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The term algorithm describes the method for doing a task. The term is generally used in the context of software to describe the program logic for a specific function. The two important factors in determining how to design an algorithm are the accuracy of the result and the efficiency of the processing.
Algorithms can generally be broken down into two types: definitive and subjective. Definitive algorithms perform tasks that have a definite answer and a best method for processing. An example is searching for a word in a list. Depending on the size of the list, certain search algorithms are more efficient then others. Definitive algorithms are typically of interest to only computer scientists.
Subjective algorithms are more interesting for business purposes. In general a subjective algorithm processes information based on an assumptive model where the "right" answer is a matter of opinion. Subjective algorithms are used heavily in social sciences, economics, business and financial forecasting, etc. The best-known examples of subjective algorithms on the Internet are those used by public search engines. Each search engine uses a different method to determine which web page/site best matches your search. The designers of the search engine determine what is "best".
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