Confidence Intervals

What are confidence intervals and levels?

A confidence interval gives the percentage probability that an estimated range of possible values in fact includes the actual value being estimated

What are confidence intervals in business

• Businesses benefit from the use of statistics in estimating or predicting future events

• A confidence interval helps a business evaluate the reliability of a particular estimate

• Because no estimate can be 100% reliable, businesses need to know how confident they should be in their estimates and whether or not to act on them

What is quality management in confidence intervals?

• Percentage reliability of machines

• The chance that quality control samples will detect issues

What is market research in confidence intervals?

• Statistical estimates for sales forecasting

• Reliability of data from customer surveys

What is risk management and contingency planning in confidence intervals?

• Risks of sales forecasts not being achieved

• Scenario planning for competitor actions

What is budgeting and forecasting in confidence intervals?

• Likely range of revenues and costs based on key assumptions

• Sales forecasts to support new product launches