Question

ou are working as the analytics developer for the National Weather Service. You have been given their collected historical data from the last 50 years.

• Why is it important to have historical data in analytics process?
• Give at least two different examples of use cases that can be solved using the historical data.

Your answers are to be well thought out, scholarly paragraphs that answer each question.

Answer 1

Solution:

The data has the ability to provide the patterns within the given past information. It is possible that the patterns in the data are repeated after a specific period or there is the possibility of finding some other pattern which is helpful in understanding the past information better and determine the implications of this past information which can be used for the present cases. The patterns in data provide a great deal of support for making the decisions for management. The data has abilities which the organizations are utilizing to understand the different patterns related to weather, climate change or the sudden climate situations which have arisen. these are the implications which can be drawn from the data and modeled to make appropriate predictions for the weather which is of immense use. Hence, data is used to draw out patterns which are further used to make appropriate predictions.

The 2 major use cases to solve using the past data include the case of forecasting the sales volume for an organization. The past data is analyzed to understand the demand for the products and also the seasonality of the demand. These two factors are used to understand the patterns of sales of product and thus forecast the sales for future periods based on the past data and seasonality indices. Hence, forecasting of sales is one use of analyzing past data.
Another use of analyzing past data is to estimate the price of the stock for its movement with respect to the stock index under which it is traded. The stock prices are analyzed to find the peaks and fall and then they are compared with the strategies of the business to dig out the relevant patterns and understand the stock price movements which are heavily used in hedging the price of the stock by analyzing the past data. Hence, stock price past data analysis is another great use of analyzing the past data.