Data Models Explained

Data Models Help Predict Impact of Price Changes

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A data model helps illustrate the way groups of information within a data set relate to one another. Data models can represent all sorts of information, from customer call-center databases to apartment-rental data used by real estate agents. Multiple models can be applied to individual data sets in order to view the information in a variety of ways and ensure all relationships are represented.

Sam Wilcke, director of analytics at Marin Software, on data models

"I think modeling is a word that's thrown around a lot," said Sam Wilcke. A data model might be used in retail pricing to help determine the number of dresses that might be sold at a given price. "If a retailer sells 30 dresses a month at $100 each and 50 dresses a month at $80 each, then a model can be built to determine how many dresses might be sold at $90 each," said Mr. Wilcke. "A straight line, predicting 40 dresses will sell at $90 each, is the simplest model. A model that depends on other factors, such as time of year, competitor prices and prices of like items in the same store is a significantly more complex model."
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