Business Decisions with Data Chapter 1

Chapter 1: Data and Business Decisions

• This chapter covers data analysis and decision modeling
• Data are numerical facts and figures collected through measurement
• Information comes from analyzing data
• Modern organizations use data to evaluate daily performance and make crucial decisions
• Data is important for various business functions like:
  • Annual reports
  • Audits
  • Financial analysis
  • Market research
  • Operations management
  • Human resource management
  • Economic analysis
  • Regulatory compliance
  • Budget allocation
• A decision model is a logical or mathematical representation of a problem or business situation
• Data is key input to decision models
• Statistics is the science of uncertainty and extracting information from data
• Statistics involves collecting, organizing, analyzing, interpreting, and presenting data
• A statistic is a summary measure of data
• The Malcolm Baldrige Criteria Measurement Categories include:
  • Product and process outcomes
  • Customer-focused outcomes
  • Workforce-focused outcomes
  • Leadership outcomes
  • Financial and market outcomes
• Understanding relationships among metrics leads to better decisions

Sources of Data

• Internal data comes from company records, databases
• External data comes from published sources, external databases, the Internet
• Generated data comes from surveys, focus groups

Metrics and Measurement

• A metric is a measurement unit for objectively quantifying performance
• Measurement is the act of obtaining data associated with a metric
• Measures are numerical values of a metric

Discrete and Continuous Metrics

• Discrete metrics are derived from counts (e.g., defects, on-time arrivals, complaints)
• Continuous metrics are based on a continuous scale of measurement (e.g., delivery time, quantity in a bottle, revenues)

Data Classification

• Cross-sectional data is collected over one time period
• Time series data is collected over time
• Univariate data consists of one variable
• Multivariate data consists of two or more variables (often related)

Basic Excel Skills

• Includes opening, saving, and printing files
• Spreadsheet navigation and range selection
• Entering/editing text, data, and formulas
• Data formatting (numbers, currency, decimal)
• Text string handling
• Arithmetic calculations
• Formatting text
• Spreadsheet appearance modifications
• Data sorting

Excel 2010 Ribbon

• The ribbon structure with tabs and groups (Home, Insert, Data, etc.) for functions and tools

Copying Formulas

• Using the clipboard and fill handle for efficient copying of formulas across a range

Cell References

• Relative addressing (B5, G13)
• Absolute addressing ($B$5, $G13, K$11)
• Using F4 key to change references

Basic Excel Functions

• MIN(range) - Smallest value
• MAX(range) - Largest value
• SUM(range) - Sum of values
• AVERAGE(range) - Average of values
• COUNT(range) - Number of cells in range containing numbers
• COUNTIF(range, criteria) - Number of cells within a range that meet conditions

More Advanced Excel Functions

• AND() -Logical Function (All conditions are TRUE)
• OR() - Logical Function (Any condition is TRUE)
• IF() - Logical Function (Returns different values based on condition)
• VLOOKUP() -Lookup a value

Insert Function

• Method to find and use Excel functions

Other Useful Excel Tips

• Split screen
• Paste special
• Column and row width adjustments
• Displaying Formulas
• Displaying grid lines for printing
• Generating number series in ranges

Excel Add-Ins

• Analysis Toolpak
• Prentice-Hall PHStat2
• Crystal Ball
• TreePlan
• Premium Solver for Education
• SimQuick

PHStat Tool: Stack and Unstack Data

• Used for data preparation within the PHStat tool

Creating Charts: Excel Insert Tab and Chart Tools Group

• Charts are used for effective data visualization

Column and Bar Charts

• These types of charts can be used for any measurement scale

Line Charts

• Show variable data over time

Pie Charts

• Useful to show relative proportions

Area Charts

• Combines the features of pie and line charts

Scatter Diagrams

• Visualize the relationships between two variables

Other Excel Charts

• Stock, Surface, Doughnut, Bubble, and Radar Charts are additional types of charts

Ethics and Data Presentation

• Importance of ethical considerations when presenting data