11/8/2016

Session#1(b):
` What is Business Analytics?
` Scope of Business Analytics.
Session#1(c):
Prof. Ravi Shankar ` A Case Study On Supply
Professor
Chain Analytics
Department of Management Studies,
Indian Institute of Technology Delhi, Session#1(d):
Vishwakarma Building, Shaheed Jeet Singh Marg,
New Delhi 110 016. (INDIA) ` Discussion on Software

Phone: +91-11-26596421 (O); +91-11-26501991 (R)

Environment (R-Language)
Mobile: +91-9811033937
Fax: +91-11-26862620
Email ravi1@dms.iitd.ernet.in; r.s.reaches@gmail.com
BUSINESS ANALYTICS & OPTIMIZATION (2013-14) 1-1

` We always take decisions about our education, life ` Business Analytics is the use of data,
partner, Job priorities etc. information technology, statistical analysis,,
` A Manager in any organization takes various quantitative methods and mathematical or
decision related to What to produce, How to price computer based models to help managers gain an
them, Workforce scheduling, Outsourcing etc. improved insight about their business operations
` These decisions are very difficult to take because and make better, fact-based decisions.
of their uncertainty, imperfect information about
the future. ` Business Analytics is a process of transforming
` Business decisions are complicated because of data into actions through analysis and insights in
overwhelming amount of available data and the context of organizational decision making and
information. problem solving.

Analytics is the use of: Business Analytics Applications

data, ` Management of customer relationships

information technology, ` Financial and marketing activities

statistical analysis, ` Supply chain management (a CASE STUDY IS

quantitative methods, and GOING TO COME SOON)

` Human resource planning
mathematical or computer-based models
` Pricing decisions
to help managers gain improved insight about
their business operations and ` Sport team game strategies

make better, fact-based decisions.

BUSINESS ANALYTICS & OPTIMIZATION (2013-14) 1-5 BUSINESS ANALYTICS & OPTIMIZATION (2013-14) 1-6

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Importance of Business Analytics

` There is a strong relationship of BA with:
- profitability of businesses Statistical Information Mathematical
Organizational Decision
making and problem
- revenue of businesses Analysis Technology models
solving
Actions
- shareholder return
` BA enhances understanding of data
` BA is vital for businesses to remain competitive
Data
` BA enables creation of informative reports

Business-Analytics
BUSINESS ANALYTICS & OPTIMIZATION (2013-14) 1-7

` Descriptive analytics ` Pricing decisions (for example, consumer and industrial goods, government
contracts and maintenance contracts)
- uses data to understand past and present ` Decisions to target consumers segments ( for example retailers, insurers,
` Predictive analytics credit card firms)
Merchandising decisions (for example, brands to buy, quantities, and
- analyzes past performance `
allocations)
` Prescriptive analytics ` Location decision (for example, bank branches or where to serve industrial
- uses optimization techniques equipment), and many others in operations and supply chains, finance, and
marketing and human resources- in fact in every discipline of business)

BUSINESS ANALYTICS & OPTIMIZATION (2013-14) 1-9

SESSION-1(c)
CASE STUDY Professor at MIT USA

on
SUPPLY CHAIN ANALYTICS

BUSINESS ANALYTICS &

OPTIMIZATION

Prof. Ravi Shankar

Department of Management Studies,
Indian Institute of Technology Delhi,
New Delhi
12

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CASE#1: BA&O FOR SUPPLY CHAIN

CASE : BA&O FOR SUPPLY CHAIN MANAGEMENT
MANAGEMENT
` Single product
` Two plants P1 and P2 ZROX
C1 F-1
Plant P1 has an annual capacity of 200,000 units.
Plant P2 has an annual capacity of 60,000 units. 3 FORECASTED
200,000 P1
ARNOLD 0 W1 DEMAND FOR
` The two plants have the same production costs. 4 APRIL 2013

` There are two warehouses W1 and W2 with identical 5 5

warehouse handling costs. C2
HEWES F-2

` There are three markets areas C1, C2 and C3 with 4 2 1

Past SIX MONTHS demands (Oct-12 to March-13)
as shown in NEXT SLIDE 60,000 P2 W2
WASH
BURN
2 2
` What is the Forecasted Demand for APRIL 2013? TRANSPORTATION COST PER UNIT C3 F-3
WRITTEN ALONG THE ARROWS,
REPRESENTING A SHIPMENT ROUTE

TRY TO LEARN (1)

WHAT IS DESCRIPTIVE
ANALYTICS AND WHY IS
IT SO IMPORTANT IN ANY
BUSINESS?

DO THESE CONVEY
SOME MEANING?

Answer is probably Yes

DOES IT CONVEY
SOME MEANING?

Answer is probably No

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DOES IT CONVEY TRY TO LEARN (2)

SOME MEANING?

Answer is probably Yes WHAT IS PREDICTIVE

ANALYTICS AND WHY IS
IT SO IMPORTANT IN ANY
BUSINESS?

CASE#1: BA&O FOR SUPPLY CHAIN

MANAGEMENT
FORECASTED
DEMAND FOR
APRIL 2013
ZROX
C1

0 3 F-1=50,000
200,000 P1
ARNOLD
W1 4
5 5
C2
HEWES

4 2 1 F-2 =100,000
60,000 P2 W2
WASH
BURN
2 2
TRANSPORTATION COST PER UNIT C3
WRITTEN ALONG THE ARROWS,
REPRESENTING A SHIPMENT ROUTE
F-3= 50,000

SESSION-1(d)
A Short Tutorial on R-Language
In The Next Class
We Will Discuss The Third
Part of This Case Study: BUSINESS ANALYTICS &
OPTIMIZATION
WHAT IS PRECRIPTIVE
ANALYTICS AND WHY IS IT Prof. Ravi Shankar
Department of Management Studies,
SO IMPORTANT IN ANY Indian Institute of Technology Delhi,
BUSINESS? New Delhi

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A SHORT TUTORIAL ON R-LANGAUAGE Writing and Executing Basic Program

HowtoInstallR
RIsfreelyavailableSoftwareyoucan
InstallItfromLinkgivenbelow:
Link: http://cran.rproject.org/bin/windows/base/

Just Go File and then New Script

You Will Get a New window which is called editor the other window is called Command Line.
Now arrange command line and editor for that just go to window and click on tile vertically

Now write the program in editor Now write the program in editor

Save The program on the directory you want Give a name to your R file

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Now Execute the Program You Can See the Command Line that the moment you execute
the line it will be displayed in command line. After that just type
data in command line it will show the value that is store in the
variable called data.

Installing Packages in R Installing Packages in R

Suppose there is a function read.xlsx which reads data from xls and xlsx files. It After Downloading Go to R. Click on Packages and got to install packages from
requires xlsx, rJava, xlsxjars packages to be installed prior to use this function local zip files.
Step 1:- Download the package from Google that you want to install Browse the folder in which you have stored the ZIP file
Type the package name along with CRAN R in Google like type xlsx CRAN Now Check the Command Line
R in Google for downloading xlsx package. Go To the first link of google search
and download the Window binary file.

Installing Packages in R To Quit R

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(1) Business Analytics: Methods, Models,

and Decisions, 1st edition, James R. Evans
(2) Supply Chain Management, 3rd Edition, Simchi
Levi, et al.
(3)http://cran.rproject.org/bin/windows/base/

BUSINESS ANALYTICS & OPTIMIZATION (2013-14) 1-37