Statistical Analysis Application in Business
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This research provides a case study of the application of statistical analysis in business management decisions. An assumption is made that the business in question is a household appliance retailer. The manager of the business is concerned because of reports that unemployment is increasing. The concerns are related to the effects rising unemployment may have on sales levels, and, in turn, how large a product inventory should be stocked. It was decided that a statistical analysis would be performed to assess the impact on durable goods sales of changes in the unemployment rate for persons 20 years old and older, and to project future changes in sales on that assessment. Inventory stocking level decisions, in turn, will be based on sales projections.STATISTICAL ANALYSIS PROCEDURES The principal statistical analysis procedure which will be used in assessing the relationship between changes in durable goods sales and changes in the unemployment rate is simple regression analysis. Data included in the analysis will be for the 1971 1990 time period, on an annual basis. Additionally, however, both two and three period moving average data will be calculated, and subjected to regression analysis, and both the base and moving average data for durable goods will be lagged one period, and subjected to regression analysis. The reason for using both moving average and lagged data, in addition to the basic data, is to determine which set of data combinations (basic, basic
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Both simple regression analysis and multiple regression analysis may be applied in the curve fitting process for moving average projections. As the number of past time periods included in a moving average projection is increased, the forecast produced becomes closer to the forecast produced through the use of arithmetic trend projection; thus, most projections relying on the moving average use only a fraction of the total available data.
The simple regression formula for the determination of a trend through the use of the moving average approach is the same as that for the determination of the arithmetic trend y = a + bx. The difference in the two approaches lies in the definition of b. In the arithmetic mean approach, b is the change in the variable value per time unit, which is determined for each prior time unit by comparing the value the dependent variable of one time unit with the value of the dependent variable in the immediately preceding time unit. In the equation, for the moving average approach, variable values for time periods are determined through the averaging of the predetermined number of time units. This, in this equation, b is still the change in the variable value per time unit; however, the deter
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Some common words found in the essay are:
ANALYSIS PROCEDURES, FORMULATED ANALYSIS, Unemployment Rate , , DURABLE SALES, RESULTS ANALYSIS, moving average, durable sales, unemployment rate, basic data, dependent variable, variable value, regression analysis, simple regression, lagged period, durable lagged, durable lagged period, UnemploymentRates Persons, unemployment rate persons, rate persons 20, simple regression analysis, statistical analyses research,
Approximate Word count = 1327
Approximate Pages = 5 (250 words per page)
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