Explain the concept of OLAP and how it is used in data analysis.
Instruction: Define OLAP and discuss its application in analyzing multidimensional data.
Updated
Official answer
OLAP supports interactive analysis across business dimensions and measures. For sales, dimensions might be time, product and region, while measures include net revenue and units sold.
A user can roll daily revenue up to months, drill from region to store, slice to one year, or pivot products against regions. These operations require consistent dimension relationships and measure definitions. “Cube” describes a multidimensional analytical model; it does not require every implementation to store a literal precomputed array.
For example, combining a store with revenue 100 and 10 units with another having revenue 300 and 20 units gives revenue 400, units 30 and revenue per unit about 13.33. Averaging the two store ratios, 10 and 15, gives 12.5 and answers a different question. Measures need aggregation rules, not just a SUM button.
SQL can perform these analyses through grouping, joins and analytical functions. OLAP tools add a reusable semantic model and navigation experience, sometimes with cached or preaggregated data. Assess freshness, permissions, scale and query performance for the actual implementation.