mgt 160 exam 1

strategic decisions

involves higher level issues concerned with the overall direction of the organization and its goals and aspirations for the future

tactical decisions

a midlevel management job; concerns how the organization should achieve the goals and objectives set

operational decisions

lower level managers; decisions that affect how the firm is run day-to-day

decision making process

1. identify/define problem

2. determine criteria that evaluates alternative solutions

3. determine alternative solutions

4. evaluate alternatives

5. choose an alternative

how we make decisions

1. tradition

2. intuition

3. rules of thumb

4. using the relevant data available

business analytics

scientific process of transforming data into insight for making better decisions

descriptive analytics

encompasses the set of techniques that describes what has happened in the past

• queries

• reports

• stats

• dashboards

• data mining

data query

a request for information with certain characteristics from a database

data dashboards

collections of tables, charts, maps, and summary statistics that are updates as new data becomes available

data mining

the use of analytical techniques for better understanding patterns and relationships that exist in large data sets

• cluster analysis

• sentiment analysis

predictive analytics

consists of techniques that use models constructed from past data to predict the future of ascertain the impact of one variable on another

• linear regression

• time series analysis

• simulation (using stats and probability to make a computer model that studies the impact of uncertainty on a decision)

prescriptive analytics

indicates a best course of action to take; providing a forecast or prediction, but not a decision

• prescriptive models that rely on a set of rules are referred to as rule-based models

optimization models

models that give the best decision subject to constraints of the situation

simulation optimization

combines the use of probability and statistics to model uncertainty with optimization techniques to find good decisions in highly complex and uncertain decisions

decision analysis

used to develop an optimal strategy when a decision maker is faced with several decision alternatives and an uncertain set of future events

utility theory

assigns values to outcomes based on the decision makers attitude toward risk, loss, and other factors

big data

any set of data that is too large or too complex to be handled by standard data-processing techniques and typical desktop software

volume

the amount of stored data

velocity

the speed of data

variety

types of data

veracity

uncertainty in the data

internet of things

technology that allows data, collected from sensors in all types of machines, to be set over to repositories where it can be stored and analyzed

data

the facts and figures collected, analyzed, and summarized for presentation and interpretation

variable

a characteristic or a quantity of interest that can take on different values

observation

a set of values corresponding to a set of variables

variation

the difference in a variable measured over observations

random/uncertain variable

a quantity whose values are not known with certainty

population

all elements of interest

sample

subset of the population

random sampling

a sampling method to gather a representative sample of the population data

quantitative data

data on which numeric and arithmetic observations can be performed

qualitative data

categorical data (arithmetic operations cannot be performed)

cross-sectional data

data collected from several entities at the same point in time

time series data

data collected over several time periods

frequency distribution

a summary of data that shows the number (frequency) of observations in each of several overlapping classes, typically referred to as bins

histogram

a common graphical presentation of quantitative data (a picture of a frequency distribution)

skewness

lack of symmetry

range

found by subtracting the smallest value from the largest value in the data set

variance

a measure of variability that utilizes all the data

• based on the difference between all the values and the mean

standard deviation

the positive square root of the variance

coefficient of variation

a descriptive statistic that indicates how large the standard deviation is relative to the mean

zscore

measures the relative location of a value in the data set; determines how far a particular value is from the mean relative to the data sets standard deviation (standardized value)

empirical rule

• 68% of the data values will be within 1 standard deviation

• 95% of the data values will be within 2 standard deviations

• 99.8% of all data values will be within 3 standard deviations

scatter chart

graphical presentation of the relationship between two quantitative variables

covariance

a descriptive measure of the linear association between two variables

correlation coefficient

measures the relationship between two variables unaffected by the units of measurement for x and y

data-ink ratio

measures the proportion of what Tufte terms “data-ink” to the total amount of ink used in a table or chart

data ink

ink used in a table or chart that is necessary to convey the meaning of the data to the audience

non data ink

ink used in a table or chart that serves no useful purpose in conveying the data to the audience

tables should be used when

1. the reader need to refer to specific numerical values

2. the reader needs to make precise comparisons and not just relative

3. the values being displayed have different units or very different magnitudes

cross-tabulation

a useful type of table for describing data of two variables

pivot table

a cross-tabulation in excel

charts/graphs

visual methods of displaying data

trendline

a line that provides an approximation of the relationship between the variables

line chart

a line that connects the points in a chart (useful for time series)

sparkline

a special type of line chart that can be placed directly into a cell in excel; can be used to provide information on general trends

bar charts

uses horizontal bars to display the magnitude of the quantitative variable (usually categorial)

column charts

uses vertical bars to display the magnitude of the quantitative variable (usually categorial)

pie chart

a common form of chart used to compare categorial data

bubble chart

graphical means of visualizing three variables in a two dimensional graph that is sometimes a preferred alternative to a three dimensional graph

heat map

a two dimensional graphical representation of data that uses different shades of color to indicate magnitude

stacked column chart

allows the reader to compare the relative values of quantitative variables for the same category in a bar chart

clustered column chart

an alternative chart to stacked-column charts for comparing quantitative variables

scatter-chart matrix

useful chart for displaying multiple variables

pivot chart

to summarize and analyze data with both a cross-tabulation and charting, excel pairs pivot charts with pivot tables

data dashboard

data visualization tool that illustrates multiple metrics and automatically updates these metrics as new data becomes available

key performance indicators

a quantifiable measure used to evaluate the success of something