Pareto Analysis

Pareto Analysis: When faced with a range of issues, it is often difficult to know which to work on first. To resolve this problem, the most useful thing to do is to apply Pareto's rule. It can be described as the 80/20 rule applied to quality-control.  The 80/20 rule was originally formalized by Vilifredo Pareto, after studying the distribution of wealth.  He noticed that about 80% of wealth was held by about 20% of the population. Several...

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Inaccuracies in Data

How and Where Mistakes Arise: The only way to avoid mistakes is, of course, to work carefully but a general knowledge about the nature of mistakes and how they arise helps us to work carefully. Most mistakes arise at the stage of copying from the original material to the worksheet or from one worksheet to another, transferring from the worksheet onto the calculating machine or vice versa, and reading from mathematical tables. It is a good idea...

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Exploring of data

“Garbage in, garbage out“ is the rule of data processing. This means that wrong input data or data with serious flaws will always leads to incorrect conclusions, and often, incorrect or harmful actions. In most of practical situations, it is hard to get good basic data, even in simple, non controversial situations and with the best of intentions. With the available basic data, the job of its processing, statistician needs help of various computing equipments such as computer, calculator and mathematical tables etc. Due to the limitations of computing...

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A Statistical-Why?

Q1. Why do we study samples when we want to know about populations?Samples that representing the population are preferable because:Cost: Cost is one of the main arguments in favor of sampling, because often a sample can furnish data of sufficient accuracy and at much lower cost than a census.Accuracy: Much better control over data collection errors is possible with sampling than with a census, because a sample is a smaller-scale undertaking.Timeliness: Another advantage of a sample over a census is that the sample produces information faster. This...

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Statistics behind A/B Testing

A/B testing is one of the primary tools in any data-driven environment. A/B Testing lets you compare several alternate versions of the same reality simultaneously and see which produces the best outcome. It’s basically testing the effectiveness of different designs to find the optimum solution. These tests are usually performed on live realities with real users who are completely unaware of the test. A/B Testing is a way of conducting an experiment...

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Statistical Concepts For Life

Statistics provides justifiable answers to the following concerns for every consumer and producer:  - What is your or your customer's, Expectation of the product/service you sell or that your customer buys? That is, what is a good estimate for µ?  - Given the information about your or your customer's, expectation, what is the Quality of the Product/service you sell or that your customers buy from your products or services? That is, what is a good estimate for quality (e.g., σ, or C.V.)?   - Given the information about...

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Examination of Normality

Most of the parametric tests follow the assumption of normality. Normality means that the distribution of the test is normally distributed with 0 mean, with 1 standard deviation and a symmetric bell shaped curve. As the normal distribution is very important for statistical inference point of view so it is desired to examine the assumption to test whether the data is from a normal distribution. You can use a statistical test and or statistical plots...

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Recency Frequency Monetary Modeling (RFM)

RFM analysis is a technique used to group or segment existing customers based on historic behavior in the hopes that history can, with the right motivators, be caused to repeat or even improve upon its self. The acronym is short for Recency, Frequency and Monetary value and each of these measures aligns to one or more of the three methods of increasing revenue for a business. RFM is an effective process for marketing to your loyal customers...

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