What is data warehouse?

A data warehouse is a electronic storage of an Organization's historical data for the purpose of Data Analytics, such as reporting, analysis and other knowledge discovery activities.

Other than Data Analytics, a data warehouse can also be used for the purpose of data integration, master data management etc.

According to Bill Inmon, a datawarehouse should be subject-oriented, non-volatile, integrated and time-variant.

What is the difference between OLTP and OLAP?

OLTP is the transaction system that collects business data. Whereas OLAP is the reporting and analysis system on that data.

OLTP systems are optimized for INSERT, UPDATE operations and therefore highly normalized. On the other hand, OLAP systems are deliberately denormalized for fast data retrieval through SELECT operations.

What is data mart?

Data marts are generally designed for a single subject area. An organization may have data pertaining to different departments like Finance, HR, Marketing etc. stored in data warehouse and each department may have separate data marts. These data marts can be built on top of the data warehouse.

What is ER model?

ER model or entity-relationship model is a particular methodology of data modeling wherein the goal of modeling is to normalize the data by reducing redundancy. This is different than dimensional modeling where the main goal is to improve the data retrieval mechanism.

What is dimensional modeling?

Dimensional model consists of dimension and fact tables. Fact tables store different transactional measurements and the foreign keys from dimension tables that qualifies the data. The goal of Dimensional model is not to achieve high degree of normalization but to facilitate easy and faster data retrieval.

Ralph Kimball is one of the strongest proponents of this very popular data modeling technique which is often used in many enterprise level data warehouses.

If you want to read a quick and simple guide on dimensional modeling, please check our Guide to dimensional modeling.

What is dimension?

A dimension is something that qualifies a quantity (measure).

For an example, consider this: If I just say… “20kg”, it does not mean anything. But if I say, "20kg of Rice (Product) is sold to Ramesh (customer) on 5th April (date)", then that gives a meaningful sense. These product, customer and dates are some dimension that qualified the measure - 20kg.

Dimensions are mutually independent. Technically speaking, a dimension is a data element that categorizes each item in a data set into non-overlapping regions.

What is Fact?

A fact is something that is quantifiable (Or measurable). Facts are typically (but not always) numerical values that can be aggregated.

What are additive, semi-additive and non-additive measures?

Non-additive Measures

Non-additive measures are those which can not be used inside any numeric aggregation function (e.g. SUM(), AVG() etc.). One example of non-additive fact is any kind of ratio or percentage. Example, 5% profit margin, revenue to asset ratio etc. A non-numerical data can also be a non-additive measure when that data is stored in fact tables, e.g. some kind of varchar flags in the fact table.

Semi Additive Measures

Semi-additive measures are those where only a subset of aggregation function can be applied. Let’s say account balance. A sum() function on balance does not give a useful result but max() or min() balance might be useful. Consider price rate or currency rate. Sum is meaningless on rate; however, average function might be useful.

Additive Measures

Additive measures can be used with any aggregation function like Sum(), Avg() etc. Example is Sales Quantity etc.