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Statistics is used daily in business and is an important asset to the decision making process. There are two broad areas of statistics, one using known information the second asks for conclusions to be made from data collected. The role of statistics in the business decision-making process is inimitable. Examples can be found from the fortune 50 organization to the mom and pop shop on the corner.

Define Statistics

Statistics is the science of data. It involves collecting, classifying, summarizing, organizing, analyzing, and interpreting numerical information (McClave, Benson, & Sincich, 2011). Statistics can be broken down into two broad areas: descriptive statistics, and inferential statistics.

Descriptive Statistics is the utilization of numerical and graphical methods to look for patterns in a data set (McClave, Benson, & Sincich, 2011). Descriptive statistics takes known information about a phenomenon and organize it in a more convenient manner. A sample from a population is taken and this data is organized. An example of this would be taking a sample of student ages from the statistics class. Asking what age is the most common age would be an example of a descriptive type question.

The second area of statistics is inferential statistics. The text defines inferential statistics as the utilization of sample data to make estimates, decisions, predictions or other generalizations about a larger set of data (McClave, Benson, & Sincich, 2011). The inferential statistics uses data collected to form conclusions. After taking a sample of the students ages in the statistics class and asking are these ages what one would expect to see in the rest of the statistics class, would be an example of an inferential statistics question.

The Role of Statistics

Statistics play an important role in business and the decision making

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...Statistics in Business Statistics is a mathematical science pertaining to the collection, analysis, interpretation or explanation, and presentation of data. It also provides tools for prediction and forecasting based on data. It is applicable to a wide variety of academic disciplines, from the natural and social sciences to the humanities, government and business ("Statanalysis Consulting", 2013). Statistics is used in decision making that affects our everyday lives. The study of statistics is divided into two categories and has four levels of measurements. The two types of statistics are descriptive statistics and inferential statistics. Descriptive statistics is the organizing, presenting, and analyzing of data in an informative way. Inferential statistics is the methods used to estimate a property of a population on the basis of a sample. The four levels of measurements in statistics are nominal, ordinal, interval, and ratio. The first scale is nominal. The nominal level of measurement is the lowest level. Nominal data deals with names, categories, or labels. The next level is called the ordinal level of measurement. Data at this level can be ordered, but no differences between the data can be taken that are meaningful. The interval level of measurement deals with data that can be ordered, and in which differences between the data does make sense. The fourth and highest level of measurement is the ratio level. Data at the ratio level possess all of the features of the...

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