Question

why knowledge of descriptive statistics are important in running a business? and how the understanding of them can increase a firm's profits?(100 words)

Answer 1

Descriptive statistics means to present the huge volume of raw data into a much simpler way so that we can easily visualize and interpret that acquired information. This is done with the help of statistical tools such as mean, average, etc, and graphs.

While running the business, the businessmen have to deal with an enormous amount of data and to be able to make proper decisions they need to extract meaningful information and then decide accordingly. For example, different programs of the business will have lots of activities and to properly monitor and make decisions throughout the process of these activities, descriptive statistics is very helpful.

As for the profits, it is obvious that if you can make sound decisions then you will be able to grasp the most advantageous opportunities to make your business grow and expand further.

For example, you are using descriptive statistics to monitor your sales and other related figures, whenever there is a change in trend, or a salesman is needed at a different store, or a store is facing some issues, you will be able to know them all in time and make sound decisions that will increase your sales and profit.