Statistics

Presented By:

Ankit Sharma Tanvi Gahlot Shikha GoelDhruv Garg Nikita Gupta Anantvijay Trivedi

The modern age is called an age of statistics. The statistics, these days, are most extensively and effectively used in all fields of social life and as such, like the ability to read and write, have become an essential part of human life. Statistics provide methodology for understanding, assessing and controlling the operation of the society and thus promotes social welfare.The facts based on statistical operations are considered to be most reliable and dependable.

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What is Statistics?• STATISTICS is a mathematical science involving the collection, interpretation,

analysis and presentation of numerical data.• Facts and figures about any phenomenon-whether it reLates to

population,production,national income,profits,sales,births,deaths etc. or any other matter are called statistics.

• Statistics is the study of how to collect, organize, analyze, and interpret numerical information from data.

• Collection of methods for planning experiments, obtaining data, and then organizing, summarizing, presenting, analyzing, interpreting, and drawing conclusions.

Whenever the numbers are collected and compiled, regardless of what they represent they become statistics.

Statistics word either refers to the quantitative information or to the methods of dealing with the quantitative information.

Statistics deals with the collection, organization, presentation, analysis and interpretation of data.

Examples• There are 993 females per 1000 males in India whereas in Russia there are

1170 females per 1000 males.• On an average for 400 students there is only one book published in India

every year.• The per capita net national product has gone up from Rs.15,839 to Rs.25,716

in last ten years.• The literacy rate has gone up from 18.33% to 64.84% in past 50 years.• Only 2 out of 11864 National Service dodgers have been hailed to the court• Based on the 2006 census, 40.5 million households have two vehicles. • The average annual salary for a professional football player for the year 2001

was $1,100,500.

In this age of information technology,we often have to deal with vast number of numerical information. Salary of employees,population of asian countries, and scores of students are example of numerical facts. Numerical information is called data. However only such numbers are termed as statistics that satisfy the following conditions

PLURAL NUMBERSINTERRELATEDREASONABLE APPROXIMATEAFFECTED BY MULTIPLE CAUSESPREDETEMINED PURPOSES

DEFINATION OF STATICSTICS

Statistics means the various methods adopted for the collection, analysis and interpretation of the figures. Further, in singular sense ,The concept of statistics is described as statistical methods. The Statistical method is “A Telescope through which we can study a large terrain that would be accessible to our unaided Vision”.Thus it may be stated that statistics is a science of collection, presentation, analysis, and interpretation of data.

SINGULAR SENSE

It means a collection of numerical facts. It is in this sense that the public usually think of statistics as figures concerned with population or production of wheat in different years or number of man-hours lost in specific year. Secondary Statistics eg- percentages, averages and coefficients derived from numerical facts, are also included in the term “Statistics” in this sense.

PLURAL SENSE

Branches of StatisticsThe study of statistics has two major branches: descriptive statistics and inferential statistics.

Statistics

Descriptive statistics

Inferential statistics

Involves the organization, summarization, and display of data.

Involves using a sample to draw conclusions about a population.

Functions

• Presentation of facts• Simplification of complexities• Facilitating comparisons• Facilitating the formulation of policies• Widening of human knowledge • Useful in testing the laws of other sciences• Facilitates the forecasting• Establishment of correlation between two facts

Broader sense FUNCTIONS

• Definiteness• Condensation• Comparison• Formulating and testing hypothesis• Prediction

Scope and importance of statistics

• Useful to bankers• Useful to insurance company• Useful to railways and other transport

agencies• Useful to business• Useful to economists• Useful to planning

Statistical Applications in Business

• Marketing - before launching a product, a market survey is done to analyze market situation, which uses many statistical techniques.

• Finance – Correlation analysis is done to find the relation between profit & dividends, assets & liabilities, income & expenditure.

• Human Resource – wage rates, labour turnover rates, incentive plans, cost of living, performance appraisal, etc.

• Production – R&D programme for the betterment of quality, appearance etc. uses statistical methods.

• Economics – Time series analysis is used to study the behavior of price, production, consumption, etc., Demand Analysis, forecasting techniques.

USES OF STATISTICS• Statistics is often used to make predictions

based on data• In Education statistics can be used to

assess students performance and correlate factors affecting teaching and learning process to improve quality of education.

• In Psychology statistics is used to determine attitudinal patterns, the causes and effects of misbehavior.

• in the field of medicine statistics is used to collect information about patients and diseases and to make decisions about the use of new drugs or treatment.

Statistical ApplicationsStatistics is used in almost all fields of human endeavor. In sports,

– statistician may keep records of the number of yards a running back gains during a football game, or the number of hits a baseball player gets in a season.

In public health– an administrator might be concerned with the number of residents who

contract a new strain of flu virus during a certain year. In education

– A researcher want to know if new methods of teaching are better than old ones.

In medical sciences– Sugar level, BP, normal heart beat rate, etc.

Furthermore, statistics is used to analyze the results of surveys and as a tool in scientific research to make decisions based on controlled experiments.

APPLICATION FOR MANAGERS

Modern business management is more a Science than an Art. Ever increasing global competition mandates business

managers to address uncertainty by using scientific methods and be Objective decision makers.

Forecasting, planning, organizing and decision making; some of the key activities of a manager intend better future for the

business. The only certainty about the future is its ‘uncertainty’. Even though one cannot eliminate uncertainty, it is possible to

measure uncertainty using Statistics: manager can make informed decisions by using Statistical methods and Statistical thinking. This calls for unraveling  the power of Statistics for

managers.Broadly, knowledge of statistics helps a manager to describe the

problem, identify and evaluate alternative courses of action, estimate error, monitor processes and take appropriate

corrective actions to achieve optimum results.

• A Marketing manager needs to gather and analyze a large amount of data pertaining to market dynamics and target customers. Ideally, marketing strategy depends up on the outcomes of a Market research, which involves statistical methods for collecting and analyzing data, application of sampling techniques and evaluating the effect of various marketing strategies.

• A production manager would ideally use Statistical Process Control techniques to improve productivity and quality. Knowledge and application of Control Charts, Sampling techniques and Probability Distributions ensures better processes and products. This also leads to the reduction in production cost and higher profits.

• A HR manager would be interested in identifying the best approach to train employees and evaluate the impact of training. There is a need to measure attrition and understand the underlying factors.

• For a Finance manager, crunching financial data and using financial techniques is an integral part of day-to-day job. Knowledge of Statistics enhances competency and proficiency of a manager as a researcher and therefore provides an edge.

• Also, in today’s scenario, a graduate from B – school is expected not just to manage functional departments of a corporate house, but, be an intrapreneur. He/she is expected to approach work with an entrepreneurial mind set. Professionally trained and skilled graduates are encouraged to establish ventures, create jobs and create value. In order to be entrepreneurial it is important to be able to ‘think out of box’ and be ‘objective’. In other words, one needs to nurture ‘Creative and Statistical thinking’ for success. Quantitative analysis aids in providing an objective, factual underpinning of situations and responses. Analysis, along with data, helps quantify the extent of problems and solutions in ways that other information seldom can.

• Be it a simple tools like Tables, Graphs, for presentation and measures of Central Tendency, Dispersion, Association for analysis of data, or complex techniques like Multi-variate techniques, Big Data analysis, Structural Equation Modeling, Statistical techniques have made their way into corporate broad rooms. This indicates the indispensability of Statistics for managerial decisions.

Limitations of Statistics• Use of statistics is limited in case of qualitative variables.• Statistics does not study individuals• Statistics reveals the average behavior, the general trend, which may

lead to wrong conclusions or sometimes may be disastrous.• Data collected for a particular purpose, may not be relevant in other

cases.• It is not 100% precise as mathematics or accounting.• Stats can be misused. One should have enough skills and experience to

draw accurate and sensible conclusions.– A survey concludes that smoking causes lung cancer, since 90% people

die before 70 who smoke. This statement is statistically invalid.