Confidence Interval In Business

Confidence interval are extxemely valuable for any usability professional. A confidence interval is a range that estimate the true population value for a statistics.---Tom Tullis and Bill Albert

Business, like many other fields, can benefit from the use of statistics in estimating or predicting future events.An important tool for business statistics is confidence interval, which help a business evaluate the reliability of a particular estimate. Because no estimate can be 100 percent reliable, business must be able to know how confident how they should be in their estimate or whether or not to act on them.

Confidence Interval :- In statistics, a confidence Interval gives the percentage probability that can estimated range of possible values in fact include the actual value being estimated. e.g.a business might estimate that a machine uses 10 lbs. of plastic for each unit of a product created. Because the machine can not be expected to use precisely 10 lbs. Per unit, a confidence Interval can be created to give a range of possibilities. The company might predict that there is a 95 percent chance that the machine uses on average between 9.85 to 10.5 lbs. of plastic per unit.The confidence Interval in this example is 95 percent, and the likelihood that the actual amount of plastic used is outside the estimated range is 5 percent.

Marketing is an important function for most firms, particularly when estimating their level of future sales. A company will want to have an idea of how many products it will sell in a given financial period, but cannot know true number with certainity until after the end of the period.By collecting data from customers, past sales numbers and other sources, a company can statistically estimate the value of duty sale. By using a confidence Interval, the company can determine the range it's sales are likely to