Business Analytics Principles, Concepts, and Applications: What, Why, and How(FT Press Analytics)

Learn everything you need to know to start using business analytics and integrating it throughout your organization. Business Analytics Principles, Concepts, and Applications brings together a complete, integrated package of knowledge for newcomers to the subject. The authors present an up-to-date view of what business analytics is, why it is so valuable, and most importantly, how it is used. They combine essential conceptual content with clear explanations of the tools, techniques, and methodologies actually used to implement modern business analytics initiatives.   They offer a proven step-wise approach to designing an analytics program, and successfully integrating it into your organization, so it effectively provides intelligence for competitive advantage in decision making. Using step-by-step examples, the authors identify common challenges that can be addressed by business analytics, illustrate each type of analytics (descriptive, prescriptive, and predictive), and guide users in undertaking their own projects. Illustrating the real-world use of statistical, information systems, and management science methodologies, these examples help readers successfully apply the methods they are learning.   Unlike most competitive guides, this text demonstrates the use of IBM's menu-based SPSS software, permitting instructors to spend less time teaching software and more time focusing on business analytics itself.   A valuable resource for all beginning-to-intermediate-level business analysts and business analytics managers; for MBA/Masters' degree students in the field; and for advanced undergraduates majoring in statistics, applied mathematics, or engineering/operations research.

Table of Contents:
Preface     xvi PART I:  WHAT ARE BUSINESS ANALYTICS     1 Chapter 1:  What Are Business Analytics?     3 1.1 Terminology     3 1.2 Business Analytics Process     7 1.3 Relationship of BA Process and Organization Decision-Making     10 1.4 Organization of This Book     12 Summary     13 Discussion Questions     13 References      14 PART II:  WHY ARE BUSINESS ANALYTICS IMPORTANT      15 Chapter 2:  Why Are Business Analytics Important?      17 2.1 Introduction      17 2.2 Why BA Is Important: Providing Answers to Questions      18 2.3 Why BA Is Important: Strategy for Competitive Advantage      20 2.4 Other Reasons Why BA Is Important      23    2.4.1 Applied Reasons Why BA Is Important      23    2.4.2 The Importance of BA with New Sources of Data     24 Summary     26 Discussion Questions      26 References     26 Chapter 3:  What Resource Considerations Are Important to Support Business Analytics?      29 3.1 Introduction     29 3.2 Business Analytics Personnel     30 3.3 Business Analytics Data     33    3.3.1 Categorizing Data     33    3.3.2 Data Issues     35 3.4 Business Analytics Technology     36 Summary     41 Discussion Questions     41 References     42 PART III:  HOW CAN BUSINESS ANALYTICS BE APPLIED     43 Chapter 4:  How Do We Align Resources to Support Business Analytics within an Organization?     45 4.1 Organization Structures Aligning Business Analytics     45    4.1.1 Organization Structures     46    4.1.2 Teams     51 4.2 Management Issues     54    4.2.1 Establishing an Information Policy     54    4.2.2 Outsourcing Business Analytics     55    4.2.3 Ensuring Data Quality     56    4.2.4 Measuring Business Analytics Contribution     58    4.2.5 Managing Change     58 Summary     60 Discussion Questions     61 References .    61 Chapter 5:  What Are Descriptive Analytics?     63 5.1 Introduction     63 5.2 Visualizing and Exploring Data     64 5.3 Descriptive Statistics     67 5.4 Sampling and Estimation     72    5.4.1 Sampling Methods     73    5.4.2 Sampling Estimation     76 5.5 Introduction to Probability Distributions     78 5.6 Marketing/Planning Case Study Example: Descriptive Analytics Step in the BA Process     80    5.6.1 Case Study Background     81    5.6.2 Descriptive Analytics Analysis     82 Summary     91 Discussion Questions     91 Problems     92 Chapter 6:  What Are Predictive Analytics     93 6.1 Introduction     93 6.2 Predictive Modeling     94    6.2.1 Logic-Driven Models     94    6.2.2 Data-Driven Models     96 6.3 Data Mining     97    6.3.1 A Simple Illustration of Data Mining     98    6.3.2 Data Mining Methodologies     99 6.4 Continuation of Marketing/Planning Case Study Example: Prescriptive Analytics Step in the BA Process     102    6.4.1 Case Study Background Review     103    6.4.2 Predictive Analytics Analysis     104 Summary     114 Discussion Questions     115 Problems     115 References     117 Chapter 7:  What Are Prescriptive Analytics?     119 7.1 Introduction     119 7.2 Prescriptive Modeling     120 7.3 Nonlinear Optimization     122 7.4 Continuation of Marketing/Planning Case Study Example: Prescriptive Step in the BA Analysis     129    7.4.1 Case Background Review     129    7.4.2 Prescriptive Analysis     129 Summary     134 Addendum     134 Discussion Questions     135 Problems     135 References     .137 Chapter 8:  A Final Business Analytics Case Problem     139 8.1 Introduction     139 8.2 Case Study: Problem Background and Data     140 8.3 Descriptive Analytics Analysis     141 8.4 Predictive Analytics Analysis     147    8.4.1 Developing the Forecasting Models     147    8.4.2 Validating the Forecasting Models     155    8.4.3 Resulting Warehouse Customer Demand Forecasts     157 8.5 Prescriptive Analytics Analysis     158    8.5.1 Selecting and Developing an Optimization Shipping Model     158    8.5.2 Determining the Optimal Shipping Schedule     159    8.5.3 Summary of BA Procedure for the Manufacturer     161    8.5.4 Demonstrating Business Performance Improvement     162 Summary     163 Discussion Questions     164 Problems     164 PART IV:  APPENDIXES     165 Appendix A:  Statistical Tools     167 A.1 Introduction     167 A.2 Counting     167 A.3 Probability Concepts     171 A.4 Probability Distributions     177 A.5 Statistical Testing     193 Appendix B:  Linear Programming     201 B.1 Introduction     201 B.2 Types of Linear Programming Problems/Models     201 B.3 Linear Programming Problem/Model Elements     202 B.4 Linear Programming Problem/Model Formulation Procedure     207 B.5 Computer-Based Solutions for Linear Programming Using the Simplex Method     217 B.6 Linear Programming Complications     227 B.7 Necessary Assumptions for Linear Programming Models     232 B.8 Linear Programming Practice Problems     233 Appendix C:  Duality and Sensitivity Analysis in Linear Programming     241 C.1 Introduction     241 C.2 What Is Duality?     241 C.3 Duality and Sensitivity Analysis Problems     243 C.4 Determining the Economic Value of a Resource with Duality     258 C.5 Duality Practice Problems     259 Appendix D:  Integer Programming    263 D.1 Introduction     263 D.2 Solving IP Problems/Models     264 D.3 Solving Zero-One Programming Problems/Models     268 D.4 Integer Programming Practice Problems     270 Appendix E:  Forecasting     271 E.1 Introduction     271 E.2 Types of Variation in Time Series Data     272 E.3 Simple Regression Model     276 E.4 Multiple Regression Models     281 E.5 Simple Exponential Smoothing     284 E.6 Smoothing Averages     286 E.7 Fitting Models to Data     288 E.8 How to Select Models and Parameters for Models     291 E.9 Forecasting Practice Problems     292 Appendix F:  Simulation     295 F.1 Introduction     295 F.2 Types of Simulation     295 F.3 Simulation Practice Problems     302 Appendix G:  Decision Theory     303 G.1 Introduction     303 G.2 Decision Theory Model Elements     304 G.3 Types of Decision Environments     304 G.4 Decision Theory Formulation     305 G.5 Decision-Making Under Certainty     306 G.6 Decision-Making Under Risk     307 G.7 Decision-Making under Uncertainty     311 G.8 Expected Value of Perfect Information     315 G.9 Sequential Decisions and Decision Trees     317 G.10 The Value of Imperfect Information: Bayes’ Theorem     321 G.11 Decision Theory Practice Problems     328 Index     335