Statistics in Practice Procter & Gamble (P&G) produces and markets such products

Question

Statistics in Practice

Procter & Gamble (P&G) produces and markets such products as detergents, disposable diapers, over-the-counter pharmaceuticals, dentifrices, bar soaps, mouthwashes, and paper towels. Worldwide, it has the leading brand in more categories than any other consumer products company. Since its merger with Gillette, P&G also produces and markets razors, blades, and many other personal care products.

As a leader in the application of statistical methods in decision making, P&G employs people with diverse academic backgrounds: engineering, statistics, operations research, and business. The major quantitative technologies for which these people provide support are probabilistic decision and risk analysis, advanced simulation, quality improvement, and quantitative methods (e.g., linear programming, regression analysis, probability analysis).

The Industrial Chemicals Division of P&G is a major supplier of fatty alcohols derived from natural substances such as coconut oil and from petroleum-based derivatives. The division wanted to know the economic risks and opportunities of expanding its fatty-alcohol production facilities, so it called in P&G’s experts in probabilistic decision and risk analysis to help. After structuring and modeling the problem, they determined that the key to profitability was the cost difference between the petroleum- and coconut-based raw materials. Future costs were unknown, but the analysts were able to approximate them with the following continuous random variables.

x = the coconut oil price per pound of fatty alcohol

and

y = the pertroleum raw material price per pound of fatty alcohol

The Industrial Chemicals Division thought that being able to quantify the impact of raw material price differences was key to reaching a consensus. The probabilities obtained were used in a sensitivity analysis of the raw material price difference. The analysis yielded sufficient insight to form the basis for a recommendation to management.

The use of continuous random variables and their probability distributions was helpful to P&G in analyzing the economic risks associated with its fatty-alcohol production. In this chapter, you will gain an understanding of continuous random variables and their probability distributions, including one of the most important probability distributions in statistics, the normal distribution.

Answer the following questions: The article states, "As a leader in the application of statistical methods in decision making, P&G employs people with diverse academic backgrounds: engineering, statistics, operations research, and business." Think of other real-world businesses that must surely utilize the skills of statisticians. Name at least two of these. Provide specific examples of how a statistician might assist the company.

Explanation / Answer

there are so many business organizations where statisticians can work like Agriculture, Health etc.

The main work of a statistician is to reduce the loss and give a model which maximize profit or minimize loss.

a statistician is a decision maker in bases of past experience. he forecast the decision and predict them for future

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