MBA741 - Saleh - Exam 2 | QUESTIONS AND ANSWERS
M5: Describe the three stages of It helps validate patterns in the data if there is a real problem and if
deriving insights: (1) Reviewing there are unusual patterns in key variables.
patterns
Look at each hypothesis, one at a time, and examine the relevant
M5: Describe the three stages of
data needed to prove or disprove each one. This will help eliminate
deriving insights: (2) Testing
some hypotheses and identify the ones on which you should
hypotheses
focus your energies.
M5: Describe the three stages of Present your findings in terms of quantified impact to guide
deriving insights: (3) Reporting prioritization of the hypotheses for analysis.
findings
𝑃𝑟𝑜𝑓𝑖𝑡 = 𝑅𝑒𝑣𝑒𝑛𝑢𝑒 − 𝐶𝑜𝑠𝑡
M5: Describe the following
Prioritizing sales volume and market share may cut into profits.
metrics and how they are
Investing into branding, improving customer satisfaction, and
calculated: (1) Profit
customer loyalty may be a more profitable strategy.
Net present value (NPV) is the
M5: Describe the following difference between the present value of
metrics and how they are cash inflows and the present value of
calculated: (2) Net Present cash outflows over a period of time.
Value (NPV)
𝐸𝑠𝑠𝑒𝑛𝑡𝑖𝑎𝑙𝑙𝑦 𝑁𝑃𝑉 = 𝑃𝑉 − 𝐶𝑜𝑠𝑡
IRR is the rate that money is
M5: Describe the following
compounding internally to the
metrics and how they are
campaign or program.
calculated: (3) Internal Rate of
Return (IRR)
M5: Describe the following Payback is the time or period needed for the revenue to become
metrics and how they are greater than the costs (breakeven).
calculated: (4) Payback
, Customer lifetime value, or CLTV or LTV
for short, is a metric that measures the
amount of money that customers spend
on a business over their lifetime.
M5: Describe the following CLTV is a forward-looking metric, since
metrics and how they are it quantifies the future value of a
calculated: (5) Customer customer.
Lifetime Value
CLTV is just the NPV of a customer.
AC is the acquisition cost (same as
evaluating the formulating at time =
0)
p is the probability the customer will stay.
M5: Remember rules of thumb NPV > 0, Good
for management making decisions
based on (1) NPV
M5: Remember rules of thumb IRR > r, Good
for management making
decisions based on
(2) IRR
M5: Remember rules of thumb Short Payback, Good
for management making
decisions based on
(3) Payback
M5: Describe general approaches Low/Negative value customers: manage costs
to value- based management of High value customers: retain, cross-sell,
customers based on their CLTV and up-sell Medium value customers:
turn them into high value
What is the customer's short-term
M5: Remember questions to
profitability? What is the customer's
ask for balancing decisions
risk?
based on short and long term
What is the customer's vulnerability
CLTV
to churn? What is the customer's
long-term profitability?
Engages the audience
M6: Remember that a
Establishes your credibility
presentation should be delivered
Call the decision makers to action
in a manner that...
Identify key project stakeholders and their expectations.
Consider how your analysis will be received based on the
stakeholders' personalities and backgrounds. Communicate in
M6: Describe: (1) Knowing your
audience terms that are meaningful to them.
Who will approve the
M5: Describe the three stages of It helps validate patterns in the data if there is a real problem and if
deriving insights: (1) Reviewing there are unusual patterns in key variables.
patterns
Look at each hypothesis, one at a time, and examine the relevant
M5: Describe the three stages of
data needed to prove or disprove each one. This will help eliminate
deriving insights: (2) Testing
some hypotheses and identify the ones on which you should
hypotheses
focus your energies.
M5: Describe the three stages of Present your findings in terms of quantified impact to guide
deriving insights: (3) Reporting prioritization of the hypotheses for analysis.
findings
𝑃𝑟𝑜𝑓𝑖𝑡 = 𝑅𝑒𝑣𝑒𝑛𝑢𝑒 − 𝐶𝑜𝑠𝑡
M5: Describe the following
Prioritizing sales volume and market share may cut into profits.
metrics and how they are
Investing into branding, improving customer satisfaction, and
calculated: (1) Profit
customer loyalty may be a more profitable strategy.
Net present value (NPV) is the
M5: Describe the following difference between the present value of
metrics and how they are cash inflows and the present value of
calculated: (2) Net Present cash outflows over a period of time.
Value (NPV)
𝐸𝑠𝑠𝑒𝑛𝑡𝑖𝑎𝑙𝑙𝑦 𝑁𝑃𝑉 = 𝑃𝑉 − 𝐶𝑜𝑠𝑡
IRR is the rate that money is
M5: Describe the following
compounding internally to the
metrics and how they are
campaign or program.
calculated: (3) Internal Rate of
Return (IRR)
M5: Describe the following Payback is the time or period needed for the revenue to become
metrics and how they are greater than the costs (breakeven).
calculated: (4) Payback
, Customer lifetime value, or CLTV or LTV
for short, is a metric that measures the
amount of money that customers spend
on a business over their lifetime.
M5: Describe the following CLTV is a forward-looking metric, since
metrics and how they are it quantifies the future value of a
calculated: (5) Customer customer.
Lifetime Value
CLTV is just the NPV of a customer.
AC is the acquisition cost (same as
evaluating the formulating at time =
0)
p is the probability the customer will stay.
M5: Remember rules of thumb NPV > 0, Good
for management making decisions
based on (1) NPV
M5: Remember rules of thumb IRR > r, Good
for management making
decisions based on
(2) IRR
M5: Remember rules of thumb Short Payback, Good
for management making
decisions based on
(3) Payback
M5: Describe general approaches Low/Negative value customers: manage costs
to value- based management of High value customers: retain, cross-sell,
customers based on their CLTV and up-sell Medium value customers:
turn them into high value
What is the customer's short-term
M5: Remember questions to
profitability? What is the customer's
ask for balancing decisions
risk?
based on short and long term
What is the customer's vulnerability
CLTV
to churn? What is the customer's
long-term profitability?
Engages the audience
M6: Remember that a
Establishes your credibility
presentation should be delivered
Call the decision makers to action
in a manner that...
Identify key project stakeholders and their expectations.
Consider how your analysis will be received based on the
stakeholders' personalities and backgrounds. Communicate in
M6: Describe: (1) Knowing your
audience terms that are meaningful to them.
Who will approve the
