Business Application of Statistics

8/3/2019 Business Application of Statistics

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Business ApplicationBusiness Application

to Statisticsto Statistics


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Collection of methods for planningexperiments, obtaining data, and thenorganizing, summarizing, presenting,analyzing, interpreting, and drawing

conclusions.

What is statistics?What is statistics?


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1. Descriptive Statistics the organization anddescription of the characteristics of acollection of data.

Example: Mean, Median, Mode2. Inferential Statistics the use of descriptive

statistics to make educated guesses aboutsomething

The basic fallacies of inferential statistics: They assume that the past is prologue to the

future They assume you are going to test your inference

an infinite amount of times.

There are two main branchesThere are two main branchesof statisticsof statistics


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Statistics starts with a question, not withdata/information

Every time we use statistic to find the solution for aquestion.

Statistics are what decision makers can use to reduceambiguity by qualifying it.

Not enough to know Just enough for a better guessStatistics are born

All Statistics are based on data Data are what we hear, see, smell, taste, touch, etc.

Data requires measuring Good measurement gives good data Good data give better answers than bad data But all data will give you an answer

How Statistics Work?How Statistics Work?


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You start a business by looking at what isalready happening in the field or industryyou are interested in.

Business trends and statistics can give you a

quick, overall glance at the viability of anindustry

Statistics can be useful in helping you comeup with new business ideas, in developing

strategies and marketing campaigns Statistics is used either on a daily basis orperiodic.

Application to BusinessApplication to Business


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How is Statistics Applied inHow is Statistics Applied inBusinessBusiness


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BI Preparation Data Visioning

Data Discovery

Data Sourcing Data Cleaning

Data Mapping

Components of BusinessComponents of BusinessIntelligence and AnalyticsIntelligence and Analytics

BI Delivery

DataWarehousing

Data MiningReporting

Analytics

Data

VisualizationData Delivery


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To deepen relationships among customers.CRM

To provide closed-loop monitoring of sales programs.SMS

To monitor progress and contribution of individual employees.HRM

To improve loan portfolio quality.LMS

To increase supply chain efficiency.SCM

How is Statistics Applied inHow is Statistics Applied inBusiness: ApplicationBusiness: Application


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2. You identify variables.



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3. You formulate your hypotheses. Identifywhat particular issues at hand.



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4. Select the descriptive or inferentialstatistics applicable in your hypothesis.

On a daily basis descriptive statistics / analytics Periodic inferential Predictive Analytics



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5. Interpreting your results.



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1.Measures of Central tendency give you an estimate of aparticular data.

2.Frequencies, Cross tabulation, proportions count ofobservations

3.Growth and Cumulative Average Growth measurechange

4.Variance / Gap Analysis distance from an assigned value5.Rankings sorting of data from highest to lowest6.Trending analyze a pattern in the data7.Runrates simple forecasting8.Percent Share percent accounted for by a particular

entity / brand9.Cross Tabulation Frequency or value tabulation10.Graphical Reports Bar, Pie, Line, Scatterplot

Statistical methods how theyStatistical methods how theyare applied (day-to-day)?are applied (day-to-day)?


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Sales In Millions YTD SALES Runrate

Month 1 2000 2000 38400

Month 2 3000 5000

Month 3 1500 6500

Month 4 6000 12500

Month 5 4000 16500

Month 6 2700 19200

Month 7 /N a

Month 8 /N a

Month 9 /N a

Month 10 /N a

Month 11 /N a

Month 12 /N a

Annual Runrate = Sum ( sales to date ) x 12 /number of m onths to date


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QURTER LAST YEAR QUARTER THIS YEAR % GROWTH

, , .4 554 724 00 , , .4 231 450 00 - . %7 10

, , .2 394 016 00 , , .2 645 645 00 . %10 51

, , .3 115 583 00 , , .3 124 564 00 . %0 29

, , .6 322 128 00

, , .6 321 145 00

- . %0 02

, , .1 305 379 00 , , .1 245 311 00 - . %4 60

, , .2 259 809 00 , , .2 312 456 00 . %2 33

, , .4 210 979 00 , , .4 213 544 00 . %0 06

, , .2 405 733 00 , , .2 456 412 00 . %2 11

, , .1 844 086 00 , , .2 154 654 00 . %16 84

, .592 006 00 , .564 231 00 - . %4 69, , .7 603 971 00 , , .7 456 421 00 - . %1 94

, , .4 176 157 00 , , .4 215 464 00 . %0 94

, , .5 174 177 00 , , .5 321 451 00 . %2 85

, , .7 542 993 00 , , .7 521 451 00 - . %0 29

, , .53 501 741 00 , , .53 784 199 00 . %0 53

Growth = (current / previous) 1 x 100%


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1.ANOVA / MANOVA Market comparison, Brandcomparison

2.Chi squared distribution Association testingof Marketing Attributes, Analyze behavior

3.Multiple regression Measure the degree ofeffect of an independent variable to adependent variable

4.Forecasting Techniques used in demand

planning, supply and operations planning5.Exploratory Data Analysis market

segmentation, behavioral analysis

6.

Statistical methods how theyStatistical methods how theyare applied (periodic)?are applied (periodic)?

Business Application of Statistics

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