Chapter 9.9, Problem 9.4ARQ

Explanation of Solution

Five Basic Reporting Operations:

Reporting Application:

In order to produce Business Intelligence, a reporting application combines data from various sources and apply reporting operations to those data.

• Reporting applies simple operations to reveal patterns in the data. The analysis of the data is modest.
• Data are sorted and grouped, and simple totals and averages are calculated using operations such as reporting applications use of five basic operations:
  • Sorting – It arranges the data systematically as per requirement.
  • Filtering – It cleans the data by clearing the errors.
  • Grouping – It groups the data into data sets with a particular pattern.
  • Calculating – It performs all the required calculations to the data sets in order to extract knowledge.
  • Formatting- It formats all the calculated data in order to make the data ready for operational use.

Example of reporting:

The common examples of reporting is swimming, and totaling.

RFM analysis:

RFM stands for Recency, Frequency and Monetary. It is an analytical technique to determine which customers are best among all by checking recent purchase date (Recency), how often the customer purchases (frequency) and how much the customer spends (monetary).

A) Customers having a score of [5, 5, 5]

• A customer in the following group has the highest points in recency, frequency and monetary. It shows that he or she is a loyal and very important customer and deserves highest level of service to reward his or her loyalty.

B) Customers having a score of [1, 5, 5]

• A customer in the following group has the lowest points in recency, frequency and monetary and lies in the middle group. It shows that he or she is a loyal and very important customer and effort need to be made to find out the reasons for which he or she has not been a recent customer. Efforts need to be made to ask the customer for feedback for previous purchases and exclusive offer and combo deals for him or her can be send via email.

C) Customers having a score of [5, 5, 3]

• A customer in the following group has best points in recency and best points in frequency and average points in monetary and lies in the next to top group. It shows that he or she is a loyal customer but likes to spend less. This type of customer is best for upselling and efforts should be made to have various lucrative combined deals and combined packages to entice him or her to buy higher value items...