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How Are Statistics Used to Make Business Decisions?

Statistical research gives managers the information they need to make informed decisions in uncertain circumstances. When managers analyze statistical research in business, they determine how to proceed in areas including auditing, financial analysis and marketing research.

Statistics is just one of the important fields of study in an online BBA program. Future business professionals need to recognize the importance of statistics in creating accurate predictions. Companies that rely on analytics can be more effective when they work with the right statistics.

What Are Business Statistics?

Statistical research in business enables managers to analyze past performance, predict future business practices and lead organizations effectively. Statistics can describe markets, inform advertising, set prices and respond to changes in consumer demand.

Descriptive analytics look at what has happened and helps explain why. By using historical data, managers can analyze past successes and failures. This is also called “cause and effect analysis.” Some common applications of descriptive analytics include sales, marketing, finance and operations.

Predictive analytics uses a variety of statistical techniques (such as modeling and data mining) to predict future probabilities and trends based on historical data. This goes beyond reporting what has happened to create best estimates for what will happen. Some common applications of predictive analysis include fraud detection and security, risk assessment, marketing and operations.

Prescriptive analytics is the stage of determining the best course of action in a given business situation. This includes knowing what may happen, why it may happen, and how to navigate it. Constantly updating information changes prescriptive analysis, allowing managers to maintain action plans for their organizations in real-time.

Mean, Median and Mode

Those who use statistical research in business should be familiar with how statistics are calculated, including how the mean, median and mode work together to create meaning from a set of numbers. The mean is an average of a set of numbers, the median is the middle number within a set of numbers and the mode is the most common number in a set.

Successful managers understand that these concepts work in concert to create an accurate picture of a business’s condition.

Responsibility With Statistics

According to Six Sigma Online, managers should be prepared when they use statistical research in business to explain the research to other stakeholders and vouch for its authenticity. It is important to know the source of the data and ask questions such as What does this research represent, and why was it generated? Was the person who compiled this data capable of doing so, and were they unbiased?

Studying Statistics

Students who enroll in an online BBA program will study statistics (perhaps in a business analysis course in the core curriculum) and learn how they can use the data in decision-making. Computer software makes analytics very accessible. Desktop tools can help create reports, charts and graphs to represent information visually, which helps communicate its meaning.

Business professionals must master all of the tools available to them, including statistical research in business, in order to help their organizations succeed.

Learn more about the Lamar University online BBA program.


Sources:

http://www.sixsigmaonline.org/six-sigma-training-certification-information/business-statistics-use-them-to-make-good-business-decisions/

http://www.sas.com/en_us/insights/analytics/predictive-analytics.html

https://www.boundless.com/management/textbooks/boundless-management-textbook/decision-making-10/conditions-for-making-decisions-77/the-value-of-analytics-in-decision-making-373-3928/


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