Quantitative Methods and Information Systems: Data to Decisions
Quantitative tools
Know descriptive statistics: mean, median, mode, range, variance, and standard deviation. The median resists outliers better than the mean. Probability rules include the addition and multiplication rules, and expected value is the probability-weighted average of outcomes. Understand normal-distribution properties and the empirical rule: about 68 percent of observations fall within one standard deviation, 95 within two, and 99.7 within three.
Decision and forecasting models
Decision trees, expected monetary value, and sensitivity analysis support choices under uncertainty. Regression and time-series methods forecast demand; recognize trend, seasonal, and cyclical components. Linear programming optimizes an objective subject to constraints.
Information systems
Distinguish transaction processing systems, management information systems, and executive support systems. Know the role of databases, primary and secondary keys, and data integrity. Internal controls over information systems include access controls, segregation of duties, backups, and audit trails. Cybersecurity risk and disaster recovery are recurring topics.
Worked rule of thumb
For outcomes 100 with probability 0.3 and 40 with probability 0.7, expected value equals 30 + 28 = 58. A trap: confusing expected value with the most likely outcome, or assuming a high mean implies low dispersion. For standard deviation, remember it is in the same units as the data, while variance is squared. When a question asks which measure best resists an outlier, choose the median.