Data Transformation for Normalization

As the abundance of collected data on products, processes and service-related operations continues to grow with technology that facilitates the ease of data collection, it becomes important to use the data adequately for decision making. The ultimate value of the data is realized once it can be used to derive information on product and process parameters and make appropriate inferences. Inferential statistics, where information contained in a sample is used to make inferences on unknown but appropriate population parameters, has existed for quite some time (Mendenhall, Reinmuth, & Beaver, 1993; Kutner, Nachtsheim, & Neter, 2004). Applications of inferential statistics to a wide variety of fields exist (Dupont, 2002; Mitra, 2006; Riffenburgh, 2006). In data mining, a judicious choice has to be made to extract observations from large databases and derive meaningful conclusions. Often, decision making using statistical analyses requires the assumption of normality. This chapter focuses on methods to transform variables, which may not necessarily be normal, to conform to normality.