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Introduction
Population: A population is the collection of all items or elements of interest in a
particular study about which we wish to make an inference. A population always
be defined in terms of its content, units, coverage and time of reference.

If we want to study the average height of the male students of Leading

University in a given year, then the totality of all male students in that year forms a
population.

Finite population: The population which has definite number of units and definite
identity and is available in a specified locality is known as finite population.

Example: Students of leading University, People living in Banani area of Dhaka

city.

Infinite population: The population which has no definite number of units and
which is not confined in a specified area is known as infinite population.

Example: The fishes in Bay of Bengal, The animals in Sundarban, The birds of a
city.

Population size: Population size refers to the total number of units contained in a
population. Population size is usually denoted by "N".

Sample: A sample is a subset of population. It should be representative of the

population. A sample may be drawn from a population one by one with
replacement of each unit after each draw, or without replacement.

Example: Suppose, we want to select a team of 20 students from 200 students in an

MBA program for participating in a management quiz. The total number of
students 200 is the population and 20 students selected for the quiz is the sample.

Sample size: Sample size refers to the total number of units contained in a sample.
Sample size is usually denoted by "n".

Random sample: A sample is called a random sample if all possible samples of

this particular size have the same probability of being chosen or selected.
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Parameter: Parameter or population characteristic is an unknown quantity in

population for which we want to have a measure or a value.

Example: We want to have some idea about the income level of a particular class
of people. Then the average income of this entire class of people is called a
parameter.

Statistic: Any function of a set of sample values in known as statistic. It is used to

make inferences about the population parameter.

Let x1 , x 2 ,......, x n are characteristics of 'n' sample collected from a population. Also
let, any function of the elements of a sample T = g ( x1 , x 2 ,......, x n ) . Hence T is called
statistic.

Example: T1 = x = ∑
xi
, T2 = ∑ xi , T3 = ∑ ( xi − x) 2 etc. are statistic.
n

Estimator: An estimator is a statistic which is used to estimate population

parameter. Estimator is a random variable which varies from sample to sample.

Example: Sample mean x = ∑

xi
is an estimator of population mean µ.
n

Estimate: Any particular value that an estimator takes for a particular sample is
called an estimate. Sample mean x = 50 (say) is an estimate for a particular sample.

Variable: A variable is a characteristic, often but not always quantitatively

measured, containing two or more values or categories that can vary from person
to person, object to object or from phenomenon to phenomenon.

Example: The number of defective items produced in a factory.

Constant: The term constant refers to a property whereby the numbers of a group
or category remain fixed and do not differ one from another.

Example: (i) The number of wheels of rickshaw.

22
(ii) The ratio between circumference and diameter (π = ) of a circle.
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Types of Variable:

1. Qualitative Variable: A qualitative variable is one of for which numerical

measurement is not possible.

Example: (i) Hair color (Black, White, Brown) (ii) Religion (Islam, Hindu,
Christian)

2. Quantitative Variable: A quantitative variable is one for which the resulting

observations are numeric and thus possess a natural ordering.

Example: Height, Weight, Family size, Age, Number of accidents etc.

Quantitative variables may be further classified as:

1. Discrete Variable: When a variable can assume only the isolated values, then
the variable is called discrete variable. Note that the possible values of the variable
are countable and separated from each other.

Example: (i) Number of children in a family (1, 2, 3, 4 …… …)

(ii) Number of motor accidents in a city per day during January

(iii) Size of shoes in a shop (13.5”, 14.8” ………)

(iv) Size of floppy disk (3.5”, 5.25”… … …)

2. Continuous Variable: A variable is continuous, if it can theoretically assume

any value within a continuous range or ranges.

Example: (i) Height of a person.

(ii) Temperature of human body (94 0 F − 108 0 F ) .

Statistics: The word “statistics” is very popularly used in practice. By statistics

we mean aggregates of facts affected to a marked extent by a multiplicity of
causes, numerically expressed, enumerated or estimated according to reasonable
standards of accuracy, collected in a systematic manner for a pre-determined
purpose and placed in relation to each other.
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According to R. A Fisher (1947), the science of statistics is essentially a branch of

applied mathematics, applied to observational data.

Croxton and Cowden (1948), defined statistics as the subject of collection,

presentation and analysis of numerical data.

As Yule and Kendal (1950) opined, statistics means quantitative data, which are
affected to a marked extent by multiplicity of causes.

N.B: Facts and column of figures, about any phenomenon- whether it relates to
population, production, income, expenditure, sales, consumption, per capital
income, imports, exports, share prices etc or any other quantitative measures of
phenomenon or events are called statistics.

Functions of Statistics: The following are the important functions of statistics

1. It presents facts in a definite form.

2. It simplicities mass of figures.

3. It facilitates comparison.

4. It helps in formulating and testing hypothesis.

5. It helps in predication.

6. It helps in the formulation of suitable policies.

1. It presents facts in a definite form: Numerical expressions are convincing and

therefore one of the most important functions of statistics is to present general
statements in a precise and definite form. Statistics present facts in a precise and
definite form and thus help proper comprehension of what is stated.

2. Condensation: Not only does statistics present facts in a definite form but it
also helps in considering mass of data into a few significant figures. In a way,
statistical methods present meaningful overall information from the mass of data.

3. Comparison: Unless figures are compared with others of the same kind they are
often devoid of any meaning.
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4. Formulating and testing hypothesis: Statistical methods are extremely useful

in formulating and testing hypothesis and to develop new theories.

5. Prediction: Plans and policies of organization are invariably formulated well in

advance of the time of their implementation. Statistical methods provide helpful
means of forecasting future event.

6. Formulation of policies: Statistics provide the basic material for framing

suitable policies.

Limitations of statistics: The following are the important limitations of the

science of statistics.

1. Statistics does not deal with isolated measurement: Not all quantitative data are
statistical. Isolated measurements are not statistical. Data are statistical when they
relate to measurement of masses, not statistical when they relate to an individual
item or event as a separate entity.

2. Statistics deals only with quantitative characteristic: Statistics are numerical

statements of facts. Such characteristics as cannot be exposed in numbers are
incapable of statistical analysis.

3. Statistical results are true only on an average: The conclusions obtained

statistically are not universally true; they are true only under certain conditions.
This is because statistics as a science is less exact as compared to natural sciences.

4. Statistics is only a means: Statistical methods furnish only one method of

studying a problem. They may not provide the best solution under all
circumstances.

5. Statistics can be misused: The greatest limitation of statistics is that it is liable to

be misused. Also statistics cannot be used to full advantage in the absence of
proper understanding of the subject to which is applied.
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Scope/Application of statistics in Business and Management: The following are

some major activities of a typical, large and progressive organization which would
indicate how statistics helps in the efficient discharge of various activities.

1. Marketing: Statistical analyses are frequently used in providing information for

marketing decisions. In retail stores, wholesale houses and sales departments and
manufacturing concerns, statistical records and analysis enable one to determine in
advance, at a small cost, much that would be very costly if determined by actual
experience.
2. Production: In the field of production, statistical data and statistical methods
play a very important role .The decision about what to produce, how to produce,
when to produce, for whom to produce is based largely on facts analyzed
statistically.
3. Finance: The financial managers in discharging their finance function (financial
forecasts, investment decisions under uncertainty) efficiently depend heavily on
statistical analysis on facts and figures.

4. Banking: In making loans, banks have to be particularly careful that they do not
lend too much money when business is dangerously inflated .In almost every
period of hand times some banks have failed because they did not correctly
analyzed the general business situation. Hence, the bankers use the objective
analysis furnished by statistics and then temper their decision.

5. Investment: Statistics greatly assists investors in making clear and valued

judgment in his or her investment decision in selecting securities which are safe
and which have the best prospects of yielding a good income.

6. Purchase: The purchase department makes use of statistical data to frame

suitable purchase policies such as from where to buy, how much to buy, at what
time to buy and at what price to buy.

7. Accounting: Statistical methods are also employed in accounting .The

accountant collects data on historical costs in the course of auditing company’s
financial records.

8. Credit: The credit department performs statistical analysis to determine how

much credit to extend to various customers.