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MSIS 3223 Exam 1 Review Questions and Answers 2024
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MSIS 3223 Exam 1 Review Questions and Answers 2024
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MSIS 3223 Exam 1 ReviewQuestions and Answers 2024
discount rate - -the opportunity costs of spending funds now vs achieving a
return through another investment, & the risks associated with not receiving
returns until a later time.
- positive NPV - -the investment will provide added value because the
projected return exceeds the discount rate.
- Descriptive analytics - --summarizes data into meaningful charts and
reports, for example, about budgets, sales, revenues, or cost.
-most commonly used and most-well understood type of analytics.
- Predictive Analytics - -predict the future by examining historical data,
detecting patterns or relationships in these data, and then extrapolating
these relationships forward in time.
- Prescriptive Analytics - -uses optimization to identify the best alternatives
to minimize or maximize some objective.
- Data Reliability - -means that data are accurate and consistent
-Data used in business decisions need to be reliable and valid.
- Validity - -data correctly measures what it is supposed to measure.
- Many decision models can be formalized using - -a model
- Model - --an abstraction or representation of a real system, idea, or object.
-capture the most important feature of a problem and present them in a form
that is easy to interpret.
-can be a written or verbal description of some phenomenon, a visual
representation (visual model) such as a graph or flowchart, or a
mathematical or spreadsheet representation.
- Decision models typically have three types of input: - --data
-uncontrollable inputs
-decision options
- Decision model: Data - -assumed to be constant for purposes of the
model.
- Decision model: Uncontrollable Inputs - -quantities that can change but
cannot be directly controlled by the decision maker.
, - Decision model: Decision Options - --are controllable and can be selected
at the discretion of the decision maker.
-Decision options are often called decision variables.
- Descriptive models - --explain behavior and allow users to evaluate
potential decisions by asking "what-if?" questions.
-describe relationships allowing a manager to make a decision, without
telling a manager what to do.
- Predictive models - -focus on what will happen in the future.
- Prescriptive models - --uses optimization: the process of finding a set of
values for decision options that minimize or maximize some quantity of
interest.
-helps decision makers identify the best solution to decision problems.
- The fundamental purpose of analytics - -to help managers solve problems
and make decisions.
- Phases in Problem Solving - -1. Recognizing the problem-a problem exists
when there is a gap between what is happening & what we think should be
happening.
2. Defining the problem-In defining problems, it is important to involve all
people who make the decisions or who may be affected by them.
3. Structuring the problem-a formal model is often developed in this phase.
4. Analyzing the problem-experimentation or solution process, evaluating
different scenarios, or analyzing risks associated with various decision
alternatives.
5. Interpreting results & making a decision-models cannot capture every
detail of the real problem, & managers must understand the limitations.
6. Implementing the solution-making the solution work in the organization or
translating the results back to the real world.
- Logical functions - -depend on whether one or more conditions are true or
false.
- A Condition - -a statement about the value of a cell, either numeric or text.
- Three useful business analytics applications are: - -• IF(condition, value if
true, value if false)—a logical function that returns one value if the condition
is true and another if the condition is false.
• AND(condition1, condition 2 . . . )—a logical function that returns TRUE if all
conditions are true and FALSE if not.
• OR(conditions 1, condition 2, . . .)—a logical function that returns TRUE if
any condition is true and FALSE if not
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