Business Analytics Session 4 & 5
The final two sessions of Business Analytics focused on how to analyse and
present the data and which types of analytics available for different types of problems. We discussed the case of optimising the offer coupons given out to the customers of Carrefour super market based on customer’s purchases.
Activities of Analytics
- Optimisation – What is the best that can happen?
- Predictive Modelling – What will happen next?
- Forecasting / Extrapolation – What if these trends continue?
- Statistical Analysis – Why is this happening?
- Alerts – What actions are needed?
- Query / Drill Down – Where exactly is the problem?
- Ad-hoc Reports – How many, how often, where?
- Standard Reports – What happened?
Tips for effective dashboard:
- Link to business need and type of users
- Less is more
- Use Simple charts
- Guide users through results
- From top results to more detail
- Focus on differences/relate to target, benchmark
- Highlight important figures
- Be careful with scales and colours
Managerial Accounting Session 6
This week’s focus was on types of costs and Costing. We discussed opportunity costs and sunk costs. The readings provided insight into Activity Based Costing and Time Driven Activity Based Costing.
Traditional cost systems answer the question of how to allocate costs for departmental cost control, where as ABC systems focus on how does it cost to perform activities and business processes.
Activity Based Costing (ABC) provides more accurate cost information by using organisational activities as the key elements of costing and linking them to spending.
Time Driven Activity Based Costing proposes another approach to costing for
complex models. TDABC model proposes a simpler alternative to ABC, because it only requires two
- The cost rate of supplying resource capacity
The consumption of resource capacity by the activities performed for
products, services, and customers.
- We discussed two cases during the session – Morgan Components and Destin Brass.
Some other notes from the session:
- Compensation drives behaviour.
- Pick the right costing system for the business.
- Sunk costs in the short term are irrelevant.