extracting larger meaning from data to support evaluation and decision making.

information dervies from analysis of data

logical or mathematical representation of a problem or business solution

establishes relationships between actions that decision maker might take and results that they might expect, allowing them to preduct what might happen based on the model assumptions

philopsophy of learning and action for improvement that is based on the principles that:

all work occurs in a system of interconnected proicesses

variation exists in all processes and

understanding and reducing variation are keys to success.

define, measure, analyze, improve, and control

six sigma's basis

refer to the numerical information that results from measurement

measures and indicators are numerical values associated with a metric

concerned with the degree of conformance to specifications

length, time, or weight

robert kaplan and david norton of harvard in response to the limitations of traditional accounting measures

purpose:  to translate strategy into measures that uniquely communicate your vision to the organization

four perspectives:  financial, internal, customer, innovation & learning

measures the ultimate results that the business provides to its shareholders

profitability, revenue growth, ROI, asset utilization, operating margins, EPS, EVA, shareholder value, etc.

focuses attention on the performance of the key internal processes that drive the business

quality levels, productivity, process yields, cycle time, cost and legal compliance

focuses on customer needs and satisfaction as well as market share

includes service lvls, staisfaction ratings, repeat business, an other indicators such as complaints

directs attn to the basis for future success - the organzations people and infrastructure

includes patent filings, employee stisfaction, turnover, market innovation, training effectiveness, etc.

  Lagging Measures 

o    Outcomes that tell what happened

 Leading measures

o    Performance drivers that predict what will happen

Dashboard

o    Monitors process performance

o    Show how business processes are performing and provide real-time information for corrective action or maintenance purposes

Types of data

o    Cross sectional – data that are collected over a single period of time

o    Time series – data collected over time

Number of variables

o    Univariable – single variable

o    Multivariable – two or more (often related) variables

Categorical data

o    Nominal data

o    Sorted into categories according to specified characteristics

o    Ex. City, employee rank

o    Categories bear no quantitative relationship to one another

Ordinal data

o    Ordered or ranked according to some relationship to one another

o    Ex. NCAA basketball rakings

o    Can be compared to one another

o    Averages are generally meaningless, since they have no fixed units of measurement

Interval data

o    Ordered

o    Have a specified measure of the distance between observations but have no natural zero

o    Ex. Celsius

 Ratio data

o    Have a natural zero

o    Ex. Sales per city

Population

o    Consists of all items of interest for a particular decision or investigation

Sample

o    Subset of a population

Statistics

o    Summary measures of population characteristics computer from samples

  Descriptive statistics

o    The process of collection, organization, and description of data

Statistical inference

o    Refers to the process of drawing conclusions about unknown characteristics of a population based on sample data

  Predictive statistics

o    Developing predictions of future values based on historical data