Business Analytics

Aviral Apurva
Anureet Bansal
Devansh Agarwaal
Dhwani Dhingra
Chirag Verma
 INDEX
1. Importance of Resource
constraints.
2. Business Analytics :
Intro
3. Business Analytics
Personnel
4. Business Analytics Data.
5. Descriptive Analytics
6. Predictive Analytics
7. Prescriptive Analytics
Business Analytics : An Introduction
Business analytics (BA) is the
iterative, methodical
exploration of an organization's
data, with an emphasis on
statistical analysis. Business
analytics is used by companies
that are committed to making
data-driven decisions.
Big Data
: Essential intro
BuSiness Analytics : Constraints
Constraints are defined as restrictions or limitations on
possible solutions. The business analyst is responsible
for documenting any restrictions or limitations to the
solution design, construction, testing, validation and
deployment.

● Storage constraints are addressed by minimizing free

space, eliminating database reorgs, and reducing or
eliminating backups
● Extended run times for bulk loads are reduced by
intelligent data partitioning
● Query elapsed time constraints due to reduced data
availability are reduced by using an active/inactive
table technique
BuSiness Analytics : Personnel
Data Scientist : A data scientist is a professional responsible for
collecting, analyzing and interpreting extremely large amounts of data. The
data scientist role is an offshoot of several traditional technical roles,
including mathematician, scientist, statistician and computer professional.

Data Analyst : The Data Analyst is the professional whose focus of

analysis and problem solving relates to data, types of data, and relationships
among data elements within a business system or IT system.
Analytics Manager : Analytics
managers are responsible for
coordinating analytics tasks for their
organization, including creating
effective strategies to collect data,
analyze information, conduct research,
and implement analytics solutions for
their products or services.

Director of Analytics : Manage

a team of analysts, assigning
schedules, and projects. Develop,
implement, and disseminate metrics
about quality, performance and
outcomes. Collaborate with executives
and other departments to identify and
meet information needs.
Analytics approaches
 Descriptive analytics
encompasses the set of
techniques that describes

Descriptive what has happened in the

past. Examples are data

analytics
queries, reports,
descriptive statistics,
data visualization
including data dashboards,
some data-mining
techniques, and basic
what-if spreadsheet
models.
Visualize and explore
data
 Descriptive statistics
help describe and
understand the features of
a specific data set by
giving short summaries
about the sample and
Descriptive statistics measures of the data. The
most recognized types of
descriptive statistics are
measures of center: the
mean, median, and mode,
which are used at almost
all levels of math and
statistics
Sampling and estimation
Predictive analytics
 WHAT IS
PREDICTIVE
ANALYTICS?
Predictive analytics is
the branch of the advance
analytics which is used to
make predictions about
unknown future events. The
patterns found in
historical and
transactional data can be
used to identify risks and
opportunities for future.
It uses a number of
predictive modeling, data
mining techniques.
Predictive analysis
process
Predictive modeling
Predictive modelling is the process of
creating, testing and validating a model to
best predict the probability of an outcome.

It consists of-

1) Logic driven models

2) Data driven models
 Logic driven model
A logic-driven model is one based on experience, knowledge, and logical
relationships of variables and constants connected to the desired business
performance outcome situation.
Influence diagram
data driven model
Regression
analysis
Managerial decisions are
often based on the
relationship between two or
more variables. A regression
analysis involving one
dependent variable (y) and
independent variable (x)
where a change in x results
in the change in y is called
simple linear regression.

Coefficient of Determination=
R2 or r2
Correlation
Analysis
Karl Pearson’s Correlation coeffecient

OR
Time series
analysis
 Data mining is a term from computer
science. Sometimes it is also called

What is data knowledge discovery in databases

(KDD). Data mining is about finding

mining?
new information in a lot of data. The
information obtained from data mining
is hopefully both new and useful. In
many cases, data is stored so it can be
used later.
Data mining Data-mining approaches can be
separated into two categories:-

approaches 1.
2.
Supervised Learning
Unsupervised Learning
 Supervised learning
The goal is to predict an outcome based on a set of variables (features). Linear regression
is a well-known supervised learning approach from classical statistics, in which
observations of a quantitative outcome (the de- pendent y-variable) and one or more
corresponding features (the independent x-variables) are used to create an equation for
estimating y values.

The Linear Regression Equation

The equation has the form Y= a + bX, where Y is the dependent variable (that's the
variable that goes on the Y axis), X is the independent variable (i.e. it is plotted on the X
axis), b is the slope of the line and a is the y-intercept.
 Unsupervised learning
Unsupervised learning methods do not attempt to predict an output value but are rather
used to detect patterns and relationships in the data. Clustering is used in unsupervised
learning.
 Data mining steps
1. Data Sampling: Extract a sample of data that is relevant to the business
problem under consideration.
2. Data Preparation: Manipulate the data to put it in a form suitable for formal
modeling.
3. Model Construction: Apply the appropriate data-mining technique
(regression, classification trees, k-means) to accomplish the desired
data-mining task (prediction, classification, clustering, etc.).
4. Model Assessment: Evaluate models by comparing performance on appropriate data
sets.
 Cluster analysis
The goal of clustering is to segment observations into similar groups based on the
observed variables. Clustering can be employed during the data preparation step to identify
variables or observations that can be aggregated or removed from consideration. Cluster
analysis is commonly used in marketing to divide consumers into different homogeneous
groups, a process known as market segmentation.
 Hierarchical clustering
Hierarchical clustering determines the similarity of two clusters by considering the
similarity between the observations composing either cluster. There are several methods
for comparing observations in two clusters to obtain a cluster similarity measure.

1. Single linkage clustering method:-The similarity between two clusters is defined by

the similarity of the pair of observations that are the most similar. Thus, single linkage
will consider two clusters to be close if an observation in one of the clusters is close
to at least one observation in the other cluster.
2. Complete linkage clustering method:-the similarity between two clusters as the
similarity of the pair of observations (one from each cluster) that are the most
different.Complete linkage will consider two clusters to be close if their most
different pair of observations are close.
3. Average linkage clustering method:-
The averaging concept of cluster
centroids to define between-cluster
similarity. The centroid for cluster k,
denoted ck, is found by calculating the
average value for each variable across
all observations in a cluster; that is, a
centroid is the average observation of a
cluster. The similarity between two
clusters is then defined as the similarity
of the centroids of the two clusters.
Descriptive Predictive Prescriptive
analytics analytics analytics
OR OR OR
Observee Predict Influence

Less gravity Quality of High quality

of statistics statistics of statistics
Prescriptive Analytics

Prescriptive analytics is a type of data analytics—the use of technology

to help businesses make better decisions through the analysis of raw
data. Specifically, prescriptive analytics factors information about
possible situations or scenarios, available resources, past performance,
and current performance, and suggests a course of action or strategy. It
can be used to make decisions on any time horizon, from immediate to
long term.
Linear Optimization
Linear programming (LP) is one of the simplest
ways to perform optimization. It helps you
solve some very complex optimization
problems by making a few simplifying
assumptions. As an analyst you are bound to
come across applications and problems to be
solved by Linear Programming.

Linear programming is used for obtaining the

most optimal solution for a problem with given
constraints.In linear programming, we
formulate our real life problem into a
mathematical model. It involves an objective
function, linear inequalities with subject to
constraints.
Example of a linear programming problem

Let’s say a FedEx delivery man has 6 packages to deliver in

a day. The warehouse is located at point A. The 6 delivery
destinations are given by U, V, W, X, Y and Z. The numbers
on the lines indicate the distance between the cities. To
save on fuel and time the delivery person wants to take the
shortest route.

So, the delivery person will calculate different routes for

going to all the 6 destinations and then come up with the
shortest route. This technique of choosing the shortest
route is called linear programming.

In this case, the objective of the delivery person is to deliver

the parcel on time at all 6 destinations. The process of
choosing the best route is called Operation Research.
Operation research is an approach to decision-making,
which involves a set of methods to operate a system. In the
above example, my system was the Delivery model.
 Integer programming
An integer programming problem is a mathematical optimization or feasibility program in
which some or all of the variables are restricted to be integers. In many settings the term
refers to integer linear programming (ILP), in which the objective function and the
constraints (other than the integer constraints) are linear.594

Hey
If some decision variables are not discrete the problem is known as a mixed-integer
programming problem.
Two types
1)Pure i.e all integer and
2)Mixed integer programming
BRANCH-AND-BOUND
CUTTING PLANES
Nonlinear Programming

Nonlinear programming (NP) involves minimizing or maximizing a nonlinear

objective function subject to bound constraints, linear constraints, or nonlinear
constraints, where the constraints can be inequalities or equalities. Example
problems in engineering include analyzing design tradeoffs, selecting optimal
designs, computing optimal trajectories, and portfolio optimization and model
calibration in computational finance.
THANK YOU:)