Business Statistics

Chapter-1
 Definition

Statistics may be defined as the science of

collection, organization, presentation, analysis
and interpretation of numerical data as well as
deriving valid conclusion and making
reasonable decision on the basis of this
analysis
 Stage of Statistics
1. Collection
Utmost care
Primary data
Secondary data
2. Organization
Editing
Classifying
Tabulation
3. Presentation
Graph
Diagram
4. Analysis
5. Interpretation
 Functions of Statistics

 Definiteness
 Condensation
 Comparison
 Formulating and testing hypothesis
 Prediction
 Formulation of policies
 Characteristics

 Statistics are aggregates of fact.

 Statistics are numerically expressed.
 Statistics are collected in a systematic manner.
 Statistics are collected for a predetermined purposes.
 Statistics should be placed in relation to each other.
 Limitation
Statistics does not deal with individual items;
Statistics deals only with quantitatively expressed
items, it does not study qualitative phenomena;
Statistical results are not universally true;

Statistics is liable/responsible/ to be misused.

 Statistics results are not always unquestionable.
 Importance of Statistics:
 It simplifies mass of data (condensation);
 Helps to get concrete information about any problem;
 Helps for reliable and objective decision making;
 It presents facts in a precise & definite form;
 It facilitates comparison(Measures of central tendency and
measures of dispersion);
 It facilitates Predictions (Time series and regression
analysis are the most commonly used methods towards
prediction.);
 It helps in formulation of suitable policies
 Application areas of statistics
Business:
Estimating the volume of retail sales, designing optimum
inventory control system, producing auditing and
accounting procedures, improving working conditions in
industrial plants, assessing the market for new products.
 Economics:
Measuring indicators such as volume of trade, size of labor
force, and standard of living, analyzing consumer behavior,
computation of national income accounts, formulation of
economic laws, etc. Particularly, Regression analysis
extensively uses in the field of Economics*.
 Some terms in Statistics
 Variable: A variable is a factor or characteristic that can take
on different possible values or outcomes. A variable can be
qualitative or quantitative (numeric). Example: Income,
height, weight.
 Population: A complete set of observation (data) of the entire
group of individuals under consideration . A population can be
finite or infinite. Example: The number of students in
thisclass,
 Sample: Asample is a portion of a population selected for
further analysis
 Types of Statistics
 There are two main branches of statistics:
1. Descriptive statistics
2. Inferential statistics
 Descriptive Statistics:
It is the first phase of Statistics; involve any kind of
data processing designed to the collection,
organization, presentation, and analyzing the important
features of the data with out attempting to
infer/conclude any thing that goes beyond the known
data.
 Inferential Statistics:
Inferential statistics includes statistical method which
facilities estimating the characteristics of a population
or making decisions concerning a population on the
basis of sample results.