→ With 19,000 unique error codes and only 7 codes per machine (on median), the data structure will likely consist of a very large number of binary features (e.g., one-hot encoded error codes), most of which will be 0 for any given machine. This leads to a sparse matrix—where the majority of elements are zero—which poses computational and modeling challenges.

Why the other options are incorrect:

B: Granularity misalignment would mean mismatched levels (e.g., mixing daily and hourly data), which is not the issue here.

C: There are many features (error codes), not too few.

D: Multivariate outliers involve unusual combinations across features, not sparsity.

Official References:

CompTIA DataX (DY0-001) Study Guide – Section 3.3:“High-cardinality categorical features can result in sparse matrices, especially when one-hot encoded for models.”