Question

Business owners like to know how their decisions will affect their business. Before making decisions, owners may explore the benefits of hypothesis testing. By making such tests, they can have more confidence in their decisions. One example is Joe Smith who is testing to see whether the company's gym shoe will have a significant difference on weight loss. If the company markets this shoe and finds that it does not cause weight loss as expected, they may want to consider their marketing strategy or dropping the campaign all together. What is a scenario of how hypothesis testing can be used in the business world

Answer 1

Hypothesis testing can be used as a way to test variables that will directly affect the outcome expected by a company. Through the statistical effect, it is possible to know the causes and effects that some management decision may affect the results and then the decision making happens more effectively, because the hopesis test is a sampling of a possible real scenario, because it uses real data, and thus opens room for correction of flaws and adequacy of the marketing strategy.