Book Image

Data Forecasting and Segmentation Using Microsoft Excel

By : Fernando Roque
Book Image

Data Forecasting and Segmentation Using Microsoft Excel

By: Fernando Roque

Overview of this book

Data Forecasting and Segmentation Using Microsoft Excel guides you through basic statistics to test whether your data can be used to perform regression predictions and time series forecasts. The exercises covered in this book use real-life data from Kaggle, such as demand for seasonal air tickets and credit card fraud detection. You’ll learn how to apply the grouping K-means algorithm, which helps you find segments of your data that are impossible to see with other analyses, such as business intelligence (BI) and pivot analysis. By analyzing groups returned by K-means, you’ll be able to detect outliers that could indicate possible fraud or a bad function in network packets. By the end of this Microsoft Excel book, you’ll be able to use the classification algorithm to group data with different variables. You’ll also be able to train linear and time series models to perform predictions and forecasts based on past data.
Table of Contents (19 chapters)
1
Part 1 – An Introduction to Machine Learning Functions
5
Part 2 – Grouping Data to Find Segments and Outliers
10
Part 3 – Simple and Multiple Linear Regression Analysis
14
Part 4 – Predicting Values with Time Series

Chapter 5: Finding the Optimal Number of Single Variable Groups

In this chapter, we will learn that we have to preprocess data to find the optimal number of groups for the values. It is not an arbitrary number and is very difficult to determine with just a visual inspection of the data chart. We will work with just one variable in this chapter, and then, in the next chapter, we will use more than two variables to segment the data, which demands a more automatic process with K-means. In this chapter, we will also learn how to install and use the K-means Excel add-in included in this book and on GitHub. We have to use an R function for K-means in Excel because it is very difficult to do an automatic segmentation by hand in Excel.

The topics we will cover in this chapter are as follows:

  • Finding an optimal number of groups for one variable
  • Running the K-means function to get the centroids or group average
  • Finding the groups and centroids of one-variable data with K-means...