Business Analytics Lecture 2 1
Lecture 2
Syllabus Overview
Introduction to Business Analytics
Objectives of Business Analytics
Business Analytics Lecture 2 2
Executive Summary
Strategic Intent: Develop solutions to leading edge problems for Lab partners through
research that brings together data, modeling and analysis to achieve industry leading
improvements in business performance.
Cross Industry: Oil/Gas, Retail, Financial Services, Government, Insurance, Airlines,
Industrial Equipment, Software
Global footprint: NA, EU, Asia, LA
Inventory,
Supply Chain Price Personalized Transportation & Online Resources Supply Chain Sales
Resiliency Optimization Offering Procurement Allocation Digitization Forecasts
Optimization
Business Analytics Lecture 2 3
Course Overview
o Demo Software
MS Excel with a Solver
XLMiner: Add-in to Excel
o Optional Textbook
Data Mining for Business Intelligence: Concepts, Techniques,
and Applications in Microsoft Office Excel with XLMiner.
Shmueli, Patel, and Bruce. 2nd Edition; 2010
Business Analytics: Methods, Models, and Decisions. Evans.
2012.
An Introduction to Statistical Learning: with Applications in R.
James. 2013.
o Occasional Supplemental Readings
Business Analytics Lecture 2 4
Expectations
Come to class prepared
Complete homework and review relative to the solution sheet
Follow the syllabus
Business Analytics Lecture 2 5
Supply Chain Digitization
Supply Chain Single, Unified Smart S&OP Smart Execution
Segmentation View of Demand
Digitization / Analytics / Automation
Business Analytics Lecture 2 6
Business Analytics
Increased computing power and the explosion of
data are changing the way organizations capture
data, analyze information, and make decisions
Business Analytics is a scientific method
associated with using extensive data to identify
models that drive decisions and actions
Applied in Operations, Marketing, Finance, and
Strategic Planning, among other functions
Business Analytics Lecture 2 7
Decision Modeling
Decision Modeling = use of mathematical
methods to improve or optimize decision
making
Business Analytics Lecture 2 8
Decision Modeling Process
Decision Model =
Formulate problem Mathematical
Real-World
Description of Decision
System
Problem
Implement Yes Computer
decision Solution
More analysis
needed?
No Interpret
output
Business Analytics Lecture 2 9
Course Objectives
Learn the concept of “Smart” Modeling and Decision Making
Learn to apply analytic tools to business problems
Build and solve “desktop” decision models using Excel tools.
Gain insights into better decision making, common fallacies and
pitfalls.
identify opportunities for creating value using business
analytics
Understand the decision modeling process; where it can be
applied; how to critically evaluate the technology and how to
estimate the value created.
Business Analytics Lecture 2 10
Are you a good decision maker?
The next couple of questions will help you examine the type of a
decision maker you are.
Please read each question in the handout and answer them as if
you are a decision maker in each situation.
Do not think too hard.
Let’s go with our (spontaneous) gut!
Business Analytics Lecture 2 11
Are you a good decision maker?
Write down your choices for 4 questions.
Go with your first instinct and move on.
No research, web browsing, asking, etc.
Especially, no wiki!!!
Business Intelligence and Analytics
Prescriptive How do you make it happen?
Optimization, Planning
Predictive What will happen?
Forecasts, Machine Learning, Simulation
Value
Diagnostic
Why did it happen?
Queries, Data Mining, Statistical Analysis
Descriptive
What Happened?
Reports, Alerts, Mapping
Difficulty
12
John Snow’s Diagnostic Analysis
• In 1854 Cholera struck England once again.
• At the time, water was supplied to London by two water companies.
• One of these companies pulled its water out of the Thames River
upstream while the second pulled its water from the river downstream
from the city.
• John Snow, in investigating the epidemic, began plotting the location of
deaths related to Cholera.
13
John Snow’s Diagnostic Analysis
Water
Pump
Officials followed Snow's advice to remove the handle of the Broad Street Pump
that supplied the water to this neighborhood; the epidemic was contained. 14
Business Intelligence and Analytics
Prescriptive How do you make it happen?
Optimization, Planning
Predictive What will happen?
Forecasts, Machine Learning, Simulation
Value
Diagnostic
Why did it happen?
Queries, Data Mining, Statistical Analysis
Descriptive
What Happened?
Reports, Alerts, Mapping
Difficulty
15
