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Mathematics & Statistics for Management

Assignment No.1

Submitted by:

Gemon Kurian 11KJM113 Kristu Jayanti College Department of Management & Technology

Mathematics & Statistics for Management

Q1. Definition of Statistics:

Statistics is the study of the collection, organization, analysis, and interpretation of data. It deals with all aspects of this, including the planning of data collection in terms of the design of surveys and experiments. A statistician is someone who is particularly well versed in the ways of thinking necessary for the successful application of statistical analysis. Such people have often gained this experience through working in any of a wide number of fields. There is also a discipline called mathematical statistics that studies statistics mathematically. The word statistics, when referring to the scientific discipline, is singular, as in "Statistics is an art." This should not be confused with the word statistic, referring to a quantity (such as mean or median) calculated from a set of data, whose plural is statistics.

Q2. & Q3. Importance & Scopes of Statistics in different fields:

The importance of statistics in recent years cannot be over emphasized. The development in statistical studies has considerably increased its scope and importance. It is no longer regarded as the science of statecraft or a by-product of state administration. Now it embraces a host of sciences-social, physical and natural. Statistical findings have assumed unprecedented dimensions these days. Statistical thinking has become indispensable for able citizenship. Statistics is of immense use in the following cases.

1. In Planning: Planning is necessary for efficient workmanship and in formulating future policies. Statistics provides the valued interpretation of facts and figures relevant to planning. Planning depends on forecasting the future. Statistics provides the necessary tools of estimation and forecasting. So statistics is indispensable in planning. 2. In Business: Statistical knowledge is very helpful to the businessman. He formulates different plans and policies using statistics. It helps him in forecasting the future trends and tendencies. To estimate the market fluctuations, changes in the demand conditions etc. statistical techniques are often used. Hence for becoming a successful businessman, ideas in statistics are essential. 3. In Administration: In ancient times statistics was used as the science of statecraft. It was used to collect data relating to manpower, crimes, income etc. for formulating different policies. In modem times, its role has become manifold. It has become indispensable for the administrators. It is being widely used formulating and forecasting different plans and policies of the state administration.

Mathematics & Statistics for Management

4. In Business Management: Business manager take decisions in the face of uncertainty. Statistical tools like collection classification, analysis and interpretation of data are essential in business-management. The success of modem business primarily depends on accurate forecasting of the future demand and mark trends. For this statistics is essential. Hence statistics is widely used in business management. 5. In Research Activities: One cannot think of undertaking any research activities without using statistics. Primarily, statistical techniques are used for collecting information in any research. Besides, statistical methods are used for analysis and interpretation of research findings. Thus there is hardly any branch of study where statistics is not being used. It is used in all spheres of human activities. 6. In Economics: Statistics are the straws out of which Economists have to make bricks. Statistics indispensable in economic studies. Statistical data and their analysis are used to solve a variety of economic problems such as in consumption, production, distribution of income and assets, poverty, unemployment etc. These problems are described, compared and correlated by using statistics. Use of statistics in Economics has led to the formulation of many economic laws like Engels law of consumption, Paretos Laws of distribution of income etc. Similarly statistical tools like index numbers are sued as economic barometers.

Q4. Statistic in Managerial Decision Making:

Whether designing new products, streamlining a production process or evaluating current vs. prospective customers, todays business managers face greater complexities than ever before. Running a shop on instinct no longer suffices. Statistics provide managers with more confidence in dealing with uncertainty in spite of the flood of available data, enabling managers to more quickly make smarter decisions and provide more stable leadership to staff relying on them.

Focusing on Big Picture Statistical analysis of a representative group of consumers can provide a reasonably accurate, cost-effective snapshot of the market with faster and cheaper statistics than attempting a census of very single customer a company may ever deal with. The statistics can also afford leadership an unbiased outlook of the market, to avoid building strategy on uncorroborated presuppositions. Backing Judgments Statistics back up assertions. Leaders can find themselves backed into a corner when persuading people to move in a direction or take a risk based on unsubstantiated opinions. Statistics can provide objective goals with stand-alone figures as well as hard evidence to substantiate positions or provide a level of certainty to directions to take the company.

Mathematics & Statistics for Management

Making Connections Statistics can point out relationships. A careful review of data can reveal links between two variables, such as specific sales offers and changes in revenue or dissatisfied customers and products purchased. Delving into the data further can provide more specific theories about the connections to test, which can lead to more control over customer satisfaction, repeat purchases and subsequent sales volume. Ensuring Quality Anyone who has looked into continuous improvement or quality assurance programs, such as Six Sigma or Lean Manufacturing, understands the necessity for statistics. Statistics provide the means to measure and control production processes to minimize variations, which lead to error or waste, and ensure consistency throughout the process. This saves money by reducing the materials used to make or remake products, as well as materials lost to overage and scrap, plus the cost of honoring warranties due to shipping defective products. Considerations Know what to measure, and manage the numbers; dont let the numbers do the managing for you, or of you. Before using statistics, know exactly what to ask of the data. Understand what each statistical tool can and cant measure; use several tools that complement one another. For example, dont rely exclusively on an "average," such as a mean rating. Customers using a fivepoint scale to rate satisfaction wont give you a 3.84; that may indicate how the audience as a group clustered, but its also important to understand the width of the spread using standard deviation or which score was used by the greatest number of people, by noting the mode. Finally, double-check the statistics by perusing the data, particularly its source, to get a sense of why the audiences surveyed answered the way they did.

Q5. Limitation of Statistics

The important limitations of statistics are: (1) Statistics laws are true on average. Statistics are aggregates of facts. So single observation is not a statistics, it deals with groups and aggregates only. (2) Statistical methods are best applicable on quantitative data. (3) Statistical cannot be applied to heterogeneous data. (4) It sufficient care is not exercised in collecting, analyzing and interpretation the data, statistical results might be misleading. (5) Only a person who has an expert knowledge of statistics can handle statistical data efficiently. (6) Some errors are possible in statistical decisions. Particularly the inferential statistics involves certain errors. We do not know whether an error has been committed or not.

Mathematics & Statistics for Management