BUSINESS STATISTICS NOTES BCOM 1ST YEAR

BUSINESS STATISTICS NOTES BCOM 1ST YEAR

BUSINESS STATISTICS NOTES BCOM 1ST YEAR: Meaning and definition of statistics, scope of statistics, importance of statistics in business and trade, limitations and distrust of statistics, advantages of statistics. statistics in plural and singular sense.

QUESTION: Define Statistics. Discuss the scope of statistics in business.

Statistics are numerical statement of facts capable of analysis and interpretation as well as study of the methods used in collection, organization, presentation, analysis and interpretation of numerical data.

Statistics word has been derived from

  • Latin word ‘Status
  • Italian word ‘Statista
  • German word ‘Statistik
  • French word ‘Statistique’.

STATISTICS IN PLURAL SENSE

It refers to group of numerical data collected in a systematic manner with some definite objective.

ACCORDING TO HORACE SACRIST

“Statistics is the aggregate of facts, affected to a marked extent by multiplicity of causes, numerically expressed, enumerated or estimated according to a reasonable standard of accuracy, collected in a systematic manner, for a predetermined purpose and placed in relation to each other”.

STATISTICS IN SINGULAR SENSE

In singular sense, statistics refers to a science of all those statistical methods and techniques which are related with various stages of statistical analysis.

ACCORDING TO CROXTON AND COWDEN

“Statistics may be defined as the science of collection, presentation, analysis, interpretation of numerical data.”

SCOPE OF STATISTICS

Statistics are numerical statement of facts capable of analysis and interpretation as well as study of the methods used in collection, organization, presentation, analysis and interpretation of numerical data.

It is often said that “Statisticians is what Statisticians do”. This explains the scope of statistics as very wide and extends extensively to the fields of Economics, Commerce, Trade, Industry, Agriculture Physical sciences, bio-sciences, astronomy, psychology and many more.

The following points explain the scope of the statistics:

STATISTICS AND THE STATE

The word Statistics has been derived from the various words:

  • Latin word ‘Status’
  • Italian word ‘Statista’
  • German word ‘Statistik’
  • French word ‘Statistique’.

All these words means ‘political state’ or ‘stateman’s art’. This means statistics has a deep relation with the state. In ancient times the statistics is considered as Science of kings or science of statecraft and is associated with:

  • Collection of data concerning population
  • Number of deaths and births
  • Area under land cultivation
  • Number of crimes
  • Military strength and allied tasks.

But at present times, statistics is used by almost all ministries or government departments like Finance Ministry, Agriculture Ministry, Defence Ministry, Industrial Ministry and many more.

EXAMPLE: Use of statistics for framing the policy of poverty alleviation, population control, inflation control, money supply etc.

STATISTICS AND ECONOMICS

Scope of Statistics include the area of Economics also. The statistical data and methods of statistics are used for understanding the

  • Economic theories
  • Economic problems
  • Economic policy formulation
  • Economic planning
  • Budgeting
  • National income accounting
  • Foreign trade, etc.    

Statistics is helpful in understanding the intensity of the economic problem and deriving the solutions for the same on the basis of the data available.

EXAMPLE

  • Index Numbers are used to study Price of commodities, Volume of production, imports and exports etc.
  • Time series analysis is used to study the behavior of prices, production and consumption of commodities, money in circulation and sales of the firms.

STATISTICS AND ECONOMETRICS

Econometrics is one of the most recent fields of study concerning economics. It combines the methods and techniques of Statistics and Mathematics to build models for the analysis of economic problems and then provides solution to all those problems.

EXAMPLE: In Econometrics Linear Regression models are formulated to analyze the effect of various determinants of demand on demand for a product.

STATISTICS AND NATURAL SCEINCES

Natural sciences are biology, Zoology, medicine, meteorology etc. the statistics are helpful in the field of physical sciences as the experiments conducted in this field are based upon the data collected with the help of descriptive statistics. Statistics is used both for analyzing data and drawing conclusions.

STATISTICS AND PHYSICAL SCEINCES

Physical sciences involve Geography, geology, astronomy, Physics etc. Descriptive statistics is used to present the complex phenomenon concerning these branches of study in numerical form in a very simple way. The methods of statistics are applies to analyze the data and to find conclusions.

EXAMPLE: In geography data concerning temperature level over the years can be collected and analyzed with the help of the statistics.

STATISTICS AND SOCIAL SCEINCES

The statistical methods are also useful in the field of History, Sociology, Education, Psychology etc. Various researches in this field are done with the help of statistics.

EXAMPLE: In the field of politics, Statistics is used to evaluate the effects of the policies of the government.

In History, the record of all the past events is maintained with the help of the descriptive statistics.

STATISTICS AND RESEARCH

The Scope of statistics also includes the area of research. Any kind of research work is incomplete without the use of Statistics. It plays an important role in the empirical investigation of the laws and theories of various branches of study. It helps in verifying the practical validity of the laws and theories of various branches of study.

STATISTICS AND PLANNING

The scope of statistics also expands to the area of Planning. Planning is always done on the basis of past records or data. In this way, statistics becomes a base for planning and forecasting about the future.

ACCORDING TO TIPPET

“Planning is the order of the day and without statistics, planning is inconceivable”.

The saying of the Tippet rightly marked that the statistics and planning are indispensable.

STATISTICS AND INDUSTRIAL MANAGEMENT

The scope of statistics also extends to the field of Industry. Statistical Quality Control is a branch of Statistics that deals with ‘Quality Control’ of manufactured goods. With the help of probability theory and sampling technique, control charts and inspection plans are formulated.

EXAMPLE: ISO (International Standard Organisation) has stipulated certain statistical procedures to be followed to get an ISO series certificates which have increased the scope of statistics.    

STATISTICS AND BANKING

Statistics is used in the field of banking for various activities like

  • Fixing rate of interests
  • Advancing of loans
  • Making recoveries
  • Establishment of new branches etc.

Also the credit policy is framed on the basis of the data collected regarding the demand and supply of money in the economy.

STATISTICS AND INSURANCE

Theory of probability is the tool of statistics that is used in the insurance sector for the calculation of premium rates. Also life expectancy tables are prepared with the help of the statistics.

STATISTICS AND COMMERCE

Statistics is also helpful in each and every activity that is covered under the framework of the commerce. It is used in the business activities such as:

  • Production Management
  • Demand forecasting
  • Financial Analysis
  • Costing
  • Marketing
  • Manpower Planning
  • Market Research etc.

CONCLUSION

Apart from the above mentioned areas, the scope of statistics also extends to the fields of Chemistry, Sociology, engineering, accounting, auditing etc. It is instrumental in enhancing human welfare and as such is a master key that enables us to solve the problems of mankind almost in every field.

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