Final answer:
The approach to business analytics that involves assigning each unit in a population to a small set of classes is called cluster analysis. This technique groups similar objects together based on characteristics or attributes.
Step-by-step explanation:
The approach to business analytics that assigns each unit in a population to a small set of classes is known as cluster analysis. Cluster analysis is a statistical method used to group similar objects into clusters based on certain characteristics or attributes. The aim is to ensure that units within each cluster are more similar to each other than to units in other clusters. This methodology is widely used across various fields, including marketing, biology, and geography to gain meaningful insights from complex data.
Cluster sampling is a related concept where the entire population is divided into clusters, and a random sample of those clusters is taken to represent the entire population. An example of cluster sampling is when a researcher divides a school into multiple homeroom classes (clusters) and selects a few of these classes to sample students from.
It is important to note that cluster analysis can be approached in various ways depending on the data. Methods can be hierarchical or reticulate, divisive or agglomerative, and based on monothetic or polythetic distinctions, as well as using qualitative or quantitative data.