Big Data and Management Accounting

Question 1

What are the benefits of Big Data?

Answer 1

A lot of information is incorporated.
Potenital competitive advantage if data is good and analysed correctly.
May help drive innovation in products and services.

Question 2

What is big data?

What is it used for?

State the 5 V’s.

Answer 2

Collection and analysis of a large amount of data

To find trends and identify customer wants and demands

Volume, velocity, variety, veracity (truthful), value

Question 3

What is price elasticity?

Answer 3

Responsiveness of a percentage change in the quantity demand of a product compared to percentage change in its price. Alcohol (non essential increasing in price may deter purchase) hence elastic, Milk (essential and therefore no matter price will still be bought) hence inelastic.

Question 4

What are the factors affecting the elasticity of demand

Answer 4

1 . Availability and price of substitutes (more subs = more elastic)
2 . Time duration of purchase horizon (longer time = more elastic)
3 . Type of goods (essential goods = more inelastic)

Question 5

What would lead models to be unfair producing biased results?

Answer 5

• not big enough data set
• correlation does not equal causation
• lack of feedback loop

Question 6

Describe what would happen if you increased the price of a product in an elastic and inelastic markets.

Answer 6

Elastic - decrease in revenue
Inelastic - increase in revenue

Question 7

when does profit maximisation occur?

Answer 7

when marginal revenue = marginal costs