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Statistics in Business
Janine Lewis
QNT/351
July 13, 2015
James Malachowski

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Statistics in Business
Statistics is a type of mathematical analysis involving the use of quantified
representations, models, and summaries for a given set of empirical data or real world
observations ("Definition of Statistics", n.d.). It is the science of data and it involves collecting,
classifying, summarizing, organizing, analyzing, and interpreting numerical information that is
helpful in all businesses.
Types of Statistics
Statistics is a general term, but it can be divided into two broader areas: descriptive and
inferential. Descriptive statistics uses numerical and graphical methods to search for patterns in
a data set. These patterns help to summarize the information so it can be presented in a
meaningful way. Inferential statistics is a process of using sample data to make estimates,
decisions, predictions, or other generalizations about a larger set of data. Instead of using the
entire set of data, a sample of the set is analyzed and an estimate is made about the entire set.
Role of Statistics in Business Decision Making
Statistics play an important role in the process of decision making in business. Before
any financial decision can be made, data must be gathered, analyzed, and presented to parties
who would stand to gain or lose if the right decision is not made. Information must be accurately
and properly prepared to provide current as well as a forecast of future plans for the business.
The quantitative data results can estimate a gain or a possible loss of revenue, and give a
company the opportunity to explore other avenues.

Three Examples of Statistics


There are numerous situations where statistics is beneficial in business because the
research, analysis, and results can show unknown situations that need to be addressed before a
new product is presented or a process is put in place. One situation is the outsourcing of
processes to an off shore location. It seems easy to pass on a certain process from one group of
employees to another, but there are many things to consider when a process is moving to a new
culture. Another situation is the rate of people on public assistance who feel that they get more
that way than working. Many states do not have requirements for public aid recipients;
therefore, they do not have a desire to work as they will lose valuable benefits such as housing,
food stamps, free medical coverage, and more. A final situation is the overcrowding of the jail
system with minor crimes while major criminals walk the streets. Statistical information
gathered could make a big difference in making sure major criminals (killers and rapists) are not
being overlooked.
Conclusion
Statistics is the process gathering, summarizing, analyzing, and interpreting data to
provide insight to a business who is about to introduce new products or services. Before the
decision making process begins, statistics must be presented in a way that a past, present, and
future analysis can be available for discussion.

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References
Definition of Statistics. (n.d.). Retrieved from http://www.investopedia.com
McClave, J. T., Benson, P. G., & Sincich, T. (2011). Statistics for business and economics (11th
ed.). Boston, MA: Pearson-Prentice Hall.