Probability and statistics

Probability and statistics

The confidence interval is a statistical term that is used to describe the percentage probability of an estimated range of values. It creates a range of possibilities for a given outcome. Organizations are increasingly using the confidence interval in predicting the level of their future sales. Organizations conduct market researches to reduce risks, and as such, the range of possibilities provided enables the firms to establish the best option that will ensure that threats are averted. The relevance of this technique can be evaluated from how businesses use it and the challenge in its use

Apple is a U.S based company that uses the confidence interval, especially when launching a new product. They use the technique to estimate the average sales that they expect from a product TheCompany establishes the volume of sales that it projects from the sale of the given product through collecting data from customers such as the volume of past transactions. Through the confidence interval, the company can establish the range of its sales. The projections of the sales are possible because, assuming, that the company is 95% confident that its sales for the next two years are between four million and five million us dollars. It still creates the possibility that the sales might be above or below by 5%, and therefore, this enables the company to ascertain the likelihood of a given sale

A project from my working environment is the organization where I work. The confidence interval couldbe used to evaluate the number of extra workers needed daily, in case of more jobs. The company establishes the range of values which represent the number of people likely to be employed, and then from these values, it creates the percentage probability of using a given number of workers. One challenge is that a machine might fail, forcing the company to employ more workers, thus, conflicting the values that were earlier on established. The company must keep a record of such scenarios so that they can consider the numbers when calculating the values

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