Describe OLAP applications and identify the characteristics of such applications.

Question

What will be an ideal response?

Answer 1

There are many examples of OLAP applications in various functional areas as listed in Table 33.1.

Table 33.1 Examples of OLAP applications in various functional areas.

Functional area Examples of OLAP applications
Finance Budgeting, activity-based costing, financial performance
analysis, and financial modeling

Sales Sales analysis and sales forecasting
Marketing Market research analysis, sales forecasting, promotions
analysis, customer analysis, and market/customer
segmentation
Manufacturing Production planning and defect analysis


An essential requirement of all OLAP applications is the ability to provide users with JIT information, which is necessary to make effective decisions about an organization’s strategic directions. JIT information is computed data that usually reflects complex relationships and is often calculated on-the-fly. Analyzing and modeling complex relationships are practical only if response times are consistently short. In addition, because the nature of data relationships
may not be known in advance, the data model must be flexible. A truly flexible data model ensures that OLAP systems can respond to changing business requirements as required for effective decision-making. Although OLAP applications are found in widely divergent functional areas, they all require the following key features:
? multi-dimensional views of data;
? support for complex calculations;
? time intelligence.