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Notes On Business Analytics

Business Analytics (BA) involves collecting, analyzing, and interpreting data to inform business decisions and optimize performance through various techniques. It is classified into four types: Descriptive, Diagnostic, Predictive, and Prescriptive Analytics, each serving different purposes and utilizing specific tools. Applications of BA span multiple sectors, including marketing, finance, human resources, supply chain management, healthcare, and manufacturing, providing benefits such as improved decision-making and operational efficiency.

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27 views3 pages

Notes On Business Analytics

Business Analytics (BA) involves collecting, analyzing, and interpreting data to inform business decisions and optimize performance through various techniques. It is classified into four types: Descriptive, Diagnostic, Predictive, and Prescriptive Analytics, each serving different purposes and utilizing specific tools. Applications of BA span multiple sectors, including marketing, finance, human resources, supply chain management, healthcare, and manufacturing, providing benefits such as improved decision-making and operational efficiency.

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fortniteonly211
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� Business Analy�cs (BA): Overview

Business Analy�cs refers to the skills, technologies, prac�ces, and con�nuous itera�ve explora�on
and inves�ga�on of past business performance to gain insight and drive business planning.

� Defini�on:

Business Analy�cs is the process of collec�ng, analyzing, and interpre�ng data to make informed
business decisions and op�mize performance.

It leverages data, sta�s�cal analysis, predic�ve modeling, and data visualiza�on to solve problems
and guide strategic decision-making.

� Types of Business Analy�cs

Business Analy�cs is generally classified into four major types:

1. Descrip�ve Analy�cs

• Purpose: Answers “What happened?”

• Tools Used: Dashboards, Reports, Data Aggrega�on

• Descrip�on: It summarizes historical data to iden�fy trends and paterns.

� Example:

A retail company uses descrip�ve analy�cs to understand last quarter’s sales performance across
different regions.

2. Diagnos�c Analy�cs

• Purpose: Answers “Why did it happen?”

• Tools Used: Drill-down, Data Discovery, Correla�on, Data Mining

• Descrip�on: It inves�gates the reasons behind past outcomes.

� Example:

An e-commerce company explores a sudden drop in customer purchases by analyzing website traffic,
pricing changes, and customer feedback.

3. Predic�ve Analy�cs

• Purpose: Answers “What is likely to happen?”

• Tools Used: Machine Learning, Sta�s�cal Models, Forecas�ng

• Descrip�on: Uses historical data and algorithms to predict future outcomes.


� Example:

A bank uses predic�ve analy�cs to assess the probability of a customer defaul�ng on a loan based on
their credit history and financial behavior.

4. Prescrip�ve Analy�cs

• Purpose: Answers “What should we do?”

• Tools Used: Op�miza�on, Simula�on, Decision Modeling

• Descrip�on: Suggests ac�ons based on data analysis to achieve desired outcomes.

� Example:

An airline uses prescrip�ve analy�cs to determine the best flight pricing strategy based on demand,
compe��on, and customer behavior.

� Applica�ons of Business Analy�cs (with Examples)

� 1. Marke�ng and Sales

• Use: Customer segmenta�on, campaign effec�veness, pricing strategies.

• Example: Ne�lix uses analy�cs to recommend content based on viewer behavior.

� 2. Finance and Accoun�ng

• Use: Risk analysis, fraud detec�on, budge�ng.

• Example: PayPal uses real-�me analy�cs to detect suspicious transac�ons and reduce fraud.

� 3. Human Resources

• Use: Talent acquisi�on, employee performance, reten�on analysis.

• Example: IBM uses analy�cs to predict employee atri�on and develop reten�on strategies.

� 4. Supply Chain Management

• Use: Inventory op�miza�on, supplier performance, demand forecas�ng.

• Example: Amazon uses predic�ve analy�cs to manage inventory and reduce delivery �mes.

� 5. Healthcare

• Use: Pa�ent diagnosis, treatment personaliza�on, hospital management.

• Example: Hospitals use predic�ve analy�cs to forecast pa�ent admission rates and allocate
resources effec�vely.

� 6. Manufacturing

• Use: Quality control, predic�ve maintenance, produc�on planning.


• Example: General Electric (GE) uses sensors and analy�cs to predict when equipment might
fail.

� Benefits of Business Analy�cs

• Beter decision-making

• Improved opera�onal efficiency

• Enhanced customer experience

• Compe��ve advantage

• Cost reduc�on and risk mi�ga�on

� Summary Table

Type Key Ques�on Focus Area Example Use Case

Descrip�ve What happened? Historical analysis Sales trend report

Why did it
Diagnos�c Root cause analysis Inves�ga�ng drop in user engagement
happen?

What might Forecas�ng,


Predic�ve Predic�ng churn rate in telecom industry
happen? predic�on

What should we Decision Recommending op�mal pricing in dynamic


Prescrip�ve
do? op�miza�on markets

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