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Multivariate Data

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Executive Summary Multivariate data is a key part of any interaction in business. The data can be used to anticipate the effect of several variables. Multivariate relationships involve multiple independent variables affecting a dependent variable. These independent variables have a distinct and measurable effect on the dependent variable. These relationships can be used by managers to make decisions. The example given is that of an automobile manufacturer that uses the data to change the methods of scheduled maintenance without affecting the longevity of the vehicle. Multivariate data can show managers how different aspects can affect an outcome.

Multivariate Data Multivariate data is a system of relationships that governs nearly any interactions between objects. These data relationships show how one set of variables can have an effect on another. Whenever something happens, it happens because of many factors that come into play; several things have to come together to create the effect observed. This is true of things in nature, occurrences in life, and decisions in business. Multivariate relationships are everywhere, and the effect they have is widespread. The ability to recognize and analyze these variables can be a strong asset in business management as understanding what drives certain effects can allow a manager to more accurately predict outcomes. Being able to accurately model what is going to happen is a distinct advantage for any manager. Multivariate relationships are at work in almost any situation. But before the relationships can be analyzed, the component parts must be identified. In every multivariate relationship, there is a set of independent variables, and then a dependent variable. The different independent variables all have an effect on the dependent variable in some way; they create a change in the dependent variable that is measureable. The dependent aspect however cannot affect the independent variables at all; the relationship is a one way street. “A multivariate analysis enables you to avoid the problem of multiple tests that would arise if you tested the effect of each independent variable on each dependent variable separately” (Darlington, n.d, para. 4). An example of this type of relationship could be a professional sports team that wins a championship. Several factors would need to come together for the team to be successful during its championship season. Roster makeup, schedule difficulty, injuries, weather, and coaching expertise are all examples of independent variables that would have an effect on the team winning a championship, which would be the dependent variable. All these factors would come to play for that team to win a championship; all the variables would require just the right effect. The team leadership can analyze as many of these variables a possible to give them an indication of the team’s success. “This is where analysis of multivariate relationships can help; it facilitates the powerful analysis of multidimensional data and simultaneously, amasses knowledge at a single glance” (Rubingh, Maarschalk, & Thissen, 2010, para. 3). The effects of multivariate relationships can be widespread and important. However, unless the data is interrupted correctly, then it cannot be used for anticipation for what effect will be sustained by the dependent variable. “Often before doing any statistical modeling, it is crucial to verify if the data at hand satisfy the underlying distributional assumptions” (Multivariate Analysis Concepts, n.d). Care must be taken to ensure that as many of the independent data factors are considered as possible. The basic assumption underlying the use of multivariate analysis is that the measured data carries information that is useful (Esbensen, Guyot, Westad. & Houmoller, 2002). For example, an automobile manufacturer may want to experiment with their recommended maintenance and vehicle longevity. They may project out the effect that longer intervals, coupled with more use of quality consumables, and taking in account intended vehicle usage would have no effect on vehicle longevity. The manufacturer could then test the data to see if their assumptions are correct. They could ensure that the independent variables meet their needs. Service interval would be stretched out to a longer mileage count, and during the service a higher quality consumables could be used. The manufacturer could then check the longevity of the vehicle as compared to the average under the older set of independent variables. This is an example of how multivariate relationships can be used in a business situation. Conclusion Multivariate data relationships occur in almost all interactions. Whether it is in science, sports or business, multivariate relationships have an effect on the outcome of the endeavors. By understanding these relationships, individuals in leadership positions can make better decisions. These leaders will understand what it takes to influence a particular outcome, and also understand the factors that led to a situation going wrong. Multivariate relationships have a large effect on the success of any organization.

References Darlington, R. (n.d). Multivariate Analysis. Retrieved June 27, 2010 from website: http://www.psych.cornell.edu/darlington/manova.htm Esbensen, K,, Guyot, D., Westad., F., & Houmoller, L. (2002). Multivariate Data Analysis. Retrieved June 26, 2010 from website: http://books.google.com/books?id=Qsn6yjRXOaMC&dq=multivariate+data&source=g bs_navlinks_s Rubingh, C., Maarschalk, K., & Thissen, U. (2010, February). Multivariate data analysis easily retrieves insight from a wealth of data. Pharmaceutical Technology Europe, 22(2), 38- 41. Retrieved June 27, 2010, from ProQuest Nursing & Allied Health Source. (Document ID: 2046646981). Unknown. (n.d). Multivariate Analysis Concepts. Retrieved June 26, 2010 from website: http://support.sas.com/publishing/pubcat/chaps/56903.pdf

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