Base120 · Decomposition
Factorization
Separate multiplicative components to understand relative contribution of each factor
When to use
"Use when an outcome is a product of multiple factors and you need to understand each factor's relative contribution. Factorize the outcome into independent (or near-independent) components."
Example
"Website conversion rate = traffic quality x landing page effectiveness x pricing perception x trust signals. Factorizing reveals that traffic quality is the bottleneck — improving the landing page has diminishing returns because the traffic is not qualified."
Common misuse
"Factorizing into factors that are not independent. If traffic quality and landing page effectiveness are correlated (high-quality traffic is more forgiving of bad landing pages), the factorization double-counts their interaction."