Factor Analysis
There exist the same number of factors as there are variables. Certain amount of the overall variance will be captured by each factor in the observed variables and the variations are always listed in the order of how much variation they explain as eigen values (is a of measure of variance in the observed variables). A factor with an eigen value ≥1 explains more variance than a single observed variable.
Goals:
To identify otherwise not-directly observable factors based on a set of observable variables
BrandIdea’s Implementation:
Socio Economic Classification, SKU Recommendations