K-medoids

The k-medoids problem is a clustering problem similar to k-means. The name was coined by Leonard Kaufman and Peter J. Rousseeuw with their PAM (Partitioning Around Medoids) algorithm.^[1] Both the k-means and k-medoids algorithms are partitional (breaking the dataset up into groups) and attempt to minimize the distance between points labeled to be in a cluster and a point designated as the center of that cluster. In contrast to the k-means algorithm, k-medoids chooses actual data points as centers (medoids or exemplars), and thereby allows for greater interpretability of the cluster centers than in k-means, where the center of a cluster is not necessarily one of the input data points (it is the average between the points in the cluster). Furthermore, k-medoids can be used with arbitrary dissimilarity measures, whereas k-means generally requires Euclidean distance for efficient solutions. Because k-medoids minimizes a sum of pairwise dissimilarities instead of a sum of squared Euclidean distances, it is more robust to noise and outliers than k-means.

k-medoids is a classical partitioning technique of clustering that splits the data set of n objects into k clusters, where the number k of clusters assumed known a priori (which implies that the programmer must specify k before the execution of a k-medoids algorithm). The "goodness" of the given value of k can be assessed with methods such as the silhouette method.

The medoid of a cluster is defined as the object in the cluster whose sum (and, equivalently, the average) of dissimilarities to all the objects in the cluster is minimal, that is, it is a most centrally located point in the cluster.