June 15, 2015
Dr. Prasad Yenumula
Statistics in Business
Statistics are used every day and everywhere. Per Lind, Marchal, and Wathen (2011), "In summary, there are at least three reasons for studying statistics: (1) data are everywhere, (2) statistical techniques are used to make many decisions that affect our lives, and (3) no matter what your career, you will make professional decisions that involve data. An understanding of statistical methods will help you make these decisions more effectively" (p.4).
Statistics is the knowledge of data. It’s the collection, classification, analysis, and interpretation of data that analyst, mathematicians, or statisticians use to characterize.
Descriptive statistics describe, show, or summarize data in a meaningful way and are applied to populations. An example of this is patterns. Patterns can be described as center, spread, shape, and unusual features. They enable us to show the data in a more significant way using graphs, charts, tables, or discussions of results. Descriptive statistics cannot make conclusions past the data or reach conclusions in regards to any hypotheses; only be used to describe data.
Inferential statistics are techniques that use samples to make generalizations about the populations from which the samples were drawn. It may be easier and less time consuming to use samples instead of entire populations. However, there is room for sampling error, because the sample may not perfectly represent the population. It is, therefore, important that the sample accurately represents the population.
What role does statistics play in business decision making?
The role of statistics in business decision making is extremely important. It helps to define and measure any uncertainty and even assist in predicting the next move or possible outcome. Short and long-term processes, plans, and initiatives can be implemented. They provide a quantitative basis for arriving at decisions in the business world. It can be a tool of management to evaluate performance and judge the efficiency of new methods by studying the relationship.
Examples of statistical use
Statistics have helped many companies come out on top. It’s not just companies that are helped from statistical data; many day to day jobs use it as well. Sports recruiters benefit from statistical data. They use it to…