BTEC Level 3

Business - Unit 7
Business Decision
Making
B.3 - Techniques to Analyse Data Effectively for
Business Purposes
Learning Outcomes

1. Identify the three statistical measures that can be used by

businesses to interpret data
2. Calculate and interpret standard deviation for a given data
set
3. Analyse the uses of data analysis to make key business
decisions
4. Explore the use of three different statistical calculations
and how a business can effectively use them
Representative Values

Data gathered through primary and secondary sources must be

processed in order for it to be of use to a business. E.g. a business may
want to discover what devices a customer owns in order to make
marketing decisions in the future. A business will want to see the data
in meaningful terms such as a percentage.
Mean, Median, Mode

Mean - Adding all the values together and dividing by the

number of values present in the data set.

Median - Re-writing the values into numerical order, find

the middle pair of numbers, add them and divide by two.

Mode - Mode is the most commonly occurring value in

the dataset.
Calculations using Raw Data

Businesses may have 1000s of responses in a data set, meaning they will
have to use software to process this data in a meaningful way. Software
packages include;

Microsoft Excel - often used by small businesses, easy to create graphs

and charts

Sage - accounting software

Microsoft Access - often used by smaller businesses, used to create

databases.
Calculations using Raw Data
SPSS - SPSS is produced by IMB and is designed to be used to
process large datasets. It is sophisticated software that requires
substantial training.

Which software packages would be useful for the following?;

● School attendance monitoring

● National market research results
● Customer satisfaction scores for a large business
● Warehouse inventory management
● Sales data for a small ecommerce business
Using Results to Make Valid Conclusions
Through quantitative and qualitative research methods, a business can
gain an insight into the market they operate in. This will help a business
make key decisions going forward. What key data would the following
industries need to know about the market and their customers?

● Construction
● Food retail
● Electronics retail
● Streaming services
● Restaurants
Measures of Dispersion
Measures of dispersion helps a business to understand how the
data set is ‘spread’. This is important to consider when interpreting
data.

Spread = how much variety there is in the data set (close, spread or
anomalous)
Standard Deviation

Standard deviation tells a business how far the values in the dataset vary
beyond what is considered the norm. The larger the data set, the smaller
the deviation tends to be as there are far more values present in the data.
The formula for standard deviation is;
Typical Uses of Statistics
Stock Control - using data to identify trends will help businesses order
the correct stock at the correct time e.g. Strawberries during Wimbledon,
ice cream in summer, warm clothing in winter.

Businesses may use statistics such as weather forecasts to make decisions

on stock. E.g. a business may decide to run a promotion on disposable
BBQs if the weather for the upcoming month is set to become colder. This
allows the business to clear out stock that will remain in storage for a year
if not liquidated.
Calculations
Task - Businesses may use many calculations when interpreting
data. In small groups, research the following types of calculation
and explain how a business may use them effectively;

● Quartiles
● Percentiles
● Correlation Coefficient