Applications in Business and Economic Statistics: Some Personal Views

Abstract

Statistical methodology has great potential for useful application in business, but that potential is seldom realized. However, companies are increasingly exploiting simple statistical tools in quality and productivity improvement and developing "company cultures" congenial to effective use of statistics. Statistical and probabilistic thinking is essential for sound decision-making. Only with understanding of statistical variability can managers distinguish special from common causes of variation, intelligently direct efforts to improve processes, and avoid the tampering that can make processes worse. Statistics can be used most effectively in business when many employees--"parastatisticians"--have some grasp of statistical tools and thinking. Fortunately, there is evidence that very elementary tools suffice to make rough-and-ready studies that can illuminate most business problems and facilitate most decisions.