Statistics is defined as a mathematics branch that deals with collection, interpretation, analysis and classification of numerical data, for purpose of drawing conclusions based on their quantifiable probability. Statistics is used to interpret data aggregates which are too large to be understandable by usual observation since data of this kind tend to behave in predictable regular manner.
Different Types and Levels of Statistics
Statistics is divided as inferential statistics and descriptive statistics. Descriptive statistics involves the summarization of population data graphically or numerically by deriving statistics relating to central tendency for instance mode, median, or mean. It also involves deriving statistics relating to dispersion around the core tendency for instance standard deviation or range. Finally, it involves deriving graphs or statistics demonstrating distribution shape (Wvu.edu, n.d.).
Inferential statistics on the other hand permit one to gather parameters of population founded on sample statistics as well as modeling associations in the data. Inferential statistics is divided to a number of categories that include hypothesis testing, modeling relationships and estimation. Estimation refers to the statistics group that permit for the estimation regarding population values founded on sample data. The two forms of statistics in this class include confidence intervals and parameter estimates. Modelling permits us to create mathematical equations that demonstrate the correlations between variables. Hypothesis testing on the other hand permits us to evaluate on whether a certain hypothesis that has been creates is held by a systematic data analysis (Wvu.edu, n.d.).
The statistical level of measurement include ratio, nominal, interval and ordinary. Nominal is the initial measurement level where data is classified by use of numbers. Ordinary is the second measurement level wherein some ordered association between various items is depicted. Interval is the third measurement level wherein measurements are ordered and classified. This level also involves specifying that distances between every scale interval are equal along the scale measured from the upper to the lower interval. Ratio is the fourth and the last measurement level wherein the measurements can obtain zero value. This makes it a unique level and thus, different from others (Statistics Solutions, 2015).
Role of Statistics in Business Decision Making
Statistical data assist in displaying the actual picture of a situation in business. It helps in determining how each external or internal factor influences a business and thus guiding the decision makers on the aspects to adjust, and in which direction, the aspect to eliminate and the aspects to retain. It eliminate the process of making decisions based on assumptions and thus reducing the risks of making the wrong decision. With statistical data, it is easy for business owners to make more objective and subjective decision in a business and to obtain more positive results. This is because the decision will be highly guided by the facts on the ground.
Three Examples or Problem Situations in which Statistics can be used
Statistics can be used in a number of situation. One of the situation is when one has more than one business solutions and wishes to establish the solution that would be more suitable for his or her business. The probability aspect of statistics can be used. The second option is when one want to evaluate the performance of the business and to follow the performance trend of a business, statistics would be very useful. The third situation is when trying to make business forecast. Statistics can be used to measure the rate of change in different business aspects and thus assisting to predict what would happen to a business in the future in different situations. Order Unique Answer Now