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Statistics and Probability in Business

Handy Hydraulic Industries is doing well after many changes in the corporate and operating structure. However, the managers know that one needs to excel to sustain in the current environment of cut-throat competition. For excellence, a business needs to evolve and execute a multipronged strategy targeting different aspects of performance and customer relationship. The aim is to become leaner on operating size to cut cost without compromising the expectations of customers. For this, the managers of business need to make informed decisions and the information has to be derived from nowhere but from the data relevant to the business. It is here that statistics and probability come to help them. Statistics is the branch of knowledge that processes data to discern hidden information, reveal patterns and extract executable results [1]. One can get a lot of information by simply arranging data in frequency and relative frequency tables [2]. One can get a good idea of central tendency and dispersion of the data set. The organized dataset can also be represented pictorially as histograms, line charts etc. It is said that a picture is worth a thousand words. This is because. even a person with common sense can see the patterns and trends in the data if the same is presented pictorially using the suitable chart. Besides, statistics provide different parameters like mean, median, mode etc. to measure central tendency of data [3, 4]. But knowing the merely central tendency of data is not good enough to describe a dataset. one needs to quantify the dispersion of the data points around the central value [5]. This is done by means of different parameters that quantify dispersion of data points around the mean like variance, standard deviation, the coefficient of variation etc. After describing a data set comparing different data set is also important. For this one needs to compare the values of mean and standard deviation etc. Using these values one can calculate the value of suitable statistics and then this value is compared with the critical value of statistics for a given significance level.