An example of a business situation where the probability distribution may be utilized is a scenario where a manager attempts to predict employee retention. The statistical test would be a binary logistic regression analysis. The probability distribution is paramount to this example because it utilizes the dichotomous dependent variable of Yes/No (employee stays/employee quits). Independent variables that may be used to predict employee retention include education level, length of employment, age, income, and gender. The output from this statistical test may help a business manager screen individuals before employment to assess whether the individual may stay or leave for another position.

The majority of statistical tests use the normal distribution as a foundation. An example of a business situation that employs the attributes of the normal distribution is a supervisor who wants to assess spending habits between males and females in a retail store. The outcome of interest, or the...
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