geographical perspectives on business analytics with applications in construction supply and...
TRANSCRIPT
![Page 1: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/1.jpg)
Geographical Perspectives on Business Analytics with Applications in
Construction Supply and Automotive
Colorado State University - PuebloJustin Holman, PhD
02-05-14
Copyright 2014 TerraSeer, Inc. All rights reserved.
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Overview
Background/Experience/Perspective
Branch Location Problem
Retail Inventory Assortment Problem
Consumer Segmentation
Geographical Visualization
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Overview
Background/Experience/Perspective
Branch Location Problem
Retail Inventory Assortment Problem
Consumer Segmentation
Geographical Visualization
![Page 4: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/4.jpg)
Background
Education Claremont McKenna College
B.A., Philosophy and Mathematics, 1990
University of Oregon Geography, GIS, Spatial Statistics, Cartographic Visualization M.S., 1996, Ph.D., 2004
Northwestern University - Kellogg School of Management Certificate, Designing and Managing the Supply Chain, 1998
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Background
Professional Experience Dynamix Inc.
3D Simulation Software Development
LogicTools, Inc. Supply Chain, Network Optimization, Map UI (Acquired by IBM)
US Geological Survey Data Visualization, Spatial Statistics, Environmental Modeling
MapInfo Retail Location Research, Applied Statistical Modeling
TerraSeer (dba Aftermarket Analytics) Location Analytics, SaaS Development Automotive Aftermarket, Construction Supply Industry
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Background: Select Clients
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Overview
Background/Experience/Perspective
Branch Location Problem
Retail Inventory Assortment Problem
Consumer Segmentation
Geographical Visualization
![Page 8: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/8.jpg)
Construction Materials Supply Chain
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Raw Materials
Manufacturing
Assembly
Engineering
Distribution
Construction Materials Supply Chain
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Construction Materials Supply Chain
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Construction Materials Supply Chain
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Types of Location Problems
Raw materialsProduction/Plant locationAssembly/KittingDistribution Centers (DCs)Cross docks
Branch
Retail LocationShowroomConstruction Site
Construction Materials Supply Chain
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Types of Location Problems
Raw materialsProduction/Plant locationAssembly/KittingDistribution Centers (DCs)Cross docks
Branch
Retail LocationShowroomConstruction Site
Min Cost
Max Revenue
Construction Materials Supply Chain
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Types of Location Problems
Raw materialsProduction/Plant locationAssembly/KittingDistribution Centers (DCs)Cross docks
Branch (Counter + Delivery)
Retail LocationShowroomConstruction Site
Min Cost
Max Revenue
Construction Materials Supply Chain
![Page 15: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/15.jpg)
Overview
Background/Experience/Perspective
The Branch Location Problem2 Competing Objectives- Maximize Revenue- Minimize Delivery Costs
Retail Inventory Assortment Problem
Consumer Segmentation
Geographical Visualization
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Sugar Land, TX Example
![Page 17: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/17.jpg)
Sugar Land Model Trade Area
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Disaggregate Trade Area Forecasting
Counter $20,009
Delivery $207,653
Total $227,662
Model predicts anticipated counter sales and delivery sales originating within each trade area ZIP Code
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Branch Sales Forecasting
Sugar Land $18,500,000
Model calculates a branch sales forecast by summing ZIP forecasts and making adjustments (see below)
Adjustments: Beyond Sales (proportion of sales projected to come from beyond the trade area), Branch Size (model assumed an average branch size of 16,000 gsf), Region/DMA (White Cap achieves stronger performance in some markets than others), Contractor Density (markets with exceptionally high contractor counts achieve stronger sales)
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Houston Market
Results suggest that 3 additional $10M+ branches can be supported in the Houston market
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WINNERS
LOSERS
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Houston Market
Results suggest that 3 additional $10M+ branches can be supported in the Houston market
![Page 24: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/24.jpg)
Overview
Background/Experience/Perspective
The Branch Location Problem2 Competing Objectives- Maximize Revenue- Minimize Delivery Costs
The Retail Inventory Assortment Problem
Consumer Segmentation
Geographical Visualization
![Page 25: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/25.jpg)
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Miami Baseline
Demand Met: $29.9 M
Delivery Cost: $1.6 M
Average Distance: 22 mi
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Miami Optimized
Demand Met: $32.5 M
Delivery Cost: $1.5 M
Average Distance: 20 mi
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Miami Optimized – Add 1
Demand Met: $32.5 M
Delivery Cost: $0.5 M
Average Distance: 7 mi
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Overview
Background/Experience/Perspective
Branch Location Problem
Retail Inventory Assortment Problem
Consumer Segmentation
Geographical Visualization
![Page 31: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/31.jpg)
Inventory Assortment Optimization Process
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1. Calculate Repair Rates
Repair Rate Modeling Process
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2. Build Statistical Models
Ball Joint Repair Rates by Vehicle Age and Type
Repair Rate Modeling Process
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3. Create Adjustment Factors
Repair Rate Modeling Process
- Make, Model, and Regional Adjustments- Analyze Residuals and Calibrate Model
1. Alabama2. California3. Georgia4. Washington5. Oregon
1. New Hampshire2. Vermont3. Maine4. Massachusetts5. Rhode Island
Lower than Forecast Higher than Forecast
Sample Adjustments for Ball Joints
![Page 35: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/35.jpg)
4. Validate Predictive Accuracy
Repair Rate Modeling Process
Initial model: R2 = 0.787 Adjusted Model R2 = 0.978
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Total Demand ForecastZip Code VIO x Repair Rates
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Total Demand > Sales Forecast
Create Store Trade Areas (ZIP codes)
Aftermarket Adjustment
Channel Market Share
Part Attributes(good, better, best)
Sales Forecast
TOTAL DEMAND SKU Level Demand by ZIP
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Trade Area Sales Forecast
ZIP Code
Total Demand x Market Share
= ZIP Forecast
Store Location
Sum of ZIP Forecasts
= Store Sales Forecast
Key Factors: Market Share, Aftermarket Adjustment, Proximity to Store Location, Competition, Part Attributes
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Sales Forecast > Inventory Recommendation
Estimated Forecast Error
Target Service Level
Replenishment Lead Time
Order Frequency
Holding Cost
Optimization Engine
Inventory Recommendation
SALES FORECASTSKU Level Sales Estimates by Store
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Optimize Inventories For Efficiency
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Optimize Inventories For Efficiency
Optimal Working Capital Utilization
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Recommendations via Web Portal
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Recommendations via Web Portal
Select A Store
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Recommendations via Web Portal
Click To See Inventory
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Recommendations via Web Portal
![Page 46: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/46.jpg)
Recommendations via Web Portal
Search Function
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Recommendations via Web Portal
Multiple Sorts
![Page 48: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/48.jpg)
Recommendations via Web Portal
Save To Excel
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Recommendations via Web Portal
Go Back To Pick Another Store
![Page 50: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/50.jpg)
Inventory Optimization Process
![Page 51: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/51.jpg)
Overview
Background/Experience/Perspective
Branch Location Problem
Retail Inventory Assortment Problem
Consumer Segmentation
Why Spatial is Special
![Page 52: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/52.jpg)
2013 Q2 Starter Demand By CountyU.S. Total Units: 2.85M
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2013 Q2 Starter Demand By CountyU.S. Total Units: 2.85M
3000+ Counties or Aggregate to Fewer Units?
![Page 54: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/54.jpg)
Most use State Borders
![Page 55: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/55.jpg)
But why not use Watersheds
![Page 56: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/56.jpg)
Or Topography
![Page 57: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/57.jpg)
Or Solar Radiation
![Page 58: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/58.jpg)
Or Precipitation
![Page 59: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/59.jpg)
Or Earthquake Zones
![Page 60: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/60.jpg)
Or Population Density
![Page 61: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/61.jpg)
Or Racial Density
![Page 62: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/62.jpg)
Or Sports Affiliation
![Page 63: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/63.jpg)
Or Language Preferences: Pop vs Soda vs Coke
![Page 64: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/64.jpg)
But Since Government Data is Typically Provided by State, Most use State Political Borders
![Page 65: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/65.jpg)
![Page 66: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/66.jpg)
Melanoma Risk
![Page 67: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/67.jpg)
Or Solar Radiation
![Page 68: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/68.jpg)
3. Create Adjustment Factors
Repair Rate Modeling Process
- Make, Model, and Regional Adjustments- Analyze Residuals and Calibrate Model
1. Alabama2. California3. Georgia4. Washington5. Oregon
1. New Hampshire2. Vermont3. Maine4. Massachusetts5. Rhode Island
Lower than Forecast Higher than Forecast
Sample Adjustments for Ball Joints
![Page 69: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/69.jpg)
![Page 70: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/70.jpg)
Overview
Background/Experience/Perspective
Branch Location Problem
Retail Inventory Assortment Problem
Consumer Segmentation
Geographical Visualization
![Page 71: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/71.jpg)
Power of Geographical Visualization
Maps vs Spreadsheets
• Pattern Detection
• Collaboration
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Power of Geographical VisualizationPattern Detection
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Power of Geographic VisualizationPattern Detection
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Would you discover this problem with a spreadsheet?
![Page 75: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/75.jpg)
Power of Geographic VisualizationCollaboration
![Page 76: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/76.jpg)
Power of Geographic VisualizationCollaboration
Wait….wouldn’t it be better to plan this war with spreadsheets?
![Page 77: Geographical Perspectives on Business Analytics with Applications in Construction Supply and Automotive Colorado State University - Pueblo Justin Holman,](https://reader037.vdocument.in/reader037/viewer/2022110116/551657dc550346a2698b4e64/html5/thumbnails/77.jpg)
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Independent Data: Vehicle Registration Repair Survey
Channel Data Store Locations and Attributes Current Inventory By SKU/Store/DC Sales History By SKU/Store/DC Delivery and Service Level Requirements
Nice to Have Customer (end-user) Locations Estimated Market Share Demand Forecast Competition
Inventory Assortment Data Inputs
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1. Model Repair Rates2. Generate Demand Forecasts3. Trade Area Sales Forecasts4. Optimize Inventory5. Develop Communication Portal6. Maintain/Refine Models7. Maintain/Refine/Customize Portal8. Start Over, Improve, Rinse and Repeat
Continuous Improvement
Iterative Analytical Approach
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Sources of Error in Spatial AnalysisGeocoding
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Sources of Error in Spatial AnalysisDistance Measurement
Method of measurement:Straight line distance vs “Great Circle” distance
Scale of Measurement:
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Sources of Error in Spatial AnalysisSpatial Autocorrelation
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Sources of Error in Spatial AnalysisSpatial Autocorrelation