Skip to main content

The Importance of Statistics in Business Decisions

Toppr
 

I think another subject worth talking about is statistics. I found it stupid (back then) that economics and statistics were only taught in fourth-year high school under the K+10 curriculum. The statistics subject was meant to teach how to process data in the term paper. College came and statistics was a subject that was required in both computer courses and commerce courses. Business calculus was also a common subject. I wanted to think about how I took statistics subjects during my undergraduate days and graduate school days. I would believe I had a total of nine units of statistics. 

Statistics would be defined as follows:

Statistics is a branch of applied mathematics that involves the collection, description, analysis, and inference of conclusions from quantitative data. The mathematical theories behind statistics rely heavily on differential and integral calculus, linear algebra, and probability theory. Statisticians, people who do statistics, are particularly concerned with determining how to draw reliable conclusions about large groups and general events from the behavior and other observable characteristics of small samples. These small samples represent a portion of the large group or a limited number of instances of a general phenomenon.

The two major areas of statistics are known as descriptive statistics, which describes the properties of sample and population data, and inferential statistics, which uses those properties to test hypotheses and draw conclusions.

So far, I enjoy writing about the application of calculus in business. However, data gathering is required before a single principle of mathematics is ever executed. The first thing I associated with statistics is the questionnaire. The scientific method involves observation, question, hypothesis, experimentation, conclusion, and result. One of its pioneers was Sir Francis Bacon. In short, statistics is really needed in the scientific method. Data is gathered in every step from observation to the results.

I would think about how statistics' known important areas are (1) state decisions, (2) economics, (3) business management and industry, (4) social and natural sciences, (5) biology and medicine, and (6) research (the most common thing I associate with it). Research would be wrapped around the first five things mentioned. You do research and get data to determine any crucial decision. For example, business calculus requires every data before the slightest derivative or anti-derivative is written. All these data are used in every aspect such as marketing, managerial, technical (which is research and development), and financial. All of these require empirical data (whether descriptive or inferential) to decide on everything.

Good examples of statistics' applications are in making a feasible study and human resources. A feasible study must find whether or not a market is worth entering into with a sample size of 95% accuracy and 5% error. There are some methods known as convenience sampling, random sampling, and purposive sampling. Linear regression analysis will help evaluate trends and forecasts to reduce losses as much as possible. Human resources may benefit from chi-square to compare observed results with observed results. Human resources might need to know their opinion about their managers and supervisors to see if anything needs to be done. These are but a few examples. Take note that I'm not a statistician.

Hotel & Restaurant Management (HRM) which was once regarded as a "loser course" has statistics in the course prospectus. I remembered how HRM students can be seen in group-study to discuss about their statistics exams. The HRM students didn't only have to take economics, accounting, and business calculus. Statistics is also very much required since it takes a lot of good statistics to make a good dish, to determine the peak seasons of hotels and restaurants, and everything related to nailing a good profit. 

I think statistics, like economics, also needs to be taught in middle school. I still feel so stupid (until now) when I realized that I didn't understand the role of economics and statistics until I entered college. It practically leaves people clueless when they just study maths and economics just for the grade. What's needed is not just to teach statistics but also how to do statistics in both middle school and high school. Every sound decision is made with statistics on hand, right? 

References


"Statistics" by Jim Chappelow, reviewed by Thomas Brock, fact-checked by Katrina Munichiello (Updated: March 4, 2022)
https://www.investopedia.com/terms/s/statistics.asp

Labels:

Popular posts from this blog

#SahodItaasPresyoIbaba Economics' Understanding of How Gasoline Prices Work

International State College of the Philippines Today is Flor Contempacion Day , and rallies are expected. However, whether it's Flor's death anniversary or not, rallies are expected for the wrongest of reasons. I would like to address this photo from the International State College of the Philippines' Facebook page. The demands here are rather clunky and stupid. We have the following demands that would naturally clash with each other, such as: No to the oil deregulation law while demanding lower oil prices. This is simply ignoring the basic fundamentals of economics, namely the law of supply and demand . They say that oil companies are greedy for gain. These rallyists probably don't really understand the difference between revenues and profits . Let's understand the Oil Deregulation Law  The Oil Deregulation Law, or the Republic Act No. 8479 , passed on February 10, 1998, under the late Fidel Valdez Ramos. Here's how the liberalization works: CHAPTER II  LIBERAL...
Read more

Does the Grades-Over-Learning Approach Contribute to Students Hating Mathematics?

Schoolessons Some time ago, I wrote about why I used to hate school . The big problem has to be that the education system cares more about grades than learning . A good grade is indeed a sign of good character. A good grade is only good if it is achieved without cheating. However, for a grade to be really good--I believe that it must spring out from learning . However, the education system has been so focused on grades over learning that students end up cheating as a result (read here ). It affects every subject since a faulty system is a faulty school of thought. I'm going to really point out that I hated school because of the grades over learning approach. It's always all about grade shaming and even the best teachers end up indirectly or inadvertently participating in it. I still remember two of my best strictest teachers. One was as stern as the late Miriam Defensor Santiago. Another was the reason why I never dropped out.  This time, I'd like to focus again on mathemat...
Read more

"Will #SahodItaasPresyoIbaba Economics Lower Philippine Gas Prices?

Inquirer Gasoline prices have increased again, haven't they?  A few days ago, I wrote  why #SahodItaasPresyoIbaba's view of gas prices is questionable . Today, I feel like writing this after several complaints on Facebook. I would like to create a follow-up post. People are complaining too much without understanding the real reason why some countries have lower prices of gasoline. Real talk. We need to talk about economic policies,  and  of course, please do a study on supply-demand analysis  on supply chain management . Let's examine the complaints made by Bulatlat Bulatlat Here's a chart from Bulatlat that compares the increase in prices of gasoline between the Philippines, Thailand, and Malaysia. It's always problematic when people ignore simple economics. It's funny, but Bulatlat mentions this on their website: Note also how expensive our diesel and gasoline products are compared to those of our ASEAN neighbors. The estimated common price today of diesel in...
Read more

Is Jollibee "Invading" South Korea Now as It's About to Acquire 70% of Shabu All Day?

I must confess that I find this new rather hilarious . It's because the word shabu is often associated with drugs. All the while, shabu shabu is a Korean delicacy! Well, I'm going to say that Jollibee Foods Corporation has now become a multinational buyer . Jollibee acquired 70% of Compost Coffee back in 2024 . This year, Jollibee as a multinational corporation is now acquiring Shabu All Day for PHP 5.1 billion pesos. Is Jollibee checkmating South Korea or is the Philippines conquering South Korea not just by OFWs but als through Jollibee? The answer is still no. From GMA News , we can read this article by Jon Viktor D. Cabuenas: Under the deal, Shabu All Day will be consolidated into Jollibee Foods Corp.’s (JFC) financial statements immediately upon completion of the acquisition for a total consideration equivalent to KRW127 billion. Completion of the transaction is subject to closing and financing conditions. The acquisition is expected to lead to a 2% jump in revenues, incre...
Read more

Are We Teaching Math in School... Wrong?

Schoolessons I could remember hating math while growing up. I actually and frequently had a vicious cycle that went like this--(1) I hate math, (2) I don't study math because I hate it, (3) I'd rather play video games or watch TV than study and practice math because I hate it, (4) I fail math exam because I didn't study, (5) it's always I hate math because I believe I'll never get it. In fact, I even felt like I wanted to quit school altogether and get into a fight with my parents because of math. It was a vicious cycle hard to break from, especially during our K+10 days. I remember being enrolled in Kumon classes for the summer when I was approaching Grade 6 (graduating year), I almost didn't graduate because of mathematics, and I had to have tutorials. I always felt math sucked, I'll never get good at it, and I'll never get better. I just kept thinking how "I hate math!" was my mantra and hating people who were better in the subject than I am...
Read more