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Data Analytics > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

What is Business Analytics?

A

The use of data, information technology, statistical analysis, quantitative methods, and mathematical or computer-based models to help managers gain improved insight about their business operations and make better, fact-based decisions.

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2
Q

What are some applications of Business Analytics?

A
  • Pricing
  • Customer segmentation
  • Merchandising
  • Location
  • Supply Chain Design
  • Staffing
  • Health care
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3
Q

What are the benefits of Business Analytics?

A
  • Reduced costs
  • Better risk management
  • Faster decisions
  • Better productivity
  • Enhanced bottom-line performance
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4
Q

What challenges are associated with Business Analytics?

A
  • Lack of understanding of how to use analytics
  • Insufficient analytical skills
  • Difficulty in getting good data
  • Sharing information
  • Not understanding the benefits versus perceived costs
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5
Q

What is the role of Business Intelligence (BI) in Business Analytics?

A

The facility of the collection, management, analysis, and reporting of data.

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6
Q

What is the definition of Descriptive analytics?

A

The use of data to understand past and current business performance and make informed decisions.

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7
Q

What does Predictive analytics do?

A

Predicts the future by examining historical data, detecting patterns or relationships, and extrapolating these relationships forward in time.

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8
Q

What is Prescriptive analytics?

A

Identifies the best alternatives to minimize or maximize some objective.

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9
Q

Fill in the blank: Big data refers to massive amounts of business data characterized by ______, ______, and ______.

A

[volume], [variety], [velocity]

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10
Q

What are the two main attributes of data quality?

A
  • Reliability
  • Validity
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11
Q

What is a model in Business Analytics?

A

An abstraction or representation of a real system, idea, or object that captures the most important features.

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12
Q

What are the three forms of a model?

A
  • Verbal description
  • Visual model
  • Mathematical model
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13
Q

True or False: The effective use of big data has the potential to transform economies.

A

True

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14
Q

What is the primary purpose of Decision Support Systems (DSS)?

A

Combining business intelligence concepts with OR/MS models to create analytical-based computer systems to support decision making.

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15
Q

What is the significance of data reliability?

A

Data should be accurate and consistent.

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16
Q

What does data validity ensure?

A

Data correctly measures what it is supposed to measure.

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17
Q

What is the main focus of data mining?

A

Better understanding characteristics and patterns among variables in large databases using various statistical and analytical tools.

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18
Q

What are some examples of data sources used in Business Analytics?

A
  • Annual reports
  • Financial profitability analysis
  • Economic trends
  • Marketing research
  • Operations management performance
  • Human resource measurements
  • Web behavior
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19
Q

Fill in the blank: Business analytics is a process of transforming data into ______ through analysis and insights.

A

[actions]

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20
Q

What are the impacts of analytics on business performance?

A

Enhanced profitability and customer satisfaction.

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21
Q

What does the term ‘visualization’ refer to in Business Analytics?

A

Data and results of analyses that provide a way of easily communicating data at all levels of a business.

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22
Q

What is a Decision Model?

A

A logical or mathematical representation of a problem or business situation that can be used to understand, analyze, or facilitate making a decision.

23
Q

What are the inputs in a Decision Model?

A
  • 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.
24
Q

What do Descriptive Models do?

A

Explain behavior and allow users to evaluate potential decisions by asking ‘what-if?’ questions.

25
Q

What is the focus of Predictive Models?

A

Focus on what will happen in the future, often developed by analyzing historical data.

26
Q

What are Prescriptive Models designed to do?

A

Help decision makers identify the best solution to a decision problem.

27
Q

What is Optimization in the context of Prescriptive Models?

A

Finding values of decision variables that minimize (or maximize) something such as cost (or profit).

28
Q

What is an Objective Function?

A

The equation that minimizes (or maximizes) the quantity of interest.

29
Q

What is an Optimal Solution?

A

Values of the decision variables at the minimum (or maximum) point.

30
Q

What is a Linear Demand Prediction Model?

A

A model where demand decreases as price increases, represented by D = a - bP.

31
Q

In a Nonlinear Demand Prediction Model, what does the equation D = cP^-d represent?

A

It assumes price elasticity is constant, where c is demand when price is 0 and d > 0 is price elasticity.

32
Q

What is the difference between Uncertainty and Risk?

A
  • Uncertainty – imperfect knowledge of what will happen in the future.
  • Risk – associated with the consequences of what actually happens.
33
Q

What are the steps in Problem Solving with Analytics?

A
  • Recognizing a problem
  • Defining the problem
  • Structuring the problem
  • Analyzing the problem
  • Interpreting results and making a decision
  • Implementing the solution.
34
Q

What constitutes recognizing a problem?

A

Problems exist when there is a gap between what is happening and what we think should be happening.

35
Q

What factors increase complexity in defining a problem?

A
  • Large number of courses of action
  • Problem belongs to a group, not an individual
  • Competing objectives
  • External groups affected
  • Problem owner and solver are not the same person
  • Time limitations.
36
Q

What does structuring the problem involve?

A
  • Stating goals and objectives
  • Characterizing the possible decisions
  • Identifying any constraints or restrictions.
37
Q

What role does analytics play in analyzing a problem?

A

Analytics involves experimentation or solution processes such as evaluating different scenarios and analyzing risks.

38
Q

What is crucial when interpreting results and making a decision?

A

Managers must understand the limitations of models and their underlying assumptions.

39
Q

What is necessary for implementing the solution?

A

Translating model results back to the real world, requiring adequate resources, motivation, and organizational support.

40
Q

What is the formula for total gallons consumed per month if G is gallons, m is miles driven, d is days driven, and f is fuel economy?

A

Gallons consumed per month = (m x d + a) / f.

41
Q

What is the breakeven point in an Outsourcing Decision Model?

A

Breakeven Point: TC(manufacturing) = TC(outsourcing), calculated as Q = 1,000.

42
Q

What is the equation for Total Sales in a Sales-Promotion Decision Model?

A

Total Sales = 1105.55 + 56.18 x Price + 123.88 x Coupon + 5.25 x Advertising.

43
Q

What are the assumptions made in developing a model?

A

Assumptions simplify a model to make it tractable and better characterize historical data.

44
Q

What is the key assumption regarding demand and price in economic theory?

A

Demand for a product is negatively related to its price; as price increases, demand falls.

45
Q

True or False: Predictive Models are used to forecast future outcomes based on historical data.

A

True

46
Q

Fill in the blank: A _______ Model helps identify the best solution to a decision problem.

A

[Prescriptive]

47
Q

What type of analytics is used to predict the failure rate of equipment in the next half year?

A

Predictive

This helps to reduce maintenance costs and improve power availability.

48
Q

What is the purpose of prescriptive analytics in a travel agency?

A

To set the price of travel packages to attract more customers

It may also analyze past data regarding trends of hot travel destinations.

49
Q

What is the formula for yearly government tax revenue in millions?

A

tax = -2.556 + 3.799 * income + 1.583 * profit + 0.739 * capital

This formula incorporates customer income, business profits, and capital gains.

50
Q

What is the impact on government tax revenue if customer income is $1 million?

A

Increases by approximately $3.799 million

This represents the average yearly government tax revenue increase.

51
Q

What is the impact on government tax revenue if business profits increase by $1 million?

A

Increases by approximately $1.583 million

This indicates the sensitivity of tax revenue to business profit changes.

52
Q

What is the impact on government tax revenue if capital gains increase by $1 million?

A

Increases by approximately $0.739 million

This shows how capital gains affect tax revenue.

53
Q

Calculate the government tax revenue given customer income of $1.2 million, business profits of $8.63 million, and capital gains of $5.76 million.

A

$19.92 million

This is the result of applying the provided formula with the given values.

54
Q

True or False: Without customer income, business profits, and capital gains, the yearly government tax revenue is at a loss of $2.556 million.

A

True

This denotes the baseline revenue without any contributing factors.

Data Analytics (1 decks)

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