Data Forecasting and Segmentation Using Microsoft Excel

Chapter 6: Finding the Optimal Number of Multi-Variable Groups

In this chapter, we will expand the use of the Elbow and K-means functions for a multivariable analysis from two to four variables. We will use the Elbow function to find the optimal number of groups and then pass it as a parameter to the K-means function. The objective of the example is to find the highest revenue group that delivers smaller quantities of items to avoid logistics costs. The K-means function is useful for this multi-dimensional research in that it combines all these variables and returns the segments evaluating the variable's influence. We will explore the data scattered by exploring the distance between the data points of each group and its centroid.

The topics ...