STATISTICS

STATISTICS
DEFINITION AND MEANING
• Statistics may be defined as a science of collection,
analysis, interpretation, presentation and
organization of numerical data.

This definition includes five terms:

1. Collection of data
2. Organization of data
3. Interpretation of data
4. Presentation of data
5. Analysis of data
 What is Statistics?
• “The mathematics of the collection, organization, and
interpretation of numerical data, especially the
analysis of population characteristics by inference
from sampling.”

• Statisticians collect and analyze data, then calculate

results using a specific design. They draw conclusions
and make decisions in the face of uncertainty.
 Why Study Statistics?

 Collecting data on subsets of the population

(samples) can give valid information about the whole
population.
 Knowing what has happened in the past can help
answer questions about the present and future.
 Knowledge helps plan future tests, determines
resource allocation, and improves quality.
 What we can do with the help of
Statistics?

 Study the safety of nuclear power plants

 Evaluate the environmental impact of pollution
 Determine the effectiveness of new drugs
 Estimate the India’s unemployment rate
 Analyze consumer demand for products
 Plan and analyze agricultural experiments
 Functions of Statistics

1. Simplification of Complex Facts:

The foremost purpose of the statistics is to simplify huge
collection of numerical data. It is beyond the reach of
human mind to remember and recollect the huge facts and
figures. Statistical method makes it possible to understand
the whole in the short span of time and in a better way.
2. Comparison:
Comparison of data is yet another function of statistics,
simplifying the data; it can be correlated or compared by
certain mathematical question like averages, ratios,
coefficients etc.
 Functions of Statistics
3. Relationship between Facts:
Statistical methods are used to investigate the cause and
effect relationship between two or more facts. The relationship
between demand and supply, money-supply and price level
can be best understood with the help of statistical methods.
4. Formulation and Testing of Hypothesis:
The most theoretical function of statistics is to test the
various types of hypothesis and discover a new theory. For
instance, by using appropriate statistical tools we can test the
hypothesis whether a particular coin is fair or not, whether
Indian consumers are brand loyal etc.
 Functions of Statistics

5. Forecasting:
Statistical methods are of great use to predict the future
course of action of the phenomenon. It is only on the basis of
statistical techniques that I planners in India prepare future
estimates for production, consumption, investment etc.
6. Enlarges Individual Knowledge:
Statistical methods sharpen the faculty of rational thinking
and reasoning of an individual. It is a master-key that solves
problems of mankind in every sphere of life. Thus, Whipple
has rightly opined statistics enables one to enlarge his
horizon.
 Functions of Statistics

7. To Indicate Trend Behaviour:

Statistics helps to indicate trend behaviour certain fields of
enquiry. The statistical techniques like Analysis of Time
Series Extrapolation etc. are highly used to know the trend
behaviour of the enquiry in question
8. Classification of Data:
Classification refers to a process of splitting up the data
into certain parts which helps in the matters of comparison
and interpretation of the various features of the data. This
is done by the various improved techniques statistics.
 Functions of Statistics

9. To Measure Uncertainty:
In most of the social fields, comprising of business,
commerce, economics, it becomes necessary to take decisions
in the face of uncertainty and study the change of occurrence
of certain events and their effect on the polio adopted.
10. To Draw Rational Conclusion:
In various fields of uncertainty like business and commerce, it
is very much necessary to draw rational conclusions on the
basis of facts collected and analysed.
For this, the mind of the decision maker should be free from
any bias and prejudices.
 Characteristics of Statistics

Statistics are aggregates of facts

Statistics are affected to a market extent by multiplicity causes
Statistics are numerically expressed
Enumerated or estimated according to reasonable standard of
accuracy
Statistics are collected in a systematic manner
Statistics should be placed in relation to each other
 Statistics are aggregate of facts
 Single and isolated numerical expressions are not called
statistics as such facts cannot be put in comparison or in
relation to others.
 For eg., ‘Atul’s marks in Management are 80’ is not a statistics.
 But marks of 10 students in Management
35,60,54,87,67,90,55,43,77,60 are statistics.
 So a set or an aggregate of observations form statistics.
 Statistics are affected to a marked extent by
multiplicity causes
 Usually statistical facts are not traceable to a single cause.
 Since statistics are most commonly used in social science it is
natural that they are affected by a large variety of factors at the
same time.
 It is usually not possible to study the effects of any one of these
factors separately as in the case in experimental methods.
 In statistical methods the effects of various factors affecting a
particular phenomena are generally studied in a combined
form.
 Most of the statistics, however, are affected to a considerable
degree by multiple causation.
 For eg., statistics of production of rice are affected by the
rainfall, quality of soil, seeds and manure, method of cultivation
etc.
 It is very difficult to study separately the effect of each of these
factors on the production of rice.
 The same is true for statistics of prices, imports, exports, sales
profits, etc.
 Statistics as numerically Expressed
 Quantitative expressions are not statistics unless they are
expressed in numerical forms.
 As for instance, the statement ‘students of a particular are
good in Statistics’ is not a statistical statement.
 Similarly, the statements like ‘the exports in the country are on
the increase’ & ‘the birth rate in India is decreasing’ are not
statistical statements.
 However, the statement worthwhile that the qualitative aspects,
which can be expressed numerically by assigning scores or
ranks or standards, can be treated as statistics.
 Enumerated or estimated according to
reasonable standard of accuracy

 Statistics are made available by maintaining reasonable

standards of accuracy.
 For precise results, statistics must be accurately complied.
 When a complete enumeration or estimation is not possible, the
sampling method is adopted and a reasonable standard of
accuracy is maintained in collecting, classifying and analyzing
the data.
 It all depend upon the nature and purpose of the enquiry for
which statistics to be serve.
 For eg., the number of students in a class can be counted with
perfect accuracy while counting the number of persons
attending a political rally may be a difficult task.
 In the later case one has to use the estimation procedure to
make statements like ‘10 thousand people attended the rally’.
 Here the statement does not mean exactly 10 thousand but it
may be few hundred less or more.
 Statistics are collected in a systematic
manner
 It is essential that data must be collected in a systematic
manner. Facts and figures collected in a haphazard manner
would like to load a fallacious result.

Statistics should be placed in relation to each

other
 Statistical data are collected mostly for the purpose of
comparison.
 For the purpose of comparison it is necessary that data must be
homogeneous.
 It would be meaningless to compare the heights of men with
heights of trees because these figures are of a heterogeneous
character such figures do not come under the category of
statistics.
Conclusion :
We may conclude from the above discussion
that, “all statistics are numerical statements
of facts but all numerical statements of facts
are not statistics”
 STATISTICS IN BUSINESS AND
MANAGEMENT
 With the growing size and ever-increasing competition, the
problems of business enterprise are becoming complex.
 And it has become necessary for the executives to rely more
and more on elaborate information system instead of their
intuition. And it is here that statistical data and statistical
methods play a very significant role.
 Some of the major areas of Business Operations where
Statistics have been extensively and affectively used are as
follows:
i. Production iv. Purchasing
ii. Investment v. Quality Control
iii. Banking vi. Marketing
 Business Physical
Economics, Engineering,
Marketing, Sciences
Computer Science Astronomy,
Chemistry, Physics

Health & Areas where

Medicine STATISTICS
Genetics, Clinical Trials,
Epidemiology, are used Environment
Pharmacology Agriculture,
Ecology, Forestry,
Animal Populations

Government
Census, Law,
National Defense
Business and Industry

 Manufacturing
Build products and deliver services
that satisfy consumers and increase
the corporation’s profit margin

 Marketing
Design experiments for new
products, conduct focus
groups and sample surveys,
and perform field
experiments in test markets
to determine product viability
Business and Industry
 Engineering
Make a consistent product, detect
problems, minimize waste, and predict
product life in electronics, chemicals,
aerospace, pollution control,
construction, and other industries
 Statistical Computing
Work in software design and
development, testing, quality
assurance, technical
support, education,
marketing, and sales to
develop code that is both
user-friendly and sufficiently
complex
Health and Medicine
 Epidemiology
Work on calculating cancer incidence
rates, monitor disease outbreaks, and
monitor changes in health-related
behaviors such as smoking and
physical activity

 Public Health
Prevent disease, prolong life,
and promote health through
organized community efforts,
including sanitation, hygiene
education, diagnoses, and
preventative treatment