BUSINESS STATISTICS

INTRODUCTION
 What is Statistics ??
 Art and science of making decision using data

Analyzing and drawing meaningful conclusions from the data

 Collecting, describing, analyzing, and interpreting data for intelligent

decision-making

 Mathematics of variation

Branch of mathematics that deals with variation

Variation??
 Different

 Variation is everywhere.
Individuals vary
Repeated measurements on the same individual vary
Almost everything varies over time

 Conclusions are uncertain

How to deal with variation? How to describe the

uncertainty in our conclusions?
Study Statistics
• Variation is an integral part of data and almost all data show
variation
• Understanding the nature and pattern of variability of a
phenomenon in the data
• Median Salary of this year is 16.5 lakhs pa
• Average number of students for an elective is 16 and not 15.6
• Are mean, median, mode the same? Can I use them
interchangeably??
• Variable
• A variable is a characteristic of interest that differs among
observations or measurements
• Statistical methods enable us to draw conclusions by
quantifying the uncertainty (variance)
Types of Statistics

• DESCRIPTIVE STATISTICS
• Graphical and numerical methods to describe and analyze data.
• Data that are summarized and presented in a form that is easy to understand.
• Statistical information in newspapers, magazines, company reports

• INFERENTIAL STATISTICS
• Drawing conclusions, making generalization and a statement about the reliability of the
conclusion
• Making decisions or drawing conclusions using sample data raises question about the likelihood of the
decisions being correct
• This helps us understand why probability theory is used in statistical analysis
 Lets speak statistics

Elements/case: Entities on which data are collected

Variables: Object upon which the data are collected

E.g.: data collected on sales, profit, the number of customers served by a bank

Observations: measurements of an element

• A survey of a large college class asked the
following questions:
• Are you female or male? (In the data, male = 0, female = 1.)
• What is your height in inches?
 Lets speak statistics

 Population denotes the entire measurements

that are theoretically possible.
 Totality of items or things under consideration.
 Described by its parameter

 Sample: Subset of population

 Described by its statistics.
• An automaker hires a market research firm to learn what percent

of adults aged 18–35 recall seeing television advertisements for a

new hybrid car.
Self-Study

• 1.1 Applications in Business and Economics

• Classification of Data

• Data Types: Cross-Sectional and Time Series Data

• 1.3 Data Sources: Existing Sources and Statistical Studies

For the next class
• Case study: Web Analytics at Quality Alloys Inc
• Case study and data have been uploaded in AIS
• Work out questions 1 to 4 from the case study

• Chapter for reading:

• Chapter 2 : 2.1 and 2.2
• Chapter 3: 3.1 and 3.2