Data Analytics Objectives: Descriptive, Diagnostic, Predictive & Prescriptive Strategies

What are the four types of analytics objectives?

Opportunity, Professional issues, Problem solving, Process and performance assessment

What are the four types of objectives in data analysis?

Descriptive, Diagnostic, Predictive, Prescriptive

What do descriptive objectives aim to do?

Better understand data to answer business questions about what is happening or has happened

What are examples of descriptive analytics?

Frequency measures, measures of location (mean, median, mode), measures of dispersion, percentage change

What do diagnostic objectives aim to identify?

The reasons why an outcome occurred

What are examples of diagnostic analytics?

Anomaly detection, correlation, pattern detection, trend analysis

What do predictive objectives focus on?

What may happen in the future

What are examples of predictive analytics?

Trendline, regression analysis

What does Multiple R measure in regression?

The strength of the relationship between dependent and independent variables

What does R² (R-squared) represent?

The proportion of variation in the dependent variable explained by the independent variables

What does adjusted R² account for?

Sample size and the number of independent variables in multiple regression

What does standard error represent in regression?

The variability of observed values from predicted values

What do prescriptive objectives aim to determine?

The best action to take advantage of opportunities or mitigate risks

What is optimization in prescriptive analytics?

Selecting values of variables that minimize or maximize a quantity of interest

What is the most common optimization model used in accounting?

Linear optimization

What tool in Excel is used for linear optimization?

Solver

What is the first step in creating a data analysis plan?

Focus on the objective

What is the second step in creating a data analysis plan?

Select a data strategy

What is the third step in creating a data analysis plan?

Select an analysis strategy

What is the fourth step in creating a data analysis plan?

Consider risks

What is the fifth step in creating a data analysis plan?

Embed controls

What does appropriate data mean?

Data that is relevant, available, and matches the analysis method

What is internal data?

Data generated within the organization that is easier to control and verify

What is external data?

Data from outside sources that is riskier but provides additional insights

In a dataset, what are fields?

Individual columns representing unique characteristics

In a dataset, what are records?

Rows that represent a collection of fields

What are three common data risks?

Outlier data points, dirty data, and incorrectly formatted data

What are examples of dirty data?

Missing, invalid, duplicate, or incorrectly formatted data

What two questions should be asked when designing a data analysis strategy?

1) Can the strategy answer the objective questions? 2) Is the measurement scale appropriate?

What is the difference between descriptive and diagnostic analysis?

Descriptive shows what happened, diagnostic explains why it happened

What do predictive analysis strategies do?

Use historical data to create models that estimate future values or outcomes

What do prescriptive analysis strategies do?

Help determine which option is most likely to produce the best outcome