The IT Department Has Recommended That Otto's Use Data Mining

question 60

Multiple Choice

The IT department has recommended that Otto's use data mining to build customer profiles and prepare business models to predict future purchasing behavior. Otto's CEO is not in favor of data mining, and argues that it shouldn't be used. Which of the following statements, if True, would support the CEO's argument for NOT using data mining?

• A) Data mining can build profiles of Otto's best customers and then use behavioral characteristics to identify new customers.
• B) Data mining is helpful to salespeople as it can identify customers that would benefit from an individual sales call, or provide them with buying reminders for particular products.
• C) Data mining can be used to track online behavior of the customers by the use of cookies, and identify customer interests and business needs.
• D) A privacy paradox exists whereby mining personal information is intrusive, but also leads to better targeting.
• E) Data mining can help spot trends and patterns in customer purchases, and enable the marketing department to shape advertising around these trends.

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Definitions:

Standard Deviation

An indicator of the range or spread of values in a dataset, showing how much the values differ from the average.

Proportion

A part, share, or number considered in comparative relation to a whole.

Nonconforming Items

Products or outputs that do not meet predetermined standards or specifications.

Samples

Samples refer to a set of data or observations taken from a larger population and used for statistical analysis.