123 School Work

Practical Applications of Statistics

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  Practical Applications of Statistics
  Introduction
        This paper will cover some applications of statistical concepts relevant to the business environment I am currently working in. I will discuss examples of (1) mean, mode, median, (2) standard deviation, and (3) binomial distribution.
  
  Mean, mode, median
  Mean, mode and median are three different ways to express an average value in a series of numerical data. A practical example can be useful to understand the difference among them.
  If we consider the following hypothetical salaries:
  
  John     $1,000,000
  Jack     $225,000
  Paul     $80,000
  Jim     $60,000
  Alan     $40,000
  Sam     $30,000
  Andrew     $20,000
  Jeff     $20,000
  Rudy     $15,000
  Brian     $10,000
  
  
  
  
  The calculation for the three types of averages yields:
  Mean     $150,000
  Median     $35,000
  Mode     $20,000
  
  The mean, median, and mode are so different because the salary distribution is not symmetrical. John and Jack earn sensibly more than their other colleagues. Therefore they greatly increase the mean income for the entire company (if they did not work here, the mean, median, and mode would be $34,375, $25,000, & $20,000 respectively). This kind of analysis can be useful, for instance, in evaluating layoffs, or in presenting data to stakeholders.
  Standard Deviation
  The standard deviation () is a summary measure of the differences of each value from the mean. The actual formula for standard deviation is:
  = square root [( x - m)^2 / N]
  Where m is the mean value, x is the variable under examination, and N is the number of samples we are considering...