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Writing Business Plans/Quantitative techniques for Business Analysis


Explain the purpose of graphs and diagrams.

Explain the purpose of graphs .
Graphs sometimes do not always get the credit they deserve in the business world. Often, they are joked about as being silly visual aids. In reality, they provide great value. Graphics are typically used to better represent a set of results or patterns and help improve the presentation of a study. Serving as illustrative visuals they can improve cognitive reasoning and enhance the scope of how an evaluation has turned out. The concept of data visualization is a great tool that can help assess business performance. In the area of business management graphical analysis is essential in presenting crucial information and in taking appropriate remedial action. Reporting and tracking the market targets of companies is best managed by creating graphs and charts to visualize data and comprehend statistics.

You may ask how a mere diagram can achieve this goal, but you will be surprised by how powerful a visual pattern is in understanding financial reports that mere numbers and figures. Graphs logically represent information along several dimensions based on how one wishes to show the available statistics. The primary purpose of graphs is to show relationships among variables and this may include, in a business world, anything from profit and loss related information to sales and marketing figures. The common types of graphs are line and bar graphs, pie charts, scatter plots and bar diagrams. In general charts represent one type of information, for example, you may show the percentage of profits from various states in the country. Graphs on the other hand show one set of variables represented in a continuous flow against another variable entity, for instance, the annual sales numbers of the past 10 years or something similar. The increasing ease with which graphs can now be created as well as the scope of attractive visuals has created an impact in the business arena.

It is interesting to note that graphs can conceal or reveal information as is desired and will depend on the type of graph chosen and the level of detail structured. For instance, the pie chart might give a picture of relative quantities of each division, but if a precise numerical figure or percentage share is required it might be better to go in for a tabular format than a graph. Thus understanding the purpose of presenting the information is critical to selecting the right type of graphical display. Consider a simple line diagram to represent the pattern of goods sold over a period of time. A graph such as this very effectively reveals the pattern of sales, and can also be used to compare the values for several manufacturers.

So how does this help make the business better you wonder? It's a fairly straightforward approach really. If one were to view the individual sales values of a company over the years, assuming there has been a steady climb in sales, then one is likely to conclude that the company is marketing its products right. Now that is pretty basic. But a comparison of corresponding data from companies within the same industry may show a marked difference, which means your business is not doing as well as you anticipated! Although you may be able to infer this little piece of information by studying pages and pages of company reports, the ease with which a single graph can tell the whole story is undeniable. So now you know not only where your company stands but you will also be able to measure and set future targets for the next year.

The process of effective graphical construction begins with a simple analysis of the information available. Pattern detection comes in very handy to decide the right kind of visual that will best represent your data. Graph construction is an iterative process meaning that there is ample scope for trial and error to assess what works best. Given the popularity and flexibility of graphics and the importance of the patterns revealed by using images, graphs are key decision-making tools for any enterprise.  

Explain the purpose of  diagrams.
A diagram is a two-dimensional geometric (can be three-dimensional also) symbolic representation of information according to some visualization technique. They have been used since ancient times but they became more prevalent during the Enlightenment.[1] Sometimes, the technique uses a three-dimensional visualization which is then projected onto the two-dimensional surface. The word graph is sometimes used as a synonym for diagram.
The term diagram in its commonly used sense can have a general or specific meaning:
•   visual information device : Like the term "illustration" the diagram is used as a collective term standing for the whole class of technical genres, including graphs, technical drawings and tables.[2]
•   specific kind of visual display : This is the genre that shows qualitative data with shapes that are connected by lines, arrows, or other visual links.
In science the term is used in both ways. For example Anderson (1997) stated more generally: "diagrams are pictorial, yet abstract, representations of information, and maps,line graphs, bar charts, engineering blueprints, and architects' sketches are all examples of diagrams, whereas photographs and video are not".[3] On the other hand Lowe (1993) defined diagrams as specifically "abstract graphic portrayals of the subject matter they represent".[4]
In the specific sense diagrams and charts contrast with computer graphics, technical illustrations, infographics, maps, and technical drawings, by showing "abstract rather thanliteral representations of information".[2] The essence of a diagram can be seen as:[2]
•   a form of visual formatting devices
•   a display that does not show quantitative data (numerical data), but rather relationships and abstract information
•   with building blocks such as geometrical shapes connected by lines, arrows, or other visual links.
There are at least the following types of diagrams:
•   Graph-based diagrams: these take a collection of items and relationships between them, and express them by giving each item a 2D position, while the relationships are expressed as connections between the items or overlaps between the items; examples of such techniques:
tree diagram

network diagram


Venn diagram

existential graph
•   Chart-like diagram techniques, which display a relationship between two variables that take either discrete or a continuous ranges of values; examples:

bar chart

pie chart

function graph

scatter plot
Schematics and other types of diagrams, e.g.,
train diagram

exploded view

population density map

Pioneer plaque

Three-dimensional diagram
Many of these types of diagrams are commonly generated using diagramming software. Thousands of diagram techniques exist. Some more examples follow.
Specific diagram types
•   Activity diagram used in UML 6/9 and SysML
•   Bachman diagram
•   Booch – used in software engineering
•   Block diagram
•   Block Definition Diagram (BDD) used in SysML
•   Business & IT Diagram (B&IT) – used in business and IT modelling
•   Carroll diagram
•   Cartogram
•   Category theory diagrams
•   Cause-and-effect diagram
•   Circuit diagram
•   Class diagram – from UML 1/9
•   Collaboration diagram – from UML 2.0
•   Communication diagram – from UML 2.0
•   Commutative diagram
•   Comparison diagram
•   Component diagram – from UML 3/9
•   Composite structure diagram – from UML 2.0
•   Concept map
•   Constellation diagram
•   Context diagram
•   Control flow diagram
•   Contour diagram
•   Cordier diagram
•   Cross functional flowchart
•   Data model diagram
•   Data flow diagram
•   Data structure diagram
•   Dendrogram
•   Dependency diagram
•   Deployment diagram – from UML 9/9
•   Dot and cross diagram
•   Double bubble map – used in education
•   Drakon-chart
•   Entity-Relationship diagram (ERD)
•   Event-driven process chain
•   Euler diagram
•   Eye diagram – a diagram of a received telecommunications signal
•   Express-G
•   Extended Functional Flow Block Diagram (EFFBD)
•   Family tree
•   Feynman diagram
•   Flow chart
•   Flow process chart
•   Flow diagram
•   Fusion diagram
•   Free body diagram
•   Gantt chart – shows the timing of tasks or activities (used in project management)
•   Grotrian diagram
•   Goodman diagram – shows the fatigue data (example: for a wind turbine blades)
•   Hasse diagram
•   HIPO diagram
•   Internal Block Diagram (IBD) used in SysML
•   IDEF0
•   IDEF1 (entity relations)
•   Interaction overview diagram – from UML
•   Ishikawa diagram
•   Jackson diagram
•   Karnaugh map
•   Kinematic diagram
•   Ladder diagram
•   Line of balance
•   Link grammar diagram
•   Martin ERD
•   Message Sequence Chart
•   Mind map – used for learning, brainstorming, memory, visual thinking and problem solving
•   Minkowski spacetime diagram
•   N2
•   Nassi–Shneiderman diagram or structogram – a representation for structured programming
•   Nomogram
•   [Network connection]
•   Object diagram – from UML 2/9
•   Organigram
•   Onion diagram – also known as "stacked Venn diagram"
•   Package diagram from UML 4/9 and SysML
•   Parametric diagram from SysML
•   PERT
•   Petri net – shows the structure of a distributed system as a directed bipartite graphwith annotations
•   Phylogenetic tree - represents a phylogeny (evolutionary relationships among groups of organisms)
•   Piping and instrumentation diagram (P&ID)
•   Phase diagram used to present solid/liquid/gas information
•   Plant Diagram
•   Pressure volume diagram used to analyse engines
•   Pourbaix diagram
•   Process flow diagram or PFD – used in chemical engineering
•   Program structure diagram
•   Radar chart
•   Radial Diagram
•   Requirement Diagram Used in SysML
•   Rich Picture
•   R-diagram
•   Sankey diagram – represents material, energy or cost flows with quantity proportional arrows in a process network.
•   Sentence diagram – represents the grammatical structure of a natural languagesentence.
•   Sequence diagram from UML 8/9 and SysML
•   SDL/GR diagram – Specification and Description Language. SDL is a formal language used in computer science.
•   Smith chart
•   Spider chart
•   Spray diagram
•   SSADM – Structured Systems Analysis and Design Methodology (used in software engineering)
•   Star chart/Celestial sphere
•   State diagram are used for state machines in software engineering from UML 7/9
•   Swim lane
•   Syntax diagram used in software engineering to represent a context-free grammar
•   Systems Biology Graphical Notation – a graphical notation used in diagrams of biochemical and cellular processes studied in Systems biology
•   System context diagram
•   System structure
•   Systematic layout planning
•   Timing Diagram: Digital Timing Diagram
•   Timing Diagram: UML 2.0
•   TQM Diagram
•   UML diagram – Unified Modeling Language (used in software engineering)
•   Use case diagram – from UML 5/9 and SysML
•   Value Stream Mapping
•   Venn diagram
•   Voronoi diagram
•   Warnier-Orr
•   Yourdon-Coad –, used in software engineering  

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Leo Lingham


Questions could cover business analysis, business planning, business development, strategic planning, corporate planning, corporate development, manpower planning etc


18 years working managerial experience in business planning,
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24 years in management consulting covering business planning,strategic planning, marketing planning, product planning,
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