Question: 5. (50) An owner would like to do a customer segmentation on his online shop based on the money (in $1,000) and time in hour)

5. (50) An owner would like to do a customer5. (50) An owner would like to do a customer5. (50) An owner would like to do a customer

5. (50) An owner would like to do a customer segmentation on his online shop based on the money (in $1,000) and time in hour) the customers spent in a week. He applied a K-means clustering using Euclidean distance with k = 3 on these two variables. Each cluster is represented by a label. The centroid of each cluster is listed in the appendix. a. (10) Can the owner apply classification method for the customer segmentation instead? Explain your answer briefly. b. (5) Given that there is a new customer and his money spent and time spent are listed in the appendix. Assign him the label by the K-means clustering model. + C. (15) An elbow plot is shown in the appendix. Is it reasonable to say that k = 3 for the K-means clustering model? Explain your answer briefly. d. (10) He interprets that the three labels should be normal customer', 'loyal customer' and 'window shopper'. Match each of the three labels with the categories in the K-means clustering model and explain your answer briefly. e. (10) If he also wants to study the behavior similarity between different customers based on the money and time they spent in a week. Should he apply hierarchical clustering instead of K-means clustering? Explain your answer briefly. 5. Centroid of each cluster: Money spent Time spent Label = 0 0.1 4.2 Label = 1 3.2 3.8 Label = 2 1.2 0.8 New customer: Money spent Time spent New customer 1 1 2 Elbow Plot: Elbow Plot 80000 70000 60000 50000 Within group Sum of Square 40000 30000 20000 10000 10 2 4 5 7 8 9 Number of clusterk 5. (50) An owner would like to do a customer segmentation on his online shop based on the money (in $1,000) and time in hour) the customers spent in a week. He applied a K-means clustering using Euclidean distance with k = 3 on these two variables. Each cluster is represented by a label. The centroid of each cluster is listed in the appendix. a. (10) Can the owner apply classification method for the customer segmentation instead? Explain your answer briefly. b. (5) Given that there is a new customer and his money spent and time spent are listed in the appendix. Assign him the label by the K-means clustering model. + C. (15) An elbow plot is shown in the appendix. Is it reasonable to say that k = 3 for the K-means clustering model? Explain your answer briefly. d. (10) He interprets that the three labels should be normal customer', 'loyal customer' and 'window shopper'. Match each of the three labels with the categories in the K-means clustering model and explain your answer briefly. e. (10) If he also wants to study the behavior similarity between different customers based on the money and time they spent in a week. Should he apply hierarchical clustering instead of K-means clustering? Explain your answer briefly. 5. Centroid of each cluster: Money spent Time spent Label = 0 0.1 4.2 Label = 1 3.2 3.8 Label = 2 1.2 0.8 New customer: Money spent Time spent New customer 1 1 2 Elbow Plot: Elbow Plot 80000 70000 60000 50000 Within group Sum of Square 40000 30000 20000 10000 10 2 4 5 7 8 9 Number of clusterk

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