Statistics and Statistical Methods Key Terms

Understand statistical methods to help predict upcoming business trends in today's busy marketplace

Many businesses use statistical methods to help them predict upcoming trends in products so that they can keep up with customer demands in today's busy marketplace. There are statistical methods that relate to specific businesses and those which have more wide- range applications. It's important to know statistics and statistical methods key terms so you can be sure that you are applying the statistical application that best fits your business needs.

 

Data mining

Data mining, or knowledge discovery, is a statistical method in which users analyze data from various perspectives or angles so that they can then categorize it and look for patterns. These patterns help users to better predict upcoming trends and errors.
Try: Learn about data mining by reading the article at UCLA Anderson School of Management.

Trend analysis

Trend analysis is a statistical method that gives users the ability to take historical data and predict future income rises and falls for various businesses. For stock investors who want to determine rises and falls in the market, this is best the statistical method to use. Besides finance, this method predicts upcoming trends, including fashion and healthcare.
Try: Learn more about trend analysis at WiseGEEK.

Discriminant function analysis

Learn about the membership of certain groups and predict how these people will function in specific circumstances by using discriminant function analysis. This statistical method examines people by analyzing things, including gender, age and health, to determine how people will react to certain factors based on demographic information and comparisons.
Try: Explore the various uses of discriminant function analysis at StatSoft.

Factor analysis

When you collect and then analyze the information of a large number of variables, either with surveys or other means, and then create scores from the collected information, you are using factor analysis. You can use the collected information in further analysis. Once you gather this information, you will need to compile it and analyze it to determine future trends.
Try: Social Research Methods offers an introduction to factor analysis that explains its uses and applications.

Predictor variable

A predictor variable is a variable that you use to forecast outcomes based on gathered information. One example of this would be using weight charts to determine the possibility of health problems in obese individuals. Demographic information is one way of gathering predictor variable information to determine upcoming financial upswings and falls. Many law enforcement organizations use predictor variables to determine crime rates.
Try: Read the information about predictor variables and discover how they predict crime rates at Net Industries.

Business forecasting

Business forecasting uses business knowledge to create a consistent and reliable image that predicts future trends. With this information, businesses can make necessary adjustments in areas such as sales or customer care to ensure continued success. This statistical method can forecast revenue increases so that companies can better plan their financial futures.
Try: E-forecasting.com provides information detailing how you can use business forecasting. It explores the opportunity of using online resources to improve business forecasting.

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