Blu-ray, and videogame rental service | My Assignment Tutor

Table of ContentsList of Figures …………………………………………………………………………………………………………………………1Part 1…………………………………………………………………………………………………………………………………….21. Introduction ……………………………………………………………………………………………………………………22. Justification of Tools and Techniques …………………………………………………………………………………23. Strategy Analysis ……………………………………………………………………………………………………………..33.1 Michael Porter’s Five Forces ………………………………………………………………………………………..33.2 Resource Audit…………………………………………………………………………………………………………..44. Investigate Situation ………………………………………………………………………………………………………..64.1 Rich Picture ……………………………………………………………………………………………………………….64.2 Context Diagrams……………………………………………………………………………………………………….75. Consider Perspective………………………………………………………………………………………………………105.1 CATWOE ………………………………………………………………………………………………………………….105.2 Power/Interest Grid ………………………………………………………………………………………………….116. Analyse Needs……………………………………………………………………………………………………………….126.1 Media Rental System ………………………………………………………………………………………………..126.2 Finance System ………………………………………………………………………………………………………..146.3 Round Management System………………………………………………………………………………………157. Define Requirements ……………………………………………………………………………………………………..187.1 ERM ………………………………………………………………………………………………………………………..187.2 ELH Diagrams …………………………………………………………………………………………………………..187.3 Class Diagram…………………………………………………………………………………………………………..227.4 Sequence Diagram ……………………………………………………………………………………………………238. Observations …………………………………………………………………………………………………………………239. Evaluation (500) …………………………………………………………………………………………………………….24Part 2…………………………………………………………………………………………………………………………………..261. Introduction ………………………………………………………………………………………………………………….262. Application ……………………………………………………………………………………………………………………263. Conclusion…………………………………………………………………………………………………………………….28References …………………………………………………………………………………………………………………………..291List of FiguresFigure 1 – Michael Porter’s Five Forces Grid – Page 4Figure 2 – Rich Picture – Page 7Figure 3 – Media Rental System Context Diagram – Page 8Figure 4 – Round Management System Context Diagram – Page 9Figure 5 – Finance System Context Diagram – Page 10Figure 6 – CATWOE Analysis – Page 11Figure 7 – Power/Interest Grid – Page 12Figure 8 – Media Rental System Use Case Diagram – Page 13Figure 9 – Media Rental System Use Case Diagram – Page 15Figure 10 – Round Management System Use Case Diagram – Page 16Figure 11 – Movies Direct ERM Diagram – Page 19Figure 12 – Driver ELH Diagram – Page 19Figure 13 – Round ELH Diagram – Page 20Figure 14 – Roundsheet ELH Diagram – Page 20Figure 15 – Customer ELH Diagram – Page 21Figure 16 – Order ELH Diagram – Page 21Figure 17 – Media ELH Diagram – Page 22Figure 18 – UML Class Diagram – Page 23Figure 19 – Media Rental System Sequence Diagram – Page 24Figure 20 – Frequent Items for Dataset 1 – Page 282Part 11. IntroductionMovies Direct is a DVD, Blu-ray, and videogame rental service based in Pembrokeshire, Wales(Movies Direct, 2013), established in its current rendition in 1996. It currently has 3 employees,founder and owner Antony Mighall, Partner Sharon Mighall, and deliver driver Andy Davies. Antonyalso does deliveries, as well as running the company’s social media, and Sharon assists in Finances,Stock control, and general operations. There is also an outsourced accountant. The delivery aspectrefers to how the media is brought to the customers for rental, items can either be directlyrequested or chosen from boxes driven around to each customer. Different areas in Pembrokeshireare regularly visited every weekday by each driver respectively, some towns being visited more thanonce in a week depending on how many customers live in that area. The organisation is operatedout of the garage of the Mighall family home, which also acts as the store room for the stock.The company had faced some issues in recent years, mainly because of the industry it is in. Due tostreaming services such as Netflix and Amazon Prime Video, as well as various videogamesubscription services, the need for media rental has heavily decreased, with it being said that “theretail “big box” video rental store is all but extinct” (Hanks), although some have speculated that theissues with streaming services leave market space for physical media rental business (Gach, 2013).This has made it much more difficult for Movies Direct to attract new and keep existing customers.This report aims to analyse the business processes that Movies Direct employs, allowing weaknessesto be discovered, which then enables solutions to be found which could strengthen the business’operation. Five key areas will be discussed, including strategy analysis, investigation of the currentsituation, a consideration of perspective for the stakeholders, an analysis of needs, and finally adefinition of requirements. A secondary aim of this report is to then evaluate the business analysistools and techniques used to delve into these areas. As Movies Direct is a small organisation with afairly simple operation, the entirety of the company will be considered in this report, as opposed to alarge organisation in which only a small section could be effectively analysed.2. Justification of Tools and TechniquesFor the Strategy analysis Michael Porter’s Five Forces Model will be used alongside a resource audit.This is because, opposed to the PESTLE analysis technique which looks more at outside factors thatcould influence the organisation, the Five Forces model looks more specifically into the organisationitself and factors that directly affect it, allowing strengths and weaknesses to be discerned (Hall,2019). The model has also been proved effective in improving business performance, such as in onestudy in which a relationship of 0.8 is found between the use of the model and the performance ofthe business in question (Indiatsy et al., 2014).For the situation investigation the Rich Picture and UML Context Diagram techniques will be used.UML Context Diagrams are not a standard use of UML, but a specific and important implementationof a Use Case Diagram (Arlow & Neustadt, 2005). Context Diagrams are useful because they’re easyto read and be understood by various stakeholders, as well as clearly defining a system’s scope(Adams, n.d.).For Consider Perspective a CATWOE analysis and a Power/Interest grid will be utlized. CATWOE is astaple in business analysis, and despite some of the keywords could potentially use updating in themodern day, the analysis it gives is still described as indispensable (Bergvall-Kareborn et al., 2003).3For the analyse needs section UML use case diagrams and descriptions will be used, as well asStructured English. Structured English is widely used in decision modelling as it is simple tounderstand for business people, and the logical and pseudocode-esque nature allows it to modelloops easily (TutorialsPoint, n.d.).Finally, in the define requirements section ERM, ELH, UML Class and Sequence diagrams will beused. ERM/ERD diagrams are a flexible and powerful way of modelling the relationships and entitiesin a system (Song et al., 1995) due to their ability to visually present the layout of said system in aclear manner (PC Dreams). ELH diagrams are a strong way to map out the timeline of an entities lifeand the different changes that could occur to it during this time. This is one of the main concepts inEntity behaviour modelling (Central Computer & Telecommunications Agency, 2000)3. Strategy Analysis3.1 Michael Porter’s Five Forces ForceIntensityCompetitive Rivalry Within The IndustrySmall – MediumBargaining power of customersMedium – HighThreat of New EntrantsSmallBargaining Power Of SuppliersSmallThreat Of Substitute ProductsHigh Figure 1 – Michael Porter’s Five Forces Grid3.1.1 Competitive Rivalry Within the IndustryThere is very little direct competition for a delivery-based media rental service like Movies Direct,especially where it is located, in the rural county of Pembrokeshire. Physical media rental isotherwise all but extinct, with there not being any brick and mortar DVD rental shops in the area.Digital movie rental services such as Amazon Prime and Sky Movies exist however but are generallymore expensive and more limited than what Movies Direct offers, which is balanced by them beingon demand and therefore more convenient. Online videogame rental services do exist but are veryrarely used, with brick and mortar videogame rental shops not existing at all. Movies Direct does fillthis niche quite well, with videogames being much more expensive to buy outright than DVDs,making their rental more appealing. Indirect competition is the real problem for the company.3.1.2 Bargaining Power of CustomersBargaining power of customers is fairly high due to the ease of cancelling a Movies Directmembership and using other services to gain access to media. Nothing you can get from MoviesDirect cannot be found elsewhere, whether that be on a streaming service, or available to purchaseoutright. It is also not a service that every customer wants to use every week. This can be seen inincome figures as they drop in the summer when the weather is better, and people can do thingsoutside. Customers can also not be at home if they are busy on their delivery day, which leads todays where a lot of people are out such as bank holidays being poor for business. The service doesnot have a reoccurring subscription bill however, it is pay as you rent, and this means that there is noincentive to ever cancel just in case you want to rent something in the future, which does slightlyreduce the bargaining power of the customer.3.1.3 Threat of New EntrantsThis factor is of a low intensity in the DVD and videogame rental industry as it is both not seen asprofitable long term due to alternate ways to access media, especially digitally, and secondarily dueto the start-up costs being so expensive. Getting all the films and videogames you would need tohave a solid library would be difficult enough, but to compete with Netflix or even Movies Direct4itself is extremely prohibitive. Netflix has quite a large library but Movies Direct has almost everymovie released since the advent of DVDs at its disposal, which would be impossible to compete withas a newcomer. Due to the long operating time of the business the market of people interested inrentals is near saturation, so it would also be very difficult for a new business to get customers.3.1.4 Bargaining Power of SuppliersThe bargaining power of suppliers is very low due to the many sources that can be used to purchaseDVDs and videogames. Much of Movies Direct’s stock is purchased from Tesco or Amazon as theyare generally the cheapest and are consistent in having new items available. In the past MoviesDirect had used a DVD wholesaler but this proved unnecessary as only a stock of 5 or so for thelargest movie releases, and 1-3 for smaller releases was necessary due to them being rented insteadof being resold. This means that the suppliers have very little bargaining power, but also very littleinvestment as stakeholders.3.1.5 Threat of Substitute ProductsThis is the main problem that Movies Direct, and the media rental industry as a whole has is theadvent of online streaming services such as Netflix, Amazon Prime Video and on demand serviceslike Sky Movies. These are more convenient, have a larger library if you’re unsure what you’d like orare just browsing, and everything is accessible once your monthly fee is paid (aside from AmazonPrime in which many of the movies you have to rent). The overall libraries may be more limited ifyou’re looking for a certain movie, and the movies won’t be the newest releases like Movies Directhas, but the cheaper price and on-demand convenience outweigh this in many cases. On the gamesfront the threat is less so for now, but the rising popularity of the Xbox Game pass and similarservices could be a worry.Another substitute is the illegal pirating of films, which is very easy if someone has the technicalknowledge to do so. This is less convenient however, and morally questionable which may be adeterrent to some. One factor Movies Direct does have on its side to combat these digital threats isthat the internet speed in many parts of the county is still sub-par, limiting streaming capabilities.3.2 Resource Audit3.2.1 Physical Resources12000x DVDs400x Blu-rays220x Videogames3x Cars2x Computers2x Laptops2x PrintersA Garage/Office3.2.2 Financial Resources~ £1000 /week gross revenueExcellent Credit Score53.2.3 Human Resources3x Permanent Staff1x AccountantPersonnel with strong cold sales skillsPersonnel with strong interpersonal skills3.2.4 IntangiblesVery good reputationWord of mouth advertisingHigh knowledge of the market due to long standing businessNo direct competition4 6. Investigate Situation4.1 Rich PictureFigure 2 – Rich PictureThis rich picture shows the relationships between the employees of Movies Direct, the customers,the accountant, and the systems they use. It also shows some of the issues that Movies Direct faces,such as competition from Netflix and Piracy, old hardware, and rising DVD and videogame prices.Another issue shown is customers not paying weekly and the money that they owe adding up. It alsoshows how Facebook is used to advertise and asks whether this is sufficient, and shows how theprocess of generating round schedules is done.74.2 Context Diagrams4.2.1 Media Rental SystemFigure 3 – Media Rental System Context Diagram84.2.2 Round Management SystemFigure 4 – Round Management System Context Diagram94.2.3 Finance SystemFigure 5 – Finance System Context Diagram105. Consider Perspective5.1 CATWOE StakeholderAntonyMighall(Owner/Management)Sharon Mighall (Partner)Delivery DriverCustomersRental CustomerAntony Mighall, DeliveryDriver, Supplier, AccountantRental CustomerActorsAntony Mighall, Delivery DriverSharon MighallDelivery DriverTransformationProvide the best rental servicepossible in order to competewith alternativesAssist in Operations, StockControl and banking to helpensure business runssmoothlyComplete deliveryrounds efficiently,selling the mediaand gathering newcustomer ifpossibleWeltanschauungProviding the best service willhelp gain new and keep existingcustomers in order to increaseprofitsSmooth operations will allowthe profit generating part ofthe business to succeed moreeasilyMore sales meansmore payment asthe delivery driveris paid oncommissionOwnerAntony MighallAntony Mighall/SharonMighallAntony MighallEnvironmentCompetition with streamingservices and pirating; thegeneral demand for media isbased on if anything thatgenerates interest is releasedFinancial limitations onbuying stockTime constraints oncompleting rounds Figure 6 – CATWOE Analysis StakeholderAccountantRental CustomersCustomersAntony Mighall, Sharon MighallA rental customers need formedia consumption forentertainmentActorsAccountantDelivery DriverTransformationManaging Movies Directsfinances, insuring they pay propertaxes, paying each employee’ssalary correctlyObtain media they think they’denjoy from the deliver driverwithout spending too muchmoneyWeltanschauungProviding a good accountingservice will lead to continuedbusiness with Movies Direct, aswell as potentially with othersthrough word of mouthMedia is entertaining and MoviesDirect is a cheaper way ofobtaining newly released thingsthan buying them outrightOwnerAccounting agency they’reemployed byRental CustomerEnvironmentTax laws; Business regulationsFinancial restraints onentertainment; Deciding whetherto use alternative services 115.2 Power/Interest GridFigure 7 – Power/Interest GridThe above Power/Interest Grid shows where each stakeholder would fit into these parameters.Antony Mighall, being the owner of the company has high power and high interest, seeing as thecompany is his and he does the decision-making business wise. Sharon Mighall still has a highinterest but has less power as she is more of a silent partner business-wise but does assist inoperations. The delivery driver also has a lot of interest as the success of the business is how theyare paid but doesn’t make key business decisions themselves. The accountant is interested and hassome power seeing as how they make sure the financials are in shape and can make decisions basedon this. The interest is only medium however as they have other clients they must split focusbetween. The rental customer has some interest as they use the service, but a single customerdoesn’t have any power on how it operates.126. Analyse Needs6.1 Media Rental System6.1.1 Use Case DiagramFigure 8 – Media Rental System Use Case Diagram6.1.2 Use Case Descriptions Use CaseRent MediaDescriptionThe Customer rents media from the deliverydriver.ActorsCustomer, Delivery DriverStandard Scenario1. The customer browses media2. The customer selects one or more itemto rent3. The Driver gives the customer theselected items4. Customer debt is calculated based onwhat is rentedAlternate ScenariosN/A 13 Use CasePaymentDescriptionThe Customer pays part or all of their debtActorsCustomer, Delivery DriverStandard Scenario1. The customer is told how much theyowe by the delivery driver2. The customer pays part or all of thedebt with cash or cardAlternate Scenarios2. Card is declinedThe Customers card is declined so theycannot pay that way 6.1.3 Structured EnglishDO WHILE Customers haven’t been visitedGo to the next customer on the RoundsheetFOR each item they rentIF item rented is a DVDADD £3 to Amount OwedELSE (Item is a Videogame)ADD £5 to Amount OwedENDIFIF Customer will pay now EQUALS TRUEIF Customer pays in cashAmount Owed EQUALS Amount Owed MINUS Amount PaidELSEIF Customer pays with cardIF Card is acceptedAmount Owed EQUALS Amount Owed MINUS Amount PaidELSEBREAKENDIFENDIFENDIFEND146.2 Finance System6.2.1 Use Case DiagramFigure 9 – Media Rental System Use Case Diagram6.2.2 Use Case Descriptions Use CaseCalculate IncomeDescriptionThe Owner gives the accountant the yearsfinancial information so they can calculate andgive income.ActorsAccountant, OwnerStandard Scenario1. Owners gives the accountant the yearlyfinancial information2. The Accountant calculates revenue3. The accountant deducts expenses4. The accountant calculates and takesaway tax5. The Accountant gives the Owner theincome figuresAlternate ScenariosN/A Use CasePay SalaryDescriptionThe accountant pays the salaries of theemployees weeklyActorsAccountant, StaffStandard Scenario1. The Accountant generates the correctsalaries for the staff based on theincome for the week, given an extra 15 bonus if applicable2. The staff collect their wagesAlternate ScenariosN/A 6.2.3 Structured EnglishCalculate Total RevenueCalculate Total ExpensesTotal Year Income EQUALS Total Revenue MINUS Total ExpensesTotal Year Profit EQUALS Total Year Income MINUS Income TaxGive Owner Total Year ProfitENDIF Staff Receive Bonus EQUALS TRUEStaff Total Wage EQUALS Salary + BonusELSEStaff Total Wage EQUALS SalaryENDIFGive Employees Staff Total WageEND6.3 Round Management System6.3.1 Use Case DiagramFigure 10 – Round Management System Use Case Diagram166.3.2 Use Case Descriptions Use CaseCreate new RoundsheetDescriptionThe Owner creates a new roundsheet for thedelivery driver’s round, detailing where to go,who is owes what, and what orders have beenplacedActorsOwner, Delivery driverStandard Scenario1. The owner logs into database2. The owner generates the round fromthe database3. The Owner Prints the roundsheet4. The Owner gives the roundsheet to theDelivery DriverAlternate Scenarios2. Edit Customer/Media DatabaseThe Owners changes any information about thecustomers or media before the round is createdif necessary eg. A customer changed address, ora DVD broke and needs to be removed from thesystem2. Add New Customer OrdersThe owner adds new customer orders if theyhave been given since the last roundsheetcame back Use CaseReturn Completed RoundsheetDescriptionRoundsheet is returned so the database can beupdated as to how much customers have paid,how much they owe and where the media is.ActorsDelivery Driver, OwnerStandard Scenario1. Delivery Driver returns roundsheet toowner.2. Owner calculates the round revenuetaken in3. The owner updates the database toaccurately display the new customerand media informationAlternate ScenarioN/A Use CaseBuy StockDescriptionPartner buys any new media that has beenreleasedActorsPartner, SupplierStandard Scenario1. Partner looks what has been releasedand what stock should be bought2. Partner researches which supplier ischeaper in this case3. Partner buys the stock4. Partner adds the stock to the database 17 Alternate ScenarioN/A 6.3.3 Structured EnglishLog into DatabaseIF Customer Information Needs Updating EQUALS TRUEUpdate Customer InformationELSEBREAKENDIFIF Media Information Needs Updating EQUALS TRUEUpdate Media InformationELSEBREAKENDIFGenerate Roundsheet from DatabasePrint RoundsheetGive Roundsheet to Delivery DriverENDTake Finished Roundsheet from Delivery DriverCalculate Round RevenueLog into DatabaseIF Customer Information Needs Updating EQUALS TRUEUpdate Customer InformationELSEBREAKENDIFIF Media Information Needs Updating EQUALS TRUEUpdate Media InformationELSEBREAKENDIFENDCreate New Stock ListFOR All SuppliersIF Supplier CONTAINS New Stock ListAdd Supplier to Supplier ListCalculate Total Cost of New Stock ListENDIFSort Supplier List by Total Cost of New Stock ListBuy from cheapest supplierLog into databaseAdd New StockEND187. Define Requirements7.1 ERMFigure 11 – Movies Direct ERM Diagram7.2 ELH Diagrams7.2.1 DriverFigure 12 – Driver ELH Diagram197.2.2 RoundFigure 13 – Round ELH Diagram7.2.3 RoundsheetFigure 14 – Roundsheet ELH Diagram207.2.4 CustomerFigure 15 – Customer ELH Diagram7.2.5 OrderFigure 16 – Order ELH Diagram217.2.6 MediaFigure 17 – Media ELH Diagram227.3 Class DiagramFigure 18 – UML Class Diagram237.4 Sequence DiagramFigure 19 – Media Rental System Sequence Diagram8. ObservationsThe main point that can be gleamed from the various business analysis methods is that while MoviesDirect is a well oiled machine with simple, streamlined systems, probably due to the fact that it hasbeen operating for so long, there is still room for improvement. The round and roundsheet systemcould be updated to be more modern as it is the same as when the organisation began. In fact thesoftware used is so old and obscure that no one really knows how it functions under the hood, and ifit were to break or the computer it is installed on were to break it would be almost certainly lost.The only real modernisations to how Movies Direct operates is the use of social media, and theoption for customers to use a card reader to pay. The worries of the old and slow hardware areevident from the Rich Picture, which was generated after talking to and observing the Movies Directstaff. If the entire round management system was automated, including creating a website thatcould be used for customers to make orders instead of having to do so over the phone, and evenhave the option to pay, many use cases would be removed entirely due to streamlining. The drivercould also use technology as a virtual roundsheet, which could update the database automatically asnew orders are made in person, stock is taken, and money is paid. This would both save time anddecrease the user error generated from repetitive data entry, which Panko (2008) estimates asabout 0.5% for simple tasks like this. That doesn’t sound like a lot, but from the thousands of inputsthat have to be done every week to maintain the database manually it adds up.24An automated system would decrease this dramatically as realising the wrong DVD name wasselected is easier than realising an incorrect 6 letter ID is incorrect. An automatic system would alsoreduce the number of inputs being made dramatically.Another key issue is new customer generation. From the rich picture it can be seen that thecompany worries about this and that Facebook and word of mouth may not be enough to groweffectively. In the past Movies Direct had use a system they call canvasing which is basicallypromoting the service door to door, in the same vein as the more common political canvassing. Thisis not currently being done however as can be seen by it not being in any of the diagrams. TheResource Audit says that the organisation has members with strong cold sales skills, and this shouldbe taken advantage of with aggressive canvasing being done. About 2% of doors knocked on leads toa sale (Gerencer, 2019) which may sound bad, but in Movies Directs case one membership can leadto a lot of money over time. Another alternative is radio advertisement but this is more expensiveand the company has done it in the past to little success.9. Evaluation (500)I believe that the techniques used for this business analysis were generally well suited and effective.The free to use draw.io was used to create the diagrams as opposed to the costly Visio, and despitebeing free draw.io doesn’t seem inferior, with a comparison on stackshare.io showing that it is usedin slightly more company stacks than Visio (drawio vs Microsoft Visio, 2019), although the samplesize is small. Draw.io was effective in this analysis and fulfilled all the requirements made of it.Porters Five Forces was also a good fit for analysis Movies Direct as it allowed an in-depthexploration of the overall standing of the company in the marketplace, as well as an easy tounderstand grid that quickly shows the intensity of each force. The intensities average aroundmedium, with some high and some low, indicating a relative moderate amount of profit (Porter,2008), which is fairly accurate for Movies Direct, although it could be argued that some of the forcesare more impactful than others in this case, Threat of Outside Forces for example. The ResourceAudit was also useful, leading to direct reference in the observations section and generally helpingbuild understanding of the business.Despite the Rich Picture being the most freeform of the techniques, because of its constructiongenerally being reliant on interviewing people in the company (Monk & Howard, 1998) it providedsome strong insights and was revealing of some of the key problems that Movies Direct faces. This isshown in the observations where the Rich Picture is mentioned a few times. The context diagramswere helpful as a stepping stone for creating the use case diagrams but ultimately didn’t providemuch value to the analysis individually.The CATWOE and Power Interest Grid is effective in understanding stakeholder thoughts andintentions, but for this specific company there may not be enough stakeholders with vastly differentinterests to make full use of these tools.The Use Case Diagrams, Descriptions, and Structured English are successful in modelling examples ofsystem behaviours, and do provide an overview of what the processes are. However in the case ofMovies Direct, a very small, family run business, the actual way things are done is a lot looser andmore free form than the diagrams can show. This is because a business of this size has to beadaptable and ‘roll with the punches’ so to speak to survive and can’t strictly rely on a formula onhow to conduct business.25Structured English though was the best tool, ahead of Decision Table’s and Trees, to perform theanalysis as it can handle many loops and IF statements effectively (TutorialsPoint, n.d.). The Use CaseDiagrams also did point to some Use Cases that could be streamlined in the observations section.The ERM and ELH diagrams provided good insight, but the Class and Sequence diagrams once againwere too rigid to fully capture how Movies Direct would operate on a day to day basis. Overall theSocio-technical approach was the most effective in generating issues and solutions, as opposed toFunctional and Object Oriented, although in a larger company with more defined and rigoroussystems this may be different.26Part 21. IntroductionThe aim of this section is to conduct a Market Basket Analysis (MBA) of transactional data, first froma relatively small ‘groceries’ dataset, then a larger, real dataset from an online retailer, before finallya very large dataset from Instacart. The goal of an MBA is to use association rules, in this casediscerned from the Apriori algorithm, to gain business insight from customer purchases by groupingfrequently bought together items in order to find relationships between them. In simple terms, thegoal is to better understand customer buying habits. This can then be used to create effectiverecommendation systems that lead to increased basket ratio (Cakir & Aras, 2012) and thereforeincreased profits.The algorithms and implementation of these methods are quite simple in themselves, the difficulty isactually finding useful relationships in the huge amounts of data, and being able to handle datasetsof the necessary size at all (Albion Research, 2019).In the following analysis the Apriori algorithm will create frequent item sets based off thetransactional data, each of which will have attributes such as support, the frequency of the item setrelationship in the dataset overall, and confidence, the estimated conditional probability that thefrequent item set is accurate. Another measurement to be taken into account is the Lift, whichsummarises the link between products on the left and right hand side of an associate rule, with ameasurement over 1 suggested that a customer buying item A & B increases the probability they willbuy item C (McColl, n.d.), with items A,B, and C making up the frequent item set. These threeparameters will be experimented with in the code in order to find a combination that provides themost valuable output.2. ApplicationThe analysis of the first dataset is very limited in both scope and functionality, only looking at 5baskets and only using the Support attribute as the dataset is only transformed into frequentpairings, not association rules. Four pairs of items and one trio have a support of 0.6, but only one ishigher, the pair of Eggs and Kidney beans at a confidence of 0.8. From this you can deduce that 4 outof 5 baskets had the pair in them as Kidney Beans on their own have a support of 1.0, meaning theyare included in every basket. In theory a business could look at this and decide that moving thepremium Kidney Beans closer to the Eggs in the shop or vice versa is a good business decision, butthe dataset is so small this result doesn’t mean much statistically.27Figure 20 – Frequent Items for Dataset 1The next dataset is much larger and from a real online retailer. The parameters are also morecomplex, including support, confidence, lift, leverage, and conviction as this dataset has associationrules generated from it. It is also filterable by the country the baskets came from. The parametersfor the final dataframe are set as a minimum confidence of 0.07, which insures the relationship hasenough data to substantiate it, a large lift of at least 6, which means the relationship between theantecedents and the consequents is positive and strong, and a confidence of 0.8, also high. Thecountry in this case is set to France. From these parameters 8 relationships are displayed. Therelationship with the highest confidence is between a set/6 of red spotty paper plates and a set/20of red retrospot paper napkins as the antecedents, and a set of 6 red spotty paper cups as theconsequent. 6/8 of the relationships are combinations of these items, with the other two being apair of different coloured alarm clocks each way. Unfortunately it is common knowledge that paperplates, paper cups, and napkins are bought together, making these rules trivial and not useful.Changing the location from France to UK also only gives trivial results even if the minimumconfidence is lowered to allow for more leniency. The strongest association in the UK baskets arevarious coloured Teacup and Saucer sets being bought together, sometimes in pairs of colours andsometimes in trios. Despite that in a vacuum these associations are common sense, the businesscould take advantage of the knowledge that people commonly buy two tea sets, but sometimes buythree, by making offers geared towards the purchase of a third set. This extra incentive may pushthe customers who would buy two sets over the edge, swaying them to buy the third as well. This isjust one example of how even trivial looking associations can be used to increase sales.The final dataset is the largest allowing for a greater number of rules to be generated, which shouldlead to more actionable rules that generate new insight in purchasing habits. The majority of therules are as you would expect, different flavours of yoghurt being paired or various kinds of babyfood, but these can still be useful to know. A common association is various types of peach andstrawberry yoghurts, be that unsweetened, almond milk, or organic, but the rules tend to stick to anindividual variety. This knowledge could be used to make sure the varieties are placed together, orthat deals are made that include them together in order to maximise sales.28One actionable rule found is the association between various protein bars and different flavouredchocolate bars, a pairing you wouldn’t necessarily expect. An action that could be taken to takenadvantage of this is moving protein bars from the ‘fitness food’ section (if that is where they arelocated) to the sweets/chocolate bar section of the shop so customers can more easily buy both.This may even persuade customer who would normally just buy a chocolate bar to try a protein baras well. All of these rules can be applied in an online store situation, simply by moving items tonearby sections of the website, or adding them to the recommended purchases.Another area that wasn’t included in the datasets analysed is the ability through loyalty cards forpersonalised association rules to be created, or rules that transcend single baskets. If for example anassociation is found for people buying bread and milk on Mondays and then beer and crisps onFridays, deals and item placements can be made accordingly, even changing throughout the week asrules change for different days. At an individual level targeted offers could be made at people if theyare found to buy things on a schedule.3. ConclusionA Market Basket Analysis can be a very useful way to gauge how customers are engaging with astore by looking at which items are frequently bought together. Large stores with many items canquickly accumulate huge amounts of purchase data, the more of which the better when it comes togenerating associations. As seen by the recommendations given in the application section, theresults of an MBA can be used to influence many factors from the layout of a store, deals that areoffered, the placement of items and more.Overall, even if it takes some looking to find actionable rules amongst the trivial and inexplicable, thebusiness advantage that can be gained from customer purchase data is very valuable and worth theeffort to gather and analyse.29ReferencesAdams, C. (n.d.). Interview Questions for Business Analysts and Systems Analysts. 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