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Statistics in a Nutshell by Sarah Boslaugh, Paul Andrew Watters

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Chapter 17. Business and Quality Improvement Statistics

Many of the statistics used in business and quality improvement applications are those within the common repertoire of basic statistics, including the chi-square test (covered in Chapter 10), t-tests (Chapter 8), and techniques based on the General Linear Model (Chapters 1215). However, there are also a number of techniques developed for the specific needs of business and quality improvement applications, and those will be the subjects of this chapter.

Index Numbers

Index numbers are commonly used in business to measure the change in quantity or price over time for some good or combination of goods and services, and are often the data points used in time series analyses. One example is the Consumer Price Index (CPI), which represents the average price of a quantity of consumer goods and services believed to be typical household purchases in the United States. The U.S. CPI is calculated monthly by the Bureau of Labor Statistics of the U.S. Department of Labor and is used as a measure of inflation and to calculate cost of living adjustments for pensions and wages. Although many criticisms have been made of the CPI, it has proven highly useful as a summary measure of the average cost of living and allows comparison across historical periods and geographic areas. Many other countries also calculate a CPI or similar index, including Canada, China, Israel, New Zealand, Australia, and many European countries.

Calculation of indexes ...

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