Business Statistics
UNIT II
Statistics
• The word “Statistics” has been derive from the Latin word “Status” or
Italian word “Statista” or German word “Statistika”.
• Each of these words means Political State.
• Statistics refers to information in terms of numbers or numerical data
such as Population Statistics, Employment Statistics etc.
• However any numerical information is not statistics.
• A cow has 4 legs.
• Average height of the 26 plus male people in India is 6 feet compare
to 5 feet in Nepal.
• Ram has 200 rupees in his pocket.
• Birth rate in India is 18 per thousand compare to 8 per thousand in
USA.
• Over the past 10 years, India has won 60 test matches in cricket and
lost 50.
• A young lady was run over by a speeding truck at 100 km per hour.
• From above information we can say that “All Statistics are data, but all
data are not Statistics”
Definitions:
• According to Bowley - “Statistics are numerical statements of facts in
any department of enquiry placed in relation to each other.”
• According to Yule and Kendall “By Statistics we mean quantitative
data affected to marked extent by multiplicity of causes.”
• Singular Sense
• “Statistics may be defined as the science of collections presentation,
analysis and interpretation of numerical data”- Croxton and Cowden
Characteristics of Statistics
• Statistics are aggregate of facts
• Statistics are affected to a marked extent by multiplicity of causes
• Statistics are numerically expressed
• Statistics are enumerated or estimated according to reasonable
standards of accuracy
• Statistics are collected in a systematic manner
• Statistics are collected for a pre-determined purpose
Functions of Statistics
• It presents facts in a definite form
• It simplifies mass of figures
• It facilitates comparison
• It helps in formulating and testing hypothesis
• It helps in prediction
• It helps in the formulation of suitable policies
Scope of Statistics
• Statistics and State or Government
• Helps in framing suitable policies (military, crimes, population, taxes etc)
• Statistics and Economics
• Measures national income
• Money market analysis
• Analysis of population,
• Analysis of competition, monopoly, oligopoly etc
• Statistics and physical sciences
• Astronomy, geology and physics develops the statistical methods
• Statistics and natural sciences
• Biology, medicine, zoology, botany etc
• Statistics and Research
• Education: evaluation of students, teachers and other entities is a
continuous activity. The collection, organization, analysis,
interpretation and presentation of data are the activities that need to
be conducted and this data is always huge and thus requires the use
of statistical tools.
Statistics in business:
• Marketing:
• Data on population, purchasing power, habits of people, competition,
transportation cost etc
• Production: - quality control, optimum inventory level, labor problem
etc
• Banking: -loans, interest, CRR
• Finance: financial forecast, breakeven analysis, investment decision
• Investment: Dividend rates, taxes
• Purchase: how much to buy, where to buy etc
• Accounting: Auditing, taxes
• Human Resources: wage rates, incentive plans, cost of living, labour
turnover, employment trends, accident rates, grievances,
performance appraisal, training programmes etc
Limitations of Statistics
• Useful for numerical studies only
• Doesn’t consider individual but population
• Dependent on estimates and rough calculations
• May promote false conclusions by deliberate manipulation of figures
and unscientific handling
• More than one method for a single problem
• Provide a basis of judgement but not the whole judgement
• Misleading results
• Expert knowledge required
Statistical Data
• Primary Data
• Secondary Data
Primary Data
• The data which is collected by actual observation or measurement or
count is called primary data.
• Either the investigator individually or through agents or employees
collects the data
• Can get most accurate data than secondary
Methods of collection of Primary
Data:
• Direct personal Interviews
• Indirect oral interviews
• Information from correspondents
• Mailed questionnaire method
• Schedules sent through enumerators
Secondary Data
• Published Sources: Govt agencies, newspapers of any other published
form
• Unpublished Sources: University records, college records, private
organisation records etc.
• Precautions of the use of secondary data:
• Suitability
• Adequacy
• Reliability
Classification of data
• According to Conner, “Classification is the process of
arranging things (either actually or notionally) in groups
or classes according to their resemblances and
affinities, and gives expression to the unity of attributes
that may exist amongst a diversity of individuals.”
Objectives of Classification of Data
• Explain similarities and differences of data
• Simplify and condense data’s mass
• Facilitate comparisons
• Study the relationship
• Prepare data for tabular presentation
• Present a mental picture of the data
Kinds/Types/ Modes of classification
[Link] Classification/Spatial
Classification:
Eg: Population of different states
[Link]/ Temporal Classification:
• classification of data with respect to different time
periods
• Eg:number of students in a school in different years
[Link] Classification:
• classification of data on the basis of descriptive or
qualitative characteristics like region, caste, sex,
gender, education, etc.,
• two types of qualitative classification:
• Simple Classification and Manifold Classification.
• Simple Classification
• When based on only one attribute, the given data is
classified into two classes, which is known as Simple
Classification. For example, when the population is
divided into literate and illiterate, it is a simple
classification.
• Manifold Classification
• When based on more than one attribute, the given data
is classified into different classes, and then sub-divided
into more sub-classes, which is known as Manifold
Classification.
4. Quantitative Classification
• The classification of data on the basis of the
characteristics, such as age, height, weight, income,
etc., that can be measured in quantity is known
as Quantitative Classification.
• For example, the weight of students in a class can be
classified as quantitative classification.
Frequency Distribution
