Question

Why is it important to understand clustering methodologies? Give one example of a business that has implemented clustering. What were the insights gained? Were there any special considerations that the business had to make when analyzing the results?

Answer 1

Clustering is the task of grouping a set of objects in such a way that objects in the same cluster are more similar to each other than other cluster.Since clustering technique generates natural cluster and is not dependent on any driving objective function.Hence , clustering is generally used to do initial profiling of the portfolio.After having a good understanding of portfolio, an objective modelling technique is used to build specific strategy.

One Example of a business that has implemented clustering is K- Means Clustering, uses for customer segmenting on the basis of customer location, demographic, income in my project.

I were insight gained that that customer those age 18-25 book less flight, 25-35 book more flight.