The process of translating data into valuable insights is referred to as business analytics. For better business decisions, data management, data visualization, and data mining business analytics are used. Business analytics heavily depend on statistical tests and quantitative operational analysis. Data visualization is used then to present the findings and shape the business decision as the result. Business analytics is a field that needs both technical background and communication skills to present data. Statistics and business have important links, statistical formulas, and tests such as the t statistic formula is used in business analysis. We can find test statistics using the test statistic calculator at https://calculator-online.net/test-statistic-calculator/. Calculator online.net is a website where many mathematical calculators are available for ease of use for students and teachers. Not only mathematical but health and informative calculators are also available.
Business Analytics
Business analytics is all about
- Identifying a new pattern and relationship with data mining
- Using statistical and quantitative analysis to design a business model
- Conducting A/B and multivariable test on finding
- In industry trends and forecasting business need
There are many statistical tests like test statistic calculator are used in business analytics and mathematicians are paid for creating new tests for use in business analytics. Statistical analysis may assist businesses in more properly analyzing their data and expenditures, as well as identifying spending trends. Businesses might derive insights about prospective future expenditures or cost-saving ways to limit spending and minimize waste after precisely detecting this information.
Although there are many statistical tests in statistics here are three commonly used tests:
- t-Test
- Chi-Square test
- Kolmogorov-Smirnov Test (commonly known as K-S test)
Business analytics deals with averages, counts, or distributions the majority of the time. Using a test statistic calculator businesses can make better and informed decisions.
Usage of Statistics test
Here are a few examples where tests are used in business analytics:
Comparing average
T-test is used in comparing the average order value between two months to determine if statistically, they are the same or not.
Chi-square test
In A/B testing the number of sales from the test experience versus the control experience is compared. The test is conducted to determine which version generates more sales. In this comparison, a 2 x 2 chi-square test is used to compare the count of sales and non-sales from each experience
One more example of a 2×2 chi-square test is A/B testing in which the number of errors generated from process A vs. process B is compared. For example, an extra step QA is added in the production process and determines whether the error is reducing or not the test is used to find it.
Multivariable test
In business analytics, the A/B/C test is used in comparing the number of sales from a 3-way test to find which version generates more sales. In this case, a 3 x 2 chi-square test is used to determine the count of sales or non-sales from each experience. The chi-square can be generalized to any number N, using the N x2 chi-square test. This is a multivariate test typically difficult to perform.
K-S test
The KS test is used to compare two distributions. Count the number of days in the distribution of sales on Monday and then on Tuesday. Count the day’s sales 1,2,3 and so on till the number of sales on a particular day. The typical sales graph looks like Gaussian or Poisson for such a type of distribution. In this case, a two-sided K-S test is used to compare two distributions.
Conclusion
Mostly in business t-tests and chi-square tests are used more than the K-S test. Businesses often use t-tests and chi-squared tests practically because most business problems are reduced to averages or counts. It is difficult to find out the business problem in the distribution curve. Most businesses assume because two averages are the same the underlying processes generating averages are also the same. In reality, it is completely different. The test statistic calculator is an online tool that uses the statistic formula behind it. It provides ease in solving steps.
