COURSEWORK: INDIVIDUAL ASSIGNMENT (10%)

FALL SEMESTER 2019

SUBJECT CODE : MAT 421

SUBJECT TITLE : STATISTICS FOR BUSINESS

PROGRAMME : MASTERS IN BUSINESS

ADMINISTRATION

LECTURER : PROF. SALMA BEGUM

STUDENT NAME ID. NO. DATE

FAHAD MOHD MBA06817985 2nd OCTOBER

NAFIZ 2018

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 Table of Contents

Topic Page No.

1.0 Introduction 3
2.0 Statistics 4
3.0 Scope of Statistics 4
4.0 Importance of Statistics 6
4.1 Statistics in Business 6
4.2 Statistics in Mathematics 7
4.3 Statistics in Economics 7
4.4 Statistics in Accounting 7
4.5 Statistics in Banking 8
4.6 Statistics in Management and Administration 8
4.7 Statistics in Astronomy 8
4.8 Statistics in the Natural and Social Sciences 8

Reference 10

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1.0 Introduction

For a layman, ‘Statistics’ means numerical information expressed in quantitative terms. This
information may relate to objects, subjects, activities, phenomena, or regions of space. As a matter
of fact, data have no limits as to their reference, coverage, and scope. At the macro level, these are
data on gross national product and shares of agriculture, manufacturing, and services in GDP
(Gross Domestic Product). At the micro level, individual firms, howsoever small or large, produce
extensive statistics on their operations. The annual reports of companies contain variety of data on
sales, production, expenditure, inventories, capital employed, and other activities. These data are
often field data, collected by employing scientific survey techniques. Unless regularly updated,
such data are the product of a one-time effort and have limited use beyond the situation that may
have called for their collection. A student knows statistics more intimately as a subject of study
like economics, mathematics, chemistry, physics, and others. It is a discipline, which scientifically
deals with data, and is often described as the science of data. In dealing with statistics as data,
statistics has developed appropriate methods of collecting, presenting, summarizing, and analyzing
data, and thus consists of a body of these methods (lury, baum and schauer, 1976).

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2.0 Statistics

Statistics is a branch of applied mathematics concerned with collecting, organizing, and

interpreting data. The data are represented by means of graphs. It is also the mathematical study
of the likelihood and probability of events occurring based on known quantitative data or a
collection of data.

Statistics thus attempts to infer the properties of a large collection of data from inspection of a
sample of the collection thereby allowing educated guesses to be made with a minimum of
expense. There are basically three kinds of averages commonly used in statistics. They are: mean,
median, and mode (Newbold, Carlson and Thorne, 2013).

3.0 Scope of Statistics

Apart from the methods comprising the scope of descriptive and inferential branches of statistics,
statistics also consists of methods of dealing with a few other issues of specific nature. Since these
methods are essentially descriptive in nature, they have been discussed here as part of the
descriptive statistics. These are mainly concerned with the following:

(i) It often becomes necessary to examine how two paired data sets are related. For
example, we may have data on the sales of a product and the expenditure incurred on its
advertisement for a specified number of years. Given that sales and advertisement expenditure are
related to each other, it is useful to examine the nature of relationship between the two and quantify
the degree of that relationship. As this requires use of appropriate statistical methods, these falls
under the purview of what we call regression and correlation analysis.

(ii) Situations occur quite often when we require averaging (or totaling) of data on prices
and/or quantities expressed in different units of measurement. For example, price of cloth may be
quoted per meter of length and that of wheat per kilogram of weight. Since ordinary methods of
totaling and averaging do not apply to such price/quantity data, special techniques needed for the
purpose are developed under index numbers.

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 (iii) Many a time, it becomes necessary to examine the past performance of an activity with
a view to determining its future behavior. For example, when engaged in the production of a
commodity, monthly product sales are an important measure of evaluating performance. This
requires compilation and analysis of relevant sales data over time. The more complex the activity,
the 11 more varied the data requirements. For profit maximizing and future sales planning, forecast
of likely sales growth rate is crucial. This needs careful collection and analysis of past sales data.
All such concerns are taken care of under time series analysis.

(iv) Obtaining the most likely future estimates on any aspect(s) relating to a business or
economic activity has indeed been engaging the minds of all concerned. This is particularly
important when it relates to product sales and demand, which serve the necessary basis of
production scheduling and planning. The regression, correlation, and time series analyses together
help develop the basic methodology to do the needful. Thus, the study of methods and techniques
of obtaining the likely estimates on business/economic variables comprises the scope of what we
do under business forecasting (Falkner, 1918).

Keeping in view the importance of inferential statistics, the scope of statistics may finally be
restated as consisting of statistical methods which facilitate decision-- making under conditions of
uncertainty. While the term statistical methods are often used to cover the subject of statistics as a
whole, in particular it refers to methods by which statistical data are analyzed, interpreted, and the
inferences drawn for decision making.

Though generic in nature and versatile in their applications, statistical methods have come to be
widely used, especially in all matters concerning business and economics. These are also being
increasingly used in biology, medicine, agriculture, psychology, and education. The scope of
application of these methods has started opening and expanding in several social science
disciplines as well. Even a political scientist finds them of increasing relevance for examining the
political behavior and it is, of course, no surprise to find even historians’ statistical data, for history
is essentially past data presented in certain actual format (Hopkins, 1999).

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4.0 Importance of Statistics

There is huge importance of statistics in daily life. Every day we come across a variety of data-
based evaluations and claims. Various promotions, advertising, propaganda and several new
researches keep coming up every day. Advertisers and promoters often make use of ambiguous
statistics and data to support their propaganda and create a deep and long-lasting impact on our
minds. Most people take these claims on face-value and often get influenced by the depicted
statistics. It is only through the knowledge of statistics and exploratory data analysis that we can
evaluate the truth value of these claims and save ourselves from such manipulative and deceiving
tricks. Statistical tools help us in making sense of all the data and data-related information that we
come across. These statistics and tools of exploratory data analysis can only be acquired through
the systematic study of collection, presentation and interpretation of data is called statistics. The
aim of this blog post to highlight the importance of studying statistics.

Statistics plays an important role in every field of human activity. Importance of statistics is far-
reaching and encompasses almost every possible domain. Uses and importance of statistics can be
seen in fields as diverse as agriculture, mathematics, healthcare, engineering, decision making,
geography, sports, sociology, marketing, government, nursing, planning, banking, economics,
research, education, medicine, accounting, business, technology, psychology, business economics,
business management, industry, physics, biology as well as educational research
(Slministryofplanning.org, 2018).

Let us look at the detailed uses and importance of statistics in different fields of our lives.
Importance of statistical analysis can be highlighted through wide range of phenomenon, including
but not limited to determining the per capita income, unemployment, population growth rate,
housing, medical facilities, schooling in a country.

4.1 Statistics in Business

Statistics involves making decisions, and in the business world, one often need to make a quick
decision then and there. Using statistics, it helps to plan the production according to what the
customer likes and wants and can check the quality of the products far more efficiently with

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statistical methods. In fact, many business activities can be completed with statistics including
deciding a new location, marketing the product, and estimating what the profit will be on a new
product (Haskin and Krehbiel, 2011).

4.2 Statistics in Mathematics

It should seem obvious that statistics plays a key role in mathematics considering it’s a branch of
applied mathematics. However, statistics is in more than just its own separate branch of math,
which includes statistical techniques in integration, differentiation, and algebra.
Much of math is based on probability and theories, and statistical methods help make those
mathematical theories that much more accurate. Using averages, dispersions, and estimation, that
helps to come up with conclusions that are closer to the real answer than just taking a wild guess
(Kachapova, 2014).

4.3 Statistics in Economics

Much of economics depends on statistics. Economists use statistics to collect information, analyze
data, and test hypotheses. Relationships between supply and demand and imports and exports are
found using statistical information. The same can be said for figuring out the inflation rate, the per
capita income, and even the national income account. A good example of statistics and economics
in the real world would be the Census Bureau and the information they collect and use to decide
many other political items (Veena, 2015).

4.4 Statistics in Accounting

Accounting involves mostly basic arithmetic, but when it comes to creating accounting reports,
statistics plays a key role. When balancing and checking accounts, exactness is very important, but
when using those reports to decide how well the company is doing and the trends within the
business. Moreover, it can also be used in accounting to create projections for the next fiscal year
(Kesan, 2015).

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4.5 Statistics in Banking
Banks use statistics for a great number of the services they offer. A bank works on the idea that
someone will deposit their money and not withdraw all of it later. They earn their profit by lending
money to others with interest, and the money they use is the money other people deposit.
Bankers use statistical approaches to estimate the number of people who will be making deposits
compared to the number of people requesting loans. A great example of statistics used in banking
is the FDIC’s own quarterly publication called Statistics on Banking (Quinonez, 2014).

4.6 Statistics in Management and Administration

A nation’s government runs on statistics. They use statistical data to make their decisions regarding
any number of things. Most federal and provincial budgets are designed upon statistical data
because it’s the most accurate data available when estimating expected expenditures and revenue.
Another great example of statistics in the government is figuring out whether to raise the minimum
wage due to a rise in the cost of living. Statistical data gives the government the best idea regarding
whether the cost of living will continue to rise (Quinonez, 2014).

4.7 Statistics in Astronomy

It is impossible to take out a ruler and measure the distance of the Earth from the sun. Unless, of
course, scientists somehow manage to invent a suit that can survive the temperatures of the sun
and design a ruler long enough to measure such a distance. However, it would likely take scientists
a very long time to measure such a distance anyway.
Instead, astronomers use estimates and mathematical theories to devise their best guess to just how
far items in the universe are away from each other. Therefore, when people read a news report that
a star will likely be going supernova “any day now,” people have to understand that “any day now”
could mean tomorrow, a year from now, or even ten thousand years from now (Quinonez, 2014).

4.8 Statistics in the Natural and Social Sciences

Biology, physics, chemistry, meteorology, sociology, communication, and even information

technology all use statistics. For many of these categories, the use of statistics in that field involves
collecting data, analyzing it, coming up with a hypothesis, and testing that hypothesis.

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In biology, the use of statistics within that field is known as biostatistics, biometry, or biometrics.
Biostatistics often involves the design of experiments in medicine, online pharmacy, agriculture,
and fishery. It also involves collecting, summarizing, and analyzing the data received from those
experiments as well as the decided results. Medical biostatistics is a separate branch that deals
mainly with medicine and health.
Physics uses probability theory and statistics dealing mainly with the estimation of large
populations. In fact, the phenomenological results of thermodynamics were developed using the
mechanics of statistics.
There are further examples of statistics in these sciences fields including analytical chemistry,
which involves the presentation of problems in data analysis and demonstrating steps to solve
them. Meteorology uses statistics in stochastic-dynamic prediction, weather forecasting,
probability forecasting, and several other fields.
Sociology uses statistics to describe, explain, and predict from data received. Like many of the
sciences, communication uses statistical methods to communicate data received. Information
technology also uses statistics to predict outcomes (Quinonez, 2014).

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References

Falkner, R. (1918). The Scope of Business Statistics. Publications of the American Statistical
Association, 16(122), p.24.

Haskin, H. and Krehbiel, T. (2011). Business statistics at the top 50 US business

programmes. Teaching Statistics, 34(3), pp.92-98.

Hopkins, B. (1999). More statistics: Scope of sector. The Nonprofit Counsel, 16(1), pp.7-8.

Kachapova, F. (2014). On the Importance of Pure Mathematics. Journal of Mathematics and

Statistics, 10(4), pp.421-422.

Kesan (2015). The role of statistics in Accounting profession - SAN LINKZ. [online] SAN
LINKZ. Available at: http://sanlinkz.com/blog/2015/04/07/role-of-statistics-in-accounting-
profession/ [Accessed 1 Oct. 2018].

Lury, D., Baum, P. and Schauer, E. (1976). Statistics Made Relevant: A Casebook of Real Life
Examples. The Statistician, 25(3), p.229.

Newbold, P., Carlson, W. and Thorne, B. (2013). Statistics for business and economics. Harlow,
Essex: Pearson Education.

Quinonez, N. (2014). The Importance of Statistics in Many Different Fields.docx | Banks |

Statistics. [online] Scribd. Available at: https://www.scribd.com/document/359036294/The-
Importance-of-Statistics-in-Many-Different-Fields-docx# [Accessed 1 Oct. 2018].

Slministryofplanning.org. (2018). The importance of Statistics. [online] Available at:

https://www.slministryofplanning.org/index.php/news/english/172-the-importance-of-statistics
[Accessed 1 Oct. 2018].

Veena, M. (2015). IMPORTANCE OF STATISTICS IN ECONOMICS. [online] prezi.com.

Available at: https://prezi.com/ecfwmnltc9di/importance-of-statistics-in-economics/ [Accessed 1
Oct. 2018].

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