ROLE

OF
TATI
TICS
BMITTED
O: MAM
BUSHRA
ANWAL

BMITTED
BY:
UMIYYA
QAMAR
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Assignment # 2

“Importance of Statistics in different fields, especially in "BUSINESS

ADMINISTRATION"

THE ROLE OF STATISTICS IN BUSINESS ADMINISTRATION

Statistics involves making decisions, and in the business world, you often have to make a quick
decision then and there.

Using statistics, you can plan the production according to what the customer likes and wants, and
you can check the quality of the products far more efficiently with statistical methods. In fact,
many business activities can be completed with statistics including deciding a new location,
marketing the product, and estimating what the profit will be on a new product

Statistical research in business enables managers to analyze past performance, predict future
business practices and lead organizations effectively. Statistics can describe markets, inform
advertising, set prices and respond to changes in consumer demand.

Descriptive analytics look at what has happened and helps explain why. By using historical data,
managers can analyze past successes and failures. This is also called “cause and effect
analysis.” Some common applications of descriptive analytics include sales, marketing, finance
and operations.

Predictive analytics uses a variety of statistical techniques (such as modeling and data mining)
to predict future probabilities and trends based on historical data. This goes beyond
reporting what has happened to create best estimates for what will happen. Some common
applications of predictive analysis include fraud detection and security, risk assessment,
marketing and operations.

Prescriptive analytics is the stage of determining the best course of action in a given business
situation. This includes knowing what may happen, why it may happen, and how to navigate it.
Constantly updating information changes prescriptive analysis, allowing managers to maintain
action plans for their organizations in real-time.

The Value of Business Statistics

By applying these two concepts to a company’s internal organizational metrics, business

statistics has the potential to improve the overall operations and success of an organization. It can
also play a role in maximizing a company’s talent.
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Professionals can apply statistical methods to analyzing employee productivity. By assessing the
data, an organization can implement methods to help individual employees become more
productive. For example, the data may reveal that an individual has difficulty meeting deadlines
on Fridays. The manager can then work with the employee on proper time management to
resolve this issue.

Organizations can also apply business statistics to enhance their financial position in the market.
Business professionals can work with accountants in applying statistical methods to identify
potential annual profits. They can also collaborate to use statistical data to develop quarterly
budgets that will keep the organization financially sound. By analyzing data relating to consumer
purchasing power, they can identify trends in the market. These methods can then be used to
forecast the demand for products based on the time of year.

Importance of Statistics in different fields

Statistics plays a vital role in every field of human activity. Statistics helps in determining the
existing position of per capita income, unemployment, population growth rates, housing,
schooling medical facilities, etc., in a country.

Now statistics holds a central position in almost every field, including industry, commerce, trade,
physics, chemistry, economics, mathematics, biology, botany, psychology, astronomy, etc., so
the application of statistics is very wide

Economics

 Economics largely depends upon statistics. National income accounts are multipurpose
indicators for economists and administrators, and statistical methods are used to prepare these
accounts. In economics research, statistical methods are used to collect and analyze the data and
test hypotheses. The relationship between supply and demand is studied by statistical methods;
imports and exports, inflation rates, and per capita income are problems which require a good
knowledge of statistics.

Mathematics

Statistics plays a central role in almost all natural and social sciences. The methods used in
natural sciences are the most reliable but conclusions drawn from them are only probable
because they are based on incomplete evidence.

Statistics helps in describing these measurements more precisely. Statistics is a branch of applied
mathematics. A large number of statistical methods like probability averages, dispersions,
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estimation, etc., is used in mathematics, and different techniques of pure mathematics like
integration, differentiation and algebra are used in statistics.

Examples of Statistics in Mathematics

Here are a few examples of statistics used in math:

 There is an 80% chance that in a room full of 30 people that at least two people will share
the same birthday.
 Find the range of the graph.
 Find the mean, median, and mode.

As you can see, some of these are basic mathematics skills you might remember from elementary
school.

Banking

Statistics plays an important role in banking. Banks make use of statistics for a number of
purposes. They work on the principle that everyone who deposits their money with the banks
does not withdraw it at the same time. The bank earns profits out of these deposits by lending it
to others on interest. Bankers use statistical approaches based on probability to estimate the
number of deposits and their claims for a certain day.

Bankers use statistical approaches to estimate the number of people who will be making deposits
compared to the number of people requesting loans.

State Management (Administration)

Statistics is essential to a country. Different governmental policies are based on statistics.

Statistical data are now widely used in making all administrative decisions. Suppose if the
government wants to revise the pay scales of employees in view of an increase in the cost of
living, and statistical methods will be used to determine the rise in the cost of living. The
preparation of federal and provincial government budgets mainly depends upon statistics because
it helps in estimating the expected expenditures and revenue from different sources. So statistics
are the eyes of the administration of the state.

Accounting and Auditing

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Accounting is impossible without exactness. But for decision making purposes, so much
precision is not essential; the decision may be made on the basis of approximation, known as
statistics. The correction of the values of current assets is made on the basis of the purchasing
power of money or its current value.

In auditing, sampling techniques are commonly used. An auditor determines the sample size to
be audited on the basis of error.

Natural and Social Sciences

Statistics plays a vital role in almost all the natural and social sciences. Statistical methods are
commonly used for analyzing experiments results, and testing their significance in biology,
physics, chemistry, mathematics, meteorology, research, chambers of commerce, sociology,
business, public administration, communications and information technology, etc.

Biology, physics, chemistry, meteorology, sociology, communication, and even information

technology all use statistics. For many of these categories, the use of statistics in that field
involves collecting data, analyzing it, coming up with a hypothesis, and testing that hypothesis.

In biology, the use of statistics within that field is known as biostatistics, biometry, or
biometrics. Biostatistics often involves the design of experiments in medicine, online pharmacy,
agriculture, and fishery. It also involves collecting, summarizing, and analyzing the data received
from those experiments as well as the decided results. Medical biostatistics is a separate branch
that deals mainly with medicine and health.

Physics uses probability theory and statistics dealing mainly with the estimation of large
populations. In fact, the phenomenological results of thermodynamics were developed using the
mechanics of statistics.

There are further examples of statistics in these sciences fields including analytical chemistry,
which involves the presentation of problems in data analysis and demonstrating steps to solve
them.

Meteorology uses statistics in stochastic-dynamic prediction, weather forecasting, probability

forecasting, and a number of other fields.

Astronomy

Astronomy is one of the oldest branches of statistical study; it deals with the measurement of
distance, and sizes, masses and densities of heavenly bodies by means of observations. During
these measurements errors are unavoidable, so the most probable measurements are found by
using statistical methods.
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Example: This distance of the moon from the earth is measured. Since history, astronomers have
been using statistical methods like method of least squares to find the movements of stars.

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