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Lecture notes Data science for Business
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This is a 42 page summary of the lecture notes of the course data science, digital business MSc. UvA. Including visuals
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Data Science for Business – Lecture notesDSB: why? 3 challenges:
1. • Business and IT- people come from different cultures, have different interests, talk “different”
languages, etc.
• We need professionals that understand both worlds and can bridge the gap between these worlds
• the managers need to understand the fundamentals of data science to effectively leverage a data
science team for making better decisions.
2.We have data…. Lot’s of data
3. Organisations are increasingly complex due to the fact they operate in complex supply chains and
business networks, they change fast and often, their environments changes as well.
→ One of the ways to manage this complexity is to use data analysis and machine learning to beat
the competition
Data science: combination of statistics, machine learning and databases
Knowledge discovery process (KDP)
→ data analytics method
ETL = extract, transform and load
70% of the time is spend on transforming data usually
once transformed, you can look at the patterns from the data → done with Rapidminer in this course
statistics, machine learning and data mining
statistics:
• More theory based
• More model based
• More focused on testing hypotheses
• Top-down approach
• Explanatory model → cannot predict
Machine learning:
• More heuristic
• Focused on improving performance of a learning agent
, • Also look at real-time learning and robotics – areas not part of data mining
→ born from computer scientists, defining data and trying to analyze it
• Bottom-up approach: look at the data, try to see patterns etc and then come up with a
model
• Predictive model: predict the future
Data mining and knowledge
• Integrated theory and heuristics
• Focus on the entire process of knowledge discovery, including data cleaning, learning, and
integration and visualization of results
• Distinctions between the 3 is fuzzy
Data mining versus….
• Data warehousing/storage
o Data warehouses coalesce data from across an enterprise, often from multiple
transaction-processing systems
▪ Database: current data for transactions etc. (for a certain month)
→ excel not an important skill – you need to have skills in SQL
Excel – gives only few dimensions per sheet → you need to make a data
warehouse in order to have all features.
• Querying / Reporting (SQL, Excel, QBE, other GUI-based querying)
o Very flexible interface to ask factual questions about data
o No modeling or sophisticated pattern finding
o Most of the cool visualizations
• OLAP – On-line Analytical Processing
o OLAP provides easy-to-use GUI to explore large data collections
o Exploration is manual; no modeling
o Dimensions of analysis preprogrammed into OLAP system
Datawarehouse vs database:
data warehouse = OLAP. You have historical data, which you are processing → database is just a
technical system which handles current customer transactions
o This course; Jump straight to data mining as opposed to understanding the data warehouses
as there are people in companies taking care of this → to complex to understand quickly
types of machine learning
1. Supervised learning:
data as a baby or dog: you teach the baby things, and you expect the baby to learn it and remember
it → your train the algorithm and hopefully learns from the data
2. unsupervised learning: you give the data to the algorithms and in finds it ways through and
discovers itself
3. reinforcement learning: trying to learn from that data again in a loop
Two types of supervised learning:
, 1. Classification: classifying whether a student passes or fail
2. Regression: you want to know the average number a student actually scores (not simply a
pass/fail → but you want an actually number)
Terminology
attributes/ features (variables in statistics)
target attribute: the last thing you would like to predict
dimensionality = number of dimensions (features/attributes) of the dataset added together
→ the more of these you have, the higher the dimensionality is of you dataset –
more dimensions = harder to analyze, so you want to reduce this to make it easier
Data mining
Data Mining Tasks: Classification
Learn a method for predicting the instance class from pre-labeled (classified) instances
Many approaches:
- Statistics
- Decision Trees
- Neural Networks
data in data mining
Need to know the types of data before analyzing:
• Categorical – binomial data (pass/fail)
o Nominal data: will it rain or not
o Ordinal: you know that a class is better than another → and therefore it becomes
more of a ranking in your data
• Numerical:
o Interval: when the 0 point is not fixed – (you can only add or subtract) - temperature
, o Ratio: the 0 point is fixed (you can divide) – height, weight etc
How does data mining/ML work?
DM extracts patterns from data
Pattern = A mathematical (numeric and/or symbolic) relationship among data items
Types of patterns
• Association
• Prediction
• Cluster (segmentation)
• Sequential (or time series) relationships
Common data mining tasks
→ most of these can be supervised and unsupervised – you need to know more about the method in
order to make these statements.
Knowledge discovery process flow, according to CRISP-DM
• Business Understanding + Data Understanding + Data Preparation 80% of the time
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