5: Informational Context Of Business Flashcards
What is data vs information?
Data: A collection of unprocessed facts/stats
Information: Data that is processed in a meaningful way
What are the characteristics of good information?
ACCURATE:
A: Accurate
C: Complete
C: Cost effective
U: User Targeted
R: Relevant
A: Accessible
T: Timely
E: Easy to use
How is data presented?
Bar charts, Frequency distributions, Histograms, Ogives, Scatter Diagrams
How to calculate the height of a histogram?
Frequency * Standard class width / Actual class width
How to calculate most frequent class on a histogram?
Calculate area of bar = Height * Width of class
What are the components of a Time Series Analysis?
Trend: Long term movement over time.
Seasonal Variations: Short term fluctuations which cause known differences due to different time periods.
Cyclical variations: Associated with phases of the trace cycle (Longer term)
Residual Variations : Other variations
Ways to calculate trends?
Line of best fit.
Linear Regression.
Moving Averages: Mid point of 2 moving averages = Trend
How to calculate seasonal variations?
Seasonal Variation = Time Series - Trend.
Or
Seasonal Variation = Time Series / Trend
How to forecast using time series?
Step 1: Plot trend line (Regression, Moving averages)
Step 2: Extrapolate trend line outside range of known data.
Step 3: Adjust forecasted trends to obtain actual forecast.
How to adjust forecasted trends?
Additive model : Add positive or subtract negative variations
Multiplicative model: Multiply forecast trends by seasonal variations.
What are the limitations of time series & regression analysis?
Time Series: Danger of random variations upsetting pattern of trend & seasonal variation.
Regression: Assumes both a linear relationship between two variables & that one variable only depends on the other and not many other variables.
What is correlation?
The extent to which the value of a dependant variable is related to the value of the independent variable.
What does the Coefficient of determination tell us?
A measure of the proportion of total variation in the value of one variable that can be explained by variations in the value of the other variable.
How to interpret correlation coefficient results?
Degrees of correlation: Perfectly, Partly & Uncorrelated.
Perfectly = +1 or -1
Uncorrelated = 0
When is spearman’s rank correlation coefficient given?
When data is given in terms of order or rank as oppose to actual values.
