1. Inventory Analysis with Tableau
Hi, I’m Iason, and I’ll be your instructor for this case study.
2. What is a case study?
A case study is an examination of a particular real-world problem. Doing a case study helps you strengthen your skills by practicing what you have learned in other courses. So, the focus is on combining your skills to solve a real-world problem.
For this case study, you might need concepts from this course.
3. Steps of the analysis
Before analyzing our business problem, it is important to understand the steps involved.
First, start by making sure the data needed is present and clean. For example, structuring the data, correcting typing mistakes, removing duplicate values, and other possible errors.
Then, explore your data. It can help you get familiar with the information, think of possible calculations, and identify potential side problems and how to solve them.
The following step is to analyze and visualize the data. Here you focus on the problem and try ways to solve it, to obtain the best possible result.
The last step is to prepare dashboards where you can show the most important results from your analysis in a clear way and communicate insights.
4. The problem
In this case study, you will use a fictitious dataset from a company called Acropolis Retail Limited. You are hired as a consultant to analyze the inventory data and give insights when it comes to renewing or increasing inventory.
5. What is inventory analysis?
What is an inventory analysis? Inventory analysis is a management technique that can help you optimize inventory control. For instance, it can help you reduce storage expenses, item costs, and unused goods, in order to increase profit. There are many ways to do inventory analysis, but this case study will use a basic approach.
6. Starting with inventory analysis
You will use some important calculations and methods for inventory analysis that will be shown gradually throughout the course. In this first part, you will use revenue, cost of goods sold, and profit calculations.
7. Calculating revenue
Revenue is the amount of money a company receives in exchange for its goods and services.
The simplest way companies calculate revenue is by multiplying the total number of units sold by their selling price.
8. Cost of goods sold
Cost of goods sold, or COGS, refers to the cost of producing or acquiring products that a company sells in a determined period. It only accounts for production costs such as raw materials, labor, and manufacturing overheads, excluding the cost of selling the product and transportation.
For example, the COGS of a wooden chair for a traditional wooden chair-making company would be the price of wood, glue, finishers, and labor, but not the distribution of the product. So, our COGS for a wooden chair would be the price of wood plus the price of glue plus the price of wood finishers plus the price of labor, all multiplied by the number of units sold.
9. Exploring gross profit
The definition of gross profit given by Investopedia is the amount remaining after subtracting costs associated with making or acquiring products from the revenue. The simplified formula is basically revenue minus COGS.
10. Dataset
The Acropolis Retail dataset contains two tables. You will find information on the items' ID codes - SKU-ID, their description, initial stock quantities, individual orders with their respective quantities and dates, order country of precedence, and price. The dataset covers three years, from 2020 to 2022. Information related to the costs and retail prices has not changed in that period. However, stock levels and order quantities have changed. It is your job to make the best use of this information.
11. Let's practice!
It's time to get stuck into the case study and start your inventory analysis journey. Good luck!