Statistics in Business
Statistics is used daily in business and is an important asset to the decision making process. There are two broad areas of statistics, one using known information the second asks for conclusions to be made from data collected. The role of statistics in the business decision-making process is inimitable. Examples can be found from the fortune 50 organization to the mom and pop shop on the corner.
Statistics is the science of data. It involves collecting, classifying, summarizing, organizing, analyzing, and interpreting numerical information (McClave, Benson, & Sincich, 2011). Statistics can be broken down into two broad areas: descriptive statistics, and inferential statistics.
Descriptive Statistics is the utilization of numerical and graphical methods to look for patterns in a data set (McClave, Benson, & Sincich, 2011). Descriptive ...view middle of the document...
The inferential statistics uses data collected to form conclusions. After taking a sample of the students ages in the statistics class and asking are these ages what one would expect to see in the rest of the statistics class, would be an example of an inferential statistics question.
The Role of Statistics
Statistics play an important role in business and the decision making process. A businessperson has to make informed decisions to continue to be successful. The business manager should have an idea of what their target market is and what they want. Statistics provide this information. Using statistically based information to make informed and educated decisions. Conducting the research that provides the date to be processed and analyzed is paramount in a successful company.
Example 1. AT&T the communications giant uses statistics to decide when and where the new technology will be placed. There are samples taken, and from these samples it is determined the period of time it will take to recover the money spent placing the new equipment. If the sample meets the predetermined time deemed satisfactory the equipment is placed.
Example 2. In politics, politicians use statistics to determine where they will spend the majority of their campaign money. The numbers of electoral votes are weighed against the number of potential voters that may or may not vote in their favor. From this data sample a decision is made.
Example 3. The local donut shop uses statistics to decide how many chocolate and glazed donuts they will make each morning. They base their decision on information accumulated day-to-day of doing business.
In conclusion, statistics are an important part of business. Everybody from the insanely large to the very small company use statistics in the business decision making process. The role of statistics cannot be replaced or skipped. The research and data collection from which the statistics are pulled is imperative to business.
McClave, J. T., Benson, P. G., & Sincich, T. (2011). Statistics for Business and economics. Boston, MA: Pearson-Prentice Hall.