Business Statistics

BBA 2nd Sem

 Meaning of Statistics
The word ‘Statistics’ seems to have been derived from the Latin
word ‘Status’ or Italian word ‘Statista’ or the French word ‘Statistique’,
each of which means a ‘Political State’.
Modern statistics has multiple meanings. Mainly statistics can be
classified under two heads: statistics as data in plural form and statistics
as method in singular form.
But for a common man statistics is always data.
 Characteristics of Statistics
1. Statistics are numerically expressed
2. Statistics are aggregate of facts
3. Statistics are affected to a marked extent by multiplicity of causes
4. Statistics are enumerated or estimated according to a reasonable
standard of accuracy
5. Statistics are collected in a systematic manner for a predetermined
purpose
6. Statistics are placed in relation to each other
 Nature of Statistics

• Statistics as a Science: Science is a body of systematized knowledge

from which specific propositions are deducted in accordance with a
few general principles. There are in general four stages in a scientific
inquiry : (a)Observation (b)Hypothesis (c)Prediction (d)Verification
Since Statistical methods are based on the same fundamental ideas and
processes as other sciences, so statistics is said to be science.
• Statistics as an Art: An art is an applied knowledge and creation of
beauty leading to perfection. If science is a knowledge then art is an
action. Statistics may be called an art of applying scientific methods
similar to an artist.
 Scope and Division of Statistics
The scope and division of statistics are divided into two parts:
1. Statistical Methods
a. Collection of data
b. Organization of data
c. Presentation of data
d. Analysis of data
e. Interpretation of data
f. Forecasting
2. Applied Statistics
a. Descriptive Applied Statistics
b. Scientific Applied Statistics
 Functions of Statistics
1. Simplifies the data
2. Presents facts in a definite and precise form
3. Comparison of data
4. Establishment of relationship
5. Enlarges human knowledge and experience
6. Formulation of Policies and Decision making
7. Forecasting for the future
8. Testing the Hypothesis
 Limitations of Statistics
1. Statistics studies only the quantitative facts and does not study
qualitative phenomena
2. Statistics is a study of aggregate and does not study individuals
3. Homogeneity and uniformity in data is must
4. Statistical laws are true only on an average
5. There is a lack of complete accuracy in Statistics
6. Proper use of statistics is possible only through experts
7. Statistical results may be misleading if quoted without context
8. Statistical method is not the only method of study of a problem
 Importance of Statistics
• Importance of Statistics in Human Behaviour
• Importance in State administration
• Importance in Economics (Consumption, Production, Exchange,
Distribution)
• Importance in Economics Planning
• Importance in Business (Trade and Industry)
• Importance in Commerce( Bank, Insurance, Transport etc.)
• Importance in Social problems
• Importance for Politicians
• Basis of various Subjects and Sciences
 Importance of Statistics in Business Management

• Production Management
• Marketing management
• Personnel Management
• Financial Management
• Accounting
 Distrust of Statistics
Distrust of Statistics means lack of confidence in statistical statements
and statistical methods.
Reasons for Distrust in Statistics
• Overlooking the data externally
• Contradictory figures
• Direct conclusions contradicts the data
• Absence of an objective test for accuracy of the data
• Unawareness of the public
• Indifference of Limitations of Statistics
• Misuse of Data by selfish persons
• Innocence of the figures
 Collection Of Data
Types of data on the basis of collection
• Primary Data : Primary data means those data which are originally
collected by an investigator or agency for the first time for any
statistical investigation.
• Secondary Data : Secondary data are those which are already
collected by other persons or agencies and the investigator just uses
them.
 Difference between Primary and Secondary Data
Basis of Difference Primary Data Secondary Data
Originality Collected originally. Already available and not original

Collection Collected by Investigator himself Collected by some other person

Objective According to the object of the survey Used and adjusted by the person according to
the object

Time Time consuming Less time consuming

Precaution Needs more precaution at the time of Needs less precaution at the time of
collection collection but more at the time of its use

Conversion After use it converted into a secondary data It can never be converted into primary data

Point of Time Primary data is collected for the first time Secondary data is collected for the second

Point of Shape Raw material Finished goods

 Methods of collecting Primary Data
1. Direct Personal Investigation
2. Indirect Oral Observation
3. Through Local Correspondents
4. Through Questionnaire filled in by informants
5. Through Schedules filled in by the investigator
 Sources of Secondary Data
1. Published Data
• Government publications and reports
• International publications and reports
• Reports of Commissions and Committees
• Newspapers
• Private publications
• Journals
• Published Thesis
2. Unpublished Data
 Classification of Data
Classification: Classification is defined as the process of arranging the
collected data into homogeneous classes so as to exhibit its common
characteristics.
In other words classification is a process in which the collected
data are arranged in separate classes, groups or sub-groups according to
their different characteristics.

• For example: qualification, age, gender etc.

 Objectives of Classification
• To condense the data
• To simplify the data
• To show points of likeness and unlikeness
• To facilitate comparison
• To enable data for analysis
• To bring out relationship
• To prepare ground for tabulation
 Types of Classification
1. Geographical Classification
2. Chronological Classification
3. Qualitative Classification
a. Dichotomous or simple classification
b. Manifold classification
4. Quantitative Classification
a. Discrete variable
b. Continuous variable
 Frequency Distribution
Frequency may be defined as the number of items having the
same measurement or lies in the same measurement group.
Frequency distribution is the distribution of frequencies over
different measurement.
Frequency distribution may be of two types:
1. Univariate frequency distribution
a. Discrete frequency distribution
b. Continuous frequency distribution
2. Bivariate frequency distribution
 Types of Class Intervals
• On the basis of Class limits
a. Exclusive Method
b. Inclusive Method
c. Open end Classes
• On the basis of Magnitude of Class intervals
a. Equal Interval
b. Unequal Interval
• On the basis of Nature of frequencies
a. General or Basic frequency distribution
b. Relative frequency distribution
c. Cumulative frequency distribution
• On the basis of Mid value or Central Size
 Tabulation
Tabulation is the another way of summarizing and
presenting the given data in a systematic form in rows and
columns.
In brief, tabulation is a process, on the basis of which
table is prepared by presenting data in a simple and condensed
form in a framework of rows and columns.
 Objectives or Advantages of Tabulation
• To simplify complex data
• To facilitate comparison
• To economise space
• To facilitate statistical analysis
• To clarify the characteristics of data
• To facilitate presentation
• To help in reference
• To provide consistency and detect errors
 Difference between Classification and Tabulation
Classification
Sequence Classification is done first.
Presentation Data classified into different classes
according to their Characteristics.
Method Classification is a method of
statistical analysis.
Basis of Presentation Classes and Sub-classes
Use of Data Original data is used
Tabulation
Tabulation later on.
In Tabulation the classified data
are placed in columns and rows.
Tabulation is a method of data
presentation.
Headings and Sub-headings
In tabulation derivatives may also
be used.
 Main parts of a Table
• Table Number
• Title of the table
• Body of the table
• Captions and Stubs
• Ruling and Spacing
• Footnotes
• Source
 Types of Tables
• On the basis of Construction
1. Simple Table
2. Complex Table
1. Double or Two way table
2. Trible or three way table
3. Manifold table
• On the basis of Objectives
1. General purpose table
2. Specific purpose table
• On the basis of Originality
1. Original Table
2. Derivative table
 Essentials of a Good Table
• Proper Size
• Attractive
• According to objective
• Comparable
• Adjustment as per Importance
• Use of Original Data
• Use of Rules of Tabulation
 Graphic Presentation of Data
Graphic presentation is a visual method of representing data in an
effective and appealing manner.
Advantages of Graphic Presentation
• Attractive and impressive
• Convenience in comparative study
• Utility in Interpolation, etc.
• Calculation of Mode and Median
• Presentation of Historical and Time based information
• Presentation of frequency distribution
• Easy to understand
• Study of the data of different units
• Study of Proportional changes
 Rules for constructing a Graph
• Proper Size
• Structural framework
• Ratio of Axis
• Selection of scale
• Mentioning the scale
• Use of false base line
• Line designs
• Index
• Use of Ratio scale
• Source of data
• Simplicity and neatness
• Mentioning original data
 Types of Graphs
• Graphs of time Series
1. One dependent variable Historigram
2. More Than one variable Historigram
3. Mixed graphs or Double scale Graphs
4. Net balance graphs
5. Range or Zone graphs
6. Band graphs
7. Zee chart or Z curve graph
• Graphs of Frequency distribution
1. Line Frequency Diagram
2. Histogram
3. Frequency Polygon
4. Frequency Curve
5. Cumulative Frequency Curve or Ogive