analytics final 102

Accounting has always been data intensive

-A ledger of transactions as data -Financial statements as data

Long history of analytics in economics

-Called "econometrics" -Based on testing theories, but also estimating economic parameters (e.g. supply and demand curves)

Why has business analytics grown in importance in the last 10-15 years?

-Communication with computerization and digitization -Businesses want to improve -Data represents a new tool to learn about the buesiness and customers

How is analytics changing management?

-Remove biases from decision making (equity analysis) -Help evaluate who should be promoted. -Evaluating broad business decisions

What are the ethical issues related to Big Data?

1. Consent 2. Ownership 3. When to intervene

What are the four types of data analytics questions?

1. Descriptive (What happened?) 2. Diagnostic (Why did it happen?) 3. Predictive (What happens next?) 4. Prescriptive (What should we do?)

Five steps of any Data Analytics exercise:

1. State your question and form a hypothesis. 2. Find/collect data to help answer your question 3. Clean and summarize the data 4. Analyzed the data 5. Communicate your results in words, tables,and figures

What is a histogram?

A histogram is a visual representation of a data set's distribution, using adjacent bars to show the frequency of data points within specified ranges.

What is a line graph?

A line graph is a visual representation of data points connected by lines, illustrating trends or changes in a variable over time or across categories.

What is a pie chart?

A pie chart is a circular graphical representation that illustrates the proportionate distribution of a whole into segments, each representing a percentage of the total.

What is a Scatter Plot?

A scatter plot is a visual representation of the relationship between two variables, using points on a two-dimensional graph.

Suppose that you have data on the proportions of customer types within customer data. The best type of chart for visualizing this information would be. A. A pie chart b. A bar chart c. A line chart d. A scatter plot

A. A pie chart

Choose one company that has been affected by the increasing ease of data collection and storage and use it to highlight your arguments.

Amazon has leveraged data analytics and storage capabilities to transform the retail industry and expand its business in various directions

How does analytics drive market segmentation?

Analytics identifies patterns in data, enabling businesses to create precise market segments based on consumer behaviors and characteristics for more effective targeted marketing.

What is Business Analytics?

Applied data analytics for business decisions

Business analytics that studies historical data to forecast future outcomes is A. prescriptive analytics B. predictive analytics C. diagnostic analytics D.descriptive analytics

B. predictive analytics

Suppose the customer churn rate is 12.5%, meaning that the firm loses 12.5% of their customers each year. If this is so, what is the average customer lifetime. A)4 Years B)12.5 Years C)8 Years D)You do not know given the information provided

C)8 Years

The correlation coefficient is a number A: between 0 and 1 and farther from 0 indicates a stronger correlation B: between -1 and 1 and closer to 0 indicates a stronger correlation C: between -1 and 1 and farther from 0 indicates a stronger correlation D: between -1 and 0 and farther from 0 indicates a stronger correlation

C: between -1 and 1 and farther from 0 indicates a stronger correlation

Main areas of finance?

Corporate Finance, Investing, Financial Services

Big data is data that A: is extremely large in size B: can be mined for pattern recognition C: sometimes raises ethical questions about its use D: all of the above E: none of the above

D: all of the above

How does one measure profitability of marketing campaign?

Define Objectives Calculate Costs Calculate ROI Use Attribution Tools: Employ tools for tracking and attributing conversions. Break-Even Analysis: Determine when campaign covers its costs

Suppose you are conducting an equity analysis to examine whether non-white workers are paid similarly to white workers. Describe the five steps of this equity analysis

Define the Scope and Objectives- assessing pay equity across racial groups, identifying potential disparities, and ensuring compliance with relevant laws and regulations Collect Relevant Data Statistical Analysis- determine whether there are significant differences in pay that cannot be explained by legitimate factors Consider Other Factors- Assess whether there are systemic issues that need to be addressed, such as biased performance evaluations or promotion processes Communicate Findings and Implement Changes

How to analyze randomized control trials and natural experiments?

Evaluating government interventions

What is Big Data?

Large, hard to manage volumes of data, both data that is structured and unstructured

What is market segmentation?

Market segmentation is the process of dividing a broader market into distinct groups of consumers with similar needs, characteristics, or behaviors.

How does a Netflix or Spotify recommendation system work and how is this an example?

Netflix and Spotify use data analytics to analyze user behavior. Netflix employs collaborative filtering, recommending content based on similar user preferences. Spotify combines collaborative and content-based filtering, considering both user interactions and song attributes for personalized recommendations.

How is analytics changing marketing?

Personalization: Recommendation algorithms like Netflix Cheaper/easier to evaluate consumer preferences

Describe how the increasing ease of data collection and storage (combined with the growth of computing power) has led to explosion of business analytics.

Several key factors have played a role in this transformative trend: -Data Availability and Accessibility -Storage Solutions -Machine Learning and AI -Competitive Advantage

What is Structured data?

Structured data is highly organized and formatted in a way that is easily searchable and can be processed by machines.

Why might studying churn rates be useful increasing profitability

Studying churn rates helps identify reasons for customer attrition, enabling businesses to implement strategies for better retention and increased long-term profitability.

What is the relationship between the churn rate & the average customer lifetime?

The churn rate and average customer lifetime are inversely related: as the churn rate increases, the average customer lifetime decreases.

Examples of Big Data

The internet -Browsing -Social Media Large Digital corporations -Mountains of transactional data Paper to electronic -Public Records

T/F: If one variable causes another variable to change then the variables will be correlated. However two variables can be correlated without one variable causing the other variable to change.

True

T/F:Business analytics used for decision-making can reduce bias in managerial instincts

True

What is unstructured data?

Unstructured data lacks a predefined data model or structure, making it more challenging to organize and analyze using traditional methods

How do data analytics questions build on one another?

What? So what? Then what?

Two assets are a good hedge for each other if their prices are: a. Positively correlated b. Negatively correlated c. Serially correlated d. Uncorrelated

a. Positively correlated

Which of the following is business analytics for marketing? a. Use data to track customer purchases b. Use data to predict stock prices c. Use data to analyze impact of Covid on unemployment d. Use data to study inventory data.

a. Use data to track customer purchases

Serial Correlation is: a. Correlation in breakfast cereal pricing b. Correlation in a value over time c. Correlation between two stock market indices

b. Correlation in a value over time

As analytics improves, accounting will move towards a. Less frequent reporting with the goal of quarterly reports b. Less frequent reporting with the goal of real time monitoring c. More frequent reporting with the goal of quarterly reports d. More frequent reporting with the goal of real time monitoring

b. Less frequent reporting with the goal of real-time monitoring

How can you apply the churn rate to better understand employee turnover?

calculate the percentage of employees leaving within a specific period, offering insights into workforce attrition and aiding in strategies to improve retention.

Analytics in economics focuses on_________

causality

Suppose dinner receipts at your restaurant are 30% lower on Sunday, Monday, and Tuesday compared to all other days. What are follow up business analytics questions you might ask?

descriptive- how do sales differ from days of the week diagnostic- why are sales lower on these days Predictive- what happens to sales if we add a monday night special Prescriptive- should we just close the restaurant on these days

What is a churn rate?

the rate at which customers leave a product or service