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ACCA Strategic Professional · Advanced Performance Management · Data science and analytics

A supermarket chain analyses till receipts and finds that customers who buy nappies on Friday evenings often also buy beer. Which data mining technique does this represent, and how might management use it?

This is association rule mining, or market basket analysis, which finds items commonly purchased together. Management can use it to decide product placement, bundle offers and targeted promotions, rather than forecasting budgets or assessing credit risk.

  1. AAssociation rule mining; to plan product placement and promotionsCorrect
  2. BTime-series forecasting; to set annual budgets
  3. CClustering; to label customers by credit risk
  4. DRegression; to predict nappy price elasticity

Explanation

Finding items frequently bought together is association rule mining, also called market basket analysis. Management can use it for shelf placement, bundling and targeted promotions. The other techniques serve different purposes.

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