Krannert School of Management, Purdue University

Management 67000 Business Analytics

Syllabus: Fall 2015
Section(s)

Instructor

Office

Office hours

Contact Info.

Prof. Thanh Nguyen

KRAN 521

Tuesday 4pm-5pm
Wednesday 4pm-5pm
or by appointment

nguye161@purdue.edu

Course Website: https://katalyst.mgmt.purdue.edu/.

Section

Instructor

Lecture Time

Venue

Prof. Thanh Nguyen

8-9:30am

RAWL 3058

I NTRODUCTION
Data analysis and modeling are important skills for effective managerial decision making in business and
industry. Advances in technology (computers, scanners, cell phones) have made significant amount of data
available to managers. For example, the Dow Jones Industrial Average is one of the best-known and most
widely watched indicators of the direction in which stock market values are heading. Administration and
Congressional policymakers rely on statistics for budget decisions and related fiscal policy choices. The
Federal Reserve System bases the monetary policy on data analysis. A manager needs to know if the manufacturing process is producing a quality product based on monitoring and assessing process performance.
A sales manager has to develop tools to regularly monitor the performance of sales force. A manufacturer
of certain electronic products needs to produce a forecast of future sales in order to decide whether or not to
expand production. Banks use customer data to identify and design lucrative banking products. These are a
few of the many examples from business where statistics can improve company performance.
The techniques learned in this course will help you infer data and as such make better informed decisions.
The course covers basic probability, decision analysis, statistical analysis (hypothesis testing and regression
analysis), and simulation. Probability models provide tools to handle uncertainty and risk. Statistical analysis
focuses on the presentation of data and techniques to draw useful and valid inferences from data. Optimization models and decision analysis focus on techniques that use data to inform decision-making.

C OURSE OBJECTIVES
The course emphasizes applications of data analysis through cases and computer exercises. The focus of the
course is as much on modeling and presenting solutions to business problems as on understanding statistical
methods. Areas covered by the course include descriptive statistics, exploratory data analysis, probability,
simulation, decision analysis, estimation, hypothesis testing, and regression analysis. At the end of the
course, you should have
a good understanding of several commonly used statistical techniques in business;
an ability to model and solve practical business problems using statistical methods;
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Krannert School of Management, Purdue University

MGMT 67000: Business Analytics

an ability to present your findings to an audience of managers/decision makers;

a good understanding of the use of statistics software.

M ETHODS OF I NSTRUCTION
The course is taught using a mix of lectures, case/data presentations, class discussions, interactive problemsolving, and computer exercises/demonstrations. Case/data set analyses provide opportunities for the creative application of statistics to unstructured management problems and also serve to illustrate the applications of statistics in managerial decision making. Homework exercises emphasize the understanding of
concepts and aim to develop proficiency in translating business problems into statistical questions. Computer exercises familiarize the students with statistical software for data analysis.
Textbook and Course Materials for Management 670
Statistics for Business and Economics, 12th edition (revised) by D. R. Anderson, D. J. Sweeney, T. A.
Williams, Jeffrey D. Camm, and James J. Cochran, South-Western Publishing, ISBN-13 978-1-285-84632-3,
2014. (SBE)
Course Packet to be distributed
Software for Management 670
Minitab
Excel add-ons Solver and Data Analysis
Decision Tools (Excel add-ins @Risk, PrecisionTree, etc.)

YOUR ROLE IN THE COURSE

Preparation Each student is expected to be prepared for each class, to contribute to class discussions,
and to complete all assigned readings and exercises. Lecture material will be posted on the course website.
Students are expected to be aware of the announcements, events, and files posted on the course website. The
class will be divided into several teams. All assignments will be handed in as a team. Class and team-work
is subject to the following rules:
if a team member does not contribute, then his/her name should not appear on the assignments handed
in, and he/she may do the entire assignment and hand it in separately;
active participation in class discussions and teams is encouraged and is viewed as essential for clarifying difficult concepts. Thus, each team member will evaluate his or her team members at the end of
the course. Class and team participation accounts for a total of 20% of the course grade. Cell phones
may not be used during class. The use of laptops in class should be restricted to the course content in
discussion. Disruptive use of personal property during class will be penalized by reducing the class
participation grade.
Proficiency in working with data and statistical modeling can be attained only through extensive practice
with textbook problems and cases. It is recommended that students attempt the numerous exercises in the
textbook on their own. Homework and case assignments must be turned in on using Katalyst before their due
time. The name of the submitted file should be HW XXX Team YYY (or Case XXX Team YYY), where
XXX is the homework number and YYY is the team number.
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MGMT 67000: Business Analytics

Methodology of Case Analysis: Identify the analysis questions. Convert them to statistical inquiries.
Perform a descriptive analysis of the data. Identify unusual data points. Formally analyze the problem using
statistical procedures. Pertinent questions, and not the ability to conduct sophisticated statistical analysis
procedures, should drive the choice of procedures. State the assumptions of the chosen statistical procedure
and, if possible, verify them using the data set. Derive reasonable conclusions and recommendations that
are supported by formal analysis. Identify unexplored questions and create a case report documenting your
findings.
Format of Case Report: The write-up should not exceed six one-sided letter-size pages, including visual
material such as charts, graphs, and tables. The reports must be typed using font sizes of at least 11 points,
and margins of at least one inch on each side. Readability is of paramount importance. Adherence to type
size and margin requirements is important to ensure fairness across teams. A typical report contains the following sections: (1) introduction and problem statement, (2) summary of results, (3) analysis: technical and
non-technical, (4) recommendations, and action plans/suggestions for future study, and (5) all attachments
(graphs, tables, etc.). Even though some of the analysis is technical and is presented as such, the results must
be summarized and interpreted so that they are accessible to a non-technical audience. More specific expectations of the case report may be provided with each case. In case of conflict with the above, the guidelines
included with your case should be followed.
Final Exam: The final exam will be open book and open notes.

C OURSE H ONOR P OLICY

We expect and encourage students to discuss readings, case materials, and the concepts covered by the
course with one another. However, do not falsely represent someone elses work as if it were your own.
Students are expected to prepare case, homework, or other assignments without the assistance or reference
to students who have taken the class before, prior semesters class notes and the like. A team is not allowed to
cooperate with other teams. In case of violation, the instructor reserves the right to award zero points on the
exam/assignment to the individual/team and refer the matter to the university for further action. Further, the
use of Internet for finding solutions to cases and problems is prohibited. Specifically, students are expected to
follow Purdue regulations governing student conduct (see http://www.purdue.edu/univregs/studentconduct/
index.html).While working individually and with your team members:
Each team member is expected to understand, for each homework and case assignment, the reason for
choosing a particular technique, the mechanics of the solution procedure, and the implication(s) of the final
solution(s) and recommendation(s).

Krannert School of Management, Purdue University

MGMT 67000: Business Analytics

G RADING P OLICY /RULES

The following table lists the percentage of points allocated to each graded activity.
Homework assignments
Case assignments
Class participation
Peer evaluation
Final examination

20%
20%
10%
10%
40%

D EALING WITH C AMPUS E MERGENCY

In the event of a major campus emergency, course requirements, deadlines, and grading percentages are
subject to changes that may be necessitated by a revised semester calendar or other circumstances. Katalyst
and my email address are ways to get information about changes in this course.

Krannert School of Management, Purdue University

MGMT 67000: Business Analytics

T ENTATIVE C OURSE O UTLINE

Session

Class Topics (Topics marked with * are not covered in SBE. Use powerpoint notes.)

Pre-Session

Data Elements, Variables, and Observations

Qualitative and Quantitative Data
Cross Sectional and Time Series Data
Data Sources
Descriptive Statistics: Tabular and Graphical Methods
Frequency Distributions
Bar-Graphs, Pie-Charts, and Histogram
Cumulative Distributions and Ogive
Cross-tabulations and Scatter Plots
Descriptive Statistics: Numerical Measures
Measures of Central Tendency
Measures of Dispersion
Box and Whisker Plot
Coefficient of Variation
Covariance, Correlation
Simpsons Paradox
Chebyshevs Theorem
Probability
Experiments, Outcomes, and Events
Unions, Intersections, Complements of Events
Mutually Exclusive and Collectively Exhaustive Events
Addition Law
Reading: SBE Chapters 1, 2, 3, and 4; M670 0 (Data).ppt

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MGMT 67000: Business Analytics

Course Introduction
Data Sources
Descriptive versus Inferential Statistics
Descriptive Statistics
Box and Whisker Plots
Scatter diagrams
Reading: SBE Sections 3.1 3.5 (Appendix 3.1, 3.2); M670 1 (Descriptive Statistics).ppt

2 (8/25)

Descriptive Statistics
Outlier Detection
Scatter diagrams
Covariance, Correlation
Auto-Parts Case
Reading: SBE Sections 3.1 3.5 (Appendix 3.1, 3.2); M670 1 (Descriptive Statistics).ppt;
Auto-Parts Case (Part I)

3 (8/27)

Probability
Contingency Table
Joint and Marginal Probabilities
Conditional Probability
Independence of Events
Updating Probability (Bayes Theorem)
Reading: SBE Sections 4.1 4.5; M670 2 (Probability).ppt

4 (8/31)

Decision Analysis
Decision Problem
Value of Information
Using PrecisionTree1
Reading: SBE Sections 21.1-21.4; M670 3 (Decision Analysis).ppt
H/W 1: (Due 11:59pm) 3.53 (p. 135), 3.57 (p. 143), Case Problem 3.2 Motion Picture
Industry (p. 158), Case Problem 3.3 Business Schools of Asia-Pacific (p. 159); 4.37 (p.
199)

PrecisionTree is part of DecisionTools suite. See page 12 for details.

Krannert School of Management, Purdue University

5 (9/1)

MGMT 67000: Business Analytics

Discrete Probability Distributions

Random Variables
Expected Value, Variance, and Covariance
Linear Combinations of Random Variables*
Reading: SBE Sections 5.1 5.4; M670 4 (Discrete Distribution).ppt

6 (9/3)

Discrete Probability Distributions

Return/Risk Analysis of a Portfolio of Investments*
Binomial Probability Distribution
Reading: SBE Section 5.5; M670 4 (Discrete Distribution).ppt

7 (9/8)

Continuous Probability Distributions

Normal Probability Distribution
Standardized distributions
Examples: Portfolio returns, Stock-out/ inventory management*
Reading: SBE Sections 6.1 6.3 (Appendix 6.1, 6.2); M670 5 (Continuous Distribution).ppt

8 (9/10)

Continuous Probability Distributions

Assessing Normality
Normal Approximation of Binomial
Reading: SBE Sections 6.1 6.3 (Appendix 6.1, 6.2); M670 5 (Continuous Distribution).ppt

9 (9/14)

Case Discussion: Forward Software, Inc.

Sampling Distributions and Estimation
Sampling Methods
Sampling Distributions and Central Limit Theorem
Reading: SBE Sections 7.1 7.5 (Appendix 7.1, 7.2); M670 6 (Estimation).ppt

Krannert School of Management, Purdue University

10 (9/15)

MGMT 67000: Business Analytics

Sampling Distributions and Estimation

Sampling Distribution of a Sample Proportion
Point Estimators
t-distribution
Confidence Interval for a Sample Mean
Confidence Interval for a Sample Proportion
Reading: SBE Sections 7.5 7.8, 8.1 8.4 (Appendix 7.1, 7.2); M670 6 (Estimation).ppt

11 (9/17)

Simulation*
Simulation Modeling with @Risk
Simulating correlated random variables
New Product Introduction
Reading: M670 7 (Simulation).ppt

12 (9/21)

Hypothesis Testing (I) about population mean

Decision Risks
Hypothesis Testing Steps
Single Process/Population Hypothesis Tests
z Test, t Test
p value
One Tail versus Two Tail tests
Reading: SBE Sections 9.1 9.4; M670 8 1 (Hypothesis Testing I).ppt
H/W 2: (Due 11:59pm) 5.62 (p. 260), 5.63 (p. 261), 5.65 (p. 261); 6.31 (p. 286), Case
6.1 Specialty Toys (page 294); 7.27 (p. 321); Case 8.1 Young Professional Magazine (p.
372)

13 (9/22)

Hypothesis Testing (I and II)

Tests about Population Proportion
Paired Sample test
Two Sample tests
Reading: SBE Sections 9.5, 9.6, 10.1 10.3; M670 8 1 (Hypothesis Testing I).ppt; M670 8 2
(Hypothesis Testing II).ppt

Krannert School of Management, Purdue University

14 (9/24)

MGMT 67000: Business Analytics

Case Due: MEM: New Technologies (No discussion planned)

Simple Regression Models
Regression Modeling
Statistical Model and Assumptions
Least Squares Estimation
Coefficient of Determination
Reading: : SBE Sections 14.1 14.4; M670 9 (Simple Regression).ppt

15 (9/28)

Simple Regression
Testing for Significance
Residual Analysis
Prediction
Reading: SBE Chapter 14.5 14.9; M670 9 (Simple Regression).ppt

16 (9/29)

Multiple Regression Models

Interpretation of coefficients
Partitioning the Sum of Squares
F-test and t-test
Reading: SBE Sections 15.1 15.5; M670 10 (Multiple Regression).ppt
H/W 3: Due (11:59 pm) 9.63 (p. 428), 9.69 ( p. 429); Case Problem 9.1 Quality
Associates Inc. (p. 430); 10.39 (p. 473), 10.42 (p. 473)

17 (10/1)

Multiple Regression Models

Partial F-test
Multicollinearity
Prediction
Reading: SBE Sections 16.2, 15.5, 15.6; M670 10 (Multiple Regression).ppt

Krannert School of Management, Purdue University

18 (10/5)

MGMT 67000: Business Analytics

Multiple Regression Models

Dummy Variables
Interaction Terms
Residual Analysis
Reading: SBE Sections 15.7, 15.8, 16.1, 16.4; M670 10 (Multiple Regression).ppt
H/W 4: Due (11:59 pm) Case 14.1 Measuring Stock Market Risk (p. 671), 15.9 (p. 692),
15.17 (p. 697), 15.25 (p. 705), Case 15.1 Consumer Research (p. 745)

19 (10/6)

Cases in Regression Models

Model Selection
Baseball Case
Revisit Auto-Parts Case
Reading: M670 11 (Case in Multiple Regression).ppt, Auto-Parts Case (Part II)

20 (10/8)

Case Discussion: Finding the Best Car Value

Course Review

Exam

Final Exam: (4 hour duration, date and time to be announced)

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Krannert School of Management, Purdue University

MGMT 67000: Business Analytics

S UMMARY OF C OURSE S CHEDULE

Class

Date

Topic

Reading

8/24

8/25

Introduction
Descriptive Statistics
Descriptive Statistics

8/27

Probability

8/31

Decision Analysis

9/1

Discrete Distributions

9/3

Discrete Distributions

9/8

9/10

9/14

Continuous
Distributions
Continuous
Distributions
Sampling Distributions

SBE 3.13.5, A 3.1, 3.22 ;

M670 1(Descriptive . . .).ppt
SBE 3.13.5, A 3.1, 3.2;
M670 1(Descriptive . . .).ppt;
Auto-Parts Case (Part I)
SBE 4.1-4.5;
M670 2(Probability).ppt
SBE 21.121.4;
M670 3(Decision . . .).ppt
SBE 5.15.4;
M670 4(Discrete . . .).ppt
SBE 5.5;
M670 4(Discrete . . .).ppt
SBE 6.1 6.3, A 6.1, 6.2;
M670 5(Continuous ).ppt
SBE 6.1 6.3, A 6.1, 6.2;
M670 5(Continuous ).ppt
SBE 7.17.5, M670 6(Estimation).ppt

10

9/15

Estimation

11

9/17

Simulation

12

9/21

Hypothesis Testing I

13

9/22

Hypothesis Testing I
and II

14

9/24

Simple Regression

15

9/28

Simple Regression

16

9/29

Multiple Regression

17

10/1

Multiple Regression

18

10/5

Multiple Regression

19

10/6

Cases in Regression
Models

20

10/8

Summary

Due

H/W 1

Case 1

SBE 7.5-7.8; 8.1 8.4;

M670 6(Estimation).ppt
M670 7(Simulation).ppt
SBE 9.19.4;
M670 8 1(Hypothesis ).ppt
SBE 9.5, 9.6, 10.1-10.3, 11.1, 11.2;
M670 8 1(Hypothesis ).ppt
M670 8 2(Hypothesis ).ppt
SBE 14.1-14.4;
M670 9(Simple Regression).ppt
SBE 14.5-14.9;
M670 9(Simple Regression).ppt
SBE 15.1-15.5;
M670 10(Multiple Regression).ppt
SBE 16.2, 15.5, 15.6;
M670 10(Multiple Regression).ppt
SBE 15.7, 15.8, 16.1, 16.4;
M670 10(Multiple Regression).ppt
Auto-Parts Case (Part II); Baseball
Case M670 11(Cases in Multiple
Regression).ppt

H/W 2

Case 2

H/W 3

H/W 4

Case 3
Final Exam

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Krannert School of Management, Purdue University

MGMT 67000: Business Analytics

I NSTALLATION OF D ECISION T OOLS S TUDENT E DITION

MGMT 670 uses several EXCEL Addins such as @Risk and PrecisionTree. These are available as part of
DecisionTools suite from Palisade Corporation (http://www.palisade.com/decisiontools suite/). As a student
of Krannert, you can download the academic student version of DecisionTools suite on your personal computer/laptop. The software will expire in one year. In addition, this software is also available in the MBA
Lab in RAWLS Hall. You may download the DecisionTools Suite from: https://www.krannert.purdue.edu/
departments/kcc/resources/palisade/Palisade Student.zip.
For detailed installation instructions see https://intra.krannert.purdue.edu/admin/kcc/Pages/Resources.
aspx. If you are prompted to authenticate, and you should respond with:
Username:
Password:

krannert\<your career uid>

<your pw>

If you are on a computer that is already logged into Krannert domain, you will not be asked to authenticate again. If you have trouble downloading and installing the DecisionTools suite, please get in touch with
KCC on 7th Floor in the Krannert Building (kcchelp@purdue.edu).

I NSTALLATION OF M INITAB
MGMT 670 makes extensive use of MINITAB for regression analysis. The software is accessible in the
MBA lab on the 4th floor of RAWLS Hall (Rawls 4082). You can lease or purchase a version for your
personal computer at at http://www.onthehub.com/minitab/.

A3.1 denotes Appendix 3.1

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