The Value of Statistics
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Discuss the value of Statistics and how Business Decision Making can benefit from utilizing statistics.
Give an example how 2 different persons within a company can utilize statistics but in a different way.
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Solution Summary
This is a discussion of the value of statistics in the context of business decision making
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Business Statistics is a science assisting you to make business decisions under uncertainties based on some numerical and measurable scales. Decision making processes must be based on data, neither on personal opinion nor on belief.
One of the statistics techniques that the marketing division can use is the regression analysis to forecast the demand. The regression analysis is the part of Statistics that analyzes the relationship between quantitative variables. It helps predict the reaction of a variable when a related variable varies. The objective here is to determine how the predicted or dependent variable y (the variable to be estimated) reacts to the variations of the predicator or independent variables. For example the demand of the product is affected by the price, change in preferences, income of the individual goods etc.
The objective of Regression analysis is to build a mathematical model that will help make accurate predictions about the impact of variable variations. If more than one independent variable is being considered, we call it a multiple regression analysis, if only one independent variable is being considered, the analysis is a simple linear regression. It can be used by Banks or financial institution can use it to determine the impact of interest rate on the mortgages.
It can also be used ...
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