Concepts_and_Terminology_of_Statistics_Applied_to_Business_Decision_Making

Introduction Company W, recently acquired by WidgeCorp, utilizes different management styles and decision making processes than their parent company. Within a year, Company W and WidgeCorp will merge all management, process and accounting functions. Company W will be expected to adopt statistical methods in presenting relevant information to the WidgeCorp executives rather than relying on the experience and judgment of their managers. To assist the marketing department, this report will suggest quantitative objects used in tracking callers of the 1-800 phone bank and/or their behavior with respect to the snack food category. It will also indicate whether the quantitative objects are continuous or discrete. Discrete and Continuous Variables Discrete variables are those which can assume a finite number of values such as integers or sets of states. Examples are items that can be counted, a yes/no response, and days of the week. Continuous variables are those with an infinite number of values such as scientific measurements and monetary items. Suggested Quantitative Objects A caller to the 1-800 call bank is most likely a current customer calling about a product or experience which leads to a somewhat biased sampling. If there is value in surveying existing customers, then the 1-800 call bank is a viable option; however, for a true random sampling, another data collection method targeting a wider population would need to be devised. Age is a major consideration in marketing discretionary items such as snack foods in order to target the most profitable demographics and to develop products and marketing strategies directed toward age groups not as inclined to purchase snack items. Age is a discrete data object subject to statistical analysis but not readily manipulated mathematically. The estimated amount of money spent on snack items weekly coupled with the age question asked above provides a direct link between demographic and product sales volume. The time period can be increased or decreased; however recalling the amount of money spent over more than a week would be difficult for the caller. Also, some callers may be embarrassed by the amount of money they spend and be reluctant to provide such information. In any case, the estimated amount of money spent weekly on snack items in the form described is a continuous variable. Finally, questioning callers of their preference to sweet or salty snack items provides product development with guidance in introducing new items and marketing with an indicator of which products may be preferred and marketed more aggressively. This is a discrete qualitative variable rather than quantitative, but it is significant in defining the preferences of callers towards snack products. Summary With the acquisition of Company W by WidgCorp, all corporate functions will be merged. Company W is not familiar with statistical methods used in presenting relevant information to executive management. To assist marketing, this report suggests three different questions that could be ask of callers to the 1-800 phone bank in order to monitor their behavior with respect to the snack food category. The report goes on to describe whether the data associated with the questions is discrete or continuous.