The paper 'Business Decision-Making Issues' is a great example of a Business Assignment. Advantages of mean – mean make use of every value in the data and hence is considered a good representative of the data (Foster 2001). In addition, mean is the only measure of central tendency that best resists the fluctuation between different samples and is the most common measure of dispersion. Disadvantages of mean-mean are sensitive to extreme values/outliers especially where the sample size is small. As such, it cannot be a good measure of central tendency for skewed distribution. Advantage of the median – the advantage of the median is that it is not affected by very big and very small values. Disadvantages of the median- median may take a long time to calculate for a relatively large data set. The advantage of mode-this is the only average that can be used when the data is not numerical. The disadvantage of mode- there may be more than one mode while at other times, there may be no mode at all.
The mode may also not be an accurate representation of the data. c) Analysis of the data calculated above-both the mode and median of the net income was £ 45,000.
On the other hand, the mean of the net income was £ 47,055.56. This is an implication that mostly HMV earns an income of between £ 45,000 and £ 47,000. d) Conclusion about net income- HMV mostly earns an income $45,000-$47,000. Thus, the company ought to plan with these figures in mind. 2.3 a standard deviation 16632.61 b) Standard deviation is important in showing how individual year’ s incomes deviated from the mean income for the business. As such, the business will use this information to establish reasons why income in some years deviated more than the standard deviation (Josphine 2011).
This will help establish the risks that the business is exposed to and hence take steps aimed at reducing the risk and solving the causes of deviation hence ensuring that the business performs better in the future. c) The range about the mean within which approximately 95% of the net income values fall. We use excel for this calculation The range is46, 809.72- 47,301.39 The interquartile range of the net income data 22000 25000 30000 35000 34000 Lower quartile 34,000 38000 40000 45000 45000 Median 45,000 45000 50000 52000 55000 56000 Upper quartile 56,000 60000 62000 65000 90000 Interquartile range 22,000 80th percentile Total numbers 18 80th percentile 14.4 is 14th number which is 56000 2c) Explain how HMV may use quartiles, percentiles, and correlation coefficient to draw useful conclusions for the business. The business may use the correlation coefficient to determine whether there is any relationship between the company’ s revenue and advertising costs.
If it is established that such a relationship exists, then the company can increase the allocation of its resources to advertising in a bid to increase revenue. On the other hand, the percentiles and quartiles will help the company in increasing its revenue generation efforts so that it can perform a certain level of profitability.
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