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- (Topic 2)
An analyst supporting the Marketing department for a specialty retailer has been asked to look through past sales data to help guide product decisions. The business sponsor for this initiative would first like to know 'What is the most profitable product line?'. What type of analytics is the analyst going to perform to address this question?
Correct Answer:C
According to the Guide to Business Data Analytics, descriptive analytics is a type of analytics that summarizes and presents data in a meaningful way. Descriptive analytics uses techniques such as statistics, charts, tables, and dashboards to provide an overview of what has happened or is happening in the data. Descriptive analytics can help answer questions such as who, what, when, where, and how. In this situation, the analyst has been asked to look through past sales data to help guide product decisions. The business sponsor for this initiative would first like to know ??What is the most profitable product line???. This is a descriptive analytics question, as it involves summarizing and presenting the past sales data by product line and calculating the profit margin for each product line.
References: Guide to Business Data Analytics, page 49; CBDA Exam Blueprint, page 7; [Introduction to Business Data Analytics: A Practitioner View], page 14.
- (Topic 2)
A fashion retailer is developing a new line of luxury handbags and would like to evaluate their target market and pricing. After an extensive evaluation based on product features, their target market, and pricing of competitor products, the analytics team has come up with a pricing proposal. On presenting the results, the management team is of the opinion that additional analysis was required before making a decision. What type of additional analysis will help the management team make a decision on pricing?
Correct Answer:D
According to the Introduction to Business Data Analytics: A Practitioner View, the breakeven point is the point at which the total revenue equals the total cost of a product or service. The breakeven point indicates the minimum sales volume or price required to cover the fixed and variable costs and to start making a profit. The breakeven point can help the management team make a decision on pricing by showing them how sensitive the profitability is to the price changes and how much margin of safety they have. The breakeven point can also help the management team evaluate the feasibility and risk of the pricing proposal and compare it with alternative scenarios.
References: Introduction to Business Data Analytics: A Practitioner View, page 18; CBDA Exam Blueprint, page 7; [Break-Even Point (BEP) Definition - Investopedia]
- (Topic 2)
A pharmaceutical company is conducting research to determine whether a new medicine in development is more successful in reducing the pain associated with rheumatoid arthritis then their current drug in the market. A group of volunteers are selected for the research. One set of participants is provided the existing drug while a second set of participants is given the new drug.Which technique is being applied?
Correct Answer:C
A/B testing, also known as randomized controlled trial or split testing, is a technique that compares the outcomes of two or more groups that are randomly assigned to different treatments or interventions. The purpose of A/B testing is to measure the causal effect of the treatments on the outcomes of interest, such as pain reduction in this case.
A/B testing can help determine whether the new medicine is more effective than the existing drug by comparing the average pain scores of the two groups of participants after the treatment.
References: Guide to Business Data Analytics, page 60-61; CBDA Exam Blueprint, page 7; [Introduction to Business Data Analytics: A Practitioner View], page 18.
- (Topic 1)
Interested in experimenting with analytics, a manufacturing company hires an analyst to see how the capability can be developed within its organization. The analyst is getting started and recognizes the need to show value from the onset of their work to gain upper management's trust and future funding. What action will accomplish these objectives?
Correct Answer:C
The best action for the analyst to show value from the onset of their work is to develop a meaningful question that can be answered with data the company already has in its possession. This way, the analyst can demonstrate the potential of analytics to solve relevant business problems, without spending too much time or resources on data collection or market research. The question should also be aligned with the organization??s strategy and goals, and provide actionable insights for decision making12. References: 1: Guide to Business Data Analytics, IIBA, 2020, p. 202: Data Science for Business, Foster Provost and Tom Fawcett, 2013, p. 14.
- (Topic 2)
An operations manager for a new hotel is in need of determining the optimum number of vans to purchase to shuttle guests to/from the airport. It will be necessary to determine the most efficient routes and schedule to follow to ensure guests do not experience excessive delays. Which business analytics technique would lend itself to supporting these types of business decisions?
Correct Answer:A
Linear programming is a business analytics technique that can lend itself to supporting these types of business decisions. Linear programming is a mathematical method that optimizes the allocation of limited resources to achieve a desired objective, subject to a set of constraints1. Linear programming can help the operations manager to determine the optimum number of vans to purchase, the most efficient routes and schedule to follow, and the minimum cost or time to shuttle guests to/from the airport, by formulating a linear objective function and a system of linear inequalities that represent the relevant variables, parameters, and restrictions2.
The other options are not correct business analytics techniques for these types of business decisions. Factor analysis is a statistical method that reduces the dimensionality of a large set of correlated variables into a smaller set of uncorrelated factors that explain the underlying structure or patterns of the data3. Factor analysis can help the operations manager to identify the key factors that influence the guest satisfaction or loyalty, but it cannot help to optimize the resource allocation or efficiency. Regression is a statistical method that estimates the relationship between one or more independent variables and a dependent variable. Regression can help the operations manager to predict the demand or revenue of the hotel based on the variables such as season, price, or location, but it cannot help to optimize the resource allocation or efficiency. K-means clustering is a machine learning method that partitions a set of data points into a predefined number of clusters based on the similarity or distance between the data points. K-means clustering can help the operations manager to segment the guests into different groups based on their characteristics or preferences, but it cannot help to optimize the resource allocation or efficiency.
References:1: Guide to Business Data Analytics, IIBA, 2020, p. 532: Introduction to Business Data Analytics: A Practitioner View, IIBA, 2019, p. 93: Guide to Business Data Analytics, IIBA, 2020, p. 54. : Guide to Business Data Analytics, IIBA, 2020, p. 54. : Guide to Business Data Analytics, IIBA, 2020, p. 55. : Guide to Business Data Analytics, IIBA, 2020, p. 53. : Introduction to Business Data Analytics: A Practitioner View, IIBA, 2019, p. 9.
: Guide to Business Data Analytics, IIBA, 2020, p. 54. : Guide to Business Data Analytics, IIBA, 2020, p. 54. : Guide to Business Data Analytics, IIBA, 2020, p. 55.