Regression analysis is a widely used statistical tool that helps determine correlation, that is, relationships between variables. In a more straightforward form, this analysis measures how much some factors or events affect others using available data on them. Variable, which is calculated by a regression analysis called dependent, and variables used to calculate, are independent (Ozyasar, 2019). It is important to note that the dependent variable can be only one, but the independent variables may include several. The analysis allows for identifying the most influential factors, recline not important ones, and determining how positive or negative the relationship between variables is (Choudhury, 2019). Moreover, such a tool allows for creating some predictions of the most likely consequences of specific actions. The analysis is a critical part of any business activity and success.
There are a few directions for the application of this tool for companies and organizations. Different areas of business use regression analysis to predict future trends and make the most profitable decisions (Ozyasar, 2019). For instance, manufacturers and stores calculate which products will be most popular among customers in a certain period. As part of forecasting and assistance in decision-making, regression analysis also allows for evaluating potential risks to the business (Choudhury, 2019). Another popular application is workflow optimization, where inefficient and outdated methods are replaced by more productive ones (Ozyasar, 2019). Finally, such analysis is used to understand the failures and mistakes of the company to create an opportunity to correct them in the future (Choudhury, 2019). Such ample opportunities that regression analysis provides make it a valuable tool for business.
Thus, regression analysis is a powerful statistical tool widely used in business. Using quantitative data on their activities, companies can track the correlation between different variables. The result of the analysis becomes the basis for making decisions, which will bring the most significant benefit to the business. The absence of analysis, in turn, will mean the activities of the organization at random and will lead to an early failure of activities.
Choudhury, A. (2019). Why regression analysis is the backbone for enterprises. Analytics India Magazine. Web.
Ozyasar, H. (2019). Application of regression analysis in business. Chron: Small Business. Web.