marketing to specific customers ▪ Identify and prevent fraudulent claim activities
Data Mining Applications Computer hardware and software Science and engineering Government and defense Homeland security and law enforcement Travel industry Healthcare Highly popular application Medicine areas for data mining Entertainment industry Sports Etc Copynight@ 2014 Pearson Education, Inc Slide 4-19
Copyright © 2014 Pearson Education, Inc. Slide 4- 19 Data Mining Applications ▪ Computer hardware and software ▪ Science and engineering ▪ Government and defense ▪ Homeland security and law enforcement ▪ Travel industry ▪ Healthcare ▪ Medicine ▪ Entertainment industry ▪ Sports ▪ Etc. Highly popular application areas for data mining
Application Case 4.3 A Mine on Terrorist Funding Questions for Discussion 1. How can data mining be used to fight terrorism? Comment on what else can be done beyond what is covered in this short application case 2. Do you think data mining, while essential for fighting terrorist cells, also jeopardizes individuals rights of privacy? Copynight@ 2014 Pearson Education, Inc Slide 4-20
Copyright © 2014 Pearson Education, Inc. Slide 4- 20 Application Case 4.3 A Mine on Terrorist Funding Questions for Discussion 1. How can data mining be used to fight terrorism? Comment on what else can be done beyond what is covered in this short application case. 2. Do you think data mining, while essential for fighting terrorist cells, also jeopardizes individuals’ rights of privacy?