Business Analytics Reviewer

Data Collection

Failures don’t plan to fail; they fail to plan. Harvey Mackey

Data Collection ideally answer Who, What, When, Where, Why, How.
It ideally contains the following info:
Input/Process/Output Measure
Operational Definition
Data Source and Location
Sample Size- how do we collect and what is the sample size.
Who will collect the data?
When will be the data collected?
How will the data be collected?
Other Data that should be collected at the same time.
How the data will be used?
How the data will be displayed?

Operational Definition- is a clear, concise, detailed definition of a measure. This ensures there is an
agreed, consistent, reliable way of collecting data.

Sampling

Process of collecting only a portion of the data that is available or could be available, and using the
information from the data in the sample, to draw conclusions about the population it was drawn from.

Why sample? Its impractical to collect all data, time consuming and costly.
Following the right method, valid conclusions can be obtained from a relatively small amount of data.

Common Sampling Approaches.

1. Simple random sampling- every unit has equal chance of being selected. 10 population. 1/10
chance of being selected. Ex. Lotto, raffle etc.
2. Stratified- randomly sampling a number from each group in proportion to the group share of the
total. Stratifying the population into group or strata then random sampling from those strata
equal chance.
 3. Systematic- sampling in which every nth unit is selected from the population. For example, in a
population of 12, you will choose every third.
4. Sub group-in which one samples N units every Tth time is selected from the population
(preserve time order)

When do we sample?
Cost associated with Data Collection is high
Time requested to collect all the data is significant
We are measuring a high-volume process

To make sure that the sample represents the population

Understand the nature of the process
Understand the characteristics of the population
Use sampling strategy that suits the process.

Baseline Performance

Baseline Performance
level of performance vs target
trend of performance
dispersion/variation
Benchmarking-comparing performance with other similar groups

Level of Performance

Trend of performance
Variation

Performance Comparison

Performance Behavior
Goal is to have a stable and predictable process.

How to know if a process is stable and predictable?

A control chart – graphic presentation of values that show how a process developed over time
Tool used to determine process behavior, where a process is stable and predictable.

Type of Signals in a Control Chart.

Common Cause variation

Normal/Inherent process variation over time. Ex. Signatures or variation in time arrival at
work.

Special Cause Variation

A shift in output caused by a specific factor or circumstance. Denotes that a process is not
stable and predictable. Ex, signature variation due to using other hand or late arrival due to MRT line
failure.

How to detect a special cause???

1. Any single observation outside the upper and lower control limits.
2. Any run of 8 consecutive observation on the same side of the center line. Ex all are at low
side of the center line.

A process that is not stable and predictable is hard to improve.

SO, is process stability the end goal?

Having a stable process doesn’t mean you hit the target. It only means you have a process you
can manage and improve. The ultimate goal is to make the process capable of achieving specified target,
consistently overtime.

How do I check if my process is both precise and accurate?

Process Capability- A measurement of how the voice of the process is capable of meeting the voice of
the customer.
CONDITIONAL PROBABILITY

Probability of A given B…. P(A/B)