Chapter 1 Introduction to Business Analytics
Chapter 1 Introduction to Business Analytics Assignment: Jamie received 105 responses, which are given in the Excel file Drout Advertising Survey. Re-view the questionnaire and classify the data collected from each question as categorical, ordinal, interval, or ratio. Next, explain how the data and subsequent analysis using business analytics might lead to a better understanding of stereotype versus empowerment advertising. Specifically, state some of the key insights that you would hope to m-swer by analyzing the data. Case: Performance Lawn Equipment An important aspect of business analytics is good com-munication. Write up your answers to this case formally in a well-written report as if you were a consultant to Ms. Drout. This case will continue in Chapters 3, 4, 6, and 7, and you will be asked to use a variety of descriptive ana-lytics tools to analyze the data and interpret the results. As you do this, add your insights to the report, culminating in a complete project report that fully analyzes the data and draws appropriate conclusions. In each chapter of this book, we use a database for a fic-titious company, Performance Lawn Equipment (PLE), within a case exercise for applying the tools and tech-niques introduced in the chapter. To put the database in perspective, we first provide some background about the company, so that the applications of business analytic tools will be more meaningful. PLE, headquartered in St. Louis, Missouri, is a pri-vately owned designer and producer of traditional lawn mowers used by homeowners. In the past 10 years, PLE has added another key product, a medium-size diesel power lawn tractor with front and rear power takeoffs, Class I three-point hitches, four-wheel drive, power steer-ing, and full hydraulics. This equipment is built primar-ily for a niche market consisting of large estates, including golf and country clubs, resorts, private estates, city parks, large commercial complexes, lawn care service providers, private homeowners with five or more acres, and govern-ment (federal, state, and local) parks, building complexes, and military bases. PLE provides most of the products to dealerships, which, in turn, sell directly to end users. PLE employs 1,660 people worldwide. About half the work-force is based in St. Louis; the remainder is split among their manufacturing plants. lathe United States, the focus of sales is on the east-ern seaboard, California, the Southeast, and the south central states, which have the greatest concentration of customers. Outside the United States, PLEs sales include a European market, a growing South American market, and developing markets in the Pacific Rim and China. The market is cyclical, but the different products and regions balance some of this, with just less than 30% of total sales in the spring and summer (in the United States), about 25% in the fall, and about 20% in the winter. Annual sales are approximately $180 million. Both end users and dealers have been established as important customers for PLE. Collection and analysis of end-user data showed that satisfaction with the products depends on high quality, easy attachment/dismount of im-plements, low maintenance, price value, and service. For dealers, key requirements are high quality, parts and fea-ture availability, rapid restock, discounts, and timeliness of support. PLE has several key suppliers: Mitsitsiu, Inc., the sole source of all diesel engines; LANTO Axles, Inc., which provides tractor .les; Schorst Fabrication, which provides subassemblies; Cuberillo, Inc, supplier of transmissions; and Specialty Machining, Inc., a supplier of precision ma-chine parts. To help manage the company, PLE managers have developed a balanced scorecard of measures. These data, which are summarized shortly, are stored in the form of a Microsoft Excel workbook (Performance Lawn Equipment) accompanying this book. The database con-tains various measures captured on a monthly or quarterly basis and used by various managers to evaluate business performance. Data for each of the key measures are stored in a separate worksheet. A summary of these worksheets is given next: Dealer Satisfaction, measured on a scale of 1-5 (1 = poor, 2 = less than average, 3 = average, 4 = above average, and 5 = excellent). Each year, dealers in each region are surveyed about their overall satisfaction with PLE. The work-sheet contains summary data from surveys for the past 5 years. End-User Satisfaction, measured on the same scale as dealers. Each year, 100 users from each region are surveyed. The worksheet contains summary data for the past 5 years. 33The case scenario was based on Gateway Estate Lawn Equipment Co. Case Study, used for the 1997 Malcolm Baldrige National Quality Award Examiner Training course. This material is in the public domain. The database, however, was developed by the author.