Statistics Archives

Business Scorecard: Keep Your Business on Track

What is a business scorecard? How can creating a business scorecard help you monitor performance and stay on track towards your business objectives? A business scorecard offers organizations a snapshot of their current performance as benchmarked against their goals. Most companies rely instead on a P&L statement, but by the time you get it, problems have already occurred. With the business scorecard, you can see where you are and, if necessary, change where you’re headed. Here is how to create your business scorecard in five simple steps.

The Pareto Principle: Focus on Value Over Quantity

What is the Pareto Principle? How can focusing on the “vital few” instead of the “trivial many” help you increase productivity? The Pareto Principle, or the 80/20 rule, states that as little as 20% of your tasks and effort will account for 80% of your results. Before you start a task, ask whether it’s a top 20% task or bottom 80% task; only do it if it’s high-value. Keep reading for advice on how to implement the Pareto Principle in your own life.

Probabilistic Thinking Puts Everything in Percentages

What is probabilistic thinking? How do probabilistic thinkers approach problems differently from an average person? Probabilistic thinking is essentially an approach to predicting an outcome of a situation or the likelihood of a future event. Most people tend to estimate probabilities in terms of “yes” or “no” options. In contrast, probabilistic thinkers think in terms of percentages. Keep reading to learn about the psychology of probabilistic thinking.

IARPA Forecasting Tournament Results

What is IARPA? When was it founded and what was its purpose? The Intelligence Advanced Research Activity (IARPA) is an intelligence arm operating under the Office of the Director of National Intelligence. From 2011 to 2015, IARPA ran a forecasting tournament to identify forecasting professionals and gain insight into their methods. Read about the IARPA forecasting tournament.

Aggregation Statistics: The Power of Collective Data

What is the function of aggregation statistics? How does aggregating data from multiple sources influence forecast accuracy? Aggregation statistics combine data from multiple sources. Aggregate numbers are often used in forecasting to obtain a more accurate prediction. Read about aggregation statistics as it relates to forecasting.

The Challenge of Measuring Forecast Accuracy

How do you measure forecast accuracy? What are some challenges in evaluating whether a forecast is correct and to what degree? Given all the ways our brains can work against us, forecasting accurately is incredibly difficult. But evaluating an existing forecast’s accuracy in the first place presents difficulties of its own. Read about the difficulties of measuring forecast accuracy.

The MBO Process: How to Manage by Objective

What is management by objectives, or MBO? What is the MBO process? The MBO process lets you decide goals in advance, and then manage based on achieving those goals. The process ensures you meet milestones. Read more about the MBO process and how you can use it.

A Black Swan Event: Unpredictable or Improbable?

What is a black swan event? Are black swan events truly unpredictable or just highly improbable? A black swan event is an extremely rare and unpredictable event or occurrence that has major negative consequences. The concept is based on the idea that someone who has only ever seen white swans would naturally assume that all swans are white and would therefore be completely unable to predict the existence of a black swan. Keep reading to learn about the concept of a black swan event.

Species-Area Relationship: The Deadly Curve

What is the species-area relationship? How is it expressed in mathematics? The species-area relationship is the relationship between the area of the species habitat and the number of animal species that inhabit it. In 2004, scientists used the concept, which is expressed mathematically as a curve, to calculate the species extinction risk at different levels of global warming. Keep reading to learn about the species-area relationship.

Build to Forecast: Predict Demand & Plan Output

Why Soft Sciences Are Flawed and Good Solutions

What does build to forecast mean? How does it help with productivity? Build to forecast is one productivity strategy where manufacturers predict how many items they’re going to need, and build enough to satisfy demand. This is usually a reliable productivity strategy. Keep reading to find how how to build to forecast.