What is the importance of statistics in business decision making? Describe a business situation where statistics was used in making a decision
According to the text and research, the importance of statistics in business decision making is a crucial role that consists of scientific data and accuracy that helps a business or organization make a secure profit. Using statistics help to eliminate assumption and gives prosperity of success in a long term perception that decreases risk exposure and increases opportunities. A business situation where statistics is used in making a decision would be a credit card company. This type of organization relies on statistics to determine what individual qualifies for a specific line of credit based on his or her credit history, payment history and/or balance they may owe.
Statistics can play a great role in business decisions. It can provide the measurable basics for a business to make the best decision possible. They deal with the gathering, selection and classifying data, to help analyze the information that can be a valuable asset to a business. Statistics helps all parts of a business from operation to administration. It helps provide a business with a plan to produce what the customers are wanting or needing. They can also be a tool that can help management evaluate production, performance, efficiency, etc. This provide a business great information on what new methods can help with cost and production values.
Statistics provides different information to different business and/or people. Statistics are important when researching a new medication. It is important to know all the data and pros and cons, prior to submitting for FDA approval. You need to show testings and results that support the data to prove your findings. I work for a school district and I know we use our statistics to help learn about students’ needs for more space, better education, new testing models and if there is need for more schools. Crowding is a constant. Statistics provide information to make the decisions that are needed easier.
According to “azcentral” (n.d.) ” Analytical methods like statistics support the understanding of the holistic impact that strategic initiatives can have on your business. For example a statistical model can provide a baseline forecast of your revenues and expenses for years to come.” It will allow business to know how many people they need to hire, what decisions to make when it comes to purchasing products or expansion. I currently work for a company that uses statistics to forecast the revenues needed to support all of our preschool programs. We look at how many teachers we will need to support children and how many family service workers will be needed to provide a quick a turnaround on information our families need. It also allows us to budget for future years and essentially ask for additional funding from the State so that we can offer additional slots for preschool based on community surveys and parent feedback.
According to Williams (2015), whether designing new products, streamlining a production process or evaluating current vs. prospective customers, today’s business managers face greater complexities than ever before. Running a shop on instinct no longer suffices. Statistics provide managers with more confidence in dealing with uncertainty in spite of the flood of available data, enabling managers to more quickly make smarter decisions and provide more stable leadership to staff relying on them. Statistics allow businesses to focus on the big picture, back judgments, making connections, ensuring quality, and considerations.
An example would be when a business uses statistics as a baseline forecast of their revenues and expenses for years to come. This baseline forecast can be adjusted by team members depending on the new product introductions, new markets and competitor activities (Williams, 2015)
Statistics in business are used for all sorts of decisions that the company will make. The first decision is where to locate the business and statistics in the situation is very important to make sure that the company takes advantage of every opportunity it can. From where to locate the business, what hours and days to be open, and how to arrange the customer area of the business to help to sell the most product. For instance, in a bar the flow of the customers’ needs to optimized so that the customer will purchase more drinks and stay in the business longer.
Statistics defiantly is important to make predictions and good decisions. Having accurate data is a must because if the data is not accurate then any predictions or decisions based off of that data will be wrong. Once accurate data has been accumulated it still has little value until it is organized in a way that can be usefully. In your example of air line tickets if they had all the relevant data but did not organize it to show time of year, day of the week, time of day, or destination they would not be able to make good decisions regarding pricing and supply resulting in poor decisions.
Statistics are created by analyzing large amounts of numerical data. When statistics are used in the corporate setting, they provide businesses with the tools they need to develop and implement short and longterm processes, plans, and marketing initiatives. Profit and loss statements, customer management systems, and market share graphs are just a few business tools derived from the use of statistics. Without the proper use of statistics, a business owner or manager may not have a full range of essential information necessary to run a successful corporate operation. In addition, many startup businesses must present detailed business plans to banks or potential investors in order to secure funding. Statistics can be used to come up with practical business plans that inform prospective partners or financial institutions.
A business decision that would use statistics in order to make an informed decision would be the amount of stock to order during different periods of the year. A company could use the statistics from years past in order to evaluate how much stock they should keep on the shelves during a particular time of the year.
The use of statistics is vital to making decisions in a timely manner. I used to be a manager of a fast food restaurant and we used surveys to gather data about the experiences of our consumers. With the information obtained we were able to correct issues to prevent bad experiences from taking place in our restaurant. If we messed up someone’s food we would call them and offer them a free meal. Other times we may encounter low scores in an area such as fry quality. Perhaps the fries have been terrible because the fry makers are not following proper procedures. In this scenario without feedback from our surveys we may end up serving many people a lower quality of product which in turn can cost future business. In the course of my experience I used statistical data every day to help run the business more efficiently. Armed with this information I would pay closer attention to employees who serve fries to make sure they are following proper procedure. Without the data it would have taken longer to correct many issues which would have been costly.
Statistics in the business world is very important. They can be used as a reference for comparative reasons, such as comparing financial numbers from year to year. Another valuable way to use statistics is for research purposes. Lastly, statistics are easier to use than raw numbers. It is easier to comprehend statistics to quickly make the correct decision. Being able to present statistics as facts will make business proposals much more impactful. Statistics scream impact for me.
Statistics are important to make good and bad decisions. Accurate data is a must because if there is inaccurate data decisions and/or predictions based off that data will be wrong. Accurate data has little to no value until it is organized and is useful. An example of this could be customer surveys. This can help a business gather data about customer experiences and how the business can improve.
Statistics is important in the business decision making because it helps businesses collect, classify, summarize, organize, analyze and interpret numerical information. For example, a business that sells cars can use statistics to help show if they are making a profit or not. This can be done by analyzing how many cars are sold within a given time period. When the business reviews these statistical reports to see if they need to increase sells to make a better profit. The text gives an example of how statistics are applied in businesses. The government also uses statistics to analyze data about various aspects such as unemployment figures.
The importance of statistics in business decision making is critical. This information being accurate and good can make or break a company. Companies have to have the facts when making decision to do things like buy a product or service to possibly service or selling a product is critical to the short and long term success of a company. If the data is correct then things should go as planned. If the data is incorrect and this product or service was looked to drive sales and or service members and it does not and it does not as a result of bad data it can be very bad for a company.
Statistics seems to provide data to an organization that can help them optimize their strategies and goals. The data that can be collected can provide good and bad news as to what is the best tactic to get to the operational goals. The data can help an organization learn what is the demand and exactly what type of product people are looking for. It is much more detailed than a survey, but it still provides valuable information about what the people want, need and are most interested in. Data can be collected in many different ways, but the four measurement scales gives a broader perspective of who your targeted audience is.
I think the importance of statistics in business decision making is it gives you the ability to compare numbers and data and transforms that information into decisions that can help a company make choices, such as investments or decisions to move forward with a product. I think that statistics are also use for strategic planning within company’s as well. A examples of a business situation where statistics was used could be at Limited Time Offers weather it be in a restaurant or on a product line using statistics to figure out how many people order or purchase a product during the summer vs how many people purchase that product during the winter, making that item only available during the prime time could benefit the sale.
The fact that business environment is complex, therefore decision-making becomes difficult. The decision-maker cannot depend completely upon evaluation, experience, or observation when making a decision. Decisions should be a on a basis of data the exhibit the relationship, display the changes rates, and point out the trends in different pertinent variables. The business field tools up the methods to collect, analyze, present, and significantly interpret data. Consequently, statistical methodology is an essential condition for decision-making in the business field.
Health care costs are rising all over the world. They become a concern to most nations. It is used for determining what kind of therapies and treatments are the most suitable or cost effective to be used by organizations and nations .
The importance of statistics lies in the skill and ability it provides for business managers and/or associates to make inferred decisions based on collected samples. Learning and applying the basic concepts of statistics allows one to efficiently collect and analyze data and then manipulate it in order to present the specific information you’re focused on. Statistics is not only important just in business concepts but it is also useful in making everyday decisions. The idea of taking samples and making a decision from collecting that sample and analyzing it can be seen in household decisions i.e., the favorite brand of toilet paper of a household depending on how often family members complain about the quality, what mobile service provider/shared family plan is most appropriate based on their average usage of cellular data, etc. Statistics basically empowers people with the ability to properly and efficiently gather information and analyze it before making a decision.
The importance of statistics in business decision making helps managers or business owners make decisions and be confident in the decisions made. A business situation where statistics was used in making a decision is where to open up shop. In order for a business to succeed it needs to start up in a location where their products or services are in demand
I have worked for two major corporations in my lifetime. The use of data in both of these companies in running there businesses can be overwhelming. We kept score on everything from sales, number of items sold, when we they were sold to how long it took for a customer to be cashed out at the cash register. Some of the statistics were very helpful but I also think some of them were harmful to the human element in dealing with people. For example the length of time it takes to cash a customer out. If the customer is asking questions or if they want to just talk to the person cashing them out this is a variable I feel that can not be accounted for and I really do not think many companies account for human variables like this and set non realistic goals based off of some data.
Statistics are extremely important when making business decisions. statistics provide businesses with the confidence and peace of mind when dealing with the unknown and uncertainties when making business decisions. it is crucial to use very accurate data when using statistics to make the right decision for the organization. statistics are also crucial in research when making business decisions as they include accurate data that helps businesses make the right decisions to maximize revenue and to be successful.
An example of using statistics in business decision making is, a business can use statistics when first starting up to forecast their revenues and to research the demographics when making their business plan. When using accurate information, this can help the business determine if this the right move and to see where they stand financially. This is also helpful information for lenders if the business is acquiring a startup loan.