Statistics-scope And Limitations 3a2q6j

Definition: Statistics is scientific methods for collecting, organizing, summarizing, presenting & analyzing sample data as well as drawing a valid conclusion about population. Characteristics: 1. Statistics alone. 2. Statistics 3. Statistics 4. Statistics 5. Statistics

deal with aggregate of individuals rather than with individual should be expressed as numerical figure. should be collected by reasonable standard of accuracy. should be obtained for pre-determined purpose. collected should allow comparison with other data.

Types: 1. Descriptive Statistics: Methods of organizing, presenting data in an informative way.

summarizing, and

EXAMPLE: A Gallup poll found that 49% of the people in a survey knew the name of the first book of the Bible. The statistic 49 describes the number out of every 100 persons who knew the answer. 2. Inferential Statistics: A decision, estimate, prediction, or generalization about a population, based on a sample. EXAMPLE: TV networks constantly monitor the popularity of their programs by hiring Nielsen and other organizations to sample the preferences of TV viewers. Scope of statistics in Business and management: 1. Marketing: Statistical analyses are frequently used in providing information for marketing decisions. A skilful analysis of data on population, purchasing power, habits of people, competition, transportation cost etc, should precede any attempt to establish a new market. 2. Production: In the field of production, statistical data and statistical methods play a very important role. The decision about what to produce, how much to produce, when to produce, for whom to produce is based largely on facts analysed statistically. 3. Finance: The financial Managers in discharging their finance function efficiently depend heavily on statistical analysis of facts and

figures. Financial forecasts, breakeven analysis and decisions under uncertainty are but part of their activities.

investment

4. Banking: Banking institutions have found it increasingly necessary to establish departments within their organization for the purpose of gathering and analyzing information. 5. Investment: Statistics greatly assists investor in making clear and valued judgment in his investment decision in selections securities which are safe and which have the best prospects of yielding a good income. 6. Purchase: The purchase department in discharging its functions makes use of statistical data to frame suitable purchase policies such as from where to buy, how much to buy, at what time to buy and at what price to buy. 7. ing: Statistical methods are also employed in ing .In particular, the auditing functions makes frequent application of statistical sampling and estimation procedures, and the cost uses regression analysis. 8. Control: The management control process combines statistical and ing methods in making the overall budget for the coming yearincluding sales, material, labor and other costs and net profits and capital requirements. 9. Credit: The credit department performs statistical analysis to determine how much credit to extend to various customers. 10. Personnel: The personnel department frames personnel policies based on facts. It makes statistical studies of wage rates, incentive plans, cost of living, labor turnover rates, employment trends, accident rates, employee grievances, performance appraisal, training programmes etc.

Limitations of statistics: 1. Statistics deals only with quantitative characteristics 2. Statistical results are true on average.

3. Statistics can be misused.