Introduction
Business Statistics (What &
Why)
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Definition of
Statistics
Characteristics
of Statistics
Functions of
Statistics
1
2
3
Chapter
Outline
4
Limitations of
Statistics
5
6
Stages in Statistical
Investigation
Subject Matter of
Statistics
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Statistics
refers
to
expression
numerical
of data related to
specific field or events.
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Statistics: Definition
Narrow/Plural
Sense
Statistics denotes some
numerical data
“statistics as
data”
Wide/Singular
Sense
Statistics refer to statistical
methods.
Statistics
“statistics as
Method”
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Overall, it is defined as the method of collecting,
arranging, classifying, presenting, comparing,
analyzing and interpreting numerical data and taking
decision on the basis of conclusion.
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Coxton &
Cowden
“Statistics may be defined as the collection, presentation, analysis
and interpretation of numerical data”
Waths and
Roberst
“Statistics is a body of methods for making decisions in the face of
uncertainty”
A.L.Bowly
“Statistics are numerical statements of data in any department of
inquiry”
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Characteristics of Statistics
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Statistics are Aggregate of Facts
Statistics are affected to a marked Extent by Multiplicity of
Causes
Statistics are Numerically Expressed
Statistics should be collected with reasonable standard of
accuracy
Statistics are collected in a systematic manner
Statistics are collected for a Pre-determined Purpose
Statistics should placed in relation to each other
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This means that a single or isolated fact cannot be called as
statistics. Only those facts which are capable of being
studied in relation to time, place or frequency can be called
statistics.
01 Statistics are
Aggregate of
Facts
Individual, single or unconnected figures are not statistics
because they cannot be studied in relation to each other. But,
aggregate of facts e.g., data relating to I.Q. of a group of
students, academic achievement of students, etc. are called
statistics and are studied in relation to each other.
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Rice
Productio
n
Quality of soil
Rainfall
Seeds & manure
Methods of cultivation
02
Statistical data are more related to social
sciences where We cannot study the effect of a
particular cause on a phenomenon. But in case of
physical sciences that individual causes can be
traced and their impact is clearly known.
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Statistics are affected to a
marked Extent by Multiplicity
of Causes
Qualitative phenomena which cannot be
numerically expressed, cannot be described as
statistics e.g. honesty, goodness, ability, etc.
The population of Bangladesh is rapidly
increasing
The production of rice is not sufficient
03
Statistics are
Numerically
Expressed
Garments industry in getting sick
Population is increasing 10
million per year
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A reasonable standard should be maintained duly in
collecting, classifying, presenting, organizing and
interpreting data.
04
Statistics should be
collected with reasonable
standard of accuracy
For instances, if the weights of the students are
being measured, fractions of kilogram (say 1/10th
or 1/20th) can be ignored.
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Before collecting statistics, a suitable plan of
data collection should be prepared and the work
carried out in a systematic manner.
05
Statistics should be
collected in a Systematic
Manner
Any rough and haphazard method of collection
will not be desirable for that may lead to
improper and wrong conclusion.
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The purpose of collecting data must be decided in advance. The
purpose should be well defined and specific. The investigator
must have a purpose beforehand and then should start the
work of collection.
06 Statistics are collected for
a Pre-determined Purpose
Suppose we want to know intelligence of a section of people, we must not
collect data relating to income, attitude and interest. Without having a clear
idea about the purpose we will not be in a position to distinguish between
necessary data and unnecessary data or relevant data and irrelevant data.
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Statistics is a method for the purpose of
comparison etc. It must be capable of being
compared; otherwise, it will lose much of its
value and significance
07
Statistics are Capable of
being placed in relation to
each other
Comparison can be made only if the data are homogeneous. For example,
Data on memory test can be compared with I.Q. not with salary status of
parents. Again, the per capita income of Bangladesh for the year 2016-17
may be compared with that of earlier years of per capita income of other
countries, say Pakistan Nepal, India.
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Functions of Statistics
Definitenes
s
Condensati
on
Comparis
on
Predictio
n
Formulation of
policies
Formulating and Test
Hypothesis
It presents facts in definite
forms
It simplifies mass of
figures
It facilitates comparison
It helps in prediction
It helps in the formulation of suitable
policies
It helps in formulating and testing
hypothesis
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01 Definiteness
Statements or facts conveyed in exact
quantitative terms are always more
convincing than vague notes.
For example, the statement that some
students out of 1,400, who had
appeared, for a certain examination,
were declared successful would not give
as much information as the one that 300
students out of 400 who took the
examination were declared successful.
It is not easy to treat large numbers and
hence they are simplified either by taking a
few figures to serve as a representative
sample or by taking average to give a
bird’s eye view of the large masses.
For example, complex data may be
simplified by presenting them in the form of
a table, graph or diagram, or representing it
through an average etc.
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02 Condensation
03 Comparison
The significance of certain figures can
be better appreciated when they are
compared with others of the same type.
The purpose of statistics is to enable correct
decisions, whether they are taken by a
businessman or Government. Statistics
provide the basic material for framing
suitable policies.
The comparison between two different
groups is best represented by certain
statistical methods, such as average,
coefficients, rates, ratios, etc.
For example, it may be necessary to decide
how much of oil a nation should import in
2018, the decision would depend upon the
expected internal production and the likely
demand of the oil for 2018.
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Formulation
of policies
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Prediction
knowledge for future trends is very
helpful in framing suitable policies and
plans.
Statistical methods are extremely useful in
formulating and testing hypothesis and to
develop the new theories.
Statistical method provides a helpful
means of forecasting future events.
For example, hypothesis like student have
benefited from extra coaching can be tested by
appropriate statistical tools.
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6
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Formulation
and Test
Hypothesis
Limitation of Statistics
Qualitative Aspect
Ignored
It does not deal with individual
items
Results are true only on
average
Statistics incapable indecision
making
Statistics cannot express the entire data set
Purposive misuses
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Statistics are numerical statement of
facts. The statistical methods don’t study
the nature of phenomenon which cannot
be expressed in quantitative terms.
For example, health, riches, intelligence
etc. needs conversion of qualitative data
into quantitative data.
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1
Qualitative Aspect
Ignored
02
It does not deal with
individual items
By statistics we mean aggregates of
fact and placed in relation to each other,
that statistics deals with only
aggregates of facts or items and it does
not recognize any individual item.
For Example; Production of a factory for
a particular day, national income of a
country for a year are meaningless
unless they are compared with other
similar figure.
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04
Statistics incapable in
decision making
Statistical conclusion are not
universally true, they are true only
under certain conditions. This is
because statistics as a science is
less exact as compared to pure
science like physics and chemistry.
It is not always possible for statistics to
take proper decision. Proper decision
always depends on proper data. But the
data is statistics are often collected by
unskilled persons.
03
Results are true only on
average
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06
Purposive misuses
Statistics method dose not express the
topic or incident fully. It simplifies the
complicated data and presents them.
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Statistics cannot
express the entire data
set
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The most total limitation of statistics
is that its purposive misuse. Very
often erroneous information may be
collected. But sometimes some
institutions use statistics for
self-interest and puzzling other
organizations.
Stages in Statistical Investigation
01 Collection of Data
Interpretation of
Data
Organization of Data
Presentation of Data
02
04
Analysis of Data
03
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05
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Organization of Data
Collection of Data
It is the first step in
statistical
enquiry.
The
technique depends upon the
objective of the study. They
should be collected carefully
so as to fulfill the basic
objective of the purposed
study.
After collection, the data is
organized in a proper form
which involves editing
(removing errors),
classification (arranging) and
tabulation (columns and rows).
Presentation of Data
It is the last step in the
statistical methodology.
To derive meaning from
analyzed data is called
interpretation of data. It
involves statistical
thinking, skill and
experience. It provides
final conclusions.
Now the data is
presented in a suitable
manner- either by
diagrams or graphs.
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Interpretation of Data
Analysis of Data
Simple mathematical
techniques are applied in
analysis. These include
central tendency,
measures of dispersion,
correlation and
regression etc. The main
purpose of analysis is to
draw some meaningful
conclusions.
Subject Matter of Statistics
Descriptive
Statistics
Subject Matter
Inferential
Statistics
Descriptive statistics comprises those
methods concerned with collection and
describing a set of data so as to yield
meaningful information.
Inferential statistics consists of
procedures used to make inferences
about the population characteristics
from information contained in a sample
drawn from population.
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End of the Chapter
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