Statistics Book (3)

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LESSON – 1 STATISTICS FOR MANAGEMENT Session – 1 Duration: 1 hr Meaning of Statistics The term statistics mean that the numerical statement as well as statistical methodology. When it is used in the sense of statistical data it refers to quantitative aspects of things and is a numerical description. Example: Income of family, production of automobile industry, sales of cars etc. There quantities are numerical. But there are some quantities which are not
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  LESSON – 1 STATISTICS FOR MANAGEMENT  Session – 1 Duration: 1 hr  Meaning of Statistics The term statistics mean that the numerical statement as well as statistical methodology. When itis used in the sense of statistical data it refers to quantitative aspects of things and is a numericaldescription.  Example : Income of family, production of automobile industry, sales of cars etc. There quantities arenumerical. But there are some quantities which are not in themselves numerical but can be made so bycounting. The sex of a baby is not a number, but by counting the number of boys, we can associate anumerical description to sex of all new born babies, for an example, when saying that 60% of all live-born babies are boy. This information then, comes within the realm of statistics. Definition The word statistics can be used is two senses, viz, singular and plural. In narrow sense and pluralsense, statistics denotes some numerical data (statistical data). In a wide and singular sense statisticsrefers to the statistical methods. Therefore, these have been grouped under two heads – ‘Statistics as adata” and “Statistics as a methods”. Statistics as a Data Some definitions of statistics as a data area)Statistics are numerical statement of facts in any department of enquiring placedin relation to each other.- Powley b)By statistics we mean quantities data affected to a marked extent bymultiplasticity of course.- Yule and Kendallc)By statistics we mean aggregates of facts affected to a marked extent bymultiplicity of causes, numerically expressed, enumerated or estimated according to reasonablestandard of accuracy, collected in a systematic manner for pre-determinated purpose and placed inrelation to each other.- H. SecristThis definition is more comprehensive and exhaustive. It shows more light on characteristics of statistics and covers different aspects.Some characteristics the statistics should possess by H. Secrist can be listed as follows.1   Statistics are aggregate of facts  Statistics are affected to a marked extent by multiplicity of causes.  Statistics are numerically expressed  Statistics should be enumerated / estimated  Statistics should be collected with reasonable standard of accuracy  Statistics should be placed is relation to each other. Statistics as a methods  Definition a)“Statistics may be called to science of counting”- A.L. Bowley b)“Statistics is the science of estimates and probabilities”.- Boddingtonc)Dr. Croxton and Cowden have given a clear and concise definition.“Statistics may be defined as the collection, presentation, analysis and interpretation of numericaldata”. According to Croxton and Cowden there are 4 stages. a)Collection of Data A structure of statistical investigation is based on a systematic collection of data. The data isclassified into two groupsi) Internal data andii) External dataInternal data are obtained from internal records related to operations of business organisation suchas production, source of income and expenditure, inventory, purchases and accounts.The external data are collected and purchased by external agencies. The external data could beeither primary data or secondary data. The primary data are collected for first time and srcinal, whilesecondary data are collected by published by some agencies. b)Organisations of data The collected data is a large mass of figures that needs to be organised. The collected data must be edited to rectify for any omissions, irrelevant answers, and wrong computations. The edited data must be classified and tabulated to suit further analysis. c)Presentation of data The large data that are collected cannot be understand and analysis easily and quickly. Therefore,collected data needs to be presented in tabular or graphic form. This systematic order and graphical presentation helps for further analysis. d)Analysis of data The analysis requires establishing the relationship between one or more variables. Analysis of data includes condensation, abstracting, summarization, conclusion etc. With the help of statistical toolsand techniques like measures of dispersion central tendency, correlation, variance analysis etc analysiscan be done.2  e)Interpretation of data The interpretation requires deep insight of the subject. Interpretation involves drawing the validconclusions on the bases of the analysis of data. This work requires good experience and skill. This process is very important as conclusions of results is done based on interpretation.We can define statistics as per Seligman as follows. “Statistics is a science which deals with the method and of collecting, classifying, presenting,comparing and interpretating the numerical data collected to throw light on enquiry”. Importance of statistics In today’s context statistics is indispensable. As the use of statistics is extended to various field of experiments to draw valid conclusions, it is found increased importance and usage. The number of research investigations in the field of economics and commerce are largely statistical. Further, theimportance and statistics in various fields are listed as below.a)  State Affairs : In state affairs, statistics is useful in following ways1.To collect the information and study the economic condition of people in the states.2.To asses the resources available in states.3.To help state to take decision on accepting or rejecting its policy based on statistics.4.To provide information and analysis on various factors of state like wealth, crimes, agricultureexperts, education etc. b)  Economics : In economics, statistics is useful in following ways1.Helps in formulation of economic laws and policies2.Helps in studying economic problems3.Helps in compiling the national income accounts.4.Helps in economic planning. c)Business 1.Helps to take decisions on location and size2.Helps to study demand and supply3.Helps in forecasting and planning4.Helps controlling the quality of the product or process5.Helps in making marketing decisions6.Helps for production, planning and inventory management.7.Helps in business risk analysis8.Helps in resource long term requirements, in estimating consumers preference and helps in business research.d)  Education : Statistics is necessary to formulate the polices regarding start of new courses,consideration of facilities available for proposed courses. e)Accounts and Audits: 1.Helps to study the correlation between profits and dividends enable to know trend of future profits.2.In auditing sampling techniques are followed.3  Functions of statistics Some important functions of statistics are as follows1.To collect and present facts in a systematic manner.2.Helps in formulation and testing of hypothesis.3.Helps in facilitating the comparison of data.4.Helps in predicting future trends.5.Helps to find the relationship between variable.6.Simplifies the mass of complex data.7.Help to formulate polices.8.Helps Government to take decisions. Limitations of statistics 1.Does not study qualitative phenomenon.2.Does not deal with individual items.3.Statistical results are true only on an average.4.Statistical data should be uniform and homogeneous.5.Statistical results depends on the accuracy of data.6.Statistical conclusions are not universally true.7.Statistical results can be interpreted only if person has sound knowledge of statistics. Distrust of Statistics Distrust of statistics are due to lack of knowledge and limitations of its uses, but not due tostatistical sciences.Distrust of statistics are due to following reasons.a)Figures are manipulated or incompleted. b)Quoting figures without their context.c)Inconsistent definitions.d)Selection of non-representative statistical units.e)Inappropriate comparisonf) Wrong inference drawn.g)Errors in data collection. Statistical Data Statistical investigation is a long and comprehensive process and requires systematic collection of data in large size. The validity and accuracy of the conclusion or results of the study depends upon howwell the data were gathered. The quality of data will greatly influence the conclusions of the study andhence importance is to be given to the data collection process.Statistical data may be classified as Primary Data and Secondary Data based on the sources of datacollection.4
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