Determining the Appropriate

Analysis Technique
Data Driven Decision Making

ver. 26-Oct-16
 Performance Assessment
Task 1
A proposal
Simply fill out the template from TaskStream
Submit the Waiver-Release Form (and Organization
Verification Form as necessary)
You must pass Task 1 before you can submit Task 2

Task 2
A report

2
 Performance Assessment
Considerations
1. You should have familiarity with the business situation that you
will analyze
2. Is your business question clear and succinct?
3. Is your proposed data gathering approach feasible? Do you
have consent to collect and use the specific data?
4. Will you be collecting a sufficient number of observations for
statistical reliability (should be at least 30+ observations)?
5. Can your data be analyzed using one of the analytical
techniques that you have learned? Do you know what
technique is appropriate?
if not sure, talk with a Course Mentor
6. Is it clear to you what software you will use to analyze your
data and create any necessary tables, charts or graphs?
3
 Performance Assessment Examples
Business Analytic
Sector Business Question Data Method
Donation amount,
What factors impact driving distance
Small Business Multiple
donations to a yoga from studio, and
(Yoga studio) Regression
studio? associated zip
code population.
Is there a relationship
between number of
Counselor training
training hours for
info and 3 years
Health Care counselors and number Regression
of monthly
of patient incidents
incidence data.
requiring physical
restraint?
Is there a perceived
Ratings of the
difference in the
effectiveness of Paired sample
HR effectiveness of a new
new versus old t-test.
versus old employee
plan (n=804). 4
incentive plan?
 Performance Assessment Examples
Business Analytic
Sector Business Question Data Method
2 years of
Is there a trend in the
monthly incidence Time series
Non-Profit incidence of child abuse
rates of child analysis
in a particular State?
abuse
Number of
Should a staffing plan for
emergency
emergency nurses be
Health Care patient arrivals Chi-Square test
adjusted based on time of
every 3 hours
day?
over a week.
Are there differences in Annual salaries of
Local average police salaries individual police
ANOVA
Government across 3 adjoining officers from 3
precincts? precincts

5
What are NOT Analysis Techniques?
Means These are examples of Descriptive
Statistics rather than Analyses.
Correlation You might calculate and include one or
Net Promoter Score more of these, but they are not
analyses per se.

Bar Chart or Histogram These are types of Graphs/Charts

rather than types of Analyses. You are
Line Graph
expected to include a chart in your
Scatter Plot report in addition to an analysis.

6
What are Allowed Analysis Techniques?
regression (linear regression, multiple regression, logistic regression)
chi-square
one sample z-test or t-test
two independent-samples t-test
paired-samples t-test
ANOVA
statistical process control
linear programming
crossover analysis
break-even analysis
trend analysis
time series analysis
decision tree
simulation
7
 Analysis Techniques
Two general categories of analysis techniques
1. Statistical Analyses (i.e., Inferential Statistics)
Goal is to make an inference about a larger population
based on analysis of a smaller sample
Is there a statistically significant finding (trend, group
difference, etc.)?
e.g., regression, t-test, Chi-Square, ANOVA
2. Decision Science
Analytics to derive an optimal solution/decision
e.g., linear programming, break-even analysis, simulation

8
 Analysis Techniques

1. Statistical Analyses
2. Decision Science

9
 Decision Tree for Statistical Analyses
Objective
Relationships
between variables
Are 2 variables correlated?
Can a measure be predicted
using other measures?
(i.e., regression)
Does the data exhibit a trend
over time? (i.e., trend analysis)
Do different groups show
different relative frequencies in
preferences or behaviors?
(i.e., Chi-Square)
Comparing Means
Do two groups differ in mean
performance? (i.e., independent
samples t-test)
Do the same individuals rate 2 brands
differently? (i.e., paired-samples t-test)
Is there a difference in means among 3
or more groups? (i.e., ANOVA)
10
 Relationships
between variables

Which kind of variables?

Both Interval
Both Nominal or Ratio DV: Binary
(frequency (measuring IV(s): Interval
counts) something) or Ratio

Relationship or
Logistic
Chi-Square Prediction/Trend?
Regression

Regression (1 IV) or
Multiple Regression (2+ IVs)

DV = dependent variable 11
IV = independent variable
 Comparing Means

How many means?

1 Sample mean 2 sample

3+ sample
& a population means
means
mean

Are the 2 samples related?

Is known?

No, No -
Yes Yes - Paired
just SD Independent

1-sample Independent Paired Samples

Z-test ANOVA
t-test Samples t-test t-test

= population standard deviation 12

SD = sample standard deviation
 Analysis Techniques

1. Statistical Analyses
2. Decision Science

13
Decision Science Analysis Techniques
Recall, these are analytics to derive an optimal
solution or decision
Covered in this course
Statistical Process Control
Linear programming
Crossover Analysis
Break-even Analysis
Time Series Analysis
Decision Tree
Simulation

14
 Statistical Process Control
Use:
Derive standards and then monitor whether a
process is meeting those standards
Example:
An Internet Service Provider monitors
whether there are atypical changes in the
number of customer complaints it receives

15
 Linear Programming
Use:
Determine how best to use
limited resources (e.g., employee
hours, materials, space) to either
maximize profits or minimize
costs
Example:
Determine number of junior and senior
nurses to assign to emergency versus in-
patient wards based on a series of
constraints, in order to control costs while
meeting patient needs
16
 Crossover Analysis
Use:
Determine the least expensive
option, of 2 or more options, at
different volumes of need (considers
both fixed costs and variable costs)

Example:
A school district wants to determine whether it
makes more sense to purchase a hybrid powered
bus or a diesel powered bus (that differ in the
cost to purchase and cost per mile to operate)

17
 Break-Even Analysis
Use:
Determine the volume at
which Total Revenues make
up for (equal) Total Costs

Example:
An entrepreneurial artist wants to sell hand-
designed t-shirts online. She wants to
determine how many she will need to sell to
cover her costs and then start making a profit.
18
 Time Series Analysis
Use:
Determine a trend or pattern in
time series data in order to
predict/forecast a value for a
future time period
Example:
An analyst has monthly Sales data from 2009-2014
and wants to forecast sales for 2015. The analyst
uses regression, moving average, and exponential
smoothing to determine the forecast approach with
the least forecasting error, and uses that approach to
forecast 2015 sales.
19
 Decision Tree
Use:
A form of financial modeling that considers different
options, and determines the options(s) with the highest
profit potential based on a set of specified assumptions
and outcome probabilities
Example:
A non-profit charity wants to determine
which of 3 options, that have different
resource requirements and possible
outcomes, will generate the highest
net charitable contributions.
1. an internet campaign
2. a mailing campaign
3. organizing a 5k charity run

20
 Simulation
Use:
Computer-based models that
simulate real-world situations for
different What if ?" scenarios
Example:
A hospital has a policy of ordering 10 sets of crutches
whenever the inventory gets down to 5 sets or fewer. It
takes anywhere from 2 days to 2 weeks for an order to
arrive. Every now and then the hospital runs out of
crutches when there is a high demand. A new re-order
policy is needed to minimize running out of crutches,
while minimizing inventory (because hospital storage
space is scarce).
21
Remember that Course Mentors are available to
help you if you should have any questions about
your chosen business situation, type of data that
you will collect, and/or the type of analysis that
you should use.

e-mail us at MBAQuant@WGU.edu
make an appointment http://tinyurl.com/C207-
Appointments

22