Using this data and key figures, you can model your sales and profits using:
Posted: Sun Jan 19, 2025 10:40 am
Average sales broken down by item per unit of time, e.g. 1 unit sold on average every 10 days => 3 units sold per month on average;
The difference in sales by SKU, for example if 1 unit is sold every 10 days, this means you have 9 days out of every 10 days where there are no sales.
Normal distribution (be careful, this may not be the optimal choice for pricing models as it can be negative);
Gamma distribution (this method is often quite suitable for pricing models);
Poisson distribution (the method is well suited for pricing models).
Read also our guide to data analysis - How to analyze data: a basic guide .
Why Using Averages Is Not the Best Way to Model Sales and Profits
The mean is a simple statistical figure taken spain telegram database from a list of numbers to represent them. It can be calculated in different ways depending on its use. The mean is generally used to describe statistical populations that follow a normal distribution (a bell-shaped curve), such as population growth.
The arithmetic mean (AM) is calculated as the sum of all the values divided by the number of values in any data set. There are also other types of means such as the geometric mean (GM) and the harmonic mean (HM) which have the mathematical properties of AM ≥ GM ≥ HM in any data set. From now on in this article, we will discuss the use of the arithmetic mean (AM) and simply refer to it as the mean. If a population data set follows a bell curve, the AM has the property of being equal to (the most common data point in the data set) and the median (the 50th percentile in the data set).
The difference in sales by SKU, for example if 1 unit is sold every 10 days, this means you have 9 days out of every 10 days where there are no sales.
Normal distribution (be careful, this may not be the optimal choice for pricing models as it can be negative);
Gamma distribution (this method is often quite suitable for pricing models);
Poisson distribution (the method is well suited for pricing models).
Read also our guide to data analysis - How to analyze data: a basic guide .
Why Using Averages Is Not the Best Way to Model Sales and Profits
The mean is a simple statistical figure taken spain telegram database from a list of numbers to represent them. It can be calculated in different ways depending on its use. The mean is generally used to describe statistical populations that follow a normal distribution (a bell-shaped curve), such as population growth.
The arithmetic mean (AM) is calculated as the sum of all the values divided by the number of values in any data set. There are also other types of means such as the geometric mean (GM) and the harmonic mean (HM) which have the mathematical properties of AM ≥ GM ≥ HM in any data set. From now on in this article, we will discuss the use of the arithmetic mean (AM) and simply refer to it as the mean. If a population data set follows a bell curve, the AM has the property of being equal to (the most common data point in the data set) and the median (the 50th percentile in the data set).