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Solution Manual for Introduction to Business Analytics, 1st Edition By Vernon Richardson and Marcia Watson, Verified Chapters 1 - 12, Complete Newest Version

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Solution Manual for Introduction to Business Analytics, 1st Edition By Vernon Richardson and Marcia Watson, Verified Chapters 1 - 12, Complete Newest Version Solution Manual for Introduction to Business Analytics, 1st Edition By Vernon Richardson and Marcia Watson Solution Manual for Introduc...

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Chapter 01 – Specify the Question: Using Business Analytics to Address Business Questions


Solution Manual for Introduction to Business Analytics,
1st Edition
By Vernon Richardson and Marcia Watson
Verified Chapter's 1 - 12 | Complete

, Chapter 01 – Specify the Question: Using Business Analytics to Address Business Questions




TABLE OF CONTENTS
Chapter 1: Specify the Question: Using Business Analytics to Address Business Questions

Chapter 2: Obtain the Data: An Introduction to Business Data Sources

Chapter 3: Analyze the Data: Basic Statistics and Tools Required in Business Analytics

Chapter 4: Analyze the Data: Exploratory Business Analytics (Descriptive Analytics and Diagnostic Analytics)

Chapter 5: Analyze the Data: Confirmatory Business Analytics (Predictive Analytics and Prescriptive Analytics)

Chapter 6: Report the Results: Using Data Visualization

Chapter 7: Marketing Analytics

Chapter 8: Accounting Analytics

Chapter 9: Financial Analytics

Chapter 10: Operations Analytics

Chapter 11: Advanced Business Analytics

Chapter 12: Using the SOAR Analytics Model to Put It All Together: Three Capstone Projects

, Chapter 01 – Specify the Question: Using Business Analytics to Address Business Questions



Chapter 1 End-of-Chapter Assignment Solutions
Multiple Choice Questions
1. (LO 1.1) A coordinated, standardized set of activities conducted by both people and equipment to accomplish a
specific business task is called .
a. business processes
b. business analysis
c. business procedure
d. business value

2. (LO 1.2) According to the information value chain, data combined with context is
a. Information.
b. Knowledge.
c. Insight.
d. Value.

3. (LO 1.5) Which phase of the SOAR analytics model addresses the proper way to communicate results to the
decision maker?
a. Specify the question
b. Obtain the data
c. Analyze the data
d. Report the results

4. (LO 1.5) Which phase of the SOAR analytics model involves finding the most appropriate data needed to address
the business question?
a. Specify the question
b. Obtain the data
c. Analyze the data
d. Report the results

5. (LO 1.5) Which questions seek information about Tesla’s sales in the next quarter?
a. What happened? What is happening?
b. Why did it happen? What are the causes of past results?
c. Will it happen in the future? What is the probability something will happen? Can we forecast what
will happen?
d. What should we do, based on what we expect will happen? How do we optimize our performance based
on potential constraints?


6. (LO 1.5) Which questions seek information on the routing of products from Queretaro, Mexico to Chicago,
United States in the last quarter?
a. What happened? What is happening?
b. Why did it happen? What are the causes of past results?
c. Will it happen in the future? What is the probability something will happen? Can we forecast what will
happen?
d. What should we do, based on what we expect will happen? How do we optimize our performance based
on potential constraints?

, Chapter 01 – Specify the Question: Using Business Analytics to Address Business Questions
7. (LO 1.5) Which questions ask why net income is increasing when revenues are decreasing, counter to
expectations?
a. What happened? What is happening?
b. Why did it happen? What are the causes of past results?
c. Will it happen in the future? What is the probability something will happen? Can we forecast what will
happen?
d. What should we do, based on what we expect will happen? How do we optimize our performance based
on potential constraints?

8. (LO 1.5) Which questions help managers understand how to organize future shipments based on expected
demand?
a. What happened? What is happening?
b. Why did it happen? What are the causes of past results?
c. Will it happen in the future? What is the probability something will happen? Can we forecast what will
happen?
d. What should we do, based on what we expect will happen? How do we optimize our performance
based on potential constraints?

9. (LO 1.5) Which term refers to the combined accuracy, validity, and consistency of data stored and used over
time?
a. Data integrity
b. Data overload
c. Data value
d. Information value

10. (LO 1.3) A specialist who knows how to work with, manipulate, and statistically test data is a
a. decision maker.
b. data scientist.
c. data analyst.
d. decision scientist.

11. (LO 1.4) Which type of analysts predicts the amount of money that a company will receive from its customers to
help management evaluate future investments based on expected investment performance, such as
investments in equipment or employee training?
a. Marketing analyst
b. Operations analyst
c. Financial analyst
d. Accounting analyst

12. (LO 1.4) Which type of analyst addresses questions regarding tax and auditing?
a. Marketing analyst
b. Operations analyst
c. Financial analyst
d. Accounting analyst

13. (LO 1.5) Suppose a company has timely product reviews that are available when needed, but the reviews are
biased. These product reviews are which type of data?
a. Reliable
b. Relevant
c. Curated
d. Consistent
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.



4

, Chapter 01 – Specify the Question: Using Business Analytics to Address Business Questions
14. (LO 1.6) Which common visualization type shows trends in values over time?
a. Line graph
b. Scatterplot
c. Pie chart
d. Bar chart

15. (LO 1.6) Which common visualization type shows the composition of values over time?
a. Line graph
b. Scatterplot
c. Pie chart
d. Bar chart


Discussion Questions
1. (LO 1.1) Give five examples of business processes at Tesla. How do they create business value for Tesla and its
shareholders?


Suggested Solution:
Answers will vary,
1. Tesla procures automobile parts from auto suppliers – Because of Tesla’s unique styling, getting quality
parts from its suppliers on a timely basis will support its manufacturing business.
2. Tesla manufactures batteries for its electric vehicle at its desired specifications – The quantity and quality
of its batteries are of critical importance to Tesla.
3. Accepting and processing preorders from its customers – Tesla receives some indication of the demand for
each of its products, that helps with planning.
4. Tesla markets its products – Tesla works to get Tesla products in the front of mind for its customers.
5. Tesla car and truck design – Tesla designs its automobiles in a way that will appeal to its customers (for
example, Cybertruck).

2. (LO 1.2) Explain the information value chain by summarizing how data are transformed into knowledge insights
for decision-making. Use the example of a book review on Amazon and how it might lead Amazon to decide how
many of those books to stock at its warehouses.

Suggested Solution:
Amazon allows those who purchase books and other products at its website to give product reviews and assign
product ratings. The product reviews may provide text which textual analytics could use to understand the
general sentiment about the specific book. The product rating could also be used to understand how well the
book is liked by verified buyers. Statistical correlations could be run among product review sentiment, product
ratings and product sales to help forecast demand for the product. This will help Amazon determine how many
books to keep in its warehouse ready for delivery.
This is an example of how data turns into information, knowledge and ultimately helps with decision making.


3. (LO 1.3) Explain the information value chain by summarizing how data are transformed into knowledge insights
for decision-making. Use the example of a book review of this book on Amazon and how it might help the
publisher, McGraw Hill, determine whether to revise this book for a new, updated edition as the discipline of
data analytics evolves.


© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.

3

, Chapter 01 – Specify the Question: Using Business Analytics to Address Business Questions
Suggested Solution:
McGraw Hill will use many determinants to determine how well each one of its textbooks are performing.
They’ll look at overall sales of the book, compared to competitors. But they may also survey users to determine
how well the book is liked, what is deficient in the book, what new topics should be considered, etc. All told, all
of the data will be put together, analyzed, knowledge will be gained, and a decision will be made.

4. (LO 1.3) Explain the difference between a decision-maker, a data scientist, and a business analyst. What is the
role of each?


Suggested Solution:
While there are not always definitive distinctions between these three positions, the decision maker needs
questions answered before they can make data-informed decisions. The data scientist is most familiar with the
data, as that is their specialty, collecting and maintaining data in databases, manipulating, transforming and
analyzing data. The business analyst generally understands the business and the information needs of the
decision maker, but also understands the data. The business analyst can serve as a go between, between the
decision maker and the data scientist, all working together to make data-informed decisions.

5. (LO1.4) Compare and contrast marketing analytics with accounting analytics. How are they similar? How are
they different?


Suggested Solution:
Both marketing and accounting analytics address management questions using appropriate data and analytics.
But they also differ from each other. For example, marketing analytics are used to address the needs of the
marketing department, the business of promoting and selling products and services. Marketing analytics is
often involved in providing insights into customer preferences and trends. In contrast, accounting analytics uses
business analytics to help measure accounting performance and address accounting questions, such as analyzing
whether a company committed fraud or predicting future sales or earnings of a company.

6. (LO1.4) Compare and contrast financial analytics with operations analytics. . How are they similar? How are
they different?


Suggested Solution:
Both financial analytics and operations analytics address management questions using appropriate data and
analytics. But they also differ from each other. For example, financial analytics uses business analytics to help a
company measure and evaluate its financial performance, from predicting receivables collection from its
customers to helping management evaluate future investments based on expected investment performance. In
contrast, operations analytics uses business analytics to measure and improve the efficiency and effectiveness of
the company’s operations, since operations is all actions needed to run the company and generate income.

7. (LO 1.5) Identify the four steps in the SOAR analytics model. Explain how marketing analysts might use the SOAR
model to help Netflix better understand its customers.




© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.



4

, Chapter 01 – Specify the Question: Using Business Analytics to Address Business Questions
Suggested Solution:

Specify the Question:
Who is the model customer for Netflix? How can Netflix keep their current and prospective users
happy? What level of variety do Netflix users expect?

Obtain the Data:
What data can be used to assess viewing trends?
Do we have surveys of current customers? Of prospective customers?

Analyze the Data:
Have the viewing trends changed over the past few quarters and years?
Do the customers prefer old classics or new programming?
Do the customers prefer greater variety, or less variety when finding movies to watch?
Are these trends expected to continue into the future?

Report the Results:
Run the analysis and report trends and make forecast.
Make dashboard of current performance and changing trends.

8. (LO 1.5) Identify the five sets of questions that are asked in business analytics. Brainstorm different types of
business-related questions that might fit in each of the five question sets.


Suggested Solution:
1. Questions like “What happened? What is happening?” (and form the basis of Descriptive Analytics)
These types of questions include questions like:
a. How much did we pay in advertising expenses last year?
b. What was the shipping time for our products manufactured in Mexico?
2. Questions like “Why did it happen? What are the root causes of past results?” (and form the basis of
Diagnostic Analytics) These types of questions include questions like:
a. Is our company’s overall shipping time greater than or less than our competitors?
b. By how much did the increase in adverting expenses lead to an increase in sales revenues for our
company?
3. Questions like “Will it happen in the future? What is the probability something will happen? Is it
forecastable?” (and form the basis of Predictive Analytics) These types of questions
include questions like:
a. What will be the demand for the new Tesla model over the next two years?
b. What is the chance that company is going to go bankrupt?
4. Questions like “What should we do based on what we expect will happen? How do we optimize our
performance based on potential constraints?” (and form the basis of Prescriptive Analytics) These types
of questions include questions like:
a. How can revenues be maximized (or costs be minimized) if there is a trade war with China?
b. Should the company make its products or outsource to other manufacturers?
5. How can we continuously learn using artificial intelligence? Can we learn from past and current events
with adaptive and autonomous technology (and form the basis of Adaptive Analytics)?These types of
questions include questions like:

© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.

5

, Chapter 01 – Specify the Question: Using Business Analytics to Address Business Questions
a. How do we continuously update our predictions of needed inventory to more closely meet
customer demand?
b. How do we rebalance our investment portfolio to optimize our portfolio based on the change in oil
prices last week?
c. Could a computer learn from decisions from the internal audit department of which transactions
might constitute fraud and which ones will not?
9. (LO 1.5) Consider the data qualities of relevance and reliability. Explain why each quality and both qualities
together are valuable to business analysts.


Suggested solution:
While relevant data provides pertinent, timely data to the question at hand, it must be reliable to evaluate and
analyze. The true value of the data is when it has qualities of relevance and reliability.

10. (LO 1.5) Some argue that a picture is worth a thousand clicks. Argue for and against the use of data visualizations
when reporting the results.


Suggested solution:
Increasingly, visualizations are preferred to written content to communicate results. For example, 91 percent of
people prefer visual content over written content.1 Why is that? Well, some argue that the brain processes
images 60,000 times faster than text (and 90 percent of information transmitted to the brain is visual).
However, sometimes it is hard to see precise numbers in a visual, so that so that would be one case where a
table of numbers might be superior to a data visualization.
Explanatory visualizations, as opposed to exploratory visualizations, specifically communicate results to
interested stakeholders.


(Level 1) Brief Exercises


1. (LO 1.1, 1.2, 1.4, 1.5) Ma tch each business analytics term to its definition.


Business Analytics Term Business Analytics Definition
1. Information e. Data organized in a way that
is meaningful to the user.
2. Dashboard c. A graphical summary of
various measures tracked by a
company.
3. Dynamic report d. A report characterized by
constant update, change, or


1
Zohar Dayan, “Visual Content: The Future of Storytelling,” Forbes, April 2, 2018, https://www.forbes.com/sites/forbestechcouncil/2018/04/02/visual-
content-the-future-of-storytelling/?sh=6517bfbe3a46, April 2, 2018 (accessed January 14, 2021).




© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.



6

, Chapter 01 – Specify the Question: Using Business Analytics to Address Business Questions
Business Analytics Term Business Analytics Definition
activity.
4. Data overload b. Access or exposure to too
much data, which prevents data
from being properly synthesized
and interpreted.
5. Context a. The setting, event, statement,
or situation in which data can be
more fully understood and
evaluated.


2. (LO 1.5) For each business analytics task, identify the correct step in the SOAR Analytics Model.


Business Analytics Task SOAR Analytics Model Component
(Specify the question, Obtain the data,
Analyze the data, or Report the results)
Creating a dashboard that provides daily Report the results
sales in the Northeast region of the country
Trading off accessing cleaner data (fewer Obtain the data
errors) with a data set that is less expensive
Small business owner trying to decide which Specify the question
products to sell on the eBay platform
Using a statistical test to see if customer Analyze the data
characteristics changed from one year to the
next
Deciding whether to use static or dynamic Report the Results
reports to communicate findings to
management


3. (LO 1.5) For each business analytics task, identify the correct step in the SOAR analytics model.
Business Analytics Task SOAR Analytics Model Component
(Specify the question, Obtain the data,
Analyze the data, or Report the results)
Deciding which data to use in the analysis Obtain the Data
Running a statistical analysis to evaluate the Analyze the Data
impact of advertising on sales of targeted
products
Extracting data from blogs to analyze Obtain the Data
consumer sentiment regarding Verizon
wireless service
Communicating current customers’ key Report the Results
characteristics to management
Analyzing how profits will change if taxes on Analyze the Data
Chinese-sourced products increase in the
coming year

© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.

7

, Chapter 01 – Specify the Question: Using Business Analytics to Address Business Questions
Business Analytics Task SOAR Analytics Model Component
(Specify the question, Obtain the data,
Analyze the data, or Report the results)
Asking which vendor is most reliable based Specify the Question
on past performance


4. (LO 1.1, 1.2, 1.4, 1.5) Match each business analytics term to its definition.
Term Definition
1. Data integrity c. The combined accuracy,
validity, and consistency of data
stored and used over time
2. Business analytics d. The use of data to make
knowledge, draw conclusions,
and address business questions
3. Data a. Raw numbers and facts that
have little meaning on their own
4. Accounting Analytics e. Analytics used to evaluate the
financial performance of a
business.
5. Marketing analytics b. Analytics used to evaluate the
promotion, distribution, and
selling of a product or service.



5. (LO 1.5) For each business analytics question below, identify the questions it is answering. Choose from this list:
a. What happened? What is happening?
b. Why did it happen? What are the causes of past results?
c. Will it happen in the future? What is the probability something will happen? Can we forecast what will
happen?
d. What should we do, based on what we expect will happen? How do we optimize our performance based
on potential constraints?
e. How can we continuously learn using artificial intelligence? Can we learn from past and current events
with adaptive learning?

Business Analytics Question Question Type (Indicate letter a, b, c, d, or
e)
What are the key characteristics of the A
customers who purchased from us last year?
Why did Delta Airlines’ on-time departures B
improve this past month?
What is the expected return on an d
investment in stocks instead of bonds, based
on what we expect will happen?
Can we predict how long it will take our c
vendor to get its products to our distribution

© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.



8

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