Statistics

Class 2
 Functions of Statistics
 Definiteness (results are in number)
 Condensation (Precision to the facts)
 Comparison
 Formulating and Testing Hypothesis
 Prediction
 Formulation of policy (Food policy, Tax policy)
 Enlarging Knowledge
 Measure uncertainty
 Scope of Statistics
 Statistics and the State
 Statistics in Business and Management
 Statistics and Economics
 Statistics and Physical Science
 Statistics and Natural Science
 Statistics and Research
 Statistics and Computer
 Statistics and other uses
Uses of Statistics in Business and
Management
Accounting Control

Marketing Credit

Production Personnel

Finance Research and Development

Banking

Investment

Purchase
 Limitations of Statistics
• Statistics laws are true on average.Statistics are aggregates
of facts, so a single observation is not a statistic.Statistics
deal with groups and aggregates only.
• Statistical methods are best applicable to quantitative data
• Statistics cannot be applied to heterogeneous data.
• Does not depict entire story of phenomenon
• O nly a means
• Can be misused
• Laws are not exact ( Law of inertia of large number, Law of
statistical regularity)
• O nly an expert can handle data
 Parameter and Statistic
 A descriptive measure of the population is called a
parameter.
 Parameters are usually denoted by G reek letters.
Examples of parameters are population mean ( ),
population variance ( ), and population standard
deviation ( ).
 A descriptive measure of a sample is called a statistic.
 Statistics are usually denoted by Roman letters.Examples
of statistics are sample mean ( ), sample variance (s2),
and sample standard deviation (s).
 Differentiation between the terms parameter and
statistic is important only in the use of inferential
statistics.
 Assignment
• Classify each of the follow ing as
nom inal,ordinal,interval,or ratio data.
a.The time required to produce each tire on an assembly line
b.The number of quarts of milk a family drinks in a month
c.The ranking of four machines in your plant after they have
been designated as excellent, good, satisfactory, and poor
d.The telephone area code of clients in the United States e.
The age of each of your employees
f.The dollar sales at the local pizza shop each month
g.An employee’s identification number
h.The response time of an emergency unit
 Assignment
• The Rathburn Manufacturing Company makes electric
wiring, which it sells to contractors in the construction
industry. Approximately 900 electric contractors purchase
wire from Rathburn annually. Rathburn’s director of
marketing wants to determine electric contractors’
satisfaction with Rathburn’s wire. He developed a
questionnaire that yields a satisfaction score between 10
and 50 for participant responses.A random sample of 35 of
the 900 contractors is asked to complete a satisfaction
survey.The satisfaction scores for the 35 participants are
averaged to produce a mean satisfaction score.
• a. W hat is the population for this study? b. W hat is the
sample for this study? c.W hat is the statistic for this study?
d.W hat would be a parameter for this study?