Business Intelligence and

Business Analytics

Dr. Robert Chi

Please copy and paste the following link for
pre-recorded lecture

https://csulb.zoom.us/rec/share/L6QbuD6QchVRSf-
YrH8zwMioAavVxjftIm8OwMrkBZe70eSPpidYYHkOEYxQP7Ih.otBl76uYpofYPA7L
 What is Business Intelligence

• Using and analyzing data to make business

decisions inteligently
 Managers and Decision Making

• Management: a process by which an organization

achieves goal through the use of resources (people,
money, materials and information)
• Ratio of input resources and output is an indicator
of productivity
 What is The Manager’s job

• Interpersonal roles: Figure head, leader, liaison

• Informational Role: Monitor, Disseminator,
spokesperson, analyst
• Decision Role: Entreprenure, resource allocator,
negotiator
Manager’s Decision Making Process
• Intelligence: What is the problem
• Design: What are my options
• Choice: Pick an option and decide how to implement it
• Implementation: inspect and result and use feedback for
improvement
Decision Support
• Management hierarchy
Types of Decisions

• Strategic(Unstructured)
• EIS
• Tactical(Semi-structured)
• MIS
• Operational(Structured)
• TPS
 BI Process
• Descriptive Analysis (What happened)
• We are losing market share in west region (OLAP finds out that the average
sales per store is going down 3 percent from January to March 2021)
• Predictive Analysis (what is going to happen)
• More west region customers are moving to online shopping (Data Mining
trend analysis finds out that in 2022, the average in store shopping time per
visit is going down 10 percent and spending per visit is going down 5
percent compare with 2021)
• Prescriptive Analysis (What should we do)
• Using optimization technology to find more economical local delivery
services
 BI Applications

•Prediction: (find out what type of consumers would purchase

Miller beer, predicting machinery failure)
•Forecasting: bad loans and fraudulent credit card use
•Correlation: Correlating demographics of patients with critical
illness
•Classification: Classify customers for certain purchasing pattern
(customers purchase item A will also purchase item B)
•Cross selling: People who purchase beer will also purchase..
•Up selling: People who buy a Toyota car may upgrade to Lexus
•Sequential selling: People who buy a printer will later purchase
 Descriptive Analysis
• Summarize what has happened in the past
• What has happened
• Tools
• Online analytical Processing (OLAP)
• Statistical Tools: Excel, SPSS
• Data Mining: searching for valuable business information in a large
database, data warehouse and data mart
• Decision Support Systems
• Sensitivity Analysis
• What if Analysis
• Goal Seeking Analysis
 Predictive Analysis
• Exam recent and historical data to detect patterns and predict
future outcomes and trends
• What is going to (could) happen
• Tools
• Data Mining
• AI (neural networks)
• http://www.nd.com
• Regression Analysis
 Prescriptive Analysis
• Recommend one or more courses of actions
• What should we do
• Tools
• Optimization
• Linear programming (use solver.xls in excel)
• Simulation
• What if analysis (use Goal seek.xls in excel)
 Case Study

UPS using 3 types of Analytics

1.DIAD capture detailed data that measure company’s current
status
2.Package Flow Technologies provides DIAD the details of the
package and order to deliver
3.ORION provide an optimal rout to deliver the packages
 In-class Exercise
• Suppose you work for Home Depot as a sales manager. Develop a BI
strategy to find out which type of customers are going to do a XXXX
project in the next 6 months.
• Make your assumptions and explain how it works in the problem domain
Why Decision Support
• Decisions are supported by Information
• Solving a Problem vs. Finding a Solution
• Solving a problem has the focus of removing the symptom
• Finding a solution look for the cause and resolve the issue
• Soap factory with X-Ray
• Pens in the space program
Decision Support Systems (DSS)
• Knowledge base
• Data base
• Model base
• Case base
• Rule base
• If your GPA is >= 3.0, you are a “A” student
• If your GPA is < 3.0 and >= 2.0, you are a “B” student
• If your GPA is < 2.0 and >= 1.0, you are a “C” student
• If your GPA is < 1.0 and >= 1.0, you fail

• Inference Engine
• Data processing
• Model/case/rule application
• Data mining tools
• User Interface