Dummy variables are variables that take values of either 0 or 1, and are used to indicate the presence or absence of one or more qualitative characteristics. In other words, dummy variables quantify or measure qualitative variables that are not measurable except by signaling whether a characteristic is absent or present. The coefficient of a dummy variable in a regression equation shows the average effect on the dependent variable when the dummy variable assumes the values 1. There are three classic applications of dummy variables:
1) Detect seasonal patterns or seasonality associated with the dependent variable.
2) Adjust the dependent variable's history for aberrations or outliers.
3) Measure the effect of qualitative variables on the dependent variable.
The benefits of using dummy variables are:
1) They enable other independent variables to account more accurately for normal sales variances during unusual periods (such as hotter than normal weather conditions due to El Nińo).
2) They enable nonmetric qualitative data to be transformed into metric quantitative data and used as independent variables.
In Demand Planning, you can define dummy variables as part of multiple linear regression (MLR).
More terms such as dummy variable in Dictionary D.
- Manual Detail Log:
- Help generated as part of the risk and profitability analyses that records the calculations performed and the basis used for those calculations. For example, a detail log is generated for the NPV dummy variable definition.
- Manual Distribution Plan Template:
- Help Prepared data for coinsurance business, which can be defined in template management dummy variable explain.
- Manual Drop Shipment (SBO):
- Help directly from a wholesaler or manufacturer to a third-party customer. A drop shipment is based on an order from a customer to a distributor. The distributor initiates the shipment by informing the dummy variable what is.
- Manual Database Cursor:
- Help resulting set of a database selection. The database cursor is always assigned to a row in the resulting set. In Open SQL, the cursor is handled implicitly with the exception of the statements OPEN dummy variable meaning.
- Manual Direct Distribution (SBO):
- Help A sales system in which goods are sold by the manufacturer to consumers without making use of markets or brokers dummy variable abbreviation.
