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. 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.
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". On the other hand Lowe (1993) defined diagrams as specifically "abstract graphic portrayals of the subject matter they represent".
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". The essence of a diagram can be seen as:
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:
Chart-like diagram techniques, which display a relationship between two variables that take either discrete or a continuous ranges of values; examples:
Schematics and other types of diagrams, e.g.,
population density map
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
Booch used in software engineering
Block Definition Diagram (BDD) used in SysML
Business & IT Diagram (B&IT) used in business and IT modelling
Category theory diagrams
Class diagram from UML 1/9
Collaboration diagram from UML 2.0
Communication diagram from UML 2.0
Component diagram from UML 3/9
Composite structure diagram from UML 2.0
Control flow diagram
Cross functional flowchart
Data model diagram
Data flow diagram
Data structure diagram
Deployment diagram from UML 9/9
Dot and cross diagram
Double bubble map used in education
Entity-Relationship diagram (ERD)
Event-driven process chain
Eye diagram a diagram of a received telecommunications signal
Extended Functional Flow Block Diagram (EFFBD)
Flow process chart
Free body diagram
Gantt chart shows the timing of tasks or activities (used in project management)
Goodman diagram shows the fatigue data (example: for a wind turbine blades)
Internal Block Diagram (IBD) used in SysML
IDEF1 (entity relations)
Interaction overview diagram from UML
Line of balance
Link grammar diagram
Message Sequence Chart
Mind map used for learning, brainstorming, memory, visual thinking and problem solving
Minkowski spacetime diagram
NassiShneiderman diagram or structogram a representation for structured programming
Object diagram from UML 2/9
Onion diagram also known as "stacked Venn diagram"
Package diagram from UML 4/9 and SysML
Parametric diagram from SysML
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
Pressure volume diagram used to analyse engines
Process flow diagram or PFD used in chemical engineering
Program structure diagram
Requirement Diagram Used in SysML
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.
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
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
Systematic layout planning
Timing Diagram: Digital Timing Diagram
Timing Diagram: UML 2.0
UML diagram Unified Modeling Language (used in software engineering)
Use case diagram from UML 5/9 and SysML
Value Stream Mapping
Yourdon-Coad , used in software engineering