Statistics has been defined differently by different authors and each author has assigned new limits to the field which should be included in the scope of statistics
Seligman, defines “Statistics is a science which deals with the method of collecting, classifying, presenting, comparing and interpreting the numerical data to throw light on inquiry.
Horace Secrist defines “Statistics as the aggregate of facts affected to mark extent by the multiplicity of causes, numerically expressed, enumerated or estimated according to a reasonable standard of accuracy, collected in a systematic manner for the predetermined purpose and placed in relation to each other”.
Prof. Boddington defined “Statistics as the science of estimates and probabilities”.
Croxton and Cowden define “ Statistics is the science of collection, presentation, analysis, and interpretation of numerical data from logical analysis”.
A.L. Bowley defines, “Statistics may be called the science of counting and may be called the science of averages”.
According to King, “The science of statistics is the method of judging collective, natural or social, the phenomenon from the results obtained from the analysis or enumeration or collection of estimates”.
We can see that the definition given by Boddington is complete and covers all characteristics of Statistics.
Components of Statistics:
Collection of Data
Presentation of Data
Analysis of Data
Interpretation of Data
Importance of Statistics in Business and Management:
Statistical sampling techniques are used during the conduction of audits for clients. It also helps in detecting the trend and make a projection for next year.
Finance and Investments:
Statistical information can be used to study the trend in securities and that can be used to provide investment recommendations. Statistical methods help in selecting securities which are safe and have the best prospects of yielding a good income.
Statistical analysis is frequently used in for making a decision in the field of marketing it is the first step to find out what can be sold and to whom. Then using statistical methods a suitable strategy is formulated. A statistical analysis of data on production purchasing power, manpower, habits of competitors, habits of consumer, transportation cost can be done before entering a new market.
Nowadays electronic scanners at retail checkout counters are used to collect data and to study the buying behavior of the customer. The data obtained in this procedure is used to analyze it to formulate future marketing policies.
Statistical methods are used in quality control during the production process. It is also used to control and manage the flow of production. Statistical methods are used in the scheduling of men and machines.
Statistical data gathering and analysis of the information, help banks in their own business and also give an idea of the general economic situation of every segment of business in which they may have interest. Using this analysis they can formulate their lending policies.
The management control process combines statistical and accounting method in making the overall budget for the coming year including sales, materials, labor and other costs and capital requirement.
Purchase department can fix their schedule of purchasing orders depending upon the trends in consumption of raw materials and inputs. Thus they decide what to buy? When to buy? And how much to buy?
Statistical techniques and analysis are used for forecasting the future of the economy. Time series like moving averages, indicators like inflation index are statistical methods. We can consider statistics as the backbone of economics.
Categories of Statistics:
Statistics is broadly categorized into two parts based on their functions a) Descriptive Statistics and b) Inferential Statistics
Descriptive Statistics involves collecting, organizing, summarizing and presenting data.
It is useful in clinical research while communicating the results with experiments.
The methods used in this statistics is preparing tables, drawing graphs, measuring central tendency and the variation of the data from the central value.
Inferential Statistics involve making an inference, hypothesis testing, relation determination and making predictions.
The data obtained in descriptive statistics are analyzed and a valid inference is made out of it for effective decision making for managers and professionals. In this type deductions and conclusions are made regarding the population under study by collecting a sample from the population.