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Is The Simplest Answer Always the Right One?

09.09.2020

While Occam’s Razor states that the simplest answer is usually correct, it doesn’t say that it is always correct. At NCS, we pride ourselves on identifying outliers. While it’s easy to say that those who have outliers in their data are all bad actors, that just isn’t true.

As an example, we routinely see a cannabis retailer selling an eighth of their flower product for $0.01. This is an outlier because how can a company stay in business if they are selling their products for a penny?

I subscribe to the theory of the “Rule of Five.” It is a lot like Occum’s Razor- there is an obvious reason, and then the four other plausible reasons why something happened. In the example above, the obvious answer is that the retailer is ringing up a smaller amount and pocketing what the customer is paying. However, there are other likely reasons for the penny sale; buy-one-get-one for a penny, frequent buyer programs, new customer deals, miskeying at the register, etc.

If we go the other way and see a transaction for an eighth of flower for $90, we could use the Rule of Five strategy to rationalize the transaction before making an accusation. The assumption is that the retailer miskeyed the sale. The other four reasons could be only ringing up 3.5 grams while giving the customer more, selling a new or specialty strain, miscoding the product type, etc.

While none of these reasons absolve the retailer of their wrongdoing, we have narrowed our thinking to ask the appropriate questions and gauge what an acceptable response would be.

About the Author Mark Nassi

Mark Nassi is the Co-Founder and Chief Financial Officer of NCS Analytics, where he leads the company’s financial strategy, data ingestion infrastructure, and custom analytics operations. Serving as the technical and financial backbone of the organization, Mark specializes in translating complex data architecture into clear, actionable intelligence that solves high-stakes operational and regulatory challenges for clients nationwide.

At NCS Analytics, Mark plays a pivotal role bridging the gap between enterprise software engineering and commercial financial execution. He oversees the data pipelines responsible for processing millions of weekly regulatory records, ensuring the platform’s underlying financial and behavioral models operate with absolute accuracy. His cross-functional oversight ensures that custom client requests, complex data ingestions, and risk-scoring algorithms maintain the highest standards of mathematical integrity and regulatory compliance.

Recognizing the unique compliance hurdles faced by institutions in cash-intensive industries, Mark co-architected the company’s core financial logic models, including the patent-pending analytics that power the NCS Platform and NCS Thea. By converting fragmented, government-mandated filings into structured financial metrics, his work enables credit committees, BSA/AML compliance officers, and enforcement agencies to independently verify risk and evaluate business viability with confidence.

He began his career developing specialized market research data analytics and collection software before advancing into accounting, where he focused on technology platforms and alternative investment structures.

Mark holds a Bachelor of Science in Mathematics from the University of California, Davis, and a Master of Science in Accounting from the University of Colorado Denver. He is an active Certified Public Accountant (CPA) in the state of Colorado, leveraging his combined expertise in advanced mathematics and accounting to drive continuous innovation across NCS Analytics’ data platforms.

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