TD-Central Tendency - TD-Central Tendency From a business...

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Unformatted text preview: TD-Central Tendency? From a business perspective, which measurement is more important the Mode, the Mean, or the Median? Provide examples (business related) that demonstrate the appropriateness of one of these measures and the inappropriateness of the other two in a particular situation. Can you think of situations where another one of the measures is more appropriate or relevant? In what I discovered within business statistics, the mean is most prevalent to use in calculating costs or price. It seems to be the most commonly used measure of central tendency. This is where we are talking about the average of selected data. The median is used only when seeking the middle, not the average, of a range of data points. Mode is the most frequently occurring value in the set of data. One business example I discovered is the cost analysis of patients within health care trials. A study was done called "Analysis and interpretation of cost data in randomised controlled trials." With the continuing development of new treatments and medical technologies, health economic evaluations have become increasingly important. For cost data, the crucial information is the arithmetic mean—that is, the simple average cost (the mean). This is because policy makers, purchasers, and providers need to know the total cost of implementing the treatment. This total cost is estimated as the arithmetic mean cost in the trial, multiplied by the number of patients to be treated. Measures other than the arithmetic mean (such as the median, mode, or geometric mean) cannot provide an estimate of total cost. Barber, J. A., & Thompson, S. G. (1998, October 31). Analysis and interpretation of cost data in randomised controlled trials: review of published studies. Retrieved August 7, 211, from British Medical Journal: ...
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