BUSINESS STATISTICS

COURSE DESCRIPTION:
 

This course introduces the statistical analysis methods that

are commonly used for managerial decision-making. The
course aims to encourage thinking statistically. It will
encourage you to develop your abilities to understand and
use of data. It is designed to equip managers with the skills to
make effective use of data in the workplace, to develop
expertise in a standard set of statistical and graphical
techniques that will be useful in analyzing data
 COURSE OBJECTIVES:
 The course has been designed to give you an
understanding of:
 How data are collected and how observations are
quantified during the scientific and research process
 Presenting the facts in numerical form.
 Simplifying the complex data in the form of
suitable tabular, diagrammatic and graphic form.
 Measure the variation , when we are dealing with
people and natural phenomenon.
 EVALUATION CRITERIA

  Quizzes: 20%

 Assignments: 10%

 Midterm: 25%

 Final Term Examination: 40%

 Final Project: 05%

 Total: 100%
 RECOMMENDED BOOKS

 Black, K. (2011). Business statistics: for

contemporary decision making: John Wiley & Sons.
 Barrow, M. (2009). Statistics for economics,
accounting and business studies: Pearson
Education. 
 Levin, R., Rubin, D., Rastogi, S. and Siddiqui, M.
(2013). Statistics for Management: Pearson
Education.
 Bajpai, N. (2014). Business Statistics: 2nd Edition;
Pearson Education
 Statistics
 Derived from latin word “status”
 Status means information useful to state
 Backbone of research
 Facts systematically arranged
e.g
Statistics of birth, statistics of road accidents,
statistics of educational institutions
 Statistics
It is a branch of science that deals with
collection of data, presentation of
data ,making analysis and drawing
conclusion to reach decisions in the face of
uncertainty.

Data…….collection of values
 Importance of Statistics
 Assists in summarizing the larger sets of data
in a form that is easily understandable
 Assist in effective planning in any field of
inquiry
 Drawing conclusions and making predictions
 Useful tool in aiding researches and studies in
different field
 Presentation of organized data in charts and
graphs
 Branches of statistics
 Business statistics
 Econometrics
 Psychometry
 Geostatistics
 Environmental statistics
 Actuarial statistics
 Biostatistics
 Business statistics

Business statistics takes the data analysis tools

from elementary statistics and applies them to
business.
For example, estimating the probability of a
defect coming off a factory line, or seeing where
sales are headed in the future.
 Application of statistics in business
 The field of statistics has numerous
applications in business. Because of
technological advancements, large amounts of
data are generated by business these days.
These data are now being used to make
decisions. These better decisions we make help
us improve the running of a department, a
company , or the entire economy.
 Marketing
Statistics are applied in marketing to identify
market trends, and to measure and evaluate the
potential and success of marketing programs.
The secret to successful marketing is to identify
the target market accurately and to use effective
marketing communications channels and tactics
to reach it.
 Finance
Uncertainty is the hallmark of the financial
world. All financial decisions are based on
“Expectation” that is best analysed with the help
of the theory of probability and statistical
techniques.
Organizations may use financial statistics
to prepare financial forecasts and help them with
budget models for future years
 Human resource
 Human resource management is a process to
manage people within an organization. Analysing
HRM statistics is very important for every human
resource department. After studying numerous
predictions, common data points are compiled
that would be useful in developing new strategies
for the year ahead. This will help in identification
of current industry trends, areas of weaknesses,
areas that need improvements, training needs and
employee satisfaction levels
 Population
The population consists of the set of all
measurements in which the investigator is
interested. The population is also called the
universe E.g
Population of students
Population of smokers
Population of cancer patients
 Sample
Sample is a representative part of the
population
Usually populations are so large that a researcher
cannot examine the entire group. Therefore, a
sample is selected to represent the population in
a research study. The goal is to use the results
obtained from the sample to help answer
questions about the population.
 Parameter & statistic
 Parameter is any numerical value calculated
from population. It is denoted by Greek letter

 Statistic is any numerical quantity calculated

from sample. It is denoted by Latin letter
 Branches of statistics
 Descriptive statistics
 Inferential statistics
 Descriptive statistics

 Descriptive statistics are methods which deals

with collection of data, presentation of data in
different forms e.g tables, graphs and diagrams
and finding averages and other measures which
would describe the data.
 For example, tables or graphs are used to
organize data, and descriptive values such as
the average score are used to summarize data.
 Inferential statistics

It deals with the procedures for making

inferences about the characteristics of population
based on the characteristics of sample.
 Variable
Variables are things that we measure, control, or
manipulate in research. They differ in many
respects
Variables are characteristics which takes
different values in different situations.
For example sales commissions, direct labor
costs, cost of raw materials used in production
 Constant

A constant is a characteristic that does not vary.

A constant also is a symbol, often a letter toward
the beginning of the alphabet, such as a, b, or c.
 Discrete and continuous variable
Discrete variable
Capable of taking some specific numerical
values in a given range
E.g number of employees in a department
within the company, number of boxes of
batteries sold, or the number of different
models of a product.
 Continuous variable
 It is capable of taking each and every possible
value with in a given range.
 E.g
 Age , weight , length
 Qualitative and quantitative data
 Qualitative data
When a population is classified into several
categories, it is possible to count the number of
individuals in each category. These counts are
the qualitative data.
E.g hair colors of players on a football team,
the color of cars in a parking lot, the letter
grades of students in a classroom, and the
shape of candies in a variety pack
 Quantitative data
 Observations which are measured
quantitatively give rise to quantitative data.

E.g
Bank account balance
Average number of lottery tickets sold (e.g. 25,
2,789, 2 million).
 Collection of data
Primary data
The data that is originally collected and have not
undergone any sort of statistical treatments

 Secondary data
The data that have undergone any sort of
statistical treatment atleast once.
 Scale of measurement
 Nominal scale
 Ordinal scale
 Interval scale
 Ratio scale
 Nominal scale

Assign responses to different categories

For example
 Gender…. male,female
 Marital status…. Married,unmarried
 Ordinal scale

Set of categories that are ordered from least to

most.
For example
Militry ranks
Medical condition…
(satisfactory,serious,critical)
 Interval scale

 Scale with values and there is the same

numerical distance between each value
 The scale has arbitrary zero point
 Examples
 How appealing is this cereal box to children?
Not at all very
-3 -2 -1 0 1 2 3
 Ratio scale

 Ratio data have an absolute zero, and the ratio

of two numbers is meaningful. The notion of
absolute zero means that zero is fixed, and the
zero value in the data represents the absence of
the characteristic being studied.
Example
income