MAN3550 Exam 1
What is a numerical variable?
A variable that takes on numerical values
What is exponential smoothing with trend?
An adjustment of the exponential smoothing forecasting method that projects the current trend forward to help forecast the next value of a time series (and perhaps subsequent values as well).
What is the regression tree algorithm?
An algorithm that uses a regression tree to perform predictive analytics when dealing with numerical outcomes.
What does a management science study provide?
An analysis and recommendations, based on the quantitative factors involved in the problem, as input to the cognizant managers
What is a historical record?
An entity for which data have already been collected.
What is the regression index?
An index that measures the lack of homogeneity of a region when dealing with numerical outcomes.
What is the Gini Index?
An index that measures the lack of homogeneity of a region when dealing with yes-or-no outcomes.
What are heuristic procedures?
An intuitively designed procedure for seeking a good (but not necessarily optimal) solution for the problem at hand
What is descriptive analytics focused on?
Analyzing data to create informative descriptions of what has happened so far
Business analytics
Attempts to aid managerial decision making but with particular emphasis on descriptive analytics, predictive analytics, and prescriptive analytics
What has the era of big data caused?
Business analytics to grow because the era has created new challenges that requires the use of business analytics
What is the basic approach to a classification question?
Collect data involving the characteristics and behavior of previous customers, determine a subset of the previous customers whose characteristics are similar to the prospective customer, and classify the prospective customer as likely to purchase (or not) based on the past behavior of the subset of previous customers
What is binning?
Converting a numerical predictor variable into a categorical variable whereby numerical values are categorized into bins that define a range of values.
What is satisficing?
Finding a solution that is good enough (but not necessarily optimal) for the problem at hand
What is a jury of executive opinion?
A judgmental forecasting method that involves a small group of high-level managers pooling their best judgment to collectively make the forecast.
What indicates a perfect positive correlation?
+1
What are the range of values for a correlation coefficient?
-1 to +1
What is a manager's opinion?
A judgmental forecasting method that involves using a single manager's best judgment to make the forecast.
What is the Delphi method?
A judgmental forecasting method that uses input from a panel of experts in different locations
What is a consumer market survey?
A judgmental forecasting method that uses surveys of customers and potential customers
What is a decision model?
A mathematical model that is used for making decisions that prescribe what should be done in the future as a recommendation to management.
What is a confusion matrix?
A matrix that shows how the predicted outcomes compare to the actual outcomes when using a predictive analytics algorithm
What is a correlation coefficient?
A measure of how much two numerical variables tend to move in tandem.
What is a variable?
A measured characteristic or outcome for a record, which is represented by columns
What is a statistical forecasting method?
A method that apply statistical techniques to use historical data to forecast future quantities.
What is the exponential smoothing forecasting method?
A method that gives the greatest weight to the last value in a time series and then progressively smaller weights to the older values
What is the judgmental forecasting method?
A method that uses expert judgment to make forecasts.
What is an averaging forecasting method?
A method that uses the average of all the past observations from a time series as a forecast of the next value.
What is the moving-average forecasting method?
A method that uses the average of the last n observations from a time series as a forecast of the next value.
What is a last-value forecasting method?
A method that uses the last value of a time series as the forecast of the next value
What is a classification model?
A model for predicting the class of the predictor record's outcome
What is a predictor record?
A new entity for whom a prediction is needed.
What is a circular node?
A node in a classification tree or a regression tree that represents a decision to split a region into new regions
What is a square node?
A node in a classification tree or regression tree that represents a region of historical records
What is a training partition?
A portion of the available historical data for a predictive analytics model that is used to develop ("train") the model.
What is a validation partition?
A portion of the available historical data for a predictive analytics model that is used to validate the model after a training partition is used to develop the model.
What is a constrain?
A restriction on the feasible values of the decision variables.
What is the stopping rule?
A rule for terminating an algorithm before it starts overfitting the data
What are forecasting errors?
The deviation of the forecast from the realized quantity
When did the rapid development of management science discipline begin?
The discovery of the simplex method in 1947 was the beginning of management science as a discipline.
What is data cleaning?
The largely automated process of correcting and reformatting the relevant data stored in a large database
What is the Institute of Operations Research and the Management Sciences (INFORMS)
The largest professional management science and business analytics professionals or students in the world
What is classification?
When someone tries to predict a yes or no outcome rather than a numeric outcome
What is the goal of machine learning?
To allow computers to learn automatically from historical relationships and trends in the data in order to do such things as making data-driven predicitions
What is the goal of artificial intelligence?
To build intelligent computer programs and machines that can simulate human thinking capability and behavior
What is the focus of prescriptive analytics?
Using decision models to prescribe the best options for managerial decision making
What is predicitive analytics focused on?
Using models to create predictions of what is likely to happen in the future
What is a yes-or-no outcome?
A situation where only two outcomes are possible, so the desirable outcome can be labeled yes and then the undesirable outcome can be labeled no. (Section 3.2), 98
What is a data warehouse?
A system that aggregates data from many sources into a single collection and includes tools to assist business analysts and data scientists with performing business analytics to derive valuable insights
What is an algorithm?
A systematic procedure that follows a prescribed set of steps until it concludes with a solution
What is the Knowledge Discovery in Databases (KDD) process?
A systematic sampling process through databases to find the relevant data and discover useful knowledge.
What is a retrospective test?
A test that involves using historical data to reconstruct the past and then determining how well the model and the resulting solution would have performed if they had been used.
What is a scatter plot?
A two-dimensional graph that uses dots to represent the various simultaneous values for two different numerical variables.
What is a product-mix problem?
A type of linear programming problem where the objective is to find the most profitable mix of production levels for the products under consideration.
What is a salesforce composite?
A judgmental forecasting method that aggregates the sales forecasts of the salesforce from their various regions
What is a categorical variable?
A type of variable that can take on only a small number of values that represent the few possible categories
What is a treemap?
A chart that breaks down hierarchical data into various categories and subcategories
What is a boxplot?
A chart that highlights various statistics for the distribution of a numerical variable.
What is a line chart?
A chart that is used primarily for showing how a numerical variable changes over time.
What is a histogram?
A chart that organizes a group of data points for a numerical variable into user-specified ranges
What is a map chart?
A chart that plots data on a map to show geographical information.
What is a lift chart?
A chart that visually displays the effectiveness of a predictive analytics algorithm for any given application
What is a regression tree?
A close variant of a classification tree that is used when dealing with numerical outcomes
What is a dataset?
A collection of data
What is a heat map?
A color-coded table that uses the intensity of the colors to highlight the more striking values in the table.
What is the ETL process?
A data integration process that extracts the relevant data from various sources, transforms the data into a standard form, and loads the data into a target data store
What is metaheuristics?
A general kind of solution method that provides both a general structure and strategy guidelines for designing a specific heuristic procedure to fit a particular kind of problem
What does it mean to overfit data?
It means that a predictive model is less accurate when using new data sets by having the model align too closely to the given data instead of taking into account the inherent idiosyncrasies in the given data due to randomness
What does it mean to classify the outcome?
It means to identify which of the predictor record's possible outcomes is relatively likely to occur.
What does it mean to standardize data?
It means to rescale each type of data so that it measures the number of standard deviations above or below the mean for a standard normal distribution.
What does managerial science aid?
Managerial decision making
Who makes the decisions, managers or business analysts?
Managers
Upon which scientific fields and social sciences is management science based?
Mathematics, statistics, computer science, and economics.
What is a class?
One of the categories of possible outcomes for the predictor record
If a higher value of one variable commonly implies a higher value of the other, then the variables are said to be what?
Positively correlated
What are the five steps for performing predictive analytics?
Step 1 - Develop a model Step 2 - Partition the data Step 3 - Test and refine the current model Step 4 - Repeat steps 1 through 3 for several models, and then choose the best one Step 5 - Implementation
What are the 5 steps for performing prescriptive analytics?
Step 1 - Formulate a decision model Step 2 - Learn how to derive solutions from the model Step 3 - Test the model Step 4 - Prepare to apply the model Step 5 - Implementation
What are the four steps for performing descriptive analytics?
Step 1 - Gather and organize relevant data Step 2 - Clean the data Step 3 - Explore the data Step 4 - Communicate performance information using data visualization
What do the techniques of management science provide?
Support/Firepower for prescriptive and predictive analytics
What is affinity analysis?
The analysis of the degree of association between products that might be purchased together in order to better identify "what goes with what"
What is the mean absolute deviation?
The average forecasting error.
What is the mean square error?
The average of the square of the forecasting errors.
What is an objective cell?
The cell in the spreadsheet that shows the overall measure of performance of the decisions
What is the method of least squares?
The procedure used to obtain the constants in the equation for a linear regression line
What is model enrichment?
The process of beginning with a very simple version of a model and then moving in evolutionary fashion toward more elaborate models that more nearly reflect the complexity of the real problem.
What is data mining?
The process of finding anomalies, patterns, and correlations within large data sets to predict outcomes
What will management scientists use to conduct their studies?
The scientific method, which includes gathering data, developing and testing hypotheses about the problem, and then applying sound logic in the subsequent analysis
What is a matching set?
The set of historical records whose categorical values for the predictor variables perfectly match the corresponding categorical values for the predictor record.
Operations Research
The traditional name for management science that still is widely used outside of business schools
Data set
a collection of data
Variable
a measured characteristic or outcome for a record
A study team normally works in an ________ ________.
advisory capacity
Mathematical model
an approximate representation of, for example, a business problem that is expressed in terms of mathematical symbols and expressions
Record
an entity for which data have been or will be collected and is represented by rows
Management Science
is a discipline that attempts to aid managerial decision making by applying a scientific approach to managerial problems that involve quantitative factors.
What is business analytics
the art and science of transforming data into insight for making better business decisions
Break-even point
the minimum sales level required before the product becomes profitable
Descriptive analytics
the use of data to analyze trends to date
Predictive analytics
the use of data to predict what will happen in the future
Prescriptive analytics
the use of data to prescribe the best course of action
