PROVIDE ANAYLSIS ON EACH HIGHLIGHTED SECTION STATISTICAL TECHNIQUE IN BUSINESS & ECONOMICS
1. Chapter 18 of Statistical Techniques in Business & Economics discusses time series and forecasting. Time series is simply the collection of data over a given period of time. This could be weekly, monthly, quarterly or annually (Lind, pg. 640). This data is important because the past trends tend to predict future trends, or allow businesses to forecast in just about every department. This is an important chapter to understand because it vital to any business. For example, you need to be able to predict demand so you can have enough supplies without having so much excess that you waste funds. Also, with higher demands, more staff will be needed. Right now we are in the process of setting goals for 2017, if we plan to meet these goals we will need additional staff to handle the increased patient flow.
STATISTICAL TECHNIQUE IN BUSINESS & ECONOMICS
2. In your post you mentioned how the past could predict future trends or allow businesses to forecast. I couldn't agree more that this is vital to a company as it tends to 'allow sufficient time for the procurement, manufacturing, sales, finance, and other departments to develop plans for new plants, financing, development of new products, and new methods of assembling,' (Lind, et. al., 2015, pg. 640). With this in mind, companies have to incorporate pricing for upgrades and maintenance of new machinery that would aid in producing better products. They also have to keep in mind the shareholders, stockholders, customers, and all others who have a hand in gaining or losing revenue in terms of manufacturing the new or improved products in terms of longevity and success.
Lind, D.A., Marchal, W.G. & Wathen, S.A. (2015). Statistical techniques in business & economics (16th ed.). New York, NY: McGraw-Hill.
STATISTICAL TECHNIQUE IN BUSINESS & ECONOMICS
3. Decision Theory is very important; however, many managers who did not have higher education might not even be aware of this concept.
Would you think that your learning about decision theory will help shape your managerial decision making ability? Why or why not?
STATISTICAL TECHNIQUE IN BUSINESS & ECONOMICS
4. Chapter 20 of Statistical Techniques in Business & Economics introduces Decision Theory. According to our text, "Statistical decision theory is concerned with determining which decision, from a set of possible alternatives, is optimal for a particular set of conditions (Lind, pg. 714)." Statistical decision theory looks at the financial implications of a decision as well as any alternatives that are present. These decisions have three elements including, alternatives, uncontrollable future events and payoffs to determine which is the best option. All of the data collected is then laid out in a payoff table for easier comparison. The advantage of looking at a business problem with the Decision Theory is that you are able to see the actual financial consequences of different scenarios instead of comparing means, or developing hypothesis testing and how they will affect your business.
Reference
Lind, Douglas, William Marchal, Samuel Wathen. Statistical Techniques in Business and Economics, 16th Edition. McGraw-Hill Learning Solutions, 01/2014.