Business Statistics Made Easy in SAS

Step 2: Financial Estimates of Revenue or Cost of One Unit

“Show Me the Money”

In order to assess the financial implications of a statistical procedure, you usually need to translate a focal variable or relationship into either revenue or cost. Usually, the first step is to calculate the revenue or cost implications of one unit of a focal variable. For instance:

1. Perhaps the dependent variable in a statistical analysis is employee turnover. If you knew the average cost of a single employee turnover, then you could calculate the overall cost of all turnovers this month (the level of the variable). Alternately, if you think you can reduce employee turnover by a certain percentage through management interventions (a change analysis probably ...