BUSINESS ANALYTICS

SESSION 1
 Syllabus

COURSE Class rules:

INTRODUCTION
• Please come on time at live sessions
and turn the camera on!
• Late submission of assignments results
in point deduction by 5 per hour.
• Feel free to contact me if you find any
problems/difficulties during the class.
BUSINESS
ANALYTICS

WHAT ARE WE
GOING TO
LEARN FOR ONE
SEMESTER?
Pertemuan 1: Introduction to Business Analytics
Foundation of Business Analytics
Pertemuan 2: Analytics on Spreadsheets

Pertemuan 3: Visualizing and Exploring Data Descriptive Analytics

Pertemuan 4: Spreadsheet Modeling Analysis

Pertemuan 5: Trendlines and Regression Analysis Predictive Analytics

Pertemuan 6: Forecasting Techniques

Pertemuan 7: Game Theory Prescriptive Analytics

Pertemuan 8: Linear optimization

Pertemuan 9: Integer optimization

Pertemuan 10: Multicriteria Decision Making

Prescriptive Analytics
Pertemuan 11: Monte Carlo Simulation and Risk Analysis &
Decision Making Analysis
Pertemuan 12: Waiting Line Model

Pertemuan 13: Decision analysis

Pertemuan 14: Network Flow Model

WHAT IS BUSINESS ANALYTICS?
WHAT IS BUSINESS ANALYTICS?

How Data are interpreted and used by Quantitative Techniques

(including Statistical Analysis) with the help of Information Technology to
obtain Insights and Make Decisions.
A VISUAL
PERSPECTIVE
OF BUSINESS
ANALYTICS

Source: Evans (2015)

APPLICATION OF BUSINESS ANALYTICS

1 2 3 4 5
Strategic Marketing Operational Finance HR decision
decision decision decision decision •Hiring/firing
•Business model •Choice of •Location and •Pricing •Incentive
marketing distribution •costing
channels, choice
customer
segmentation
BENEFITS CHALLENGES

 Create value  No sufficient and credible data

 Perceived benefit (quality,  No analytical tools
accessibility, product usefuleness,  No competent people
etc) to customer
 Reduce cost
 At the end increase company’s
bottom line
  Descriptive analytics
 Understand past (historical) data to answer
“what happened/is happening)

SCOPE OF  Predictive analytics

BUSINESS  Use historical data to predict/forecast the
ANALYTICS future (what will happen) → currently data
mining, pattern analysis, etc

 Prescriptive analytics
 Based on data, propose the best available
solution
SEE EMAS!
This Photo by Unknown Author is licensed under CC BY-SA This Photo by Unknown Author is licensed under CC BY-NC-ND This Photo by Unknown Author is licensed under CC BY-SA This Photo by Unknown Author is licensed under CC BY-SA

 Airlines in Indonesia may increase its pricing during peak

EXAMPLE: season.
 Problem: when is the best time to increase the price? By how
much?
Descriptive analytics: examine
historical data of pricing and
passenger by route

Predictive analytics: predict sales EXAMPLE:

based on set price for each route AIRLINE CASE

Prescriptive analytics: determine the

best price for each route
MINI QUIZ 2

USING ONLINE
SHOPPING CONTEXT,
PROVIDE AN
EXAMPLE OF HOW TO
USE EACH SCOPE OF
BUSINESS
ANALYTICS!
This Photo by Unknown Author is licensed under CC BY-SA
DATA FOR BUSINESS ANALYTICS
 DATA-INFORMATION-KNOWLEDGE-INSIGHT/WISDOM (DIKI/DIKW) MODEL

Data Information Knowledge Insight/Wisdom

Data that have been Application of

The transformation of
Raw input, structured processed or knowledge for future
information to produce
and unstructured, in structured to give action.
certain patterns or
form of number, text, meaning. (e.g. Anticipating high
contexts.
image, voice, etc. (e.g. There are 10 units sales on Monday, the
(e.g. The highest
(e.g.: Monday, 10, sold on Monday for company prepare
number of sales is
10012) order number of higher stocks on
usually on Monday)
10012) Sunday)
DATA SOURCES

Primary: market survey, census, Secondary: mostly document-

interview report, operational based sources
examination
HOW ABOUT BIG DATA?
HIGH VOLUME, HIGH VELOCITY, HIGH VARIETY (IBM)
This Photo by Unknown Author is licensed under CC BY
METRICS

Unit of Continuous
Discrete
measurement to Metrics: based
metrics: based
measure on continuous
on counting
performance measurement
Categorical (nominal): classified into categories
(e.g. geographical area, item category, color)

Ordinal: can be ordered or ranked

(e.g. survey scales, order number) DATA
Interval: numerical data with constant
MEASUREMENT
differences, arbitrary zero (e.g. dates,
temperature in C or F)

Ratio: continuous scale with meaningful zero

(e.g. money, time length, temperature in K)
SEE EMAS!
 Reliability: accurate source and data
and consistent itself
DATA RELIABILITY
VS DATA VALIDITY
Validity: measured methods and
correctly measurement
MODEL IN BUSINESS ANALYTICS
 MODEL: REPRESENTATION OF REAL CONDITION
The rate of sales starts small as early adopters begin to evaluate a new
Verbal Description product and then begins to grow at an increasing rate over time as
positive customer feedback spreads. Eventually, the market begins to
become saturated and the rate of sales begins to decrease.

Graphical Model

Gompertz curve: S = aebect, where S = sales, t = time, e is the base of

Mathematical Model natural logarithms, and a, b, and c are constants
Source: Evans (2015)
PROBLEM SOLVING WITH ANALYTICS
 PROBLEM SOLVING STEPS

1 Recognizing a problem

2 Defining the problem

3 Structuring the problem

4 Analyzing the problem

5 Interpreting results and making a decision

6 Implementing the solution

Source: Evans (2015)
Thank You