Business Analytics - ANSWERThe use of data, information technology, statistical analysis, quantitative methods, and mathematical or computer-based models to help managers gain improved insight about the business operations and make better, fact-based decisions.
Pricing (example of business analy...
Business Analytics - ANSWERThe use of data, information technology, statistical analysis, quantitative
methods, and mathematical or computer-based models to help managers gain improved insight
about the business operations and make better, fact-based decisions.
Pricing (example of business analytics application) - ANSWERsetting prices for consumer and
industrial goods, government contracts, and maintenance contracts
Customer segmentation (example of business analytics application) - ANSWERidentifying and
targeting key customer groups in retail, insurance, and credit card industries
Supply chain design (example of business analytics application) - ANSWERdetermining the best
sourcing and transportation options and finding the best delivery routes
Staffing (example of business analytics application) - ANSWERensuring appropriate staffing levels and
capabilities, and hiring the right people
Health care (example of business analytics application) - ANSWERscheduling operating rooms to
improve utilization, improving patient flow and waiting times, purchasing supplies, and predicting
health risk factors
Merchandising (example of business analytics application) - ANSWERdetermining brands to buy,
quantities, and allocations
Location (example of business analytics application) - ANSWERfinding the best location for bank
branches and ATMs, or where to service industrial equipment
Benefits of analytics - ANSWERreduced costs, better risk management, faster decisions, better
productivity and enhanced bottom-line performance such as profitability and customer satisfaction.
,Challenges of analytics - ANSWERlack of understanding of how to use analytics, competing business
priorities, insufficient analytical skills, difficulty in getting good data and sharing information, and not
understanding the benefits versus perceived costs of analytics studies.
Commercial software - ANSWER-IBM Cognos Express
-SAS Analytics
-Tableau
Spreadsheets - ANSWER-Widely used
-Effective for manipulating data and developing and solving models
-Support powerful commercial add-ons
-Facilitate communication of results
Descriptive analytics - ANSWERthe use of data to understand past and current business performance
and make informed decisions
-Example: Examine historical data fro similar products (price, units sold, advertising)
Predictive analytics - ANSWERpredict the future by examining historical data, detecting patterns or
relationships in these data, and then extrapolating these relationships forward in time
-Example: Predict sales based on price
Prescriptive analytics - ANSWERidentify the best alternatives to minimize or maximize some objective
-Example: Find the best sets of pricing and advertising to maximize sales revenue.
Data - ANSWERNumbers or textual data that are collected through some type of measurement
process.
Information - ANSWERResult of analyzing data; that is, extracting meaning from data to support
evaluation and decision making.
Big data - ANSWERrefers to massive amounts of business data (volume) from a wide variety of
sources (variety), much of which is available in real time (velocity), and much of which is uncertain or
unpredictable (veracity).
, Reliability - ANSWERData are accurate and consistent
Validity - ANSWERData correctly measures what it is supposed to measure.
Model - ANSWER-An abstraction or representation of a real system, idea, or object.
-Captures the most important features.
-Can be written or verbal description, a visual representation, a mathematical formula, or a
spreadsheet.
Decision model - ANSWER- a logical or mathematical representation of a problem or business
situation that can be used to understand, analyze, or facilitate making a decision
Inputs of decision models - ANSWER-Data - assumed to be constant
-Uncontrollable inputs - quantities that can change but cannot be controlled
-Decision options - controllable and selected at the discretion of the decision maker
Outputs of decision models - ANSWERMeasures of performance or behavior
Descriptive models - ANSWERexplain behavior and allow users to evaluate potential decisions by
asking "what-if?" questions.
Predictive models - ANSWER-focus on what will happen in the future.
-developed by analyzing historical data and assuming that the past is representative of the future.
Prescriptive models - ANSWERhelp decision makers identify the best solution to a decision problem.
Optimization - ANSWERfinding values of decision variables that minimize (or maximize) something
such as cost (or profit)
Objective function - ANSWERthe equation that minimizes (or maximizes) the quantity of interest
Optimal solution - ANSWERvalues of the decision variables at the minimum (or maximum) point
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