1. 1
Welcome To
A Session On
Business Statistics

2. Learning objectives 3
When you have completed this chapter, you will be able to:
Define what is meant by statistics.
Explain what is meant by descriptive statistics and inferential statistics.
Distinguish between a qualitative variable and a quantitative variable.
Distinguish between a discrete variable and a continuous variable.
Distinguish among the nominal, ordinal, interval, and ratio levels of measurement.
Define the terms mutually exclusive and exhaustive.

3. What is Meant by Statistics?4
The term statistics has been defined differently by different authors. There are two basic concepts:
Some defined statistics as statistical data (plural sense )
Some defined statistics as statistical methods (singular sense)

4. How is statistics defined in plural sense?5
How is statistics defined in plural sense?
Webster defined statistics as “the classified facts relating the condition of the people in a state especially those facts which can be stated in numbers or in tables of numbers or in any tabular or classified arrangements.”
Horace Secrist defined statistics as “aggregate of facts affected to a marked extent by multiplicity of causes, numerically expressed, enumerated or estimated according to reasonable standards of accuracy, collected in a systematic manner for a pre-determined purpose and placed in relation to each other.”

5. What are the characteristics which numerical data must possess in order that they may be called statistics? 6
Statistics are aggregate of facts
Statistics are affected to a marked extent by multiplicity of causes
Statistics are numerically expressed
Statistics are enumerated or estimated according to reasonable standards of accuracy
Statistics are collected in systematic manner
Statistics are collected for a pre-determined purpose
Statistics should be placed in relation to each other.

6. How is statistics defined in singular sense?7
How is statistics defined in singular sense?
“Statistics may be called the science of counting”
“Statistics may be called the science of averages”
“Statistics is the science of the measurement of Social organism, regarded as a whole in all its manifestations.”
“ the science of estimates and probabilities.”
Statistics, as defined by Lind, Marchal and Wathen, is the “science of collecting, organizing, presenting, analyzing, and interpreting data to assists in making a more effective decisions”.

7. What are the stages in a statistical investigation?8
What are the stages in a statistical investigation?
From the definition of Lind, Marchal and Wathen, the stages in a statistical investigation may briefly be stated as “COPAI”,
Where,
C stands for collecting
O stands for organizing
P stands for presenting
A stands for analyzing ( editing / classifying /
tabulating)
I stands for interpreting

8. What are the functions of statistics?9
What are the functions of statistics?
Definiteness: It presents facts in a definite form.
Condensation: It simplifies mass of figures
Comparison: It facilitates comparison
Formulation and testing hypothesis: It helps in formulating and testing hypothesis.
Prediction: It helps in prediction.
Formulation of policies: It helps in the formulation of suitable policies.

9. What are the fields in which statistics is applied?10
What are the fields in which statistics is applied?
The fields where statistical techniques are used include:
Government
Business and Management
Economics
Physical Science
Natural Sciences
Research

10. What is the scope of business statistics?11
What is the scope of business statistics?
The scope of business statistics is limited to the following areas of business:
Marketing
Production
Finance
Banking
Investment
Continued….

11. What is the scope of business statistics?12
What is the scope of business statistics?
Personnel
Research and Development
Purchase
Accounting
Control

12. What are basic types of Statistics?13
Descriptive Statistics
Inferential Statistics
Continued….

13. What is meant by Descriptive Statistics?14
Descriptive statistics : Descriptive statistics refers to methods of organizing, summarizing, and presenting data in an informative way.
Example 1: A Gallup poll found that 49% of the people in a survey knew the name of the first book of the Bible. The statistic 49 describes the number out of every 100 persons who knew the answer.
Example 2: According to Consumer Reports, Whirlpool washing machine owners reported 9 problems per 100 machines during The statistic 9 describes the number of problems out of every 100 machines

14. What is inferential Statistics?15
Inferential statistics: Inferential statistics is a decision, estimate, prediction, or generalization about a population, based on a sample.
A population is a collection of all possible individuals, objects, or measurements of interest.
A sample is a portion, or part, of the population of interest.
Continued….

15. What is inferential Statistics?16
Example 1: TV networks constantly monitor the popularity of their programs by hiring Nielsen and other organizations to sample the preferences of TV viewers.
Example 2: The accounting department of a large firm will select a sample of the invoices to check for accuracy for all the invoices of the company.
Example 3: Wine tasters sip a few drops of wine to make a decision with respect to all the wine waiting to be released for sale.

16. What is meant by a variable?17
What is meant by a variable?
A variable is any trait that can change values from case to case ( e.g. age, income).
Example:
Person A B C D
Age 20 25 30 31
What are various types of variables?

17. What are various types of variables?18
What are various types of variables?
Types of Variables
Quantitative
Qualitative
Brand of PC
Marital status
Hair color
Discrete
Continuous
Children in family
Strokes on a golf hole
TV sets owned
Amount of income
tax paid
Weight of a student
Yearly rainfall

18. What is qualitative variable?19
What is qualitative variable?
Qualitative variable or Attribute : This refers to the attribute or characteristic that is nonnumeric.
Example: Gender, religious affiliation, type of automobile owned, and eye color.

19. What is quantitative variable?20
What is quantitative variable?
Quantitative variable: This refers to a variable that can be reported numerically.
Example: Balance in your, income, wages, and number of children in a family.

20. What are different types of quantitative variables?21
What are different types of quantitative variables?
Quantitative variables can be classified as:
Discrete
Continuous
Continued…….

21. What are discrete variables?22
What are discrete variables?
Discrete variables: Discrete variables are those that can assume only certain values, and there are usually “gaps” between values.
Example: 1 : The number of bedrooms in a house. (1,2,3,..., etc...).
If the number of children in a family is the variable of interest, it is obvious that it cannot assume fractional values and hence it is a discrete variable. The important point is that the possible values of the variable are separated from one another.

22. What is meant by a continuous variable?23
What is meant by a continuous variable?
Continuous variables: A variable is said to be continuous if it can theoretically assume any value within given range or ranges.
Example:
The time it takes to fly from Toledo to New York. Other examples include height of a person, price of a commodity and time.

23. How can you classify data by levels of measurement?24
How can you classify data by levels of measurement?
There are four types of data based on levels of measurement :
Nominal
Ordinal
Interval
Ratio

24. 25 Levels of Measurement Nominal Ordinal Interval Ratio Data may only
be classified
Data are ranked
Meaningful
difference
between values
Meaningful 0
point and ratio
Between values
Jersey numbers
of football
players
Make of car
Your rank in
class
Team standings
in the Pac 10
Temperature
Number of
patients seen
Number of sales
calls made
Distance to class

25. What are the levels of measurement?26
What are the levels of measurement?
Nominal level (scaled): Nominal level data refer to those that can only be classified into categories and cannot be arranged in an ordering scheme.
Example : Eye color, gender, religious affiliation.
Mutually exclusive: An individual or item that, by virtue of being included in one category, must be excluded from any other category.
Example : Eye color.

26. What are the levels of Measurement?27
What are the levels of Measurement?
Exhaustive: each person, object, or item must be classified in at least one category.
Example: religious affiliation.
Ordinal level: Ordinal level data refer to involves those data that may be arranged in some order, but differences between data values cannot be determined or are meaningless.
Example: During a taste test of 4 colas, cola C was ranked number 1, cola B was ranked number 2, cola A was ranked number 3, and cola D was ranked number 4.

27. What are the levels of Measurement?28
What are the levels of Measurement?
Interval level: Interval level data are similar to the ordinal level, with the additional property that meaningful amounts of differences between data values can be determined. There is no natural zero point.
Example: Temperature on the Fahrenheit scale.

28. What are the levels of Measurement?29
What are the levels of Measurement?
Ratio level: Ratio level data are those have all the characteristics of the interval level with an inherent zero starting point. Differences and ratios are meaningful for this level of measurement.
Example: Wages, weight, money, heights.

29. Is statistics science or Art ?30
Is statistics science or Art ?
Science refers to a systematised body of knowledge. It studies cause and effect relationship and attempts to make generalisations in the form of scientific principles or laws. It describes facts objectively and avoids vague judgements as good or bad. Science, in short, is like a lighthouse that gives light to the ships to find out their own way but does not indicate the direction in which they should go.
Statistics is the science of collecting, organizaitng, presenting, analyzing, and interpreting numerical data for the purpose of assisting in marking a more effective decision.
Continued…..

30. Is statistics science or Art ?31
Is statistics science or Art ?
Art, on the other hand, refers to the skill of handling facts so as to achieve a given objective. It is concerned with ways and means of presenting and handling data, making inferences logically and drawing relevant conclusions.

31. What are the limitations of statistics?32
What are the limitations of statistics?
The limitations of statistics are as follows:
Statistics does isolated measurement
Statistics deals only with quantitative characteristics
Statistical are results true on only an average
Statistics is only a means
Statistics can be misued

32. How people are mislead by statistics?33
How people are mislead by statistics?
Figures are convincing and, therefore, people are easily led to believe them.
They can be manipulated in such a manner as to establish foregone conclusins.
Even if correct figures are used, these may be presented in such a manner that the reader is misled.
Continued……

33. 34
Figures are innocent, easily believable and more convincing. The facts supported by figures are psychologically more appealing
Figures, put forward for arguments may be inaccurate or incomplete and thus might lead to wrong information.
Figures, though accurate, might be moulded and manipulated by selfish persons to conceal the truth and present a distorted picture of facts to the public to meet their selfish motives.

34. 35
Thank you
For
Attending
The
Session