Calculating the optimal number of groups for two and three variables

In this section, we will explore the groups of products and sales results for two and three variables. In the previous chapter, we analyzed the groups using the single variable of revenue. Now, we will perform a multivariable grouping calculation by performing the following activities:

• Finding the optimal number of segments for two variables:
  • Revenue
  • Quantity
• Using the elbow function to get the number of groups for three variables:
  • Revenue
  • Quantity
  • Month of sale

Computing the optimal number of segments for two and three variables is more complex than the simple example of the last chapter. We will do a chart of the variables before we use the Elbow function to get an idea of the data dispersion. For the three variables, we will use the R function included in this book to execute a 3D chart.

Finding the optimal number of segments for two variables – revenue and quantity

An analysis involving...