Wk 1 L2 Foundations of Business Analytics Flashcards
What are the Three categories of analytics methods?
1) Descriptive Analytics
2) Predictive Analytics
3)Prescriptive Analytics
What is Descriptive Analytics?
Descriptive Analytics are statistical methods designed to explore “what has happened in the past, or is happening now?
Extracting information from data to find out what happened in the past, or is currently happening
Presenting and communicating this information to decision-makers
Summary information (making it more readily understandable to humans)
Management dashboards (making it accessible)
Data visualization (making it attractive)
What is Predictive Analytics?
Predictive Analytics is the statistical and data mining methods designed to predict “what will happen next, if things continue as they are?
These methods aim to predict what will happen in the future, usually by detecting patterns in past data
They contain many assumptions about how different factors are related and influence outcomes
They assume these patterns, relationships and influences will remain the same in the future
Take account of risk and uncertainty
What is prescriptive Analytics?
Prescriptive Analytics is predominantly OR/MS techniques designed to answer “what should we do next, to make better things happen in future?
Mainly Management Science and Operational Research modelling methods
Enable managers to make the best decision when faced with a business problem (or in some cases, just a good enough decision)
A whole variety of methods, ranging from complex mathematical models to methods that involve special computer software: a “toolkit”
What is a model?
A model is an external and explicit representation of part of reality as seen by the people who wish to use that model to understand, to change, to manage, and to control that part of reality in some way or other
What six things do Models help with?
A model is a simplified version of a real-world system, that helps managers to
1) Understand the system better
2) Solve complex problems
3) Make better decisions
4) Improve performance
5) Reduce costs
6) Manage risk
