Data Shoes

SQIT 3033
KNOWLEDGE ACQUISITION IN DECISION MAKING

GROUP A
GROUP PROJECT: DATA SHOES

PREPARED FOR:
DR. IZWAN NIZAL BIN MOHD SHAHARANEE

PREPARED BY:
AZIZAH BINTI AZIZ 211299
SITI ZULAILA BINTI MD ZAINAL ABIDIN 212193
SITI SOLEHAH BINTI ABDUL REJAB 212302

SQIT 3033 KNOWLEDGE ACQUISITION IN DECISION MAKING
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Table of Contents
CHAPTER 1 INTRODUCTION .............................................................................. 4
1.1 Data Background ................................................................................................... 4
CHAPTER 2 PROBLEM STATEMENT ................................................................ 5
2.1 The Use of Specific Solution Techniques .............................................................. 5
2.1.1 Decision Tree ............................................................................................... 5
2.1.2 Regression .................................................................................................... 6
2.1.3 Neural Network............................................................................................ 7
CHAPTER 3 RESEARCH METHODOLOGY ...................................................... 8
3.1 Knowledge Discovery in Database (KDD)............................................................ 8
3.1.1 Selection....................................................................................................... 8
3.1.2 Pre-processing .............................................................................................. 9
3.1.3 Transformation........................................................................................... 11
3.1.4 Data Mining ............................................................................................... 12
3.1.5 Interpretation & Evaluation Process .......................................................... 13
CHAPTER 4 RESEARCH SOLUTION ................................................................ 14
4.1 Steps Involving in EXCEL .................................................................................. 14
4.1.1 Original Data.............................................................................................. 14
4.1.2 Editing Data ............................................................................................... 15
4.2 Steps Involving in SAS Enterprise Miner ............................................................ 16
4.2.1 Creating New Folder .................................................................................. 17
4.2.2 Import Data ................................................................................................ 18
4.2.3 Nodes for Decision Tree ............................................................................ 19
4.2.3.1 Input Data Source .......................................................................... 19
4.2.3.2 Data Partition ................................................................................. 20
4.2.3.3 Tree Model .................................................................................... 22

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4.2.4 Nodes for Neural Network ......................................................................... 31
4.2.5 Nodes for Regression ................................................................................. 35
CHAPTER 5 RESULT AND DISCUSSION ......................................................... 37
5.1 Test for Misclassification Rate ............................................................................ 36
5.1.1 Using Assessment Node ............................................................................ 49
CHAPTER 6 REFERENCES ................................................................................. 51

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CHAPTER 1
INTRODUCTION
1.1 Data Background
Shoes are the most commonly used for people nowadays. It takes us everywhere, let us walk
wherever we want and are one of the parts of our body that hardest work in day to day. Wearing
shoes is very important due to a number of reasons. One of the reasons why we must wear shoes
is because of it protects our feet from germs. Besides, it keeps our feet warm, clean and safe as
well. However, for the rich people will most concern with brand names and indeed it is probably
very expensive shoes. Proper walking shoes will maintain the correct walking techniques and
prevent feet injuries.
Due to that, for our project in Knowledge Acquisition in Decision Making (SQIT3033),
we were given a set of data shoes to be analysis. The total number of data shoes consists 395 and
followed with several attributes which are region, product, subsidiary, stores, sales, target sales,
inventory and returns. .In this report, our group wants to focus on the 3 parameter that is decision
tree, regression and neural network to examine the data shoes set. We want to know which one
from this three parameter will give us the best model to make prediction for determine either
achieves the target of sales or not by using data shoes set. Therefore, this report will described all
work that we have done to examine the data shoes set using the SAS Enterprise Miner.

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CHAPTER 2
PROBLEM STATEMENT
The guide clearly states that there is no simple rule for determining whether the observations are
listed into the item of a shoes; no rule like stores less than or greater is achieve the target sales
or not.
From above statement, we need to categorize the classes of target sales for determining
the achievement of data shoes.
2.1 The Use of Specific Solution Techniques
2.1.1 Decision Tree
Decision tree is a tree-shaped structure that represents set of decisions or prediction of data
trends. It is suitable to describe sequence of interrelated decisions or prediction of future data
trends and has the capability to classify entities into specific classes based on feature of entities.
Each tree consists of three types of nodes: root node, internal node and terminal node/leaf. The
top most nodes are the root node and it represents all of the rows in the dataset. Nodes with child
nodes are the internal nodes while nodes without child node are called the terminal node or leaf.
A common algorithm for building a decision tree selects a subset of instances from the training
data to construct an initial tree. The remaining training instances are then used to test the
accuracy of the tree. If any instance is incorrectly classified the instance is added to the current
set of training data and the process is repeated. A main goal is to minimize the number of tree
levels and tree nodes, thereby maximizing data generalization. Decision trees have been
successfully applied to real problem, are easy to understand, and map nicely to a set of
production rules.

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2.1.2 Regression
The Regression node in Enterprise Miner does either linear or logistic regression depending upon
the measurement level of the target variable. Linear regression is done if the target variable is an
interval variable. In linear regression the model predicts the mean of the target variable at the
given values of the input variables. Logistic regression is done if the target variable is a discrete
variable. In logistic regression the model predicts the probability of a particular level(s) of the
target variable at the given values of the input variables. Because the predictions are
probabilities, which are bounded by 0 and 1 and are not linear in this space, the probabilities
must be transformed in order to be adequately modeled. The most common transformation for a
binary target is the logic transformation. Probity and complementary log-log transformations are
also available in the regression node. There are three variable selection methods available in the
Regression node of Enterprise Miner. Forward first selects the best one-variable model. Then it
selects the best two variables among those that contain the first selected variable. This process
continues until it reaches the point where no additional variables have a p-value less than the
specified entry p-value. Backward will starts with the full model. Next, the variable that is least
significant, given the other variables, is removed from the model. This process continues until all
of the remaining variables have a p-value less than the specified stay p value. Stepwise is a
modification of the forward selection method. The difference is that variables already in the
model do not necessarily stay there. After each variable is entered into the model, this method
looks at all the variables already included in the model and deletes any variable that is not
significant at the specified level. The process ends when none of the variables outside the model
has a p-value less than the specified entry value and every variable in the model is significant at
the specified stay value.

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2.1.3 Neural Network
An artificial neural network is a network of many simple processors ("units"), each possibly
having a small amount of local memory. The units are connected by communication channels
("connections") that usually carry numeric (as opposed to symbolic) data encoded by various
means. The units operate only on their local data and on the inputs they receive via the
connections. The restriction to local operations is often relaxed during training. More
specifically, neural networks are a class of flexible, nonlinear regression models, discriminant
models, and data reduction models that are interconnected in a nonlinear dynamic system. Neural
networks are useful tools for interrogating increasing volumes of data and for learning from
examples to find patterns in data. By detecting complex nonlinear relationships in data, neural
networks can help make accurate predictions about real-world problems.

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CHAPTER 3
RESEARCH METHODOLOGY
The method that used in research methodology is known knowledge discovery (KDD). KDD is
non-trivial extraction of implicit, previously unknown and potential useful information from
data. This method used to find or digest hidden information in database and convert unknown or
hidden pattern into useful, understandable and informative way. KDD process contains 5 steps
that are selection, pre-processing, transformation, data mining, interpretation and evaluation.
3.1. Knowledge Discovery in Database (KDD)
3.1.1 Selection
Generally, selection process is the data needs for the data mining process may be
obtained from many different and heterogeneous data sources. Data selection process is
to acquire the most appropriate size that useful to the KDD process. Using sampling
method if data too big. Sampling method has two types that are probability sampling
(randomly chosen) and non-probability sampling (expert judgment).
(1) Central Limit Theorem
The size of sample, n must be greater than 30 (n >30). If n is the size of population,
standard error is 0.

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(2) Based on confidence interval and acceptance error.

(3) Subject to data availability (more is merrier).
3.1.2 Pre-processing
Data pre-processing is a data mining technique that involves transforming raw data into
an understandable format. Real-world data is often incomplete, inconsistent, and/or
lacking in certain behaviours or trends, and is likely to contain many errors. Data pre-
processing is a proven method of resolving such issues. Data processing can be
categorized into few methods:
Data cleaning
Data cleaning is a process of detecting and correcting (or removing) corrupt or
inaccurate records from a record set, table, or database. The purpose of using data
cleaning is to identifying incomplete, incorrect, inaccurate, irrelevant, etc. parts of
the data and then replacing, modifying, or deleting this dirty data. Data cleaning
can handle incomplete, noisy and inconsistent data.
o Incomplete data is the missing value happens due to improper data
collection methods. During collection of data, there may happen no
recorded value for certain attribute and causing incomplete of data. To
overcome this problem, we can use mean-value, estimate the probable
value using regression, using constant value or ignore the missing record.

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o Noisy data is random error or variance in data. This happens due to
corrupted data transmission, technological limitation. During transmission
data into certain software such as SPSS or SAS, we may key in wrong
data in it, thus, this will cause noisy data happened. To solve this problem,
we can use binning method or outlier removal method.
o Inconsistent data means the data contains replication or possibly
redundancy data. Method to overcome this problem is removing redundant
or replicate data.

Data integration involves combining data residing in different sources and
providing users with a unified view of these data. Data comes from different
sources with different naming standard. This will cause in inconsistencies and
redundancies. There are several ways to handle this problem:
Consolidate different source into one repository (using metadata).
Correlation analysis (measure the strength of relationship between different
attribute)

Data reduction is the transformation of numerical or alphabetical digital
information derived empirical or experimentally into a corrected, ordered, and
simplified form. The basic concept is the reduction of multitudinous amounts of
data down to the meaningful parts. This is to increase efficiency, can reduce the
huge data set into a smaller representation. Several techniques can be used in data
reduction such as data cube aggregation, dimension reduction, data compression
and discretization.

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3.1.3 Transformation
In the transformation process, which also known as data normalization, is basically re-scale the
data into a suitable range. This process is important because it can increase the processing speed
and reduce the memory allocation. There are several methods in transformation:
(1) Decimal Scaling
(2) MinMax
(3) ZScore
(4) Logarithmic Normalization.
We choose Min Max normalization to solve our data. Min Max normalization is linear
transformation of the original input to newly specified range. The formula use is

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3.1.4 Data Mining
Data mining is the use of algorithms to extract the information and patterns by the KDD process.
This step applies algorithms to the transformed data to generate the desired results. In this
project, we are using SAS Enterprise Miner to build up the comparing models. In the SAS
Enterprise Miner, we are using decision tree method. Decision tree is a tree-shaped structure that
represents set of decisions or prediction of data trends. It is suitable to describe sequence of
interrelated decisions or prediction of future data trends and has the capability to classify entities
into specific classes based on feature of entities. Each tree consists of three types of nodes: root
node, internal node and terminal node/leaf. The top most nodes are the root node and it
represents all of the rows in the dataset. Nodes with child nodes are the internal nodes while
nodes without child node are called the terminal node or leaf. A common algorithm for building
a decision tree selects a subset of instances from the training data to construct an initial tree. The
remaining training instances are then used to test the accuracy of the tree. If any instance is
incorrectly classified the instance is added to the current set of training data and the process is
repeated. A main goal is to minimize the number of tree levels and tree nodes, thereby
maximizing data generalization. Decision trees have been successfully applied to real problem,
are easy to understand, and map nicely to a set of production rules. The resulting trees are
usually quite understandable and can be easily used to obtain a better understanding of the
phenomenon in question.

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Picture 1: Shoes variables

3.1.5 Interpretation & evaluation process
In interpretation and evaluation process, certain data mining output is non-human understandable
format and we need interpretation for better understanding. So, we convert output into an easy
understand medium.

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CHAPTER 4
RESEARCH SOLUTION

4.1 Step to import data from EXCEL to SAS
4.1.1 Original Data
Our data is about Shoes. The original data which is consist of 395 data with 8 variables. From the
data we would like to know either the target sales are achieves or not.

Picture 2: Original data
However, not all attribute data is valid. For instance, SALES attribute and target sales attributes,
they are referring to the same things. As the problem needs to be solved by classification,
therefore, the SALES attribute is removed.

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4.1.2 Editing Data
Figure above shows the cleaned data that will be imported and used into SAS. The red colored is
variables that related to sales.

Picture 3: Variables that related to target sales

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4.2 Steps Involving in SAS Enterprise Miner
For our project, it is about a classification of data SHOES (sales at Africa, Asia, Canada, Central
America/Caribbean, Eastern Europe, Middle East, Pacific, South America, United States, and
Western Europe) into YES or NO for achieving a sales target. Thus, we used regression, neural
network and decision tree by using the SAS Enterprise Miner to solve the data set given. SAS
Enterprise Miner helps in developing models quickly by streamlining the data mining process.
Below are the step of developing model using SAS enterprise miner.

Picture 4: The overall scenario

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4.2.1 Creating new folder
Create 1 folder and rename as SQIT 3033. Copy the data shoes into the folder and open the SAS.
To select the enterprise miner in the tool strip menu choose Solution > Analysis > Enterprise
miner.

Picture 5: Creating a new folder
To create a new project from the SAS menu tool strip, File>New>Project. Rename the project
as SHOES and click browse to change the directory of your file location. Click create button
when finish entering all information. Project will create and we can see the project name in the
upper left hand corner in the diagram tab of a window that we will refer to as the project
navigator. A default diagram labelled Untitled will be created underneath it. To rename the
diagram, simply right click on the diagram icon and choose rename. Type a new name
classification model.

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4.2.2 Import Data
Go to File Import Data to change the data format from Excel to SAS format so it can be read
and analyzed later using SAS Enterprise Miner.

Picture 6: Import Data
The next step is selecting the data in Excel format by browsing the location where its saved.
Figures below show the details steps on how to import the Excel data to SAS.

Picture 7: Steps on how to import Excel data to SAS

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4.2.3 Nodes for Decision Tree
4.2.3.1 Input Data Source

Picture 8: Input data source
Drag the data input source icon to the workspace. Open the input data source icon that you just
dropped in your diagram workspace by double-clicking on the icon. The input data source
window will now appear. In the source data field click the select button, a pop window will
appear, from the library field drop down menu choose EMDATA option and your data will
appear in the white workspace. EMDATA can make sure that our work is saved. Double click on
your data set.

Picture 9: Emdata
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4.2.3.2 Data Partition
Data partition is important as its help to keep a subset of available data out of analysis and use it
later for evaluation purpose.
Picture 10: Data partition
The function of this node is to partition the input data sets of shoes into a training, validation and
test model. The training data set is used for preliminary model fitting. The validation data set is
used to monitor and tune the free model parameters during estimation and is also used for model
assessment. The test data set is an additional holdout data set that we can use for model
assessment. Right click on this data partition node then click open and we set the percentage of
each partition and we decide to set 70% for training, 0% for validation and 30% for test.
Partition:

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We also used Transform Variable node and connect it with Data Partition node.

Picture 11: Connection for Transform variables
The function of the Transform Variables node is to create new variables or variables that
are transformations of existing variables in the data. Transformations are useful when we want to
improve the fit of a model to the data. The Transform Variables node also enables us to create
interaction variables. Sometimes, input data is more informative on a scale other than that on
which it was originally collected. For example, variable transformations can be used to stabilize
variance, remove nonlinearity, improve additivity and counter non-normality. Therefore, for
many models, transformations of the input data (either dependent or independent variables) can
lead to a better model fit. These transformations can be functions of either a single variable or of
more than one variable. In our project, we use the TransformVariables node to make variables
better suited for decision tree, logistic regression models and neural networks.

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4.3.3.3 Tree Model
Picture 12: Decision Tree
After that we choose Decision Tree node and connect it with Transform node. The function of
Decision Tree is used to fit decision tree models to the data. When we run the Decision Tree
node in automatic mode, it automatically ranks the input variables, based on the strength of their
contribution to the tree. This ranking can be used to select variables for use in subsequent
modelling. We can override any automatic step with the option to define a splitting rule and
prune explicit tools or sub-trees. Interactive training enables us to explore and evaluate a large
set of trees as we develop them.

Picture 13: The process of Decision Tree
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Add Decision Tree Nodes We have three decisions three in our model.
1) Decision Tree connect from Data Partition without connect to Assessment.
2) Decision Tree connects from Data Partition and Assessment.
3) Decision tree connects from Transform Variables and Assessment.
*We draw the line to connect this node.
Right click at Decision Tree node and then click Open.
Decision Tree (2 Splits)
Variables:

Basic:

From the result above, we can say that there are two numbers of branches from a node.
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Then, we click Run to view the results.

Picture 14: Result tree 2 Splits
- Based on the training data set, 2 leaves in the tree are selected.
- The misclassification rate in training data set is 0.0505
Next, go to View and then choose Tree to view the decision tree results.

Then, right click at the blank space and choose view competing splits
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From the table above, we can conclude that RETURNS variable was used for first split.
The others variable such as INVENTORY, STORES, PRODUCT and REGION are the
connecting split for the first node.
Decision Tree (3 Splits)
Variables:

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Basic:

From the result above, we can say that there are four numbers of branches from a node.

Picture 15: Results tree 3 Splits

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Then, right click at the blank space and choose view competing splits.

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Decision Tree (2 Splits/Maximize Normality)
Variables:

Basic:

From the result above, we can say that there are two numbers of branches from a node.

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Picture 16: Results tree 2 Splits/Maximize Normality

Then, right click at the blank space and choose view competing splits.
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4.2.4 Nodes for Neural Network

Neural Network node is used to construct, train, and validate multilayer, feed forward neural
networks. We add Neural Network node and connect with Transform Variables node and
Assessment node. By default, the Neural Network node automatically constructs a network that
has one hidden layer consisting of three neurons. In general, each input is fully connected to the
first hidden layer, each hidden layer is fully connected to the next hidden layer, and the last
hidden layer is fully connected to the output. The Neural Network node supports many variations
of this general form. In this project, we click Open at neural network node and this is the result
for:
Variables:

Basic:

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Click the button of Multilayer Perception, for Hidden neurons, Set number is 2. There are 2
hidden nodes.

Then, right click at neural network then click run. Then click weights. There are H11 and
H12 relationship.

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Tables:

Misclassification rate in training data set = 0
Misclassification rate in testing data set = 0.0593

Based on the result, we can say that the Neural Network model is not the best as it contain error.
Then, from table weight, we can make this table of summary to identify the relationship
between variables and H11 and H12.
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Picture 17: Neural Network 1 hidden layer and 2 hidden node

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4.2.5 Nodes for Regression
The function of Regression node is to fit both linear and logistic regression models to the data.
We add Regression node and connect it with Transform Variables node and Assessment node.
We can use continuous, ordinal, and binary target variables, and you can use both continuous and
discrete input variables. The node supports the stepwise, forward, and backward selection
methods. Right click the Regression node to open it and we get this result.

Variables:

Model options:

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Selection Method:

Then we run the regression node and click Statistics and we will get the table below:

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CHAPTER 5
RESULT AND DISCUSSION
5.1 Test for Misclassification Rate
Misclassification rates from each process are noted and differentiate to find the best method or
process to use for data mining to achieve target sales. The dependent variable for this analysis is
the target sales (yes or no) which is categorical data and also the other 7 variable. The interval
variables are 4 other variables. After screening the data, we found out that no missing value for
our data. So, we do not need to add the replacement node because we have no missing value.

Continuous variable

Categorical variable
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Picture 18: After transformation: Log (Inventory)

Picture 19: After transformation: Log (Returns)
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Logistic Regression Model
After running the logistic model, we inspect the T-scores in the figure below. The T-scores are
ranked in decreasing order of their absolute values, which indicates that the higher the absolute
value is, the more important the variable is. From the results, it shows target sales YES ,
Subsidiary MONTREAL not really important but Subsidiary GENEVA are the most important
model input variables.

Picture 20: Effect T-scores

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Picture 21: Lift chart for Regression
For each observation, the logistic regression model predicts the probability that the target sales is
yes. And all these observations are sorted by the predicted probability from highest to lowest.
For example, from the Figure above, In top 10%, almost 100% of the target sales is yes. In top
30%, 100% of the target is yes. The horizontal blue line represents the base line rate. The base
line is an estimate of the percentage of target sales that you would expect.

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Misclassification rate training = 0
Misclassification rate testing = 0.14407

From the figure above, in top 30%, 100% of the target sales is classified in class 3 (yes). The
base line is an estimate of the percentage of class 3 (yes) target sales that you would expect.
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Picture 22: Lift chart for Neural Network

Misclassification rate training = 0
Misclassification rate testing = 0.05932
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Lift chart to compare between regression and neural network.
Here, we can conclude that the Neural Network disappear because it is the best model

Picture 23: Lift chart for Regression and Neural Network

Decision Tree
Generally, decision trees are flexible, while regression models are relatively inflexible, for
example, you have to add additional terms, i.e. interaction terms, polynomial terms. And
decision trees can deal with missing values without imputation, while regression model usually
has to impute missing values before building the model set. Based on the training dataset below
we choose on any leave because all it have the lowest misclassification rate that is 0.0505.
Therefore our accuracy is 1 0.0505 = 0.9495. That means overall accuracy is 95% (still have
some error).

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Tree Model for 2 Splits

Based on the decision tree above, there are 2 number of leaves node.

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The criteria of first and second leaf of nodes
Based on the above tree, we can conclude that if Returns <3426.5 so, the target sales is NO with
93.4%. If Returns >=3426.5 so, the target sales is YES with 98.8%.

Returns were used for the first split. Inventory, Stores, Product, and Region were used as the
competing split for the first split.
Tree Model for 3 Splits

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Based on the decision tree above, there are 3 number of leaves node
The criteria for first, second and third node
100%. If Returns <3426.5.So, the target is NO with 63.9% and if Returns >=3426.5 so, the target
sales is YES with 98.8%.

Returns were used for the first split. Inventory, Stores, Product, and Region were used as the
competing split for the first split.

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Tree Model for 2 Splits/Maximize Normality

There are 2 numbers of leaves node based on the decision tree above.

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The criteria of first and second leaf node
93.4%. If Returns >=8.13929 so, the target sales is YES with 98.8%.

Returns (after transformation) were used for the first split. Inventory (after transformation),
Stores, Product, and Region were used as the competing split for the first split.
Summary:
After do the transform and view the result, the variable for three model of tree is same where the
first is Return, Inventory, Stores, Product and last is Region. The value for the third model is
change but the turn of variable is still same. It is because we used maximize normality for third
tree model.

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5.1.1 Using Assessment node
Picture 24: Assessment node
By using Assessment node, we can analyze the results to find the best method or tool. The best
method is defined by its value of misclassification rate of each method. The lesser its
misclassification rate, the higher its probability to be selected as the best tool.

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We used 3 models for tree where two tree for 2 splits way and one model for 3 splits way.
The splits mean here we can decide how much the leaves of tree result. The result for three tree
model is same. As conclusion, from the table above we know that the best model is when using
Neural Network with Variable Selection tools. It only has 1% of misclassification rate on
Testing.

Tool Training
Misclassification Rate
Testing Misclassification
Rate
Regression 0 0.1441
Neural Network
(2 Hidden Neuron)
0 0.0593
Tree (2 Splits way)

0.0505 0.0593

Tree (2 Splits way)

0.0505 0.0593

Tree (3 split way) 0.0505 0.0593
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CHAPTER 6
REFERENCES
1) F. George. (2003). Data mining using SAS applications. Boca Raton: Chapman &
Hall/CRC.
2) J. P. Bigus. (1996). Data Mining with Neural Networks: Solving Business Problems from
Application Development to Decision Support. New York: McGraw-Hill.
3) M. Craven & J. Shavlik. (1997). Using Neural Networks for Data Mining: Future
Generation Computer Systems, 13, pp. 211-229. Retrieved May 30, 2013 from
http://pages.cs.wisc.edu/~shavlik/abstracts/craven.fgcs97.abstract.html
4) Noorlin Mohd Ali. (2005). Mining students' data with Holland model using neural
network and logistic regression. Sintok: Faculty of Information Technology, Universiti
Utara Malaysia.

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SQIT 3033

KNOWLEDGE ACQUISITION IN DECISION MAKING

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