MB0040 – STATISTICS FOR MANAGEMENT- 4 Credits

Ans. 1 (a) H. G. Wells asserted that, “Statistical thinking will one day be as necessary for efficient citizenship as the ability to read and write.” For most of us, that day has come. The importance of numbers and statistics to the modern world cannot be overstated. In his book How to Think About Statistics, author John L. Phillips put it succinctly: “The culture of any industrialized society is suffused with quantitative information. Some quantitative messages are simple and direct; others involve a relatively complicated process of inference. Knowing how to think statistically makes possible the comprehension of both.” Understanding statistics is even more imperative given that numerical results are often used (and misused) to manipulate or distort information. In Statistical Deception at Work, John Maura writes, “If you cannot understand simple statistics, you can be fooled by news stories, advertisements and daily encounters with other people. You are likely to be taken in by modern-day medicine men who are out there seeking ways to dupe unsuspecting [individuals] into becoming their agents.” And as Cynthia Crossen writes in Tainted Truth, “People know enough to be suspicious of some numbers in some contexts, but we are at the mercy of others. We have little personal experience or knowledge of the topics of much modern research, and the methodologies are incomprehensibly arcane. Nevertheless, we respect numbers, and we cannot help believing them.” Statistics and statistical methods are of two basic types: • Descriptive statistics summarize some facet of a complete population. They are used when an entire population is small or easy enough to measure. For example, the average height or weight of everyone in your family is a descriptive statistic. Because all members of the population are included in the calculation, the result is a totally accurate, and thus completely reliable, measurement. • Inferential statistics are used to predict or infer something about a very large population by measuring samples, or subsets, of that population. This is done when it is virtually impossible, or prohibitively expensive, to obtain data about all members of a particular population. Many of the statistics we normally come in contact with while reading the paper, watching TV, or talking to colleagues are of the inferential variety. Examples include the number of people projected to carry the HIV virus in 1998, the average growth rate of maple trees, and the odds of incurring a side effect when taking a new drug.

Inferential Statistics: Inferential statistics is used to make valid • inferences from the data which are helpful in effective decision making for managers or professionals. there is a need for them to depend more upon quantitative techniques like mathematical models. inferential statistics. In other words. . Statistical methods such as estimation. durability. Statistics play an important role in this aspect. Answer : a) Due to advanced communication network. As you can see. Therefore. Statistics is broadly divided into two main categories. Descriptive Statistics: Descriptive statistics is used to present the • general description of data which is summarised quantitatively. it is critical that we develop a good understanding of how best to use. 1 (b) The word "Statistics" which comes from latin word status. modern managers have a difficult task of making quick and appropriate decisions. suppose a company wishes to introduce a new product. we like to know the price. it is important to develop the ability to extract meaningful information from raw data to make better decisions. prediction and hypothesis testing belong to inferential statistics. Again. Hence. quality. to the level of funding allocated to school lunch programs.These types of statistics are thus used to make far-reaching policy decisions regarding everything from the number of street lights needed per city block. feasibility of producing the product. Therefore. and not abuse. data collection is the back-bone of any decision making process. and maintainability of various brands and models before buying one. This is mostly useful in clinical research. we can say ‘Statistics is the backbone of decision-making’. availability of raw materials. for example. Many organisations find themselves data-rich but poor in drawing information from it. to the amount of money spent to protect the grizzly bear population of the Western United States. statistics. operations research and econometrics. it has to collect data on market potential. Ans. in this scenario we are collecting data and making an optimum decision. Decision making is a key part of our day-to-day life. when communicating the results of experiments. originally meant information useful to the state. meaning a political state. So. consumer likings. rapid changes in consumer behaviour. The two categories of Statistics are descriptive statistics and inferential statistics. Even when we wish to purchase a television. The researchers make deductions or conclusions from the collected data samples regarding the characteristics of large population from which the samples are taken. we are using Statistics. varied expectations of variety of consumers and new market openings. Thus.

sometimes called scientific method. In this sense. statistics of prices. The word statistics is plural when used in this sense. the word statistics is used in the singular. accidents. etc. the word statistics is numerical quantities calculated from sample observations. statistics is characterized as a science. the word statistics denotes a set of numerical data in the respective fields. a single quantity calculated is called a statistic. the word statistics refers to "numerical facts systematically arranged". In this sense.In the first place.Thirdly. In all these examples. the word statistics is always used in the plural. . Thus the word statistics used in the plural refers to a set of numerical information and in the singular denotes the science of basing decision on numerical data. the word statistics is defined as a descipline that includes procedures and techniques used to collect. But this word has now acquired different meanings. This is the meaning the man in the street gives to the word statistics and the most people usually use the word data insteadIn the second place. statistics of educational institutions. process and analyse numerical data to make inferences and to reach decisions in the face of uncertainty. statistics of births. statistics of road. As it embodies more or less all stages of the general process of learning. The mean of a sample for instance is a statistic.information about the sizes of population and armed forces. statistics of crimes. We have. It should be noted that statistics as a subject is mathematical in character. for instance.

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