Class notes
Business Analytics - lecture notes
- Course
- Institution
The document contains a summary of the lecture notes for the course Business Analytics from the minor Business Administration.
[Show more]
2 reviews
By: thijnswaap • 10 months ago
By: louloutruijen • 11 months ago
Seller
Follow
Sasch
Reviews received
Content preview
Business analytics lectures Y3, S1Lecture 1
Developments and trends (H1)
Three developments spurred recent explosive growth in the use of analytical methods in
business applications:
- Technological advances (easier to produce incredible amounts of data)
- Methodological developments (easier to explore and visualize data; faster algorithms for
optimization and simulation)
- More computing power and storage capability
Definition (Ch. 1)
Business Analytics
- “Scientific process of transforming data into insight for making better decisions”
- Objective: “Used for data-driven or fact-based decision making, which is often seen
as more objective than other alternatives for decision making”
Examples
• Amazon.com possesses huge databases with purchases, preferences, and
recommendations (hundreds of millions of records)
- It also contains information about potential buyers
- Hence, it proposes recommendations based on similarities between historical and
“new” information
• Entrepreneurs who apply for a bank loan
- Information and characteristics known of previous potential borrowers and whether
these persons were creditworthy
- E.g., the probability of re-paying a bank loan can then also be determined for those
who apply for a bank loan
Descriptive (Ch. 1)
• Descriptive analytics (beschrijvend)
- Encompasses the set of techniques that describes what has happened in the past
Predictive (Ch. 1)
• Predictive analytics (voorspellend)
- Consists of techniques that use models constructed from past data to predict the
future or ascertain the impact of one phenomenon on another
Prescriptive (Ch. 1)
• Prescriptive analytics (voorschrijvend)
- Indicates a best course of action to take
- For example, optimization models: Models that give the best decision subject to
constraints of the situation
,Descriptive (Ch. 1)
• Descriptive analytics
- Encompasses the set of techniques that describes what has happened in the past
- For example, a report summarising relevant information from a large database
- Visualisation techniques (e.g., bar chart)
- Dashboards (e.g., Health app of Apple)
Predictive (Ch. 1)
• Predictive analytics
- Consists of techniques that use models constructed from past data to predict the
future or ascertain the impact of one phenomenon on another
- Use of historical sales data to predict future sales
- Use of purchasing behaviour of consumers to predict market shares
- What are the risk factors of cardiovascular diseases?
- Which characteristics determine whether a soccer team is able to win a match?
- Which factors increase the probability of extending a magazine subscription?
Prescriptive (Ch. 1)
• Prescriptive analytics
- Indicates a best course of action to take
- For example optimization models: Models that give the best decision subject to
constraints of the situation
- What is the best pricing strategy?
- Leverage historical data to determine the timing and level of discounts that maximize
a company’s revenues
- At which location should a factory be opened to meet customer requirements at
minimum costs?
- What financial investments need to be made to achieve superior returns with as little
risk as possible?
- Predictive and prescriptive more advanced than descriptive
Big data (Ch. 1)
• Any set of data that is too large or too complex to be handled by standard data-
processing techniques and typical desktop software
• The 4 V’s
- Volume – volume and file size (data at rest)
- Velocity – speed at which data become available and are analysed (data in motion)
- Variety – various types/forms of data such as text data, audio data, video data, GPS
data, social media data, both structured and unstructured (data in many forms)
- Veracity – uncertainty in the data, e.g. with regard to missing data, inconsistency and
reliability of the data (data in doubt)
- Are there other dimensions that play a role? => VALUE – it should be usefull
,Sub-domains of Business Analytics
• Finance
- Prediction of performance
- Determining optimal stock portfolio
• Human resource (HR) analytics
- How do we improve well-being among employees?
- How do we optimize the work schedules?
• Health care analytics
- How do we speed up the diagnosis process?
• Sports analytics
- How do we optimize the performance of the team?
- Which players in a team are lined up, and at what positions?
- How much is a player worth? How much do we offer them in contract negotiations?
- How do we optimize the design of the car to keep a lasting advantage over the
competition?
- Dynamically adjusting ticket prices throughout the season
• Web analytics
- Analysis of numbers of visitors of websites and social media
- When and where do we place ads?
- How can we best use social networks to promote our products?
How do datasets look like? (Ch. 2)
• Data
- The facts and figures (=information) collected, analysed, and summarized for
presentation and interpretation
• Variable
- A characteristic or a quantity of interest that can take on different values
- Hence the name “variable”; it is about the variation in the data
• Observation
- A set of values corresponding to a set of variables
- So, for each person, firm, country, region, …
• Variation
- The difference in a variable measured over observations
Example dataset (Facebook)
, Data (Ch. 2)
• Often one has a sample rather than the entire population
• Population
- All elements of interest
• Sample
- Subset of the population
- Random sampling: Goal is to gather a representative sample of the population data
• Quantitative / continuous data
- Continuous variables are variables that could take any value (perhaps within some
range)
- Data on which numeric and arithmetic operations, such as addition, subtraction,
multiplication, and division, can be performed
• Categorical data
- Variables recording which category an observation is in
- Data on which arithmetic operations cannot be performed (such as Yes / No
variables)
Where do the data come from?
• Experimental studies
- Individuals randomly assigned to treatment group and control group
- Treatment group is assigned a treatment (controlled environment)
- In this way one gains insight into the causal effect of one variable on another
- Relevant data are collected before and after the study
- The differences before and after are compared between the treatment group and
control group
- For example, the effectiveness of a drug
- Or what the effect of entrepreneurship education is
- “Observational studies”, such as a survey
- Day reconstruction method
Summarising datasets (Ch. 2)
• Important!
• First step in any analysis!
• Descriptive analytics: structure large collections of data into indicators (kengetallen)
Distributions (you summarise datasets through this)
- A description of how often different values occur
- Categorical variables: frequency distribution
- Quantitative variables: histogram (intervals and frequencies)
Summarise the variables
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Sasch. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
52510 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now