BAO refers to the extensive application of models and quantitative tools designed to optimize the decision making process and innovate business models, while focusing on the future, unlike Business Intelligence (BI) which intends to explain the past.
BAO answers questions such as:
- Which clients are more likely to fail on payments?
- When facing a capacity restriction, which demand should be covered?
- How can transport resources be optimized to reduce distribution spending without impacting on service levels?
- Where should the new plant and/or distribution center be opened? With which capacity?
To answer those questions, BAO uses two types of mathematical models:
Predictive analysis:
- Exploration and simulation: segmentation, hierarchy, classification, experiment design
- Exploration and causality: regression, neuronal networks, SEM
Prescriptive Analysis
- Optimization: complete mixed lineal programming, genetic algorithms, meta-heuristics
Related publications:
- Sales and Profit impact at Herdez Group due to new Supply Chain Strategy
- Sintec and Grupo Nutresa Supply Chain Innovation