1.

Introduction to Business Statistics

1.1. Definition and Scope of business statistics, Importance, scope and Applications of statics, characteristics of statistics,
Functions of Statistics, Limitations of statistics, Importance of Statistics in modern business environment.
1.2 Need of Data: Organization of data, data classification and Types of data: Qualitative and Quantitative.
1.3 Data Collection Methods and representation of data, principles of measurement, sources of data.
1.4 Scales of measurement: Nominal , Ordinal, Interval, Ratio
1.5 Descritive Vs Inferential Statistics
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What is Statistics?
 The word “Statistics” has been derive from the Latin word “Status” or Italian word “Statista” or German word
“Statistika”. Each of these words means Political State. Initially, Statistics was used to collect the information of
the people of the state about their income, health, illiteracy and wealth etc.
 But now a day, Statistics has become an important subject having useful application in various fields in day to day
life
Statistics in Plural Sense:--
 In the plural sense, Statistics refers to information in terms of numbers or numerical data such as
Population Statistics, Employment Statistics etc. However any numerical information is not statistics.
 Example: Ram gets Rs 100 per month as pocket allowance is not Statistics. It is neither an
aggregate nor an average. Whereas average pocket allowance of the students of Class X is Rs. 100
per month and there are 80 students in class XI & 8 students in Class XII are Statistics. The following
table shows a set of data that which is Statistics and which is not Statistics.
Data which are not Statistics Data which are Statistics
 A cow has 4 legs. Average height of the 26 plus male people in India is 6 feet compare to 5 feet in
Nepal.
 Ram has 200 rupees in his pocket. Birth rate in India is 18 per thousand compare to 8 per thousand in
USA.
 A young lady was run over by a speeding truck at 100 km per hour. Over the past 10 years, India has
won 60 test matches in cricket and lost 50.
From above information we can say that “All Statistics are data, but all data are not Statistics”
Definition:-
 According to Bowley - “Statistics are numerical statements of facts in any department of enquiry placed
in relation to each other.”
 According to Yule and Kendall ----- “By Statistics we mean quantitative data affected to marked extent
by multiplicity of causes.”
Importance of Statistics :
The importance of business statistics cannot be overstated in today‟s data-driven business
environment. Business statistics is essential for enhancing decision-making, optimizing operations,
managing risks, and staying competitive in the business landscape. It empowers organisations to
harness the power of data to achieve their objectives and drive long-term success. Here are several key
reasons why business statistics is crucial for organizations:
1. Informed Decision-Making:
 Business statistics provides the tools and techniques necessary to analyze data and extract
valuable insights. This enables organizations to make informed decisions based on empirical
evidence rather than relying on intuition or guesswork.
2. Performance Evaluation:
 It allows businesses to assess the performance of various aspects of their operations, such as
sales, marketing, production, and finance. By measuring performance against established
benchmarks and objectives, companies can identify areas for improvement.
3. Risk Assessment and Mitigation:
 Business statistics help in identifying and quantifying risks. By understanding the likelihood
and potential impact of various risks, organizations can take proactive measures to mitigate
them, enhancing their resilience and ability to adapt to changing circumstances.
4. Market Understanding:
 Companies can use statistics to gather and analyze data on market trends, consumer behavior,
and competition. This information is vital for developing effective marketing strategies,
launching new products, and staying competitive.
5. Resource Optimization:
 Statistics aids in optimizing resource allocation, including budgeting, manpower, and inventory
management.
6. Quality Improvement:
 Statistical quality control techniques help businesses monitor and enhance the quality of their
products or services. By reducing defects and variations, companies can improve customer
satisfaction and reduce waste.
7. Forecasting:
 Business statistics is essential for making accurate forecasts, whether it is predicting sales,
demand for products, or financial trends. These forecasts are instrumental in planning and
resource allocation.
Scope of Statistics :
In early stages, the scope of statistics was very limited. It was confined mainly to the administration of
government and was, therefore, called the „Science of Kings‟. But in modern time, the scope of statistics has
widened usually all those facts come in the purview of statistics, which are expressed in quantitative terms
directly or indirectly. That is why Croxton & Cowden observed, “Today there is hardly a phase of endeavor
which does not find statistical devices at least occasionally useful.” It is not unfair to say, science without
statistics bears no fruit and statistics without science have no root.” The applications of statistics are so numerous
that it is often remarked, “Statistics is what statisticians do.” Now let us examine a few fields or areas in which
statistics is applied.
1. Statistics and the State: in recent years the functions of the state have increased tremendously. The concept of
the state has changed from that of simply maintaining law and order to that of a welfare state. Statistical data and
statistical methods are of great help in promoting human welfare. The government in most countries is the biggest
collector and user of statistical data. These statistics help in framing suitable policies.
2. Statistics in Business and Management: with growing size and increasing competition, the problems of
business enterprises have become complex. Statistics is now considered as an indispensable tool in the analysis of
activities in the field of business, commerce and industry. The object can be achieved by properly conducted
market survey and research which greatly depends on statistical methods. The trends in sales and production can
be determined by statistical methods like time-series analysis which are essential for future planning of the
phenomena. Statistical concepts and methods are also used in controlling the quality of products to satisfaction of
consumer and the producer. The bankers use the objective analysis furnished by statistics and then temper their
decisions on the basis of qualitative information.
3. Statistics and Economics: R.A.Fisher complained of “the painful misapprehension that statistics is a branch of
economics.” Statistical Data and methods are of immense help in the proper understanding of the economic
problems and in the information of economic policies. In the field of exchange, we study markets, law of prices
based on supply and demand, cost of production, banking and credit instruments etc. The development of
various economic theories own greatly to statistical methods, e.g., „Engel‟s law of family expenditure‟,
„Malthusian theory of population‟. The impact of mathematics and statistics has led to the development of new
disciplines like „Econometrics‟‟ and „Economic Statistics‟. In fact, the concept of planning so vital for growth of
nations would not have been possible in the absence of data and proper statistical analysis.
4. Statistics and Psychology and Education: Statistics has found wide application in psychology and education.
Statistical methods are used to measure human ability such as; intelligence, aptitude, personality, interest etc. by
tests. Theory of learning is also based on Statistical Principles. Applications of statistics in psychology and
education have led to the development of new discipline called „Psychometric‟.
5. Statistics and Natural science; Statistical techniques have proved to be extremely useful in the study of all
natural sciences like biology, medicine, meteorology, botany etc. for example- in diagnosing the correct disease
the doctor has to rely heavily on factual data like temperature of the body, pulse rate, B.P. etc. In botany- the
study of plant life, one has to rely heavily on statistics in conducting experiments about the plants, effect of
temperature, type of soil etc. In agriculture- statistical techniques like „analysis of variance‟ and „design of
experiments‟ are useful for isolating the role of manure, rainfall, watering process, seed quality etc. In fact it is
difficult to find any scientific activity where statistical data and methods are not used.
6. Statistics and Physical Science: The physical sciences in which statistical methods were first developed and
applied. It seems to be making increasing use of statistics, especially in astronomy, chemistry, engineering,
geology, meteorology and certain branches of physics.
7. Statistics and Research: statistics is indispensable in research work. Most of the advancement in knowledge
has taken place because of experiments conducted with the help of statistical methods. Statistical methods also
affect research in medicine and public health. In fact, there is hardly any research work today that one can find
complete without statistical methods.
8. Statistics and Computer: The development of statistics has been closely related to the evolution of electronic
computing machinery. Statistics is a form of data processing a way of converting data into information useful for
decision-making. The computers can process large amounts of data quickly and accurately. This is a great benefit
to business and other organizations that must maintain records of their operations. Processing of row data is
extensively required in the application of many statistical techniques.

Applications of Statistics
1. Healthcare: In the medical field, statistics are used for designing clinical trials, understanding disease
prevalence, and evaluating the effectiveness of treatments. It helps in making informed decisions
regarding patient care and public health policies.
2. Business and Economics: Companies rely on statistical analysis for market research, quality control, and
financial forecasting. It aids in understanding consumer behavior, optimizing operations, and assessing
economic trends.
3. Environmental Science: Statistics help in monitoring environmental changes, assessing pollution levels,
and studying the impact of human activities on the environment. It‟s vital for developing sustainable
practices and policies.
4. Government and Public Policy: Statistical data is essential for governments in planning, resource
allocation, and policy formulation. It supports decision-making in areas like education, transportation, and
social services.
5. Sports: In sports, statistics are used to analyze player performance, strategize game plans, and predict
outcomes. It enhances the understanding of game dynamics and improves team performance.
6. Research and Development: Statistics are fundamental in scientific research, enabling the testing of
hypotheses and interpretation of experimental data. It supports innovation and discovery across all
scientific disciplines.
The application of statistics is integral to solving complex problems and making informed decisions in a
data-driven world.
Characteristics of Statistics
Some characteristics of statistics include:

1. Aggregates of facts: Statistics are made up of a collection of facts.

2. Numerical expression: Statistics are a way to express information numerically so that the relationship
between variables can be studied.
3. Systematic collection: Data is collected in a systematic order.
4. Comparability: Data should be comparable to each other.
5. Presentation: Data presentation is important for helping users understand the statistics.
6. Correlation: Correlation is a common statistic that measures the relationship between two variables.
7. Statistical inference: Statistical inference is a way to make evidence-based claims when only partial data
is available.
8. Measures of central tendency: Measures of central tendency, such as the mean, median, and mode,
represent the middle of a set of data values.
9. Numerical comparisons: Numerical comparisons between variables can help researchers and
stakeholders better understand the data.

Functions of Statistics:
Statistics performs the functions of making the numerical aspects of facts simple, precise, comparable and
reliable. In fact, the various functions performed by statistics are the basis of its utility. R.W. Burgess says, “The
fundamental gospel of statistics is to push back the domain of ignorance, prejudice, rule of thumb, arbitrary and
premature decisions, tradition & dogmatism and to increase the domain in which decisions are made. Principles
are formulated on the basis of analyzed quantitative facts.”
1. Numerical and definite expression of facts: The first function of the statistics is the collection and presentation
of facts in numerical form. We know that the numerical presentation helps in having a better understanding of the
nature of a problem. One of the most important functions of statistics is to present general statements in a precise
and definite form. Statements and facts conveyed in exact quantitative terms are always more convincing than
vague utterances.
2. Simplifies the data (condensation): Not only does statistics present facts in a definite form but it also helps in
condensing mass of data into a few significant figures. According to A.E.Waugh, “the purpose of a statistical
method is to simplify great bodies of numerical data.”In fact, human mind cannot follow the huge, complex and
scattered numerical facts. So these facts are made simple and precise with the help of various statistical methods
like averages, dispersion, graphic or diagrammatic, presentation, classification, tabulation etc. so that a common
man also understand them easily.
3. Comparison of facts: Baddington states, “The essence of the statistics is not only counting but also
comparison.” The function of comparison does help in showing the relative importance of data. For example- the
pass % of examination result of a college may be appreciated better when it is compared with the result of other
college or the results of previous years of the same college.
4. Establishment of relationship b/w two or more phenomena; to investigate the relationship b/w two or more
facts is the main function of statistics. For example-demand and supply of a certain commodity, prices and wages,
temperature and germination time of seeds are interrelated.
5. Enlarges individual experiences: In word of Bowley, “the proper function of statistics indeed is to enlarge
individual experience.” Statistics is like a master key that is used to solve problems of mankind in every field. It
would not be exaggeration to say that many fields of knowledge would have remained closed to the mankind
forever but for the efficient and useful techniques and methodology of the science of statistics.
6. Helps in the formulation of policies: statistics helps in formulating policies in different fields, especially in
economic, social and political fields. The government policies like industrial policy, export-import policies,
taxation policy and monetary policy are determined on the basis of statistical data and their movements, plan
targets are also fixed with the help of data.
7. Helps in forecasting: statistical methods provide helpful means in estimating the available facts and forecasting
for future. Here Bowley‟s statementis relevant that, “a statistical estimate may be good or bad, accurate or the
reverse; but in almost all cases it is likely to be more accurate than a casual observer‟s impression.”
8. Testing of hypothesis: statistical methods are also employed to test the hypothesis in theory and discover newer
theory. For example-the statement that average height of students of college is 66 inches is a hypothesis. Here
students of college constitute the population. It is possible to test the validity of this statement by the use of
statistical techniques.

Limitations of Statistics:
Newsholme states, “Statistics must be regarded as an instrument of research of great value but having several
limitations which are not possible to overcome and as such they need out careful attention.”
1. Statistics does not study qualitative facts: Statistics means aggregate of numerical facts. It means that in
statistics only those phenomena are studied which can be expressed in numerical terms directly or indirectly. Such
as- (1) directly in numerical terms like age, weight and income of individual (2) no directly but indirectly like
intelligent of students and achievements of students (3) neither directly nor directly like morality, affection etc.
such type of facts don‟t come under the scope of statistics.
2. Statistics doesn‟t study individual: According to W.I.King, “Statistics from their very nature of subject cannot
and will never be able to take into account individual causes. When these are important, other means must be used
for their study.” These studied are done to compare the general behavior of the group at different points of time or
the behavior of different groups at a particular point of time.
3. Statistical results are true only on the average: The statistical laws are not completely true and accurate like the
law of physics. For example – law of gravitational forces is perfectly true & universal but statistical conclusions
are not perfectly true. Such as the average age of a person in India is 62 years. It does not mean that every person
will attain this age. On the basis of statistical methods we can say only in terms of probability and not certainty.
 4. Statistics as lack of complete accuracy: According to Conner, “Statistical data must always be treated as
approximations or estimates and not as precise measurements.” Statistical result are based on sample or census
data, are bound to be true only approximately. For example – according to population census 2001, country‟s
population is 1,02,70,15,247 but can real population may not be more or less by hundred, two hundred and so on.
5. Statistics is liable to be misused: Statistical deals with figures and it can be easily manipulated, distorted by the
inexpert and unskilled persons it is very much likely to be misused in most of the cases. In other words, the data
should be handled by experts. Thus it must be used by technically sound persons.
6. Statistics is only one of the methods of studying a phenomenon; According to Croxton & Cowden, “It must not
be assumed that the statistical method is the only method to be used in research; neither this method be considered
the best attack for every problem.” The conclusions arrived at with the help of statistics must be supplemented
with other evidences.
7. Statistical results may be misleading; Without any reference, statistical results may provide doubtful
conclusions. For example – on the basis of increasing no. of prisoners in the prison, it may be conclude that crime
is increasing. But it may be possible that due to rude behavior of police administration the number of prisoners is
increasing but crime is decreasing.
Therefore, it is worth-mentioning that every science based on certain assumption and limitations. This does not
reduce the importance of the subject but lays emphasis on the fact that precautions should be taken while dealing
with statistical analysis and interpretations.

Importance of Statistic in Business Environment:

Statistics are important in business because they help with decision making and performance management. They
can help businesses:
1. Understand performance
Statistics can help businesses understand how they're performing, which products are profitable, and which are
not.
2. Forecast trends
Statistics can help businesses forecast trends in the market, consumer behavior, and sales.
3. Make informed decisions
Statistics can help businesses make decisions based on data instead of intuition.
4. Evaluate employees
Statistics can help businesses evaluate employee performance and provide training to improve it.
5. Develop strategies
Statistics can help businesses develop new production strategies and introduce new product lines.
6. Understand customers
Statistics can help businesses understand their customers and identify the best course of action.
7. Use marketing and advertising
Statistics can help businesses use data sets for marketing and advertising efforts.
Need of data in Statisitcs
Data is important in statistics because it helps people make informed decisions, identify patterns, and track
progress:
 Decision-making
Data can help people make decisions based on evidence instead of assumptions or intuition. For example, data can
help companies identify new business opportunities, improve customer experience, and stay competitive.
 Identifying patterns
Data can help people identify trends, patterns, and correlations that can provide insights into customer behavior,
market trends, or business performance.
 Tracking progress
Data can help people track progress towards set goals and objectives. For example, data can help people assess
whether strategies are effective or if adjustments are needed.
 Measuring effectiveness
Data can help people measure the effectiveness of a given strategy. For example, data can help people determine
how well a solution is performing and if an approach needs to be tweaked.
 Data can be collected in many fields, including business, healthcare, education, and public policy-making. When
collecting data, it's important to consider the quality, accuracy, validity, and ethics of the data. It's also important
to consider the context of the statistics, such as who published them, when the information was collected, and the
demographics of the sample size.

Organization of Data in Statistics :

Data organization is the process of sorting data into categories to make it easier to understand and analyze. Here are some
ways to organize data:
1. Tabulation
Arranging data in a table to make it easier to understand and interpret. A frequency table is a type of table that
shows the number of observations in each group.
2. Stem and leaf diagram
A method that splits each data value into a stem and a leaf to help visualize the data's size and order.
3. Mind-mapping
A diagram that uses images, words, and parts of words to visually organize information.
4. Concept mapping
A diagram that shows the relationships between concepts.
Data organization is important because it makes it easier to find information in a data set. As the amount of data
increases, it takes longer to search for information if the data isn't organized.
Types of Data
Data are the foundation stones and basic raw material in relation to any statistical investigation that can be
counted, classified, measured or quantified.
Types of Data are following;

ON THE BASIS OF CHARACTERISTICS OF FACTS

Data may be divided into two types;
1. Quantitative Data or Numerical Data:
These types of data can be measured directly such as age, income, production, marks etc. those facts are called variables
and variables may be discrete or continuous.
 Discrete variable– Those variables whose values are individually distinct and discontinuous.
There is a definite difference between two variables. According to Boddington, “Discrete variables is one where
the variables (Individual values) differ from each other by definite amounts.” For example – number of students
of a class, number of children in a family, number of cattle‟s etc. It takes integral values such as 0, 1, 2, 3, 4 …etc.
 Continuous variable – A continuous variable is one which assumes all values with in an interval. That is no
definite breaks are visible in this type of series. For example – age, weight, height……
 Questions; State which of the following represents Discrete data or Continuous data?
I. No. of accidents on each day in a month
II. Lengths of 1,000 bolts produced in a factory
III. Speed of an automobile in kilometer per hour
IV. No. of books on a library shelf
2. Qualitative Data or Categorical Data:
They include data relating to such facts which can„t be measured directly but are counted or categorized to the
basis of attributes such as literates, illiterates, unemployed, honest etc. are called attributes. For example-
population can be classified on the basis of males and females or males may be classified on the basis of marital
status, i.e. married or unmarried. Qualitative Data may further be classified into two categories ON THE BASIS
OF VARIABLES
 On the basis of variables, also data may be of two types;
(1) Univariate Data: When the frequencies are determined on the basis of one variable. For example – no. of
workers on the basis of wages, no. of persons on the basis of age etc.
(2) Bivariate Data: When the data are edited or presented on the basis of two variables simultaneously. For this
two-way frequency table is constructed, one variable is placed horizontally and the second one vertically. For
example – to present the number of students in one table on the basis of marks obtained in two subjects, to
tabulate the no. of persons in one table on the basis of two variables i.e. height and weight.
ON THE BASIS OF ARRANGEMENTS
Data may be categorized into two types;
(1) Raw Data: When the data is arranged and analyzed. It is called „Raw‟ because it is unprocessed by statistical
methods.
(2) Arrange Data: When the data is processed and is arranged, summarized, classified and tabulated in proper
way. Terms like „Data Point‟ and „Data Set‟ are also used in order to distinguish between the numbers relating to
individual or single facts and the aggregate of facts. For example– the data of production of sugar for ten years
will be termed as „Data Set‟ and the figures for production of one year will be as „Data Point‟.

Scales of Measurement:
 In Statistics, the variables or numbers are defined and categorized using different scales of measurements.
Each level of measurement scale has specific properties that determine the various use of statistical
analysis. In this article, we will learn four types of scales such as nominal, ordinal, interval and ratio
scale.
What is the Scale?
 A scale is a device or an object used to measure or quantify any event or another object.

Levels of Measurements
There are four different scales of measurement. The data can be defined as being one of the four scales. The
four types of scales are:

 Nominal Scale
 Ordinal Scale
 Interval Scale
 Ratio Scale
Nominal Scale
 A nominal scale is the 1st level of measurement scale in which the numbers serve as “tags” or “labels” to
classify or identify the objects. A nominal scale usually deals with the non-numeric variables or the
numbers that do not have any value.

Characteristics of Nominal Scale

 A nominal scale variable is classified into two or more categories. In this measurement mechanism, the answer should
fall into either of the classes.
 It is qualitative. The numbers are used here to identify the objects.
 The numbers don‟t define the object characteristics. The only permissible aspect of numbers in the nominal scale is
“counting.”

Example:

An example of a nominal scale measurement is given below:

What is your gender?
M- Male
F- Female
Here, the variables are used as tags, and the answer to this question should be either M or F.

Ordinal Scale
 The ordinal scale is the 2nd level of measurement that reports the ordering and ranking of data without
establishing the degree of variation between them. Ordinal represents the “order.” Ordinal data is known
as qualitative data or categorical data. It can be grouped, named and also ranked.
Characteristics of the Ordinal Scale

 The ordinal scale shows the relative ranking of the variables

 It identifies and describes the magnitude of a variable
 Along with the information provided by the nominal scale, ordinal scales give the rankings of those variables
 The interval properties are not known
 The surveyors can quickly analyse the degree of agreement concerning the identified order of variables

Example:

 Ranking of school students – 1st, 2nd, 3rd, etc.

 Ratings in restaurants
 Evaluating the frequency of occurrences

 Very often
 Often
 Not often
 Not at all

 Assessing the degree of agreement

 Totally agree
 Agree
 Neutral
 Disagree
 Totally disagree

Interval Scale
The interval scale is the 3rd level of measurement scale. It is defined as a quantitative measurement scale in
which the difference between the two variables is meaningful. In other words, the variables are measured in an
exact manner, not as in a relative way in which the presence of zero is arbitrary.

Characteristics of Interval Scale:

 The interval scale is quantitative as it can quantify the difference between the values
 It allows calculating the mean and median of the variables
 To understand the difference between the variables, you can subtract the values between the variables
 The interval scale is the preferred scale in Statistics as it helps to assign any numerical values to arbitrary assessment
such as feelings, calendar types, etc.

Example:

 Likert Scale
 Net Promoter Score (NPS)
 Bipolar Matrix Table

Ratio Scale
  The ratio scale is the 4th level of measurement scale, which is quantitative. It is a type of variable
measurement scale. It allows researchers to compare the differences or intervals. The ratio scale has a
unique feature. It possesses the character of the origin or zero points.

Characteristics of Ratio Scale:

 Ratio scale has a feature of absolute zero

 It doesn‟t have negative numbers, because of its zero-point feature
 It affords unique opportunities for statistical analysis. The variables can be orderly added, subtracted, multiplied,
divided. Mean, median, and mode can be calculated using the ratio scale.
 Ratio scale has unique and useful properties. One such feature is that it allows unit conversions like kilogram –
calories, gram – calories, etc.

Example:

An example of a ratio scale is:

What is your weight in Kgs?

 Less than 55 kgs

 55 – 75 kgs
 76 – 85 kgs
 86 – 95 kgs
 More than 95 kgs

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Descriptive statistics and inferential statistics

 Descriptive statistics and inferential statistics, along with exploratory statistics, are the main
areas of statistics. Descriptive statistics provides tools to describe a sample. Starting from the
sample, inferential statistics can now be used to make a statement about the population.
  After collecting data, one of the first things to do is to graph the data, calculate the mean and get
an overview of the distributions of the data. This is the task of descriptive statistics.
 Thus, the goal of descriptive statistics is to gain an overview of the distribution of data sets.
Descriptive statistics helps to describe and illustrate data sets.
Definition :
 The term descriptive statistics covers statistical methods for describing data using statistical
characteristics, charts, graphics or tables.

Difference between Descriptive and Inferential statistics

Descriptive Statistics Inferential Statistics

It gives information about raw data which It makes inferences about the population using
describes the data in some manner. data drawn from the population.

It helps in organizing, analyzing, and to present It allows us to compare data, and make
data in a meaningful manner. hypotheses and predictions.

It is used to explain the chance of occurrence

It is used to describe a situation.
of an event.

It explains already known data and is limited to a It attempts to reach the conclusion about the
sample or population having a small size. population.

It can be achieved with the help of charts,

It can be achieved by probability.
graphs, tables, etc.

Descriptive Statistics
 Descriptive statistics is a term given to the analysis of data that helps to describe, show and
summarize data in a meaningful way. It is a simple way to describe our data. Descriptive
statistics is very important to present our raw data in effective/meaningful way using
numerical calculations or graphs or tables. This type of statistics is applied to already
known data.
 Descriptive statistics involves summarizing and organizing data to describe the main
features of a dataset. It provides simple summaries about the sample and the measures.
 Descriptive statistics is primarily concerned with the presentation of data in a meaningful
way, which includes graphical representation and numerical analysis.
Uses cases of Descriptive Statistics
Measures of Central Tendency
 Mean: The average of all data points.
 Mode: The most frequently occurring value in a dataset.
 Median: The middle value that separates the higher half from the lower half of the data.
Graphical Representation
 Histograms: Bar graphs representing the frequency distribution of a dataset.
 Pie Charts: Circular charts divided into sectors representing relative frequencies.
 Box Plots: Graphical depiction of data through their quartiles.
Measures of Dispersion
 Range: The difference between the maximum and minimum values.
 Variance: The measure of how data points differ from the mean.
 Standard Deviation: The square root of the variance, representing the average distance
from the mean.

Descriptive Statistics

Applications of Descriptive Statistics

 Business Analysis: Summarizing sales data to identify trends and make informed business
decisions.
 Healthcare: Analyzing patient data to understand the distribution of health outcomes.
 Engineering: Monitoring manufacturing processes through quality control charts to ensure
consistency.
2. Inferential Statistics:
 Inferential statistics is used to make predictions by taking any group of data in which you
are interested. It can be defined as a random sample of data taken from a population to
describe and make inferences about the population. Any group of data that includes all the
data you are interested in is known as population. It basically allows you to make
predictions by taking a small sample instead of working on the whole population.
Uses cases of Inferential Statistics
Estimation
 Point Estimation: Provides a single value estimate of a population parameter (e.g., sample
mean as an estimate of population mean).
 Interval Estimation: Provides a range of values within which the population parameter is
expected to lie (e.g., confidence intervals).
Hypothesis Testing
 Null Hypothesis (H0): A statement of no effect or no difference, which researchers aim to
test against.
 Alternative Hypothesis (H1): A statement indicating the presence of an effect or difference.
 p-value: The probability of observing the test results under the null hypothesis.
 Significance Level (α): The threshold for rejecting the null hypothesis, commonly set at
0.05.
Regression Analysis
 Simple Linear Regression: Analyzing the relationship between two continuous variables.
 Multiple Regression: Examining the relationship between one dependent variable and
multiple independent variables.
Applications of Inferential Statistics
 Market Research: Making predictions about consumer behavior based on survey samples.
 Clinical Trials: Drawing conclusions about the effectiveness of new treatments from
sample data.
 Engineering: Predicting product performance and reliability through sample testing and
analysis.