MGT 306 Lecture Notes - Lecture 2: Linear Regression, Markdown
15 Apr 2018
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A categorization of analytical methods & models: Predictive analytics: consists of techniques that use models constructed from past data to predict the future or ascertain impact of one variable on another, linear regression, time series analysis, data-mining techniques: Techniques used to find patterns or relationships among elements of the data in a large database: simulation aka risk analysis: Involves use of probability & statistics to construct computer models to study impact of uncertainty on a decision. Used in pharmaceutical industry to assess risk of introducing a new drug. Prescriptive analytics: indicates a best course of action to take, the output of a prescriptive model is a best decision, portfolio models in finance. Use historical investment return data to determine mix of investments that yield highest expected return while controlling/limiting exposure to risk: supply network design models in operations. Provide cost-minimizing plant & distribution center locations subject to meeting customer service requirements: price markdown models in retailing.
