What are business statistics?

What are business statistics?

1. Business statistics take data analysis tools from elemental statistics and apply them to businesses. For example, estimating the probability that a defect will roll off a factory line or seeing where sales are headed in the future. Many of the tools used in business statistics are based on the ones you've probably already encountered in basic math: mean, mode and median, bar graphs and the bell curve, and basic probability. Hypothesis testing (where you test an idea) and regression analysis (fitting data to an equation) are based on this foundation.

2. Description of populations and samples. The process of describing populations and samples is called Descriptive Statistics. A population includes everyone in the area of ​​interest

   • Measures of central tendency. In this area, you will find where most of the data is located. It includes finding the mean, mode, and median. The formulas for finding the population mean and the sample mean have slightly different symbols: Formula for the sample mean: x̄ = (Σ x i) / n. Population mean: μ = (Σ * X) / N. They are solved in the same way: add the elements and then divide by the number of elements in the set.

3. Probabilities and random variables. Probability is the basis of business statistics. Several formulas are used, including the basic formula: P (A) = number of outcomes that give A / number of possible outcomes = r / n

4. Every probability distribution is generated by a random variable x, which can be of two types:

   • Discrete random variable (x). It is called a variable because it can take different values, random, because the value taken is totally random and discrete because it can only take integer values ​​and a finite number of them.
     • types of distributions
       • The negative binomial distribution is similar to the binomial, but it does not have a fixed number of trials.
       • The geometric distribution represents the number of failures before it succeeds in a series of Bernoulli tests.
       • Poisson distribution: used to predict the probability of certain events happening when you know how often the event has occurred

5. Inferential statistics. While descriptive statistics "describe" the data, inferential statistics make inferences. In other words, take data and draw some kind of conclusion. The two main areas are parameter estimation and hypothesis testing.

6. Business data sampling. When you want to get a sample of the trading statistics, you can't just pick a few items at random from the stack. You must take care to ensure that your sample is representative of the entire population. This is not as simple as it sounds; sampling can be a complicated process. There are literally dozens of methods to choose from. These include choosing numbers from a hat (called simple random sampling) and using your contacts to make other contacts (called snowball sampling).

   • Snowball sampling is where research participants recruit other participants for a test or study. It is used when it is difficult to find potential participants.

7. Simple linear regression and correlation. Simple linear regression and correlation are used in business statistics to predict trends. For example, you might have a list of sales data for a group of stores. You can use that data to make predictions about where sales are going; Regression can create a model for future sales. Correlation takes a set of variables and tells you how well they are related