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Framework of Business Analytics: Statistics

The document discusses the framework and process of business analytics. It describes key concepts like statistics, quantitative methods, and information systems used for business intelligence. The analytical approach of using data to make decisions is advocated over non-analytical methods. Examples are provided of applications in risk management, fraud detection, and healthcare. The scope of business analytics is explored through cases involving retail markdown decisions and analytics used in the entertainment industry. Strategies for implementing analytics and key variables and data sources are also outlined.

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Saurav Dash
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66 views9 pages

Framework of Business Analytics: Statistics

The document discusses the framework and process of business analytics. It describes key concepts like statistics, quantitative methods, and information systems used for business intelligence. The analytical approach of using data to make decisions is advocated over non-analytical methods. Examples are provided of applications in risk management, fraud detection, and healthcare. The scope of business analytics is explored through cases involving retail markdown decisions and analytics used in the entertainment industry. Strategies for implementing analytics and key variables and data sources are also outlined.

Uploaded by

Saurav Dash
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Framework of Business Analytics

 Statistics
- descriptive statistics
- inferential statistics
- forecasting
- modelling
 Quantitative methods
- Simulation
- optimization
- modelling
 Information systems for business intelligence
- Big data, small data
- data marts, spreadsheets
- modelling

1-1
Step-wise Process of Business Analytics
- Problem identification
- literature review
- hypotheses setting
- modelling
- Data collection
- Data structuring
- Data Analysis
- Reliability and validity
- Results and discussion
- Robustness
- Sensitivity analysis
- Inferences

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Why Business Analytics
- Analytical Approach
- Non-analytical approach (Delphi Technique/ Grounded theory)
Analytical approach is better choice than non-analytical approach
Why????
Using data to derive conclusions/decisions can deliver a significant higher chance of making a
good, long-lasting decision over non-data driven approach.

More useful Applications as per the current requirements:


Risk management, fraud detection, revenue management, healthcare management
Advantage:
Time saving, cost saving, more productive, competitive advantage, increased
customer satisfaction, expanded sales/profits, etc.

1-3
Scope of Business Analytics
Example 1.1 Retail Markdown Decisions
 Most department stores clear seasonal inventory by reducing prices.
 The question is:
When to reduce the price and by how much?
 Descriptive analytics: examine historical data for similar products
(prices, units sold, advertising, …)
 Predictive analytics: predict sales based on price
 Prescriptive analytics: find the best sets of pricing and advertising to
maximize sales revenue

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Scope of Business Analytics
Analytics in Practice: ABC Entertainment
•ABCE owns numerous hotels and casinos
•Uses analytics to:
- forecast demand for rooms
- segment customers by gaming activities
•Uses prescriptive models to:
- set room rates
- allocate rooms
- offer perks and rewards to customers

1-5
Possible Strategies for Business Analytics
1. Competing ON Analytics
– Analytics is THE key competitive advantage
– Target Result – Sustainable competitive advantage
2. Competing WITH Analytics
– Focus on one business process
– Target result – Incremental profits
3. Improving With Analytics
– Culture of analytics
– Target result – Continuous improvement
4. Revenue Through Analytics
– “Sell” data as a secondary product
– Improved margins or market share
5. Persevering Through Analytics
– Do what the competition does
– The price of entry

1-6
Step-wise Process of Business Analytics
- Problem identification
- literature review
- hypotheses setting
- modelling
- Data collection
- Data structuring
- Data Analysis
- Reliability and validity
- Results and discussion
- Robustness
- Sensitivity analysis
- Inferences

1-7
Data for Business Analytics

VARIABLES
DATA
- collected facts and figures
DATABASE
- collection of computer files containing data
INFORMATION
- comes from analyzing data
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Variables for Business Analytics
Variables: Categorical (Qualitative); Quantitative
Dependent Independent
Endogenous Exogenous
Explained Explanatory
Effect Cause
Controlled Control
Outcome Covariate
Regressand Regressor
Predictand Predictor
Response Stimulus

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