The And Methods Of Statistics

1360 Words6 Pages
Realistically, the reason people go into business is to make money. The owners of companies task their managers with the responsibility to ensure that the bottom line is profit. A profitable business typically benefits everyone from employees and management to business owners, but most importantly the consumers that make profit possible. There are countless ways that the collection and methods of statistics are used in everyday business practices; this paper will highlight some of the most common methods of statistics and explain how, through a variety of applications and tests, statistics can enhance the production, management, consumer satisfaction, and ultimately the profit of a business. The programs used to gather and process a…show more content…
Typically, the accountant has a database that allows inserted data to yield statistical charts, graphs, and other information with monetary trends of the company. This collection of data also allows owners to solve various problems and improve processes within the company. Data collected can be used for innumerable purposes. For instance, some owners utilize statistical datum to forecast which of its customers is likely to cancel or reorder services provided. Data can also be used for an owner to “predict, a number of months in advance, when business will pick up or recede” (Croxton and Cowden 805). The statistical method of Chi-square tests can be analyzed using the formula X2=Σ (observed value-expected value) 2/expected value. This test, among others, may be helpful to determine the types of or regions for sales and predict decreases and increases in future business. When using this test, careful data analysis must be used and one must ensure the sample size is large enough to provide accuracy. Employing the use this statistical methods test can help management determine the trends of desired information. Have you ever thought about how retail stores determine when to hire and get rid of holiday help? One way to determine how much help is needed to support a peak in sales is the use of a scatter plot diagram. Scatter plot diagrams are typically several sets of data plotted on a graph to represent correlation; they are very helpful for statistical measuring. Companies
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