Assignment(doc) on Business Analytics 2022

BUSINESS ANALYTICS

BUSINESS ANALYTICS
Contents
Background Context....................................................................................................................................3
Problem Statement...................................................................................................................................3
Decision Requirements............................................................................................................................3
Methods and Analysis.................................................................................................................................3
Exploratory Data Visualization...............................................................................................................3
Correlation Analysis................................................................................................................................4
T-test.......................................................................................................................................................4
Six Sigma Analysis..................................................................................................................................4
Time Series Analysis...............................................................................................................................5
Analysis Results..........................................................................................................................................5
Benford Analysis.....................................................................................................................................5
Question 1...............................................................................................................................................6
Trend Analysis....................................................................................................................................6
Comparative Analysis..........................................................................................................................8
Question 2...............................................................................................................................................9
Correlation Analysis................................................................................................................................9
Question 3...............................................................................................................................................9
Question 4.............................................................................................................................................10
Six Sigma Analysis................................................................................................................................10
Discussion.................................................................................................................................................11
1. Production Capacity Constraints....................................................................................................11
2. Production Possibility Frontiers.....................................................................................................11
3. Scaling and Capacity Expansion....................................................................................................11
4. Allocative Efficiency.....................................................................................................................11
T-test Analysis.......................................................................................................................................11
Time Series Analysis.............................................................................................................................12
Conclusions...............................................................................................................................................12
References.................................................................................................................................................13
Appendix...................................................................................................................................................14
2

BUSINESS ANALYTICS
Background Context
Ubuntu Micro Devices LLC is a Canadian based company that deals with the
development and manufacture of devices for monitoring human biological metrics for both
medical and sports performance purposes. The company is faced with strong competition
especially from Chinese based companies that offer same products at lower prices. This
competition threatens the profitability of Ubuntu Micro Devices LLC both currently and in the
long term.
As a measure for managing and countering the competition from the China based
companies, Ubuntu Micro Devices LLC has had to innovate by extending its technology in
developing Self-Monitoring Blood Glucose (SMBGs) devices and Cardiac Arrhythmia
Monitoring (CAMs) devices to the Athletic Performance Monitoring (APM) devices.
Ubuntu Micro Devices LLC is also interested in injecting more capital into its product
development and production. This capital would be invested into research and development to
improve the product quality as well as to innovate in new technology. The additional investment
would also enable the company to march the mass production capabilities that the Chinese based
companies have.
Problem Statement
Ubuntu Micro Devices LLC needs to convince potential investors on the stability and
profitability of the company. Therefore, there is need to observe the current performance of the
company as well as predict the future sales of the products.
Decision Requirements
The continued profitability of the company will be based on the forecasted values with
relation to the current value of the production sales of Ubuntu Micro Devices LLC.
Methods and Analysis
The analysis of the data on Ubuntu Micro Devices LLC will involve five main data
analytics techniques: exploratory data visualization, correlation analysis, six sigma analysis, time
series analysis and t-test analysis. The Benford Analysis will be used to check for the validation
of the datasets used in the analysis in this paper.
Exploratory Data Visualization
Exploratory data visualization is a type of exploratory data analysis that visualizes the
descriptive statistics of the variables of interest 1. Exploratory data visualization is also essential
in improving the communication of statistical information to the audience being targeted 2.
Exploratory data visualizations serve as both analyses and complimentary analyses.
3

BUSINESS ANALYTICS
The graphs that will result from the exploratory data visualization of the data variables of
interest from Ubuntu Micro Devices LLC will provide a general picture of these variables’
descriptive statistics as well as providing inferences for the efficiency.
As individual analyses, the exploratory data visualizations will present information on:
1. The trend in the research and development spending of Ubuntu Micro Devices LLC.
2. The trend in the total product sales price for Ubuntu Micro Devices LLC.
3. The trend in the efficiency of Ubuntu Micro Devices LLC’s production processes.
4. Comparison in the research and development spending of Ubuntu Micro Devices LLC on
the different units the company produces.
5. Comparison in the total product sales price for Ubuntu Micro Devices LLC on the
different units the company produces.
6. Comparison in the efficiency of Ubuntu Micro Devices LLC’s production processes for
the different units the company produces.
As complimentary analyses, the exploratory data visualizations will present information
on the time series analysis.
Correlation Analysis
Correlation analysis is a statistical analysis technique that determines the extent to which
two or more variables are associated with each other 3. Correlation analysis also informs on the
effect that variables have on each other. The resultant Pearson correlation coefficient value (r)
lies in the range (-1 < r < 1). A Person correlation coefficient value = 0, implies that the variables
have not association. r = -1 (and values close to it) indicates very strong negative correlation
while r = 1 (and values close to it) indicates very strong positive correlation. Values close to 0 on
either sides (negative and positive) indicate weak associations 4.
Correlation analysis will be applied for the evaluating the association between the
following variables of interest with regards to Ubuntu Micro Devices LLC:
1. Research and Development Spending and Production Growth (total product sales price).
2. Training Type A and Production Growth (total product sales price).
3. Training Type B and Production Growth (total product sales price).
T-test
T-test analysis evaluates whether there exists a significance difference between various
groups of a given variable 5. In determining whether certain types of defects are associated with
certain PCB production teams, the t-test analysis will be applied.
Six Sigma Analysis
The Six Sigma analysis technique is a defects model that checks for the percentage of
defects in relation to the 99.99% defect free production level in the Six Sigma concept model 6.
This technique will be applied in determining whether the Ubuntu Micro Devices LLC has
attained Six Sigma capabilities.
4

BUSINESS ANALYTICS
Time Series Analysis
This is a statistical technique for evaluating data collected over time 7 8. Time series
analysis is an important tool in the forecasting of future values, hence making it the appropriate
method for determining aspects such as potential and capacity expansion of Ubuntu Micro
Devices LLCs.
Analysis Results
Benford Analysis
The plot in Figure 1: Benford Analysis (Period Data) shows the output of the evaluation
of the data validation for the Period Data. From the plot, we observe that digit 1 has a 44.4%
occurrence in the data which is above the 30.1% threshold for digit 1 under Benford’s Law.
Hence the data passes the data validation test.
1 2 3 4 5 6 7 8 9
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0% 44.4%
23.8%
0.4%
9.7%
4.8%
10.1%
2.2% 2.0% 2.7%
Benford Analysis for Period Data
Digit
Percentage
Figure 1: Benford Analysis (Period Data)
The plot in Figure 2: Benford Analysis (Unit Data) shows the output of the evaluation of
the data validation for the Unit Data. From the plot, we observe that digit 1 has a 55% occurrence
in the data which is above the 30.1% threshold for digit 1 under Benford’s Law. Hence the data
passes the data validation test.
5

BUSINESS ANALYTICS
1 2 3 4 5 6 7 8 9
0%
10%
20%
30%
40%
50%
60% 55%
14%
0% 0%
8% 4% 2%
14%
2%
Benford Analysis for Unit Data
Digits
Percentage
Figure 2: Benford Analysis (Unit Data)
Question 1
Trend Analysis
The plot in Figure 3: Research and Development Spending Trend below shows the trend
in Ubuntu Micro Devices LLC’s spending on research and development over the 96 months
period. From the plot we observe that spending on research and development has been on a
general rising trend from month 37 through to month 96. The trend between month 1 and month
37 is however undefinable.
Figure 3: Research and Development Spending Trend
6

BUSINESS ANALYTICS
The plot in Figure 4: Total Product Sales Price Trend below shows the trend in Ubuntu
Micro Devices LLC’s total sales price for the products the company produces over the 96
months period. From the plot we observe that the sales price for the products has been on a
general rising trend from month 77 to month 96. From month 1 to month 77, the sales price for
the products has a general oscillating trend with jumps and falls.
Figure 4: Total Product Sales Price Trend
The chart in Figure 5: Malmquist Trend below represents the trend in the production
efficiency of Ubuntu Micro Devices LLC over the 96 months period. From the chart, we observe
that Ubuntu Micro Devices LLC’s production efficiency does not have definable trend.
Figure 5: Malmquist Trend
7

BUSINESS ANALYTICS
Comparative Analysis
The plot in Figure 6: Research and Development Comparative Analysis below compares
Ubuntu Micro Devices LLC’s spending on the research and development of the various units it
produces. From the plot we observe that a majority of Ubuntu Micro Devices LLC research and
development spending was on the F4 unit.
Figure 6: Research and Development Comparative Analysis
The plot in Figure 7: Sales Price Comparative Analysis below compares the sales price
for the various units produced by Ubuntu Micro Devices LLC. From the plot we observe that the
F1 unit had the highest sales prices value over the 96 months’ period.
Figure 7: Sales Price Comparative Analysis
8

BUSINESS ANALYTICS
The plot in Figure 8: Malmquist Comparative Analysis below compares the production
efficiency of the various units produced by Ubuntu Micro Devices LLC. From the plot we
observe that the production efficiency was highest for F5 and F7 units.
Figure 8: Malmquist Comparative Analysis
Question 2
Correlation Analysis
The table below, Table 1: Correlation Analysis gives the correlation analysis summary
for the Ubuntu Micro Devices LLC’s variables of interest. From the table, we observe that the
Research and Development Spending, and Production Growth have a weak negative association.
Table 1: Correlation Analysis
Relationship Correlation
R&D and Production Growth -0.18435
Training Type A and Production
Growth
0.352917
Training Type B and Production
Growth
0.422728
Question 3
From the table above, Table 1: Correlation Analysis, Training Type A and Production
Growth have a reasonably strong positive association. Training Type B and Production Growth
also have a reasonably strong positive association. Thus past investment in training is reasonably
associated with increase in production growth.
The plot in Figure 9: Learning/Progress Curve below shows the production efficiency of
Ubuntu Micro Devices LLC as the gauge for learning and progress of the company. The dotted
line on the plot represents the learning/progress curve for the company. We observe that Ubuntu
9

BUSINESS ANALYTICS
Micro Devices LLC has a decreasing learning/progress curve. Hence the company is currently
located at the slow learning stage on the learning curve.
Figure 9: Learning/Progress Curve
Question 4
Six Sigma Analysis
The chart in Figure 10: Six Sigma below represents the results for the Six Sigma Analysis
of the different product lines over the 96 month period. From the plot we observe that the
histogram is not bell-shaped with a majority of the percentage defects at 2%. This implies that
the average production defects free level is 98%. Hence, Ubuntu Micro Devices LLC has not
attained Six Sigma capabilities which have a 99.99% production defects free threshold level.
Figure 10: Six Sigma
10

BUSINESS ANALYTICS
Discussion
1. Production Capacity Constraints
The main production capacity constraint for the company presently is the limited
operation capital. The amount of money available for the company is not enough to enable it to
expand the production capacity.
2. Production Possibility Frontiers
The APM devices market presents a viable area of exploitation for the company. More
and more athletes and generally individuals interested in fitness are increasingly enthusiastic
about APM devices. Therefore, the APM devices market presents a possible frontier for
production.
3. Scaling and Capacity Expansion
With additional investment, scaling would focus on increasing production of current
devices; SMBG and CAM devices, as well as in production of the APM devices. This would
involve both the setting up of additional production plants and expanding the existing production
plans.
4. Allocative Efficiency
Maintaining product quality and focusing the marketing on quality instead of price will
allow the company to attain allocative efficiency even with the injection of new investment. This
will be key in ensuring that the company achieves and maintains profitability during the post-
investment period.
T-test Analysis
Table 2: T-test Summary Results (MSD) in the Appendix gives the T-test analysis results
for the MSD. From the table we observe that the p-value = 0.9733 > 0.05 level of significance,
thus there is no significant difference in the percentage of defects in MSD associated with both
production teams a and b.
Table 3: T-test Summary Results (MR1) in the Appendix gives the T-test analysis results
for the MR1. From the table we observe that the p-value = 0.8918 > 0.05 level of significance,
thus there is no significant difference in the percentage of defects in MR1 associated with both
production teams a and b.
in the Appendix gives the T-test analysis results for the MRD90. From the table we
observe that the p-value = 0.2578 > 0.05 level of significance, thus there is no significant
difference in the percentage of defects in MRD90 associated with both production teams a and b.
Table 5: T-test Summary Results (MRP60) in the Appendix gives the T-test analysis
results for the MRP60. From the table we observe that the p-value = 0.0355 < 0.05 level of
significance, thus there exists significant difference in the percentage of defects in MRP60
associated with both production teams a and b.
11

BUSINESS ANALYTICS
Time Series Analysis
The plot in Figure 11: Sales Prices Forecast shows the time series predictive analysis of
the Total Product Sales Prices for Ubuntu Micro Devices LLC. The analysis forecasts the values
of the Total Product Sales Prices to the year 2022. From the plot we observe that the Product
Sales Price fluctuates with the peaks not higher than the current Product Sales Price. However,
the peaks for the Upper Confidence Bound are significantly higher than the current Product Sales
Price.
Figure 11: Sales Prices Forecast
Conclusions
From the analysis, we can conclude that the Research and Development Spending does
not have a significant relationship with the production growth and thus the Research and
Development Spending plan has to be restructured to ensure that the spending has a positive
correlation with the production growth. Also from the analysis, we conclude that the investment
in training has a reasonably strong positive correlation on the production growth.
Considering the 96-month data, Ubuntu Micro Devices LLC fails to attain the Six Sigma
capabilities, which can be attributes by the decreasing trend of the learning/progress curve of the
company over the same period. This thus places the company at the slow learning stage on the
learning curve. The analysis also singles out the defects in MRP60 as associated with certain
PCB production teams. With respect to future performance, there is a likelihood of considerable
increase in the Product Sales Price given that the optimum conditions are provided for Ubuntu
Micro Devices LLC.
12

BUSINESS ANALYTICS
References
1. Kirk A. Data Visualization: A Handbook for Data Driven Design. 2nd ed. Thousand
Oaks, CA: Sage Publications, Ltd; 2016.
2. Martinez WL, Martinez AR, Solka, J. Exploratory Data Analysis With MATLAB. 2nd
ed. London: CRC/Chapmann & Hall; 2010.
3. Barbara I, Susan D. Introductory Statistics. 1st ed. New York: OpenStax CNX; 2014.
4. Everitt BS, Skrondal A. Cambridge Dictionary of Statistics. 4th ed. London: Cambridge
University Press; 2010.
5. Fay MP, Proschan MA. Wilcoxon-Mann-Whitney or t-test? On Assumptions for
Hypothesis Tests and Multiple Interpretations of Decision Rules. Statistics Surveys.
2010; 4(1): 1-39.
6. Freedman DA. Statistical Models: Theory and Practice. 1st ed. London: Cambridge
University Press; 2009.
7. Imanol A, Ignacio NL. Testing for Predictability in Financial Returns Using Statistical
Learning Procedures. Journal of Time Series Analysis, 2015; 36(5): 1-13.
8. Sam A, David IH, Leybourne SJ, Robert S, Taylor AM. Real Time Monitoring for
Explosive Financial Bubbles. Journal of Time Series Analysis, 2018; 39(8): 1-7.
13

BUSINESS ANALYTICS
Appendix
Table 2: T-test Summary Results (MSD)
Table 3: T-test Summary Results (MR1)
14

BUSINESS ANALYTICS
Table 4: T-test Summary Results (MRD90)
Table 5: T-test Summary Results (MRP60)
15