Statistics in Business
Define statistics with citation and reference.
Statistics is defined as the “collection, organization, analysis, and interpretation of various data” (Lind, Marchal, & Wathen, 2011). This process of utilizing data is intended for the purpose of decision making in a variety of fields such as business and science (Lind, Marchal, & Wathen, 2011).
Contrast quantitative data and qualitative data with citation and reference.
Quantitative and qualitative methods are differentiated by their use of different forms of collecting data. Quantitative research uses facts, numbers, and other measurable ideas. Qualitative research uses more subjective collection methods such as ranges, opinion, and other concepts that must be measured. These forms of data both have advantages and disadvantages.
Qualitative data is derived from the measure of ideas that are qualified such as product satisfaction or opinion. In contrast to this measure, quantitative data is derived from facts and figures such as measures of return on investment (Cooper, 2014). Both methods are able to show different types of information pertaining to certain business functions.
Describe the levels of data measurement.
There are two basic forms of data measurement which are known as descriptive and inferential statistics (Cooper, 2014). Descriptive statistics attempts to show patterns in data such as found in data mining. Descriptive statistics will use large amounts of data to create information. Inferential statistics works to the same end as descriptive statistics but is used when testing an entire population would be too difficult. Inferential statistics uses sample data taken from segments of populations which is then extrapolated to the whole (Cooper, 2014).
Describe the role of statistics in business decision-making.
In business, decisions-making is performed often by using statistics. Using data, managers can create useful information that can assist with decision-making. For instance, attempting to find the profitability of a department by analyzing expenses across the year can yield information which specifically shows where money is being lost or gained. This is a valuable tool for operations management because costs are better identified along with waste (Lind, 2011). By using data obtained from records, statistics can show managers where money is lost or what activities are costing the most. This allows for better strategic management of business processes.
Marketing is another area of statistics which allows marketers to make predictions for products and to create sales strategies. To understand the importance of marketing data, one only needs to understand how often marketing fails. The failure rate of products and service as a result of poor decision making and marketing analysis is approximately 75% (Cooper, 2014). This is due to the fact that research is often poorly designed and does not answer the necessary questions for creating a marketable product. For this reason, statistics are vital to the decision-making of all companies.
Cooper, D. R. (2014). Business research methods (12ed.). New York, NY: McGraw-Hill/Irwin.
Lind, D. A., Marchal, W. G., & Wathen, S. A. (2011). Basic statistics for business and economics (7th ed.). New York, NY: McGraw-Hill/Irwin.