WGU Quantitative analysis for business C723

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76 terms cell Decision modelsare used to identify a business problem and develop alternative solutions.Payoff tableswill quantify the costs and benefits of each solution alternative.Decision treeswill be used to identify the alternatives and probabilities of occurrence.Network analysisrefers to the network of activities required to complete a business project.Quantitative analysisprovides methods to analyze large or small amounts of data to look for patterns, trends, and relationships.Mathematical analysiscan help managers make strategic decisions and find statistically supported solutions to business questions. These are functional areas over a period of time.Data may be categorized as eithersubjective or objective.Subjective dataobtained through surveys and interviews, are considered non-measurable, data typically include personal perceptions, such as likes, dislikes, attitudes, and opinions.

Objective data aremeasurable and typically arise from observation or testing in business areas like sales, operations, manufacturing, and logistics.Data must be valid: that is, the data must accurately represent the true business

relationship at hand. Further, the data must be reliable: if we sought to

characterize a particular business relationship by gathering data several different times (different samples), the data would reflect the relationship the same way with every sample.Examples of quantitative analysiscost-benefit analysis, inventory analysis, logistical analysis, and forecasting revenue.quantitative analysis approachdefines a problem and then develops a mathematical model to represent the particular business situation. The model allows managers to make inferences regarding the data.Total Revenuep=$xq $X is the revenue earned per item sold, Q is the quantity of items sold.Company XYZ can use this equation to forecast its revenue if X remains constant Steps in Quantitative Analysis1. Define problem.

• Develop mathematical model.
• Prepare and input data.
• Find best solution.
• Test solution.
• Analyze results.
• Implement solution.

Cause and effect useindependent and dependent variables. A dependent variable is the variable that is being measured, or affected. The independent variable is free to change in a given model.The dependent variable is affected by the changes in the causing independent variable. Although only one dependent variable is considered, many independent variables can have an effect.fishbone diagram is sometimesused to determine the cause of a problem.moderating relationshipthe relationship between the dependent and independent variables depends on the level of the moderating variable.mediating variableexplains the relationship between the dependent and independent variables.Scatter diagramsare used to graph pairs of numbers to determine the relationship.trend lineThe line that shows the general direction of the relationship of points over time If the trend line moves downward as we progress from left to right there is a negative correlation between the two variables.

what does it mean if one variable increases as the other variable also increases?That there is a positive correlation between the variables Forecastinghelps businesses make adjustments to the current business environment to encourage better business outcomes in the future.Choice vs decisiondecision -is to choose among reasonable alternatives.Quantitative analysisis based on specific, not subjective, information. Businesses can obtain specific information through a method of closed questions.Subjective questioninguses open-ended answers.Open-ended questionsquestions that do not offer answer choices but instead encourage a narrative response.Examples of quantitative datagathering strategies can include surveys with close-ended questions, observing measurable events (how many people were in the coffee shop at a specific time of day), and performance data.Mathematical modelsare used to quantitatively analyze the impact of changes on business performance and the evaluation of risk.Statisticsis the gathering, organizing, and interpreting of numerical data. It provides tools to analyze important numerical information through organizing, analyzing, and interpreting large amounts of data.There are two types of statisticsdescriptive and inferential.Descriptive statisticsis the analysis of data to describe, interpret, and summarize data in a meaningful way in order to find patterns.provides a summary that can be used to compare this student with other students.Inferential statisticstries to reach conclusions, generalizations, and estimations based on a smaller sample of the population.statistics infoDescriptive statistics is only concerned with the observed data, but inferential statistics makes predictions or inferences about a population larger than the observed set of data.Quantitative analysis (2)applies mathematical computations and statistical modeling to a business scenario or problem in order to determine the results and to identify business alternatives and consequences.null hypothesis statementit is written to state that there is not a relationship between the variables alternative hypothesiswill state that there is a relationship between the variables.The job of the quantitative analysis researcher is then to collect evidence in order to reject the null hypothesis statement.

expected monetary valueThe calculation considers both the likelihood or probability of the alternative occurring and the monetary benefit assigned to the alternative after costs are considered.weighted average of the outcomes of a decision with the probability of each outcome serving as the weight ROPreorder point ((daily demand * lead time) + safety stock) economic order quantity.when it is time to reorder, inventory managers must take care to balance the cost or reordering with the costs to hold the inventory, the best quantity to order considering these two factors Safety stockensures that a business will not run out of inventory when the demand is unusually high.When a business runs out of inventory stock this is called stockout.Lead timetime interval between ordering and receiving the order work breakdown structure (WBS)is a common tool used to help breakdown and manage a project's deliverables and their supporting tasks.beta distribution methodis a calculation that uses a combination of three duration estimates based on experience or history: the most optimistic duration, a pessimistic duration, and the most likely duration in order to consider variation in the final duration estimate.This method is thought to give a better final estimate for a task's duration.duration of the tasklength of time to complete the task beta distribution method (3)Used to estimate the duration of a task. Used when there is known to be variation or possible uncertainty in the time estimates of the tasks and subtasks beta distribution method (2)The beta distribution method is equal to the sum of the optimistic time estimate for the task (o), four times the most likely time (m) estimate, and the pessimistic time estimate (p); this result is then divided by six.

The formula is: Te=(o+4m+p)/6

critical path method (CPM)is an algorithm that is used to calculate the longest sequence of tasks that must be completed on time for the project to be completed by the deadline.The critical path method (2)determines which tasks are without any slack time and which tasks have extra time and can be delayed without delaying the entire project.InfoThe tasks that have zero slack time are considered critical; each of the critical tasks makes up a project's critical path. Delays on tasks that are on the critical path will negatively impact the completion of the project by the deadline.Gantt chartsare used to display tasks with duration and linkages to other activities in the project.