use any data and answers those questions There are severalstores that or businesses that set these types of goals. Would thistell us an overall average? For example lets just say the salesgoal is 100,000 a month, this month 98,000 is sold that is clearlyless than the goal. However is that what the test tells us? Or doesit look at a long term average over several months? Why is itvaluable to know if the results are statistically signficant?
thank you
Did Sales Reach Target Value?
Business requires careful planning because storing goods isassociated with the additional costs. Thus, business sets monthlyrevenue goals, and understanding if the sales have reached themonthly revenue goal is important. Let us take a retail chain, andsuppose they have monthly revenues of the stores, and a certaingoal revenue.
In this case, the four-step hypothesis testing is as follows:
1) The null hypothesis suggests that the mean stores sale doesnot significantly differ from the goal value. The alternatehypothesis is opposite to null and it suggests that the differencebetween the mean stores sales and goal value is significantlydifferent (Triola, 2015).
2) The decision rule is set according to the significance level.For this case, we can set the significance level 0.1 because we donot require the highest precision. Thus, if the significance of thecalculated t-value exceeds 0.1, we do not have enoughevidence to reject the null hypothesis. Otherwise, we reject thenull and accept the alternate hypothesis (Ott, Longnecker &Draper, 2016).
3) At this stage, we calculate the test statistics using meanvalue, goal revenue, standard deviation of the mean (s),and the number of observations (n):
t=(Mean-Goal)/s/squareroot of n
.
Also, we obtain the significance of this t-value fromstatistical tables or statistical software. Afterwards, we comparethe value with the significance level (Triola, 2015).
4) The final step is interpretation of the statistical test for thereal life situation. If the test confirms the null hypothesis, thismeans that the mean stores sales are approximately equal to thegoal value. If the null is rejected, then the store chainunderperforms, which is an important information for the management(Black, 2017).
Therefore, in this problem t-test was used as a supportfor the decision-making process in management. It provides astatistical background for sales analysis of the store chain andprovides management with the valuable information about business(Black, 2017).
There are several stores that or businesses that setthese types of goals. Would this tell us an overall average? Forexample lets just say the sales goal is 100,000 a month, this month98,000 is sold that is clearly less than the goal. However is thatwhat the test tells us? Or does it look at a long term average overseveral months? Why is it valuable to know if the results arestatistically signficant?
