Business statistics uses data to make decisions in uncertain situations. It is used in finance, marketing, and customer service departments. Understanding and applying it can give companies a competitive advantage. Techniques include descriptive statistics, probability, hypothesis testing, and linear regression.
Business statistics is the science of using data to make good decisions in the face of uncertainty. Several departments often use business statistics, such as finance, marketing, and customer service. Statistical techniques commonly encountered in business include the use of descriptive statistics, probability, binomial and normal distributions, hypothesis testing, confidence intervals, linear regression, and correlation.
Managers often use business statistics when forecasting or making decisions that involve a level of uncertainty. It takes a certain amount of skill and training to interpret and apply business statistics. Business professionals in the US are generally required to complete a course in business statistics prior to graduation. Understanding and applying business statistics can give managers and companies a competitive advantage.
Companies that use statistics have a competitive advantage in making data-backed decisions. For example, if a manager believes that an item will be obsolete in the future and wants to halve the price to run out of sales, he might find, after performing linear regression, that the product will sell out at full price in two months. If he cut prices now, the company would cut its profit margin for no reason. In addition, managers often calculate the mean, or mean, when they must also consider the mode or median. Outliers may be present, making the average and decisions based on that number inaccurate.
The most common departments that use business statistics include finance, marketing, and customer service. The finance department benefits from using business statistics to perform financial statement analyses, forecasts and correlations. The marketing department can use it to forecast sales and demand, as well as look for trends and find out how likely a particular event is to occur. Customer service can increase its performance by using business statistics to determine which offers or retention techniques are working best, as well as reviewing staff performance.
The techniques used for business statistics vary by organization. Business schools teach students descriptive statistics, probability, binomial and normal distributions, hypothesis testing, confidence intervals, linear regression, and correlation. Descriptive statistics includes calculating and knowing when is the most appropriate time to use the mean, median, and mode. Probability and distributions are used to determine the probability of an event occurring. Hypothesis tests, confidence intervals, linear regression and correlations are generally used when making predictions or testing whether a theory is true.
Asset Smart.
Protect your devices with Threat Protection by NordVPN
