Today’s business environment is more uncertain than it was before. It is very challenging to attain unremitting sustainable growth or hold the premier position in the competitive market.
The growth of Business is unthinkable without the use of statistics and statistical tools.Different types of statistical tools are used by businesses to measure the performance and identify trends of Business. This allows managers to make the decision which is based on data and not on assumptions.
Statistical tools provide a more accurate solution than other techniques. It helps Business to deal with future uncertainties with more confidence. Business can take quick and long term decisions with the help of trend analysis which analyzes the past trends of the market and predicts the future on the basis of that.
Correlation is used to analyze the efficiency of Business operations. Correlation can lead managers to try and identify substitute supplies that lower manufacturing cost. The same goes for employee behavior. If a business finds that employee performance picks up with the implementation of a bonus, the correlation of behavior can signal that a small bonus expense can make serious production improvement.
Regression analysis technique helps to understand how the dependent variable changes when one of the independent variables is varied, while the other independent variables are held fixed. Business analysts use this statistical tool for eliminating the unwanted variables and select the important ones for the growth of Business.
Capital Asset Pricing Model (CAPM) helps Business, to describe the relationship between the expected return and risk of investing in a security.
Random sampling techniques are used by production managers and the QC department to determine the quality grades of materials. Accountants use these same techniques while auditing accounts receivables for their clients.
Marketing departments may apply statistical Tests of Significance for their market research about a suitable target market for their new products or services.
Standard deviation methods are used by various profit centres within the organization to cut down the inherent risk in a particular business decision.
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