Market basket analysis

- Association Rule
Mining
August 21 2013

Market basket analysis

Customers

RFID/Barcode

Transaction Data

ARM

Revenue

Marketing Technique Business Strategy

ASSOCIATION RULE MINING (ARM)

TID

Items

Bread, Milk

Bread, diaper, Beer, Eggs

Frequent Itemsets

Support

Beer, Diaper

=4/5

Milk, Beer

=3/5

Milk, Diaper, Beer, Coke

Bread, Beer

=3/5

Bread, Milk, Diaper, Beer

Bread, Milk

=3/5

Bread, Milk, Diaper, Coke, Beer

Milk, Beer, Diaper

= 3/5

Representation of Association Rule : X Y

X and Y are itemsets
E.g. {Milk, Diaper} { Beer} - 100%(3/3)
E.g. { Beer} {Milk, Diaper} 75% (4/3)
Itemset
A collection of one or more items
E.g. {Milk, Diaper, Beer}=3
4

ARM(Contd.)

Support(S)

Confidence(C)

Fraction of transactions that contain an itemset

E.g. Support = 3/5 = 0.6

Measures how often items in Y appear in transactions that contain X

E.g. Confidence = 3/3 = 1

Association Rules

Find all itemsets that have minimum support (frequent itemsets)

Use the frequent itemsets to generate the desired association rules

LOGISTICS SLOTTING

Identify the relationship among the parts those are shipped

together.

Slot the parts those are shipped together into one area ex:
Rack, Crib etc.,

Slotting together parts with strong confidence and support

helps reducing the manual touches.

Excel tool Input for Market basket

analysis