The case on Chow Tai Fook (CTF), the world’s largest jewelry company, introduces an important challenge for data analytics in the jewelry or luxury product industry. It is difficult to provide an accurate demand prediction for a product at CTF. The reasons are mainly three-fold. First, the jewelry products are of high value and slow-moving, with mostly single digit sales numbers over a year. Second, the demand of a product partly depends on the availability of other products, due to customers’ substitution behavior. There are 16 product categories with more than 15,000 distinct products offered by CTF, and how the sales of different products are related is not clearly understood. In this case, traditional statistical methods such as linear regression is not useful.
Students will learn that, in practice, they need to find out a suitable analytics method. They may have to compare different methods (such as linear regression, logistic regression, structure models, and clustering) to find the best solution.
Students can get to know about the operational details of the jewelry industry: how customers typically behave, what are the important decisions to make, and what kind of data will be available in practice.