Decision-tree methods have wide applicability for data
exploration, classification and scoring. Decision trees are also
a natural choice when the goal is to generate understandable
and explainable rules. The ability of decision trees to generate
rules that can be translated into comprehensible natural
language or Structured Query Language (SQL) is one of the
greatest strengths of the technique. Decision trees require less
data preparation than many other techniques because they
‘are equally adept at handling continuous and categorical
variables’ (Bekhor et al., p. 9). ‘Categorical variables, which
pose problems for neural networks and statistical techniques’
(Bekhor et al., p. 9), are split by forming groups of classes. For
this reason, decision trees are often used to pick a good set
of variables that can be used as inputs in another modeling
technique (Berry &Linoff, 2004).