8 Analytics-Informed Business Decision Making Free Online FlashCards

What should a clearly framed business decision specify?

State what action must be chosen, who will choose it, and by when; then define the objective and the outcome that would indicate success.

What does descriptive evidence show?

Descriptive evidence summarizes observed performance, such as sales by week or customer segment.

What should decision-makers check about evidence quality?

Check that evidence is relevant, current, and collected in a way that supports the intended conclusion. Look for missing observations, inconsistent definitions, biased samples, and recording changes.

Does a trend or regression relationship alone prove causation?

An observed association or trend alone does not demonstrate that changing one factor will cause a predicted result.

What should a decision-focused briefing communicate?

A decision-focused briefing states the decision and deadline, main finding, relevant evidence, uncertainty and limitations, available options and tradeoffs, and a recommendation with a next step.

Which chart fits time trends, category comparisons, and relationships between two measures?

Use a line chart for change over time, a bar chart for category comparisons, and a scatterplot for the relationship between two measures.

How do confidence and prediction intervals differ?

A confidence interval describes uncertainty about an estimated population quantity; a prediction interval describes the range of outcomes that may occur for a future observation.

What is sensitivity analysis used to test?

Sensitivity analysis varies important inputs, such as price, demand, or implementation cost, to see whether the preferred option remains preferred.

When is additional research worth its cost and delay?

Additional research is useful when its results could realistically change the decision enough to justify the cost and delay. It is less useful if every plausible result supports the same action.

What should be considered when options have different downside risks?

Options with similar expected returns can differ in their chances of severe loss. Consider the downside's scale, who bears it, and whether the organization can absorb or reverse it.

What criteria can a decision table use to compare options?

Make comparison criteria explicit, such as expected benefit, cost, risk, implementation time, reversibility, and effects on customers or employees.

How should a decision be evaluated after implementation?

After implementation, compare actual results with expectations while accounting for relevant external changes. Investigate whether differences came from assumptions, conditions, execution, or measurement.