Introduction
Statistical analysis is very vital to every organization as it shows where a company is coming from and where it heading to thus helping it to strategize in order to increase its profitability. The prices of gas have been on the rise in the recent past and it has become very difficult for the consumers and the suppliers to predict the future performance of the gas prices. It is very important for any party involved in the supply of gas to carry out a statistical analysis of the gas prices and also determine the reaction of the consumers. This will help in determining the amount of stock that needs to be maintained so that the profitability of the company is not affected. Statistics can be defined as the mathematical or scientific study of data. It is practically impossible to analyze large pieces of data quickly. Therefore a small sample of data has to be used which indiscriminately describes the overall set of data that is to be represented (Ziliak, Stephen, McCloskey and Deirdre, 2008). The statistical analysis mainly involves studying some given data and using it to resolve issues facing a business from time to time. This project will help the company plan for its future deliveries and also help it in devising ways of improving its profitability.
Statistical analysis is important as it helps in obtaining accurate results with some significance that can help the company maintain and improve its productivity. If a business relied on guesswork, things can on the other hand backfire and this can lead to some undesirable circumstances like losing the business or a sharp drop in the profitability of the business. Statistical analysis can also help the business establishment to get immediate feedback from the customers thus enabling the business establishment to make the necessary adjustments in order to improve customer satisfaction and customer profitability hence ensuring that the business becomes more productive hence remaining in existence.
The data used in part I of this study was obtained from http://data.bls.gov/cgi-bin/surveymost?ap. This data shows the price of gas from 1982 to 2011 march. This set of data shows how the price of gas has been fluctuating over the years. The price of 1 gallon of the gasoline hit a record high of 3.26 in 2008. This was attributed to the economic down town or the global financial crisis of 2008 when the production of oil reduced drastically while the demand remained the same (Siu, 1996). The price however dropped later on in 2009 but has been on the rise in the recent past between January 2011 and March 2011 when this data was collected. The progressive rise in the costs of gas is attributed to the ever increasing cost of production and the fluctuation in international markets. There was some relief in the price of gas in 2009 when the war against terrorism took a different direction after the change of guard in the US presidency. However, the governments of different oil producing countries have not been able to caution their citizens about the escalating gas prices. Carrying out statistical analysis on the price of gas, plays a very important role in preparing the citizens for even tougher economic times.
According to the above statistical analysis carried out, the price of the gas has been on the rise since 1982. However in 2008, it shot higher than the trend used to be. Later on in 2009 the price dropped and then started rising again. Most companies that produce oil have been affected in a number of ways due to the high cost of production and the increase in the cost of living. Therefore they have to raise the wages of their workers. Once the wages have been raised, the companies have to recover the extra expenditure from the final consumers hence the reflection of high prices offered per gallon of gasoline. The information obtained from the graph is very important as it helps the company to predict on the future prices of gas thus cautioning both the consumers and the company to take the necessary actions so that they are not caught by surprise by the escalating gas prices.
Conclusion
Statistical analysis is very vital and it helps companies to determine their progress record and know whether a given business is viable and sustainable or not. The prices of gas have been on the rise and carrying out a statistical analysis on the price can help the company to determine the possible price of the gas in future. This can also help the consumers prepare for their future expenditure and consumptions. Once there is a proper plan, the consumers may not feel the hit since they shall have prepared adequately. Statistical analysis also helps the company to prepare their inventory management and determine on what amount of gasoline to stock. This helps the company not to run short of their stock and also avoid overstocking. This helps in obtaining the optimal performance of the business. Statistical analysis is therefore very important for any organization as it help organizations to increase on their profitability.
References
1. Ziliak, Stephen, and McCloskey, Deirdre, (2008). The Cult of Statistical Significance: How the Standard Error Costs Us Jobs, Justice, and Lives., University of Michigan Press
2. Thompson, Bruce, (2004). The "significance" crisis in psychology and education. Journal of Socio-Economics, 33, pp. 607–613.
3. Chow, Siu L, (1996). Statistical Significance: Rationale, Validity and Utility, Volume 1 of series Introducing Statistical Methods, Sage Publications Ltd,
4. Kline, Rex, (2004). Beyond Significance Testing: Reforming Data Analysis Methods in Behavioral Research Washington, DC: American Psychological Association.
