This paper will explain what statistics are. Statistics are used in so many ways, including business. This paper will thoroughly defining statistics, the types and levels of statistics, the role of statistics in a business and examples of how statistics may be used.
The most common definition for statistics would be the collection of numerical data. Examples of numerical data could be the percentage of how many African-Americans passed, dropped out or failed out of high school in Vallejo, CA in 2013. Another would be how many slam dunks did LeBron James have last year or asking how many assist did LeBron James average last season; would give you numerical data. In this coarse, statistics is described as the science of collecting, organizing, presenting, analyzing, and interpreting data to assist in making more effective decisions.
Statistics are usually divided ...view middle of the document...
There are four levels of measurement when involving statistics: nominal, ordinal, interval and ratio. Nominal level is the lowest level. Nominal levels are when a observation of a qualitative variable can only be classified and counted, there is no order. Ordinal level is the next level above nominal. Ordinal levels place variables in a rank or order. The next level above ordinal are interval levels. Interval levels consist of all the same attributes has ordinal, along with the difference between values is a constant size. Ratio level is the highest level of measurement. Ratio level has the same characteristics as internal, along with a 0 point that is meaningful and the ratio between two numbers is meaningful.
Statistics play a major role in business decision making because it shows you if something is working or not. Examples of the role in statistics would be a mechanical company measuring a workers repair efficiency to determined if the employee deserves a promotion. Also, statistics will tell you if a product is selling. The sales statistics from the product will help you determine if you should keep the product or remove it from your store.
An example of how statistics are used would be monitoring inventory. The statistics will show how much a product was used and how much is on hand, letting you know to order another shipment or not. Statistics can be used to determine how much a average customer spends in a store. Statistics can also be used to to determine a company's future. During a annual review, statistics will show if the company is making money or loosing money. If the sales statistics are on the downfall, the company may be forced to close, lacking sufficient profit.
In conclusion, this paper described how statistics relate to business. In this paper statistics was defined, different types and levels of measurements dealing with statistics were highlighted and the role of statistics in business were given along with examples to support the importance of statistics in a business.