What does a scatter diagram primarily illustrate?

A scatter diagram primarily illustrates the relationship between two numerical variables. It does this by plotting individual data points on a two-dimensional graph, where each axis represents one of the variables. This visual representation allows observers to see patterns, correlations, or clusters in the data. For instance, if one variable tends to increase as the other variable increases, a positive correlation is indicated by an upward trend in the plotted points. Conversely, a downward trend would suggest a negative correlation.

By utilizing scatter diagrams, analysts can visually assess the strength and nature of relationships, which is critical for data analysis and decision-making in various fields, including supply chain management. This tool is fundamental for identifying potential relationships and forecasting outcomes based on established data trends.