Data Warehouse ad hoc classification
Oracle Tips by Burleson Consulting
The Data Warehouse Development Life Cycle
AN EXAMPLE OF AD HOC CLASSIFICATION
Let’s illustrate this concept with an example from Guttbaum’s
Grocery. One of management’s requirements is to be able to compute
the demand curve for each item category. As you may remember from
Economics class, the demand curve for an item is a downward sloping
curve that measures the propensity of a customer to pay for a
product as the price changes. Obviously, the smaller the price the
greater the sales, but it is the slope of the curve that is of
interest to Guttbaum’s management. For example, Guttbaum’s
management needs to be able to compute the demand curve for all
brands of coffee to make an intelligent decision about which product
to offer at a sale price. In Figure 3.16, you can see the computed
demand curve for all customers for all brand names within a specific
product category, in this case, coffee.
Figure 3.16 The demand curves for different brands of coffee.
Here, you can see that there are different demand curves depending
on the brand name. Essentially, this is a measure of product
loyalty, and this type of information is very useful when management
decides which product to advertise at a discounted price. In this
example, a $1 per pound price reduction will have drastically
different effects on various brands of coffee. For instance, a price
reduction will not affect the demand for Java Joe’s Coffee,
indicating that consumers of Java Joe’s have a high product loyalty,
as evidenced by the inelastic demand curve. Peak Coffee, on the
other hand, shows a very large increase in demand when the price is
reduced by $1 per pound. If the goal of a sale is to get customers
into the supermarket, then it appears that the brand name with the
most elastic demand curve would be the best choice for an advertised
price reduction. Guttbaum’s wants to offer specials on those
products that demonstrate a high elasticity--the products that will
substantially increase sales volume with a small drop in price.
Figure 3.17 illustrates price elasticity and how it affects sales.
Figure 3.17 Price elasticity for different products and the
effect on in-store promotions on sales.
This is an excerpt from "High Performance
Data Warehousing", copyright 1997.
If you like Oracle tuning, you may enjoy the book
Oracle Tuning: The Definitive Reference , with over 900 pages of BC's favorite tuning
tips & scripts.
You can buy it directly from the publisher and save 30%, and get
instant access to the code depot of Oracle tuning scripts.