Chapter 1

Question 1

Define Business Analytics

Answer 1

INFORMS defines Analytics as the scientific process of transforming data into insight for making better decisions. Analytics is seen as an end-to-end process beginning with identifying the business problem to evaluating and drawing conclusions about the prescribed solution arrived at through the use of analytics tools and methodologies.

Question 2

Who is INFORM?

Answer 2

INFORMS is the world’s largest professional society for those in the field of analytics, operations research (O.R.), and management science.

Question 3

What is the type of models used in this course? (4)

Answer 3

Mental Model, Visual Model, Prototype Model, Mathematical Model

Question 4

What is a mental model?

Answer 4

A model in which you visualize outcome

Question 5

What is a visual model?

Answer 5

blueprint for a building, maps for traveling

Question 6

What is a physical or scale model?

Answer 6

A prototype of final designs

Question 7

What is a mathematical model?

Answer 7

A mathematical relationships are used to describe a decision problem. Often spreadsheets are the tool for building mathematical models

Question 8

What are the characteristics and benefits of modeling?

Answer 8

1) Models are often usually SIMPLIFIED versions of the object or decision problem they represent
2) The model represents the relevant characteristics of the object or decision problem being studied
3) Less EXPENSIVE to analyse decision problems using a model.
4) Models are often deliver needed information on a timelier basis
5) Models are frequently helpful in examining things that would be impossible to achieve in real life
6) Models allow us to gan insight and understanding

Question 9

Where can you gather data for a decision model?

Answer 9

For many models the data can be collected INTERNALLY from the company

Question 10

Data for modelling must consider the time and cost of what three factors

Answer 10

1) Collecting, organizing, and sorting relevant data
2) Generating a solution approach
3) Using the model

Question 11

What is an End-User Development?

Answer 11

Building models yourself. (or involving assisting other to build models themselves).

Question 12

What End-User documentation is required for ease of use? (3)

Answer 12

1) User Documentation
2) Model documentation
3) Programming documentation

Question 13

What is the anchoring and framing effect that impact decisions as a result of human error?

Answer 13

framing- The decision is based on how the question is asked, the decision maker’s perception of risk, and/or how it would impact the decision maker personally.

Anchoring - depends on your starting point. Think USA example.

Question 14

A company will try to satisfy an objective: (2)

Answer 14

Maximize profit and minimize cost

Question 15

What are the categories of a Mathematical Models?

Answer 15

Deterministic and probabilistic

Question 16

Define Deterministic (mathematical model)

Answer 16

known and well defined: statistics, linear & Integer Programming (prescriptive)

Question 17

Define Probabilistic (2)(mathematical models)

Answer 17

PREDICTIVE - in depended variables known (such as amount of sales) but their impact is unknown: Forecasting
DESCRIPTIVE - Inputs are unknown (such as customer arrivals or service time)

Question 18

Give an example of a Mathematical model that is predictive (Probabilistic)

Answer 18

forecasting

Question 19

Give an example of a Mathematical model that is descriptive

Answer 19

decision theory, simulation, queing

Question 20

what is Business Analytics and the Problem Solving Process? (4)

Answer 20

1) define the problem
2) Model the problem
3) Solve the model
4) Communicate the results

Question 21

What is considered in management a successful quantitative model? (3)

Answer 21

Success( business insight), Technical Success (model works) , Organizational success (model is accepted)