Statistics in Business Essay Example | Topics and Well Written Essays - 500 words

Statistics in Business - Essay Example When drawing inferences about a population, basically estimation and hypothesis testing is involved. Data may be quantitative or qualitative in nature. Qualitative data is data that is not numerical. Quantitative data on the other hand is numerical (involves numbers). Data can be measured in four levels: nominal, ordinal, interval and ratio (Anderson, Sweeney & Williams, 1994). The lowest of the four levels of data measurement is nominal and deals with labels, categories or names. Data that falls under the nominal level is usually qualitative. At this level, the data cannot be ordered and statistics can not be reasonably drawn from it. The second level of data measurement is ordinal. At this level, the data can only be ordered and ranked with no room to make meaning of the differences between the data. Data that can be ordered and in which sense can be made of their differences can be measured at the interval level. However, the data that falls in this category is known to have no starting point, examples being the Celsius and Fahrenheit scales used to measure temperature (Thompson, 2006). The highest level of data measurement is the ratio level. Data that falls in this category possesses all the characteristics of the interval level. In addition to these, the data has a zero value. Statistics plays an integral role in business decision making in the modern setup. In order to make sound business decisions, for example, an entrepreneur should have a good idea about the demand for their products. Based on statistics, the quality of products produced by a business may be verified (Anderson, Sweeney & Williams, 1994). Furthermore, statistical data may be used by managers to establish or evaluate customer satisfaction, evaluate risks, calculate loss or profit, and calculate financial ratios among other applications, all