Unit 5 AMDM IP

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APPLIED MANAGERIAL DECISION-MAKING
MGMT 600

AGENDA

  • The wrap up

  • Every business decision

  • KPI’s and Metrics

  • Week 5 Assignments

HERE’S HOW IT WORKS

  • First you start with a research question.
  • Then establish your hypothesis.
  • Determine what data you want to collect.
  • Decide on your method of study (how will you analysis).
  • Who will you study (the population).
  • and go to it.

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HERE’S HOW IT WORKS

Every business decision is, in effect, a research question.

Will our new product succeed?

Should I hire, fire or promote?

Why did that product fail?

How do I motivate my employees?

Will I out produce or sell my competitors?

Should we expand our operations?

Will investing in new technology / equipment improve our efficiency or operations?

Should we go public / split our stock / buy back outstanding shares?

So what should be your hypothesis?

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DATA

Factors Influencing the selection of Data

__________ of decision.

S___________ of your systems.

A__________ of your _____ ___________.

Not the measure!

______ - Key Performance Indicators

Financial results, performance results, internal designed requirements

_______

Bench-marks, quality indicators, supplier guidelines

______________________________________

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METHODOLOGY

Factors Influencing the selection of a Data Analysis Strategy

B________ and ___________ of the researcher.

C___________ of decision

The ______

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REGRESSION CORRELATIONS

DOES THE RELATIONSHIP SHOW A CORRELATION ?

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  • Predicts or forecasts relationships
  • Correlation does not imply causation
  • Regression is denoted by an “R”
  • Slope of the line (negative or positive) is determined by calculating coefficient and t-stat (demo coming)

REGRESSION CORRELATIONS

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REGRESSION CORRELATIONS

DOES THE RELATIONSHIP SHOW A CORRELATION ?

-1.00

1.00

0.00

CORRELATION CONTINUUM

r =

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A CASE STUDY

Borrowed from a study conducted by Duke

  • Comparisons of sales of 3 carton sizes over 52-weeks at varying prices for beer
  • Dependent variable is sales by carton size
  • Independent variable is price

https://people.duke.edu/~rnau/regex.htm

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DEFINITIONS

  • Confidence - A confidence level refers to the percentage of all possible samples that can be expected to include the true population parameter. For example, suppose all possible samples were selected from the same population, and a confidence interval were computed for each sample. If you had a mean score of 5.83, a standard deviation of 0.86, and a desired confidence level of 95%, the corresponding confidence interval would be ± 0.12. That is to say that you can be 95% certain that the true population mean falls within the range of 5.71 to 5.95, risk,
  • Sampling Error - sampling error is the error caused by observing a sample instead of the whole population
  • Risk - The probability and magnitude of harm or discomfort anticipated in the research are not greater than those ordinarily encountered in daily life or during the performance of routine physical or psychological examinations or tests

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DEFINITIONS

  • Central tendency -  is a central or typical value for a probability distribution. It may also be called a center or location of the distribution. Usually the arithmetic mean, mode or median.
  • Dispersion- (also called variability, scatter, or spread) is the extent to which a distribution is stretched or squeezed.

  • Outlier - A convenient definition of a outlier is a point which falls more than 1.5 times the interquartile range above the third quartile or below the first quartile.

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