MGT555

BUSINESS ANALYTICS

INDIVIDUAL ASSIGNMENT 1

PREPARED BY:
AFIQ NAJMI BIN ROSMAN
(2020878336)
NURUL NABILAH BINTI AYOB
(2021839444)

NBO5B

PREPARED FOR:
DR. MUHAMMAD AZMAN BIN IBRAHIM
QUESTION 1

Data collected in the market can be used to describe or inform a certain

situation/phenomenon, to predict or look at trend and to prescribe the course of action. You
may search information from the internet and provide an example of how data being used for
descriptive, predictive, and prescriptive purposes.

(6 marks)

Data collection is the process of gathering, measuring, and analyzing reliable data from a
variety of sources in order to address research challenges, offer answers to questions, assess
findings, and forecast future trends and possibilities. Data gathering is a component of almost
all research efforts. The best technique to take generally relies on the sort of data you are
gathering, but there are several options.

For good reason, most businesses nowadays place a high focus on data when making
business decisions. The aim is not simply statistics, but meaningful insights that result in
more informed action. Otherwise, facts and data are meaningless. Analytics solutions offer a
realistic method for utilizing business data. The three most common forms of analytics are
descriptive, predictive, and prescriptive analytics, and they all work together to help
organizations get the most out of their big data. All of these approaches of analysis provide
various perspectives.

Descriptive analysis is a common starting point for business intelligence. Descriptive analysis
aids organizations in understanding how they work by giving context to assist stakeholders in
comprehending information. It gathers and organizes historical data using data aggregation
and data mining to provide visualizations such as graphs, charts, reports, and dashboards.
Descriptive analysis, like statistical modelling, gives a clear picture of what happened in the
past, but it ends there. It makes no interpretations or recommendations about what to do next.
When doing this sort of analysis, you will normally begin by picking a KPI as a performance
benchmark in a given business sector.
You will gather and prepare data sets after selecting which ones will be used for the study and
where to obtain them. To uncover patterns and assess performance, several approaches will be
employed, including pattern detection, clustering, summary statistics, and regression analysis.
You will create graphics to make data more accessible and easier to understand. Descriptive
analytics may help decision makers in all departments of a business, from finance to
operations. The sales staff, for example, may see which client categories contributed the most
money to sales last year.
The marketing team can determine which social media sites generated the highest return on
advertising spend during the previous quarter, the finance team can track monthly and annual
revenue growth or decline, and the operations team can track SKU requests across multiple
geographic locations over the past year.

Understanding what occurred in the past and why it happened helps you to make predictions
about what could happen in the future. Predictive analytics uses historical data to develop
machine learning models that take into account relevant trends and patterns. Using the most
recent data, the model is then utilized to forecast future events. In addition to forecasting
prospective outcomes, predictive analytics estimates the chance that specific future events will
occur. It aids businesses in better planning, setting realistic goals, and avoiding excessive
risks. Furthermore, it enables teams to more correctly forecast future performance based on
past performance and all of the present factors influencing it. What if analysis, in which
different values are modified to see how those changes influence the outcomes,

Predictive analytics is one of the most helpful sorts of predictive analytics. When a business
team can undertake quick iterative analysis to analyze choices, they are able to make better
decisions faster. For example, the sales team can discover revenue prospects of specific
customer segments, the marketing team can forecast how much money an upcoming campaign
is likely to generate, the finance team can make a more accurate estimate for the next fiscal
year, and the operations team can better anticipate regional demand for various items at
specific times in the coming year.

Prescriptive analytics is the next stage in predictive analytics. This form of analysis drives the
team's actions based on the generated projections. Prescriptive analytics forecasts what, when,
and why an event or trend will occur. It indicates which behaviors are most likely to provide
the intended effects. It helps teams to deal with problems, enhance performance, and capitalize
on valuable possibilities. For example, how the sales team can enhance sales procedures for
each planned industry, how the marketing team can aid in product selection to emphasize the
following quarter, how the finance team can improve risk management, and how the operation
team can suggest methods to optimize storage.

When descriptive, predictive, and prescriptive analytics are combined, they may be a powerful
force. Descriptive analytics is a critical tool for assisting firms in making sense of massive
volumes of historical data. It assists you in monitoring performance and trends by measuring
key performance indicators (KPIs) and other variables. Firms may get deeper insights into the
causes and expected future consequences of events, as well as potential actions they can take
to improve company performance, by integrating descriptive analytics with predictive and
prescriptive analysis. Prescriptive analytics, like predictive analytics, would not be perfect
because it relies on guesses. They do, however, offer the finest means to peer into the future
and assess the practicality of options before making them.
QUESTION 2

The Excel file Credit Risk Data provides information about bank customers who had applied
for loans. The data include the purpose of the loan, checking and savings account balances,
number of months as a customer of the bank, months employed, gender, marital status, age,
housing status and number of years at current residence, job type, and credit-risk
classification by the bank. Answer the following questions by showing your works in
spreadsheet of the given file.

a) Find the measure of central tendency for the checking and savings account balances
among the customers who are classified as high and low credit-risk takers.
(12 marks)

Central Tendency for the Checking Account Balances - High Credit-Risk

Takers
Mean 847.2322275
Standard Error 196.0361426
Median 0
Mode 0
Standard Deviation 2847.589455
Sample Variance 8108765.703
Kurtosis 25.81903539
Skewness 4.91561773
Range 19812
Minimum 0
Maximum 19812
Sum 178766
Count 211

Central Tendency for the Saving Account Balances - High Credit-Risk

Takers
Mean 1487.957346
Standard Error 207.6299382
Median 648
Mode 0
Standard Deviation 3015.999064
Sample Variance 9096250.355
Kurtosis 15.6838512
Skewness 3.826082713
Range 19811
Minimum 0
Maximum 19811
Sum 313959
Count 211
 Central Tendency for the Checking Account Balances - Low Credit-Risk
Takers
Mean 1245.981308
Standard Error 233.2486696
Median 0
Mode 0
Standard Deviation 3412.133872
Sample Variance 11642657.56
Kurtosis 13.40303185
Skewness 3.659976656
Range 19155
Minimum 0
Maximum 19155
Sum 266640
Count 214

Central Tendency for the Saving Account Balances - Low Credit-Risk

Takers

Mean 2132.616822
Standard Error 278.3796859
Median 538.5
Mode 0
Standard Deviation 4072.343723
Sample Variance 16583983.4
Kurtosis 5.728155833
Skewness 2.540846626
Range 19568
Minimum 0
Maximum 19568
Sum 456380
Count 214
 b) Construct a cross-tabulation/pivot table for marital status and housing type and
illustrate the results with a PivotChart. Provide a brief description of it.
(6 marks)

Count of Marital
Status Column Labels
Row Labels Divorced Married Single Grand Total
Other 11 41 52
Own 98 30 164 292
Rent 47 6 28 81
Grand Total 156 36 233 425

According to the table, the number of customers applying for a loan who are single and own their own
home is 164, followed by divorced, 98, and married, 30. 47 divorced customers rent a house, followed
by single, 28, and married customers, 6. 41 customers with a single status, and 11 divorced customers
have other types of housing.

Customers who were single had the most loan applications (233), followed by those who were
divorced (156), and married (36).
There were 425 loan applications in all.
 c) Use PivotTables to find the number of loans by different purposes for the different
marital status in the Excel file Credit Risk Data. Illustrate the results on a PivotChart.
(Note: place marital status in column and loan purposes in row)
(6 marks)

Count of Marital
Status Column Labels
Row Labels Divorced Married Single Grand Total
Business 14 4 26 44
Education 13 1 9 23
Furniture 44 5 36 85
Large Appliance 1 1 2 4
New Car 37 8 59 104
Other 2 4 6
Repairs 6 1 5 12
Retraining 1 1 2
Small Appliance 32 13 60 105
Used Car 7 2 31 40
Grand Total 156 36 233 425
 d) Either using slicer or filter, determine the housing type and job type among those
bank customers who are single (show the pivot table and pivot chart). Give a brief
description of it.
(6 marks)

Count of Marital
Status Column Labels
Grand
Row Labels Management Skilled Unemployed Unskilled Total
Other 8 30 1 2 41
Single 8 30 1 2 41
Own 26 98 2 38 164
Single 26 98 2 38 164
Rent 3 17 8 28
Single 3 17 8 28
Grand Total 37 145 3 48 233

According to the data, skilled occupations have the most loan applications for single status, with 145,
followed by unskilled jobs, 48, management positions, 37, and jobless, 3. 164 of the applicants own
their own homes, 28 rent houses, and 41 have other forms of housing.
There have been 233 loan applications from people who are single.
e) Compute the descriptive summary on the savings account balances among the
customers who are married, divorced and single. Compare these groups. What can
you conclude?
(2 marks)

Savings Account Balances

Divorced Married Single

Mean 1884.673077 2000.638889 1735.223176

Standard Error 294.6751482 764.8480409 221.2678787
Median 642.5 529.5 591
Mode 0 0 0
Standard Deviation 3680.491421 4589.088245 3377.507583
Sample Variance 13546017.1 21059730.92 11407557.48
Kurtosis 8.793720842 9.2777815 8.596452666
Skewness 3.014002762 3.14806096 2.964113218
Range 19568 19811 18716
Minimum 0 0 0
Maximum 19568 19811 18716
Sum 294009 72023 404307
Count 156 36 233

In this finding, we have 156 divorced observations, 36 married observations, and 233
single observations.
Each group with a mean larger than the median shows that the distribution is skewed
to the right.
The married group's standard deviation indicates that the data are more dispersed than
the divorced and single groups, where the data are grouped around the mean.
Higher kurtosis in the married group suggests a flatter distribution shape, and flatter
tails indicate a larger probability of severe outcomes on rare occasions.
As a result of this finding, I may conclude that the single group has greater savings
account balances than the divorced group. Couples have fewer savings accounts.