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9/4/25, 12:42 AM Final Assignment | Final Assignment | Data Analytics Basics for Everyone | edX
Reading: Using Data Analytics for
Forecasting and Planning Inventory
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9/4/25, 12:42 AM Final Assignment | Final Assignment | Data Analytics Basics for Everyone | edX
One of the retail industry's operational challenges is maintaining an optimal
supply of products while reducing unused inventory. More and more retailers
today employ analytical techniques to track sales and inventory data and
make projections based on historical data.
Imagine you are a Data Analyst in the planning division of
a leading retailer in the USA. Your assignment is to forecast the demand for
three key product categories for the current year so that you can be
adequately stocked to meet the year-round demand.
Before you can forecast the inventory level for these product categories,
you need to look at the sales history for these product categories. You need
to analyze trends and patterns hidden in historical data and understand
some of the influences that drive these trends.
Here is a sample dataset that captures the sales data for these three product
categories over the years 2018 and 2019. The dataset also captures
whether the retailer conducted targeted marketing campaigns during a
specific quarter and the periods during which the product category had
discounts. In a real-life scenario, the dataset would capture many more
details, but we are presenting a more simplified dataset for our purposes.
Month-Year of Targeted
Product Category Units Sold Discount
Purchase Campaign
Jan-Mar 2018 Designer Clothes 1275 0% N
Jan-Mar 2018 Fitness Gadgets 4250 15% N
Jan-Mar 2018 Travel Accessories 1670 0% N
Apr-Jun 2018 Designer Clothes 1825 0% N
Apr-Jun 2018 Fitness Gadgets 3760 0% N
Apr-Jun 2018 Travel Accessories 1720 0% N
Jul-Sep 2018 Designer Clothes 3150 10% Y
Jul-Sep 2018 Fitness Gadgets 1330 0% N
Jul-Sep 2018 Travel Accessories 3550 0% Y
Oct-Dec 2018 Designer Clothes 4715 20% Y
Oct-Dec 2018 Fitness Gadgets 6450 20% Y
Oct-Dec 2018 Fitness Gadgets 6450 20% Y
Oct-Dec 2018 Travel Accessories 5430 20% N
Jan-Mar 2019 Designer Clothes 1375 0% N
Jan-Mar 2019 Fitness Gadgets 1765 0% N
Jan-Mar 2019 Travel Accessories 1475 0% N
Apr-Jun 2019 Designer Clothes 2175 0% Y
Apr-Jun 2019 Fitness Gadgets 1925 0% N
Apr-Jun 2019 Travel Accessories 1215 0% N
Apr-Jun 2018 Flat Screen 4750 0% Y
Jul-Sep 2019 Designer Clothes 3100 15% N
Jul-Sep 2019 Fitness Gadgets 2530 0% N
Jul-Sep 2019 Travel Accessories 3275 0% Y
Oct-Dec 2019 Designer Clothes 6425 25% Y
Oct-Dec 2019 Fitness Gadgets 7125 20% Y
Oct-Dec 2019 Travel Accessories 6510 30% Y
Descriptive techniques of analysis, that is, techniques that help
you understand what happened, include
identifying trends, patterns, and correlations in data. Some of the common
events that you may need to watch out for in this dataset include:
Quarterly sale numbers of a product category over multiple years.
Demand fluctuations over holidays.
New Year’s Eve (Jan), Valentine’s Day (Feb), Mother’s Day (May),
Father’s Day (June), Independence Day (July), Thanksgiving (Nov),
and Christmas (Dec).
Change in product sales numbers in the weeks following a targeted
marketing campaign.
Change in product sales numbers when a product is available
at a discounted price.
A correlation between increase or decrease of sales of one product
leading to a corresponding increase or decrease in sales of another
product.
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9/4/25, 12:42 AM Final Assignment | Final Assignment | Data Analytics Basics for Everyone | edX
A correlation between customer ratings accrued for a product in a quarter
and its impact on sales numbers in the next quarter.
A correlation between complaints received for defective products in a
quarter and its impact on sales numbers in the subsequent quarter.
Before you can analyze the data for patterns and anomalies, you need
to:
Identify and gather all data points that can be of relevance to your use
case.
For example, product category, month and year of sale, product
discounts, targeted marketing campaigns, product ratings, and
defects reported.
Clean the data
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