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Business Intelligence

Business Intelligence: Data Mining and Optimization for Decision Making Carlo Vercellis © 2009 John Wiley & Sons, Ltd. ISBN: 978-0-470-51138-1

Business Intelligence: Data Mining and Optimization for Decision Making
Carlo Vercellis
Politecnico di Milano, Italy.

A John Wiley and Sons, Ltd., Publication

This edition first published 2009 © 2009 John Wiley & SonsLtd Registered office John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, United Kingdom For details of our global editorial offices, for customer services and for information about how to apply for permission to reuse the copyright material in this book please see our website at www.wiley.com. The right of the author to be identified as the author of this work hasbeen asserted in accordance with the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by the UK Copyright, Designs and Patents Act 1988, without the prior permission of the publisher.Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. Designations used by companies to distinguish their products are often claimed as trademarks. All brand names and product names used in this book are trade names, service marks, trademarks or registered trademarks of their respective owners. The publisheris not associated with any product or vendor mentioned in this book. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold on the understanding that the publisher is not engaged in rendering professional services. If professional advice or other expert assistance is required, the services of a competent professional shouldbe sought.

Library of Congress Cataloging-in-Publication Data Vercellis, Carlo. Business intelligence : data mining and optimization for decision making / Carlo Vercellis. p. cm. Includes bibliographical references and index. ISBN 978-0-470-51138-1 (cloth) – ISBN 978-0-470-51139-8 (pbk. : alk. paper) 1. Decision making–Mathematical models. 2. Business intelligence. 3. Data mining. I. Title.HD30.23.V476 2009 658.4 038–dc22 2008043814 A catalogue record for this book is available from the British Library. ISBN: 978-0-470-51138-1 (Hbk) ISBN: 978-0-470-51139-8 (Pbk) Typeset in 10.5/13pt Times by Laserwords Private Limited, Chennai, India Printed in the United Kingdom by TJ International, Padstow, Cornwall

Contents
Preface xiii

I

Components of the decision-making process
. . .. . . . . . . . . . . . . . . . . . . . . . . .

1
3 3 6 8 9 11 13 14 17 18 21 21 23 24 25 29 33 35 36 40 43 45 45 49 50

1 Business intelligence 1.1 Effective and timely decisions . . . . . . . . . . . . . . . 1.2 Data, information and knowledge . . . . . . . . . . . . . 1.3 The role of mathematical models . . . . . . . . . . . . . 1.4 Business intelligence architectures . . . . . . . . . .. . . 1.4.1 Cycle of a business intelligence analysis . . . . . 1.4.2 Enabling factors in business intelligence projects . 1.4.3 Development of a business intelligence system . . 1.5 Ethics and business intelligence . . . . . . . . . . . . . . 1.6 Notes and readings . . . . . . . . . . . . . . . . . . . . . 2 Decision support systems 2.1 Definition of system . . . . . . . . . . . . . . . . . 2.2Representation of the decision-making process . . . 2.2.1 Rationality and problem solving . . . . . . . 2.2.2 The decision-making process . . . . . . . . 2.2.3 Types of decisions . . . . . . . . . . . . . . 2.2.4 Approaches to the decision-making process 2.3 Evolution of information systems . . . . . . . . . . 2.4 Definition of decision support system . . . . . . . . 2.5 Development of a decision...