Business Management Fundamentals

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Questions and Answers

What are critical success factors (CSFs)?

Reports that highlight deviations larger than defined thresholds.

Forecasting methods to determine long-term trends.

The factors most crucial for the success of a business. (correct)

Specific measures of performance used to evaluate success.

What is the primary function of key performance indicators (KPIs)?

To analyze historical trends over short periods.

To provide real-time status access on metrics.

To serve as specific measures of critical success factors. (correct)

To highlight significant deviations in reports.

What does trend analysis help determine?

Forecasts for short-, medium-, and long-term trends of KPIs. (correct)

Immediate exceptions to baseline performance.

Real-time performance scorecards.

The latest data available on KPIs.

What is the purpose of exception reporting?

To highlight any deviations above set thresholds. Signup and view all the answers

What is a Geographic Information System (GIS) primarily used for?

To manipulate and display data using digitized maps. Signup and view all the answers

What is Business Intelligence (BI) primarily focused on?

Gathering, storing, accessing, and analyzing data Signup and view all the answers

How is Business Analytics (BA) defined?

The process of developing actionable decisions from historical data insights Signup and view all the answers

Which of the following is NOT a component of Business Analytics?

Operational Efficiency Signup and view all the answers

Which of the following statements about BA and BI is accurate?

BA and BI can be considered interchangeable in some contexts. Signup and view all the answers

What type of data sources might Business Analytics utilize?

Social media, spreadsheets, and databases Signup and view all the answers

What is a key difference between Business Analytics and Business Intelligence?

BI is focused on past data, while BA focuses on future actions. Signup and view all the answers

Which business example illustrates the use of Business Analytics effectively?

A bank determining the most profitable customer segments Signup and view all the answers

What technological method is commonly used in the Business Analytics process?

Statistical models and machine learning Signup and view all the answers

What does what-if analysis primarily evaluate?

The impact of changes in a variable on the outcome Signup and view all the answers

What is goal-seeking analysis primarily designed to find?

The necessary inputs to achieve a desired outcome Signup and view all the answers

What does OLAP allow users to do with data?

Interactively analyze pre-aggregated data Signup and view all the answers

Which of the following is a key feature of data mining?

Discover previously unknown patterns in datasets Signup and view all the answers

In the context of decision support, which component assists in presenting relevant data?

Visualization tools Signup and view all the answers

What is an essential component of descriptive analytics?

Data warehousing Signup and view all the answers

What type of analysis primarily takes advantage of decision trees?

Data mining Signup and view all the answers

Which statement accurately describes the relationship between ETL and data marts?

ETL processes data from external sources directly into data marts Signup and view all the answers

What is the first phase of the decision-making process?

Intelligence Signup and view all the answers

Which type of decision deals with routine and repetitive problems with standard solutions?

Structured decisions Signup and view all the answers

What is a common challenge in decision-making?

Pressure from external factors Signup and view all the answers

Which of the following describes descriptive analytics?

It summarizes past events to inform decisions. Signup and view all the answers

What does OLAP stand for?

Online Analytical Processing Signup and view all the answers

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

To combine models and data for complex problem analysis Signup and view all the answers

During which phase of decision-making is the solution selected?

Choice Signup and view all the answers

Which of the following uses techniques to identify previously unknown patterns in data?

Data mining Signup and view all the answers

What type of decisions concern long-term goals and resource allocation?

Strategic decisions Signup and view all the answers

Which method allows decision-makers to see how changes in variables affect outcomes?

Sensitivity analysis Signup and view all the answers

What does the 'Design' phase of decision-making involve?

Building a model to address the situation Signup and view all the answers

Which of the following is NOT a target of Business Analytics (BA)?

Creating a budget for the next year Signup and view all the answers

What is the primary purpose of predictive analytics?

To detect patterns and predict future outcomes Signup and view all the answers

Which of the following tools is NOT commonly used in predictive analytics?

Optimization Signup and view all the answers

In the context of decision-making, what is an 'input'?

Resources used to achieve goals Signup and view all the answers

How is data mining applied in targeted marketing?

By predicting which prospects are likely to respond positively Signup and view all the answers

What distinguishes prescriptive analytics from predictive analytics?

Prescriptive analytics recommends actions and predicts outcomes Signup and view all the answers

Which of the following applications is an example of predictive analytics?

Setting insurance premiums based on past claims Signup and view all the answers

Which statistical procedure is commonly used in predictive analytics?

Multiple regression Signup and view all the answers

What is the primary function of dashboards in data presentation?

To allow drilling down into detailed data across various levels Signup and view all the answers

Which of the following fields is NOT mentioned as utilizing predictive analytics?

Energy management Signup and view all the answers

In which situation is prescriptive analytics particularly helpful?

Making real-time decisions in autonomous vehicles Signup and view all the answers

Which of the following best describes data visualization?

The representation of data in graphical formats for decision-makers Signup and view all the answers

Study Notes

Management Information Systems

Course code: ADM 2372
Instructor: Mayur Joshi, PhD
Email: [email protected]

Week 10: Business Analytics (Chapter 12)

Topics covered: Business analytics vs. intelligence, Managers and Decision Making, The Business Analytics Process, Descriptive Analytics, Predictive Analytics, Prescriptive Analytics, Presentation Tools

Business Intelligence (BI)

BI is a broad category of applications, technologies and processes for gathering, storing, accessing and analyzing data to assist business users in better decision making.

Business Analytics (BA)

BA is the process of developing actionable decisions or recommendations for actions based on insights generated from historical data.
Some consider BA and BI interchangeable. This course considers them interchangeable.

Business Analytics (BA) - Tools and Techniques

Data is the foundation
Tools and techniques include statistical models, machine learning techniques, and more.
Example: Capital One discovered high-spending customers who pay slowly are most profitable.

Decision-Making

Management is a process an organization uses to achieve its goals through resources (people, money, materials, and information).
Input resources are considered the input to the management process.
Output (goal) is the achievement of the organization's goals achieved by the management process.
Managers execute and optimize the management process.

Decision-Making Process and Phases

Includes three major phases:
- Intelligence Phase: identify and define the problem or opportunity.
- Design Phase: build a model (an abstraction of reality); define variable relationships, validate model with test data.
- Choice Phase: select a solution using evaluation criteria; implement the solution.

Decision-Making Challenges and Need for IT

Number of alternatives increases constantly.
Most decisions must be made under time pressure.
Increased uncertainty in the decision environment.
Rapid access to remote information, expert consultation, and/or group sessions are often needed.

Types of Decisions

Structured decisions deal with routine and repetitive problems with standardized solutions (e.g., inventory control). Can be automated.
Unstructured decisions deal with complex problems with no clear solution or procedure. Human intuition and judgment are necessary (e.g., R&D project selection). BA assists decision-makers with these decisions by providing relevant information.
Decision types include:
- Operational: executing specific tasks.
- Management: acquiring and efficiently using resources to achieve goals.
- Strategic: long-term goals and policies for growth and resource allocation.

IS Support Framework for Decision-Making

A framework describing how information systems (IS) support different types of decisions (operational, management, strategic).

Business Analytics (BA) Process

Includes getting data into a data warehouse or data mart and getting data out using BA applications.
The process involves ETL to transform data for storage and analysis in the warehouse.
Key stages in getting insights from the data.

Analytic Targets

Development of one or more analytics applications.
Development of enterprise-wide analytics infrastructure.
Support for organizational transformation.

Descriptive Analytics

Summarizes past events to learn from past behaviors.
Tools include OLAP (Online Analytical Processing - multidimensional analysis).
Tools include Data mining (uncovering previously unknown patterns).
Tools include Decision Support Systems (DSS). -What-if analysis, Sensitivity analysis, and Goal-seeking analysis are three types of quantitative models.

Predictive Analytics

Examines recent and historical data to predict future outcomes and trends based on probabilities.
Uses data mining and statistical procedures like linear regression, multiple regression, and logistic regression.
- Examples: Targeted marketing, fraud detection.

Prescriptive Analytics

Goes beyond descriptive and predictive to recommend courses of action, quantifying the effects of future decisions, and advising on potential outcomes. Examples: Driverless cars needing to analyze possible decisions' impact before making them.

Presentation Tools

Data visualization is the process of presenting processed data in visual formats. Dashboards present data to users in organized visual formats.
- Components of dashboards include: Drill-down, Critical success factors (CSFs), Key Performance Indicators (KPIs), Status Access, Trend analysis, and Exception reporting.
GIS (Geographic Information Systems) is a computer-based system for capturing, integrating, manipulating, and displaying data using digitized maps.

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Description

Test your understanding of critical success factors (CSFs), key performance indicators (KPIs), trend analysis, exception reporting, and Geographic Information Systems (GIS). This quiz covers essential concepts in business management and performance measurement. Assess your knowledge in these crucial areas to enhance your managerial skills.