Statistical Analysis of Big Mart Sales

Overview and Problem Statement

This dataset contains sales data on different items at multiple outlets of a major retail chain and the data is multi-level.The client is a business entrepreneur considering franchising one or more stores of this retail chain and is looking for the following answers, with adequate justification:

1. What type of outlet will return him the best sales: Grocery store or Supermarket Type 1, 2, or 3.
2. What type of city will return him the best sales: Tier 1, 2 or 3.
3. What are the top 3 highest performing and lowest performing stores in the sample.

Data Source and Description

Attributes of the dataset:

• Item_Weight: Weight of the product
• Item_Fat_Content: Low Fat or Regular
• Item_Visibility: Percentage of total display area of all products in a store allocated to this product
• Item_Type: Dairy, Soft Drinks, Meat, Fruits and Vegetables, Household, Baking Goods, Snack Foods, Frozen Foods, Breakfast, Health and Hygiene, Hard Drinks, Canned, Breads, Starchy Foods, Others, Seafood
• Item_MRP: Maximum Retail Price (list price) of the product
• Outlet_ID: Unique store ID
• Outlet_Year: Year in which store was opened
• Outlet_Size: Store size**: [High, Medium, Small]
• City_Type: Size of city where store is located [Tier 1, Tier 2, Tier 3]
• Outlet_Type: Grocery Store, Supermarket Type1, Supermarket Type2, Supermarket Type3
• Item_Sales: Sales of product in this store

Variable selection for Multi/Mixed Level Analysis

Data Visualizations

Model Buidling and Results

1) What type of outlet will return him the best sales: Grocery store or Supermarket Type 1, 2, or 3.

Interpreatation: After looking at the outputs here and analyzing the results, I would suggest my client to consider franchising with the outlet type of “Suptermarket 3”. Because as I add those random effects values of each type of outlet in average block, I am getting maximum sales at Supermarket 3. It will get the maximum sales based in this analysis.

2) What type of city will return him the best sales: Tier 1, 2 or 3.

Interpreatation: After looking at the outputs here and analysing the results, I would say that city from “Tier 2” could get the maximum sales. As I those random effects values of each type of city in average block, city from “Tier 2” can get the maximum sales to business owner.

3) What are the top 3 highest performing and lowest performing stores in the sample.

Interpreatation: After looking the outputs here and analyzing the results I would say rank outlet as below: TOP 3: 1) OUT027, 2) OUT017, 3) OUT035 BOTTOM 3: 10) OUT019, 9) OUT010, 8) OUT018