Statistics In Business

Business statistics is the science of good decision making in the face of uncertainty and is used in many disciplines such as financial analysis, econometric, auditing, production and operations including services improvement, and marketing research.

Use of Statistics In Functional Areas

Accounting

cost of goods, salary expense, depreciation, utility costs, taxes, equipment inventory, etc.

Finance

World bank bond rates, number of failed savings and loans, measured risk of common stocks, stock dividends, foreign exchange rate, liquidity rates for a single-family, etc.

Human Resources

salaries, size of engineering staff, years experience, age of employees, years of education, etc.

Marketing

number of units sold, dollar sales volume, forecast sales, size of sales force, market share, measurement of consumer motivation, measurement of consumer frustration, measurement of brand preference, attitude measurement, measurement of consumer risk, etc.

Information Systems

size of memory, number of work stations, storage capacity, percent of professionals who are connected to a computer network, dollar assets of company computing, number of “hits” on the Internet, time spent on the Internet per day, percentage of people who use the Internet, retail dollars spent in e-commerce, etc.

Production

number of production runs per day, weight of a product; assembly time, number of defects per run, temperature in the plant, amount of inventory, turnaround time, etc.

Management

measurement of union participation, measurement of employer support, measurement of tendency to control, number of subordinates reporting to a manager, measurement of leadership style, etc.

Use of Statistics in Business Industries

Manufacturing

size of punched hole, number of rejects, amount of inventory, amount of production, number of production workers, etc.

Insurance

number of claims per month, average amount of life insurance per family head, life expectancy, cost of repairs for major auto collision, average medical costs incurred for a single female over 45 years of age, etc.

Travel

cost of airfare, number of miles traveled for ground transported vacations, number of nights away from home, size of traveling party, amount spent per day on nonloging, etc.

Retailing

inventory turnover ratio, sales volume, size of sales force, number of competitors within 2 miles of retail outlet, area of store, number of sales people, etc.

Communications

cost per minute, number of phones per office, miles of cable per customer headquarters, minutes per day of long distance usage, number of operators, time between calls, etc.

Computing

age of company hardware, cost of software, number of CAD/CAM stations, age of computer operators, measure to evaluate competing software packages, size of data base, etc.

Agriculture

number of farms per county, farm income, number of acres of corn per farm, wholesale price of a gallon of milk, number of livestock, grain storage capacity, etc.

Banking

size of deposit, number of failed banks, amount loaned to foreign banks, number of tellers per drive-in facility, average amount of withdrawal from automatic teller machine, federal reserve discount rate, etc.