Thursday, December 13, 2001

Here's more on diapers and alcohol.

I attended a lecture on Knowledge Management: A Data and Text Mining Perspective by Hsinchun Chen, founder of Knowledge Computing Corporation and the Artificial Intelligence Lab at Arizona University.
Of all the things he said, one particular example struck me most.
An analysis of sales data by a American supermarket chain revealed a suprisingly high co-relation between the sales of diapers and beer.
Flummoxed, the chain investigated it further. Only to be confronted by a syndrome called the 5pm Man.
The 5pm Man is your average American joe. On his way back from work, he calls up his wife to ask whether she needs him to buy anything.
"Diapers," she says. Off our hero goes to the nearest supermarket. While buying diapers, he picks up a few cans of beers to go with it.
That's knowledge. No counter salesman could have made that association. A computer using complex statistical analysis did.
How did the store use the nugget of knowledge. It began stocking diapers next to beers. That's taking knowledge to the user level.

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