What do you do if your business decisions rely on quantitative analysis?

When making business decisions based on quantitative analysis, gather accurate data from sources such as sales reports and market research. Define clear objectives and KPIs to guide your analysis. Use analytical tools to process data and identify trends, patterns, and correlations for insights into business performance. Conduct scenario analysis to explore different outcomes and assess potential risks. Validate findings by cross-checking with other data sources and involve experts for additional perspectives. Base decisions on the insights gained and continuously monitor outcomes to adjust strategies as needed. Document and communicate findings to stakeholders for transparency.

I would Highly recommended that the way of data and database management are synced together with a senior data engineer for collecting a data set to use in quantitative analysis

When gathering and conducting quantitative and combined quantitative/qualitative analysis, you must start with the question being asked and what questions must be answered to inform the user in order to make a decision on the primary question. For example, if the question is, “should we buy this commercial building for our company?”, we need to need to answer the questions such as, what is the capital requirement, cost of holding the asset, and cost to move operations to the new site, as well as adequacy of the site for future use. This would then provide the context to identify the documents and data to analyze to answer these questions.

This is subject to the depth of the data pool you have of the target company as well as the overlay of available of local market, industry, and macro factors. For example if you only have 3 trailing periods of financial data on a firm and a set of projections, you can adequately use industry reports to assess headwinds/tailwinds and also comprehend the firm’s critical strategic hurdles to achieving their projections. However, you may not have enough data to adequately assess and assign correlation to various macro factors, such as industrial orders or consumer spending.

Market demand Fluctuations to consider: 1. Historical Trends- Analyze historical demand patterns to understand seasonal variations, trends, and cyclicality in market demand. 2. External Influences: Consider external factors impacting demand, such as economic conditions, consumer behavior, regulatory changes, and competitive dynamics. 3. Scenario Variations: Model different scenarios of demand changes (e.g., moderate growth, sudden spikes, downturns) to assess the impact on sales volumes and revenue.

Once you have the information, have assessed trends, you can begin to assess your externalities. What happens to my relationship with key suppliers if I onboard an additional supplier to reduce my supply chain risk? How does the investment in a new building, limit my firm’s ability to seek better labor markets should demographics change in my regional market? These questions are critical to ask and assess when making decisions and getting out beyond the horizon.