September 18, 2020

DATA AND INFORMATION FOR DECISION MAKING

DATA AND INFORMATION

DATA AND INFORMATION

The terms information and data are usually used interchangeably, technically the terms have distinct meanings.

Consider what happens at a travel agency. Some of the decisions that must be made are:

  1. how many seats on a charter flight to book for this holiday next year
  2. who to send the latest brochure to
  3. which holidays to promote

Information that will inform these decisions includes:

  • number of people booked on a holiday
  • number of un-booked places
  • Comparative demand for vacation over the past 3 years.
  • the profitability of the package holiday
  • number of holidays taken by a specific family

This info comes from data that is composed frequently as part of the business:

  • details of package leave (price, location, duration)
  • details of package holiday bookings (no of people, date of departure, holiday selected, the amount paid)

Data

Data are raw facts, unorganized and frequently unrelated to one another. Data are frequently numerical (quantitative) but are not necessarily so. Data can be non-numeric (qualitative).

  • Examples of data:
  • A sure machine broke down four times last week,
  • There are 13 employees in the Accounts Department,
  • Last year’s budget for the HR Department was £157,000,
  • Employee satisfaction with operating conditions within the plant
  • In December 1500 wheelbarrows were produced,
  • Last month 385 expense claims were submitted.

These are examples of internal data, generated within an organization.

External data are generated outside the organization. For example:

  • The increase rate rose last month to 4 percent pa,
  • Parliament has just passed new legislation on pollution controls,
  • The imports of Japanese cars rose previous year by 5 percent,
  • Correspondence from a customer praising the wheelbarrow he purchased.

Information

Information is obtained by processing data in some way. Information may be an assortment of connected pieces of information. For example

  • The machine that skits down four times last week had a serious overhaul solely three weeks past,
  • The 13 workers in the Accounts Department represent 10 percent of the workers of the corporation,
  • Last year’s budget of £157,000 for the HR Department was up by 12% on the year before,

The drawing together of relevant pieces of data provides managers with some important information. Information adds context to the data and provides meaning.

Data can be processed into information by:

Bringing together related pieces of data and tabulating, aggregating, filtering or simply rearranging them;

  • Summarizing;
  • Tabulation and the use of diagrams;
  • Statistical analysis;
  • Financial analysis

DECISION MAKING IN BUSINESS

Sources of Data For Decision Making

BUSINESS & CAREER

This post contains the content of the book Applied Business Analysis