Process - Data Extrapolation

Author: Jacques ter Huurne

Definition

Data extrapolation is to extend on the information that is given. Depending on what kind of extrapolation is being done, it means to extend further then the given boundaries. For example, a driver extrapolates the road conditions behind his line of sight.

Description

To extrapolate with data is to see what is given to you, and then using that data to estimate future events with little to no certainty of whether it will actually happen.

Explanation and application

Businesses like supermarkets can use data extrapolation to estimate their future and sales, and whether it would be profitable or not to release a certain product. For example, over the sales of one year the pizzas sold by an Italian restaurant was around 1000 pizzas each sold for $10, but it takes $10,000 to make of the pizzas, which means no profit, using that data the Italian restaurant might extrapolate to see that next year they will again not make profits from those pizzas.

References and resources


http://www.businessdictionary.com/definition/extrapolation.html

http://www.merriam-webster.com/dictionary/extrapolation