Statistics for Decision- Making in Business - Maricopa Community ...

Row Labels Average of Revenue ($) Max of Revenue ($) Min of Revenue ($) Range
New 5933 8861 3643 5218
Old 5681 9590 2230 7360
Grand Total 5750 9590 2230
We see that both company‟s tend to have about the same average purchase amount. However, it
appears that the amount spent by old customers is prone to more fluctuation than that of new
customers. This might be due simply to the fact that there are only three new customers.
Technology Note: All of the information above was generated using Microsoft Excel.
1.2.3 Inferential Statistics
Descriptive statistics is a great way to describe what you have, but how can we describe data that
we do not have
Let‟s consider an example. You are the manager of the production branch at Healthy Heart
Organic Foods. Due to recent workload increases, you are concerned that your employees‟ team
morale has decreased. You have 864 employees working in your department. You would like to
conduct a survey, but you do not have the means to investigate the data in each of the surveys
provided. Certainly, you could pay your assistant overtime to analyze them for you, but that
would be costly of his time and payroll. Instead, you decide to randomly survey 50 of the
employees in your department in order to get an idea of the overall morale. This process of
collecting data on a smaller portion of the whole in order to generalize to the whole is known as
statistical inference. This branch of statistics is called inferential statistics.
It is of utmost importance to make appropriate conclusions when reporting findings of any study,
a survey or an experiment. For example, if we find that rats die after ingestion of 20mg of
caffeine, does that mean caffeine will kill a human, as well This brings up the worthwhile
discussion of a population versus the sample. Let‟s consider the figure below:
Statistics for Decision-Making in Business © Milos Podmanik Page 17