How Would You Differentiate Between Principal Component Analysis (PCA) and Factor

question 9

Multiple Choice

How would you differentiate between principal component analysis (PCA) and factor analysis (FA) ?

• A) PCA is concerned with explaining the maximum amount of total variance, whilst FA is concerned with covariance.
• B) FA is concerned with explaining the maximum amount of total variance, whilst PCA is concerned with covariance.
• C) PCA and FA are essentially the same thing, but PCA relates to psychology, whereas FA relates specifically to motor control.
• D) PCA and FA are essentially the same thing, but FA relates to psychology, whereas PCA relates specifically to motor control.

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Definitions:

Capacity Utilization

The percentage of a firm's total production capacity that is actually being used in the production of goods or services.

Aggregate Planning

A process by which a company determines optimal levels of capacity, production, subcontracting, inventory, and labor for meeting expected demand.

Forecast Quality

The accuracy and reliability of predictions regarding future demand, sales, or other market dynamics.

Supply Chains

Complex networks of suppliers, manufacturers, and distributors that produce, handle, and distribute goods and services from origin to consumer.