Types of Variation – Essay Example
The paper "Types of Variation" is a great example of a statistics essay.
Variation is primarily an inevitable change in either the output or the results of a process or system. This is simply because all systems tend to vary over time. Regardless of whether the variation is common (inherent in a particular system) or special (caused by changes in situations or circumstances), variation would still influence the way we do things and make decisions with respect to the different aspects of the business.
When dealing with export and/or export businesses, for example, there are many variables involved: variables that could affect the profitability of the organizations directly. Exchange rates and the rates of inflation are examples of business variables that keep changing with time. These factors affect the profitability of any company since they affect the normal operations of the businesses variously. Other factors may include the costs of production, competition, and government policies (Chikkodi and Satyaprasad 15).
The differences of some of these variables between different time periods help any business organization evaluate its progress in attaining its objectives. Determining the inflation rates between time A and B could play a fundamental role in the decision-making process with respect to production. These two periods certainly have different production costs if the rates of inflation differ.
To determine whether the specific observed differences are important or not, it is prudent to, first, analyze if the changes have a significant impact on the business’ bottom line. This can be facilitated by using the mean difference test, which involves the use of t-test statistics to determine whether or not there exists a significant difference between the two sets of data compiled from different time periods. Assessing the impact of such variation or change on the core objectives of the organization would ease the decision-making process.