Importance of Statistical Analysis for

Decision Making

Manoj Pandey
Aug 2022
Statistical Analysis

It is a process of collecting and analyzing data to

identify patterns and trends, remove bias and
inform decision-making
Statistical Analysis – Two Types

1. Descriptive Statistics
2. Inferential Statistics
Descriptive Statistics

It focuses on using current and historical data to identify

trends and relationships
Descriptive Statistics Use Cases
1. Web traffic and engagement scores (Google Analytics)
2. Financial statements
3. Demand trends (Netflix)
4. Customer or employee survey results (CSAT)
5. KPI / Goals reporting
Inferential Statistics
Inferential statistics has two main uses:

1. Making estimates about populations

Example:
a. mean SAT score of all 11th graders in the US
b. mean order value of each order on Flipkart
Inferential Statistics
2. Testing hypotheses to draw conclusions
Example:
a. relationship between SAT scores and family income
b. conduct an experiment to find drug effectiveness in treating
headaches
Correlation Vs Causation
Few important areas to focus on
1. Data types
2. Hypothesis testing [t-test, z-test, ANOVA, p-value]
3. When to use specific statistical test (build your own cheat-sheet)
4. Probability Distributions (Normal, Binomial, Poisson, Chi-Square etc)
5. Bayesian Statistics
6. Regression
7. Decision Tree
8. Time Series Forecasting
9. Clustering
10. Visualization and more…
Probability Distributions
Probability Distribution Cheat-Sheet
Real World Use Cases
1. Financial Risk Model Validation
2. Forecasting
3. Pricing Simulation
4. Airplane Schedule Maintenance Optimization
Real World Use Cases
5. Capacity Planning
6. Pricing Simulation
7. Replenishment Planning
8. Data Quality
Today every Job has Data Analytics elements
Q/A
Thank You