Thursday, May 24, 2018

To Analyze a Sales Population, Consider the Expanded Percentile Curve

(Click on the image to enlarge)
Analysis of Sales Population

1. Instead of just one parameter consider the expanded Percentile curve.
2. 5th to 95th is the most meaningful inliers’ range, extending out to outliers’.

3. So, while studying outliers, consider below the 5th and above the 95th percentile.

4. When the time series is extended (e.g., sales between 1/2017 and 3/2018 are used here), sales must be time-adjusted.

5. Since growth rates vary by the market, time adjustment factors (coefficients) must be derived as such (e.g., 6% in this example).

6. If you have to choose one parameter, it must be the Median, as it is less prone to outliers (Average is heavily influenced by outliers, distorting the analysis).

7. In this example, Median ASP and Median Bldg SF are mutually exclusive (may be connected to get a general idea of the ASP/SF, but not for any serious analysis).

8. In order to analyze ASP/SF, create the variable and run percentile stats on it (auto-regressive).

9. Ideally, ASP should be modeled (regression) and the resulting output variable (smoother and statistically more significant) used in all analyses, including defining/removal of outliers.

I picked the above table from TownAnalyst.com as I own and operate it, to avoid having to deal with any copyright issues. My TownAnalyst site is totally free (no strings) and requires no login or registrations whatsoever. Please use the site/system that works best for you.

http://www.townanalyst.com/

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