Business Analytics Defined
- Scientific process of transforming data into insight for making better decisions. - Used for data-driven or fact-based decision making, which is often seen as more objective than other alternatives for decision making.
Tools of business analytics can aid decision making by:
- Creating insights from data
- Improving our ability to more accurately forecast for planning - Helping us quantify risk
- Yielding better alternatives through analysis and optimization If you want to learn more check out What is the general relationship between vassals and lords?
A Categorization of Analytical Methods and Models
It encompasses the set of techniques that describes what has happened in the past. Examples: data queries, reports, descriptive statistics, data visualization (data dashboards), data- mining techniques, and basic what-if spreadsheet models. - Data query: It is a request for information with certain characteristics from a database.
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- Data dashboards: Collections of tables, charts, maps, and summary statistics that are updated as new data become available.
It consists of techniques that use models constructed from past data to predict the future or ascertain the impact of one variable on another. Survey data and past purchase behavior may be used to help predict the market share of a new product.
Sources of data:
• Experimental study - A variable of interest is first identified.
o Then one or more other variables are identified and controlled or manipulated so
that data can be obtained about how they influence the variable of interest. o Nonexperimental study or observational study - Make no attempt to control the
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variables of interest.
o A survey is perhaps the most common type of observational study.
• Relative frequency and percent frequency distributions
o Relative frequency distribution: It is a tabular summary of data showing the
relative frequency for each bin.
o Percent frequency distribution: Summarizes the percent frequency of the data for
-Used to provide estimates of the relative likelihoods of different values of a
• Frequency distributions for quantitative data
o Three steps necessary to define the classes for a frequency distribution with quantitative data:Don't forget about the age old question of What is the number of deaths per 1000 population in a given year?
Don't forget about the age old question of How do you find the unit sales to attain target profit?
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1. Determine the number of nonoverlapping bins.
2. Determine the width of each bin.
3. Determine the bin limits.
Tables should be used when:
1. The reader needs to refer to specific numerical values.
2. The reader needs to make precise comparisons between different values and not just
3. The values being displayed have different units or very different magnitudes.