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How many customer groups should you specify?

Refer to the exhibit.

You are using K-means clustering to classify customer behavior for a large retailer. You need to
determine the optimum number of customer groups. You plot the within-sum-of-squares (wss)
data as shown in the exhibit. How many customer groups should you specify?

PrepAway - Latest Free Exam Questions & Answers

A.
2

B.
3

C.
4

D.
8

2 Comments on “How many customer groups should you specify?

  1. Salamaleico says:

    This answer is strange. When k + 1 clusters do not greatly reduce the value of WSS from the
    case with only k clusters, there may be little benefit to adding another cluster. In my opinion, the correct answer should be A, but C can also be considered right depending on you classify “great reduction”.




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