Statistics in Business

Statistics in Business

Statistics in Business

Statistics is the science of collecting and analyzing data that is collected from a specific source (Stine & Foster, 2014). There are different categories of variables that can be part of the data set. Categorical variables identify membership in a group. Categorical variables can be referred to qualitative or nominal variables as well. Numerical variables describe quantitative attributes of the data set. The type of variable that you have is important because it allows you to identify the most appropriate way to analyze the data (Stine & Foster, 2014).

There are four levels of measurement that refer to the relationship among the values that are assigned to the attributes for a variable; nominal, ordinal, interval, and ratio. Nominal measurement only names the attribute. In ordinal measurement, the attributes can be order ranked. Interval measurement measures the distance between attributes. Finally, in ratio measurement an absolute zero is meaningful.

By collecting scientific data and analyzing that information accurately, businesses can make well-educated and profitable decisions for the organization opposed to making decisions based off of approximations and instincts. Statistics also permit businesses to project sales and consumer demand so that they can make the appropriate decisions in regards to manufacturing and production of goods.

All in all, statistics play a large part in business operations. For example, businesses that operate a call center depend on statistics to ensure the business operates effectively. Using statistics to analyze the amount of incoming at various times can allow management to staff employees adequately to meet the phone demands of customers. Another example is shown within insurance companies. The rates that insurance companies charge consumers to insure their vehicles and homes is dependent on statistics, such as driving or loss history, from all drivers and...