Business Analytics
3rd Edition
ISBN: 9780135231715
Author: Evans
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 1, Problem 4PE
For each of the following scenarios, state whether descriptive, predictive, or prescriptive analytics tools would most likely be used.
- The chief financial officer for a small manufacturing firm would like to estimate the net profit that the firm could expect over the next three years.
- A human resource manager needs to understand whether the company’s current employee mix has the skills and capabilities needed to achieve the goals laid out by a new strategic plan.
- A financial advisor would like to develop the best mix of stocks, bonds, and other investments for a client to achieve a comfortable level of risk.
- A large service firm wishes to determine how to invest the cash received from its financial product to achieve the best return.
- A logistics company wants to better understand the relative profitability of its numerous customers over the past three years.
- A disaster relief agency needs to allocate its budget for the next year among various relief efforts and programs.
- An automobile company would like to determine the number of vehicles it could sell next year based on the proposed price.
- A baseball team would like to set ticket prices for different sections in its stadium to attract the highest number of fans throughout the season.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Morning House is a mail-order firm which carries a wide range of rather expensive art objects for homes and offices. It operate problems would be greatly reduced. Since it takes approximately six weeks to receive 90% of the response to a given campaign, an accurate prediction of total sales made as late as the end of the first week of receiving orders would be useful. The first week’s sales and total sales of the last 12 campaigns of the firm are shown below. Can the first week’s sales be used to predict total sales? First week’s Total Campaign Sales Sales 1 32 167 2 20 91 3 114 560 4 66 335 5 18 70 6 125 650 7 83 401 8 65 320 9 94 470 10 5 15 11 39 210 12 50 265 --------------------------------------------
The National Entrepreneurship and Innovation Programme has initiated a business incubation venture ahead of schedule in the venture lifecycle. Something that must be done is to do a justification for the project. Since very little information is known about the project, the estimates are considered to be rough estimates. The accompanying table is the project manager’s gauge of the income that will occur throughout the following five years:
End of Year
Cash Flow In (GHC)
Cash Flow Out (GHC)
1
0
500,000.00
2
300,000.00
90,000.00
3
400,000.00
100,000.00
4
100,000.00
175,000.00
5
50,000.00
35,000.00
What is the payback period for the project. show workings
If the net present value (NPV) for each of the cash flows were calculated at a 10% interest rate, what would the NPV cash flow be at the end of five years? Comment on the feasibility of the project.
The Bennett Distribution Company, a subsidiary of a major home appliance manufacturer, wants to forecast sales
for next year. The Atlantic Coast branch, with current sales of $193.8 million, is expected to achieve
sales growth of 7.25%; the Midwest branch, with current sales of $79.3 million, is expected to have a
increase of 8.20%, and that the Pacific Coast branch, with current sales of $57.5 million, increase its sales 7.15%.
What is the predicted average growth rate in sales for the next year?
Select one:
Or a. The predicted average rate in sales for the next year is 7.46%
Or b. The predicted average rate in sales for the next year cannot be calculated due to lack of information
O c. The predicted average rate in sales for the next year is 22.6%
Or d. The predicted average rate in sales for the next year is 7.53%
6
Chapter 1 Solutions
Business Analytics
Ch. 1 - Discuss how you might use business analytics in...Ch. 1 - How might analytics be used in the following...Ch. 1 - A supermarket has been experiencing long lines...Ch. 1 - For each of the following scenarios, state whether...Ch. 1 - Suppose that a manufacturer can produce a part for...Ch. 1 - A bank developed a model for predicting the...Ch. 1 - Four key marketing decision options are price P,...Ch. 1 - Total marketing effort is a term used to describe...Ch. 1 - A manufacturer of headphones is preparing to set...Ch. 1 - In this chapter, we noted the importance of...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, statistics and related others by exploring similar questions and additional content below.Similar questions
- You are on the board of directors for Sew and Tell, an up and coming apparel brand focusing on producing t-shirts with a positive message. The company is looking to ramp up production and has hired an independent consulting group to evaluate the profitability of either a medium or large scale expansion. Your boss, the company president Jack Pott, has sent you the following email: Board of Directors Member, The consulting group has completed the analysis. The following table breaks down the results with us pursuing either a medium or large scale expansion. It gives low, medium, and high projections, the associated amount of profits (in thousands of $), and the probability of each outcome happening. Medium-Scale Expansion Profit 50 Large-Scale Expansion Profit Probability Probability Low .2 .2 Medium 150 .5 100 .5 High 200 .3 300 .3 Personally, I would love to hit the jackpot and reach a profit of $300,000, but our goal as a company is to maximum profit in the least risky way. Taking…arrow_forwardFollow-up question on the Household finances: Pls. Illustrate the output path diagram. Thanks.arrow_forwardThe ABC Company is involved in the production and selling of consumer goods, particularly beauty products such as bath soap and shampoo and had registered a positive profit growth for the last 10 years. However, the current year seems to be different from those years as the company is expecting a decline in profit; which is estimated to be about 70% below the target. The manager now is in a dilemma … asking himself/herself “What happened, why this decline in profit?” The Manager then asked the company Accountant to give him/her the data on sales and advertising cost for the last 10 years – he/she wants these data to determine whether the company can live without advertising, as advertising cost happens to be substantial. Justify your answer by doing as step-by-step procedure in Correlation Analysis using a 0.05 level of significance. The data are as follows –arrow_forward
- When considering the future performance of a company, financial analysts often use forecasts for earnings per share (EPS). Naturally, we are interested in the quality of these forecasts. We can define a forecasting error as follows: Forecasting Error = Predicted Value of the Variable – The Actual Value of the Variable. The optimal forecast would have a mean forecasting error of zero. This suggests that, on average, the predicted value is equal to the actual value. Therefore, we construct a hypothesis test to see if the mean forecasting error is equal to zero. You have collected data, as shown in the picture below, for two analysts covering different industries. Analyst A covers the pharmaceutical sector; Analyst B covers the retail sector. Please complete the following tasks (1–3) and provide an answer to the following question (4): Define μ as the population mean forecasting error and formulate the null and alternative hypothesis for a zero mean test of forecasting quality. For…arrow_forwardProfitability remains a challenge for banks and thrifts with less than $2 billion of assets. The business problem facing a bank analyst relates to the factors that affect return on assets (ROA), an indicator of how profitable a company is relative to its total assets. Data collected from a sample of 88 community banks include the ROA (%), the efficiency ratio (%), as a measure of bank productivity (the lower the efficiency ratio, the better), and total risk-based capital (%), as a measure of capital adequacy. Use the accompanying multiple linear regression results to complete parts (a) and (b) below. Variable Coefficient Standard Error t Statistic p-value Intercept −0.21762 0.39401 −0.55 0.5822 Efficiency Ratio, X1 0.01443 0.00498 2.90 0.0048 Risk-Based Capital, X2 0.04002 0.01034 3.87 0.0002 Determine the p-value for X1. p-value=________ (Type an integer or a decimal. Do not round.)arrow_forwardProfitability remains a challenge for banks and thrifts with less than $2 billion of assets. The business problem facing a bank analyst relates to the factors that affect return on assets (ROA), an indicator of how profitable a company is relative to its total assets. Data collected from a sample of 88 community banks include the ROA (%), the efficiency ratio (%), as a measure of bank productivity (the lower the efficiency ratio, the better), and total risk-based capital (%), as a measure of capital adequacy. Use the accompanying multiple linear regression results to complete parts (a) and (b) below. Variable Coefficient Standard Error t Statistic p-value Intercept −0.21762 0.39401 −0.55 0.5822 Efficiency Ratio, X1 0.01443 0.00498 2.90 0.0048 Risk-Based Capital, X2 0.04002 0.01034 3.87 0.0002 a. Construct a 95% confidence interval estimate of the population slope between ROA and efficiency…arrow_forward
- Profitability remains a challenge for banks and thrifts with less than $2 billion of assets. The business problem facing a bank analyst relates to the factors that affect return on assets (ROA), an indicator of how profitable a company is relative to its total assets. Data collected from a sample of 88 community banks include the ROA (%), the efficiency ratio (%), as a measure of bank productivity (the lower the efficiency ratio, the better), and total risk-based capital (%), as a measure of capital adequacy. Use the accompanying multiple linear regression results to complete parts (a) and (b) below. Variable Coefficient Standard Error t Statistic p-value Intercept −0.21762 0.39401 −0.55 0.5822 Efficiency Ratio, X1 0.01443 0.00498 2.90 0.0048 Risk-Based Capital, X2 0.04002 0.01034 3.87 0.0002 Find the test statistic for X1. tSTAT=______ (Type an integer or a decimal. Do not round.)arrow_forwardProfitability remains a challenge for banks and thrifts with less than $2 billion of assets. The business problem facing a bank analyst relates to the factors that affect return on assets (ROA), an indicator of how profitable a company is relative to its total assets. Data collected from a sample of 20 community banks include the ROA (%), the efficiency ratio (%), as a measure of bank productivity (the lower the efficiency ratio, the better), and total risk-based capital (%), as a measure of capital adequacy. Complete parts (a) through (g) below. Click the icon to view the data table. a. State the multiple regression equation. Let X₁, represent the efficiency ratio (%) and let X₂; represent the total risk-based capital (%). Ý TO DX DX = + + (Round the constant to two decimal places as needed. Round the coefficients to four decimal places as needed.) Distribution Costs ROA (%) 1.13 1.22 0.82 1.15 0.81 1.23 0.67 1.35 0.95 0.71 0.69 1.10 0.87 1.02 0.86 1.74 1.02 1.76 0.90 0.68 Efficiency…arrow_forwardWhat do the Forecast for each year add up to?arrow_forward
- The recent economic downturn resulted in the loss of jobs and an increase in delinquentloans for housing. In projecting where the real estate market was headed in the comingyear, economists studied the relationship between the jobless rate and the percentage ofdelinquent loans. The expectation was that if the jobless rate continued to increase, therewould also be an increase in the percentage of delinquent loans. The following data showthe jobless rate and the delinquent loan percentage for 27 major real estate markets. a. Compute the correlation coefficient. Is there a positive correlation between the joblessrate and the percentage of delinquent housing loans? What is your interpretation?b. Show a scatter diagram of the relationship between the jobless rate and the percentagearrow_forwardProfitability remains a challenge for banks and thrifts with less than $2 billion of assets. The business problem facing a bank analyst relates to the factors that affect return on assets (ROA), an indicator of how profitable a company is relative to its total assets. Data collected from a sample of 194 community banks include the ROA (%), the efficiency ratio (%), as a measure of bank productivity (the lower the efficiency ratio, the better), and total risk-based capital (%), as a measure of capital adequacy. A multiple linear regression model resulted in an SSR of 5.25 and an SSE of 125.02. Determine the p-value. The p-value is _____ (Round to three decimal places as needed.)arrow_forwardWhat is business analytics? Briefly describe the domain of the major fields of business analytics databases and data warehousing, descriptive, predictive, and prescriptive analytics.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Glencoe Algebra 1, Student Edition, 9780079039897...AlgebraISBN:9780079039897Author:CarterPublisher:McGraw Hill
Big Ideas Math A Bridge To Success Algebra 1: Stu...AlgebraISBN:9781680331141Author:HOUGHTON MIFFLIN HARCOURTPublisher:Houghton Mifflin Harcourt
Glencoe Algebra 1, Student Edition, 9780079039897...
Algebra
ISBN:9780079039897
Author:Carter
Publisher:McGraw Hill
Big Ideas Math A Bridge To Success Algebra 1: Stu...
Algebra
ISBN:9781680331141
Author:HOUGHTON MIFFLIN HARCOURT
Publisher:Houghton Mifflin Harcourt
Hypothesis Testing using Confidence Interval Approach; Author: BUM2413 Applied Statistics UMP;https://www.youtube.com/watch?v=Hq1l3e9pLyY;License: Standard YouTube License, CC-BY
Hypothesis Testing - Difference of Two Means - Student's -Distribution & Normal Distribution; Author: The Organic Chemistry Tutor;https://www.youtube.com/watch?v=UcZwyzwWU7o;License: Standard Youtube License