Binning, also called discretization, is a technique for reducing the cardinality of continuous and discrete data. Binning groups related values together in bins to reduce the number of distinct values.

Binning can improve resource utilization and model build response time dramatically without significant loss in model quality. Binning can improve model quality by strengthening the relationship between attributes.

Supervised binning is a form of intelligent binning in which important characteristics of the data are used to determine the bin boundaries. In supervised binning, the bin boundaries are identified by a single-predictor decision tree that takes into account the joint distribution with the target. Supervised binning can be used for both numerical and categorical attributes.

Normalization is the most common technique for reducing the range of numerical data. Most normalization methods map the range of a single variable to another range (often 0,1).

A value is considered an outlier if it deviates significantly from most other values in the column. The presence of outliers can have a skewing effect on the data and can interfere with the effectiveness of transformations such as normalization or binning.

Outlier treatment methods such as trimming or clipping can be implemented to minimize the effect of outliers.

Outliers represent problematic data, for example, a bad reading due to the abnormal condition of an instrument. However, in some cases, especially in the business arena, outliers are perfectly valid. For example, in census data, the earnings for some of the richest individuals can vary significantly from the general population. Do not treat this information as an outlier, since it is an important part of the data. You need domain knowledge to determine outlier handling.