As a rule of thumb, we can think about most data being in a certain range, given the variability of the data. There are very few ten feet tall people, for example. But the assumptions of the normal distribution apply sometimes (heights) but not always. This is especially true in financial markets and gave rise to many books, including the Black Swan (the book, not the movie). Today, oil prices moved down, and when compared to the recent movements in the market, the change was over five standard deviations. Although it rarely happens, it happens all the time, because parts of the world are not normal.
Category Archives: business
Did you make a mistake when you chose your major?
Suppose you are a proud business major here at Emory. Then you read these two articles:
In the second article, the author states that since business is number 56 on the list, it is not a wise choice. There are a number of statistical problems with the implications of the two articles. Can you create a list of them?
Rankings
Here is the most admired companies list for this year. There are quite a few ways to set up the mechanics for the ‘scoring’ and there is not much in the way of confidence intervals in the article. Would the article be more or less effective if there were statistical ties in the rankings? How many ties would there be?
Here are the undergraduate business school rankings for 2010.
Tracking inventory, among other things
We all see barcodes in action at most retail stores, and the increased accuracy that technology allows in collecting sales information opened up all kinds of analysis. A newer technology, radio frequency identification (RFID) takes this one step further by putting a chip on the merchandise that can talk to computers. IBM has a commercial where a truck is lost and it stops at an IBM help desk in the middle of the desert. The drivers ask how the help desk person knew they were lost. She says “the inventory told us.” If the RFID tags know they are supposed to be heading east and they start going north, they could send out a “help us” message. Or a supermarket could tag everything, and when you go to the checkout, a computer could read all of the tags in your cart all at once. Cool, huh?
But one interesting part of technology is that the intended use and the actual uses often diverge. Here’s a company with an interesting application of RFID. Watch where you walk.
Business School naming
Most business schools that are ranked among the best in the country have been named after a significant donor. Tuck, Sloan, Wharton, Stern, Fuqua, Simon (my alma mater) among others. Of course there are the exceptions who have enough money to not need someone’s name — Harvard and Stanford, for example. Then there are schools with no name that could find wonderful uses for such a gift. UConn, for example.
Wisconsin has found a way to have it both ways, when a group of alumni got together to give the school $85 million to not allow the name to be changed. So it will be the Wisconsin School of Business, at least for the next twenty years.