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Introduction to R for Business Intelligence

You're reading from   Introduction to R for Business Intelligence Profit optimization using data mining, data analysis, and Business Intelligence

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Product type Paperback
Published in Aug 2016
Publisher Packt
ISBN-13 9781785280252
Length 228 pages
Edition 1st Edition
Languages
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Author (1):
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Jay Gendron Jay Gendron
Author Profile Icon Jay Gendron
Jay Gendron
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Table of Contents (13) Chapters Close

Preface 1. Extract, Transform, and Load FREE CHAPTER 2. Data Cleaning 3. Exploratory Data Analysis 4. Linear Regression for Business 5. Data Mining with Cluster Analysis 6. Time Series Analysis 7. Visualizing the Datas Story 8. Web Dashboards with Shiny A. References
B. Other Helpful R Functions C. R Packages Used in the Book
D. R Code for Supporting Market Segment Business Case Calculations

Partitioning using k-means clustering


The goal of partitioning is to place partitions and create clusters that reduce the within cluster sum of square error. In an extreme case, you could achieve a zero sum of square error if every data point existed in its own cluster. This would not be very useful though, would it? So partitioning is about finding the balance between reducing error and finding the right number of clusters.

A commonly used partitioning method is k-means. You will more often see it referred to as k-means clustering. K-means clustering places centers at k locations in the observation space to serve as the means of these k clusters. For example, if you were performing k-means clustering with k = 3, you would place three cluster means somewhere in the data space to set the initial conditions of the analysis.

K-means iteratively steps through the following three primary steps:

  1. Specify the number of clusters, k. Assign their initial locations randomly or in specific locations.

  2. The...

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