Question

How far business statistics can be used in business decision?

Answer 1

Answer:

The decision making process must be include collection and analysis of as much data and information as possible in order to arrive at optimal business decisions. computerized analysis of data has made the task simpler.

Explanation:

The following are a few examples where statistical methods can be helped in decision making :

1) Random sampling techniques are used by production managers and the QC department to determine quality grades of materials. Accountants use this same techniques while auditing accounts receivable for their clients.

2) Regression and correlation analysis may be used by the finance department to correlate a set of financial ratios with other business variables.

3) Marketing departments may apply statistical tests of significance for their market research about a suitable target market for their new products or services.

4) Forecasting techniques may be used by the top management to estimate sales volume for the next budget year.

5) Standard deviation methods are used by various profit centers within the organization to cut down the inherent risk in a particular business decision.