Business Analytics
Business Analytics
Business Analytics
Example:
We are gonna do a finance forecasting problem that consist of revenue, variable and fixed
expenses. This is the spreadsheet model
Then, we are gonna do the revenue & expenses normal distributions using Excel formula
We will do 1000 variations for this model.
The basis for generating random samples from probability distributions is the concept of
a random number. A random number is one that is uniformly distributed between 0 and 1.
Technically speaking, computers cannot generate truly random numbers since they must
use a predictable algorithm. However, the algorithms are designed to generate a sequence
of numbers that appear to be random. In Excel, we may generate a random number within
any cell using the function RAND( ).
Example:
A value randomly generated from a specified probability distribution is called a random variate.
We can use Analysis Toolpak Random Number Generation Tool in excel to sample from
uniform, normal, Bernoulli, binomial, and many more distributions.
Example:
Dynamic systems simulation models allow us to draw conclusions about the behaviour of a
real system by studying the behaviour of a system model. One example of dynamic system is
a production simulation.
Example:
Lets say the planned production capacity for one component is 100 units per shift, the plant
operates one shift per day. Demand fluctuates and is historicaly between 80-130 units/day.
They run a second shift the next day if inventory falls to 50 or below at the end of the day.
How many additional shifts will they need?
Model development: