Q.A.B.D – I 2nd Sem B.

Com

2.6 QUANTITATIVE ANALYSIS FOR BUSINESS DECISIONS-I

OBJECTIVE The objective is to provide basic knowledge of statistics and their application to business
situations.

Unit 1: INTRODUCTION TO STATISTICS 03Hrs

Meaning and Definition – Functions – Scope – Limitations.

Unit 2: CLASSIFICATION AND TABULATION OF DATA 08 Hrs

Collection of data - census and sample techniques. Classification of data, preparation of frequency distribution
and tabulation of data.

Unit 3: MEASURES OF CENTRAL TENDENCY 20Hrs

Meaning and Definition Types of averages – Arithmetic Mean (Simple and Weighted), Median, Mode (excluding
missing frequency problems). Graphical representation of median and mode – Ogive– curve, histogram,
smoothed frequency curve and frequency polygon.

Unit 4: MEASURES OF DISPERSION AND SKEWNESS 15 hrs

Meaning & Definition -Range, Quartile Deviation, Mean Deviation Standard Deviation and Coefficient of
Variation. Skewness: Meaning, uses, and problems on Karl Pearson‟s‟ Co-efficient of skewness.

Unit 5: INDEX NUMBERS 10 Hrs

Meaning & Definition – Uses – Classification – Construction of Index Numbers – Methods of constructing Index
Numbers – Simple Aggregative Method – Simple Average of Price Relative Method – Weighted index method –
Fisher‟s Ideal method (including TRT & FRT) – Consumer Price Index – Problems.

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Introduction to Quantitative analysis for business decision

Quantitative analysis used for business decisions is based purely on data. In this we will discuss the importance
of quantitative analysis for making decisions on particular business organization.

Quantitative analysis refers to a measurement of the quantities of particular constituents present in a

substance.

Quantitative analysis is using data from your business to determine its success. It helps you look at data to
determine what needs to be changed in the company or what is working for the company. You can use
quantitative analysis to make purchasing decisions, marketing decisions, and even sales decisions.

It will mainly deal with quantitative information rather than qualitative information

Quantitative data is information you can objectively count, see, or rank. (for example include sales figures,
websites traffic statistics, financial reports etc.)

Qualitative data consists of subjective assessments you make. (for example you can project demand for your
product and future sales using input from your sales people and discussions with customers.)

UNIT-I

INTRODUCTION TO STATISTICS

Meaning and Definition – Functions – Scope – Limitations.

Introduction

The word statistics is derived from the Latin word ‘Status’ or German word ‘Statistik’, which means a
political state. It is termed as political state, since in early years’ statistics indicates a collection of facts about
the people in the state for administration or political purpose. The state administration requires data regarding
birth, death, income, employment etc. to measure the socio-economic condition of the people.

Among the modern stalwarts of statistics, Sir Ronald A. Fisher (1890-1962) is considered as Father of
Statistics. He developed the theories which could be used in various fields like biometry, psychology, education,
agriculture, commerce, etc.,

Meaning and Definition of Statistics

 Statistics - a set of concepts, rules, and procedures that help us to:

o organize numerical information in the form of tables, graphs, and charts;
o understand statistical techniques underlying decisions that affect our lives and well-
being; and
o make informed decisions.

 Data - facts, observations, and information that come from investigations.

o Measurement data sometimes called quantitative data -- the result of using some
instrument to measure something (e.g., test score, weight);
o Categorical data also referred to as frequency or qualitative data. Things are grouped
according to some common property(ies) and the number of members of the group are
recorded (e.g., males/females, vehicle type).

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Q.A.B.D – I 2nd Sem B.Com

According to F.E.Coroxton and D.J.Cowden “the statistics is the science of collection, analysis,
presentation and interpretation of data”.

According to Harlow “the statistics is the science and art of handling aggregate of facts – observing,
enumerating, recording, classifying and otherwise systematically treating them”.

Objectives of Statistics
The aim of statistics is to develop and apply methodology for extracting useful knowledge from the data
by conducting experiments. The primary object of statistics is to examine the variables of mass data
(population) for the purpose of making vital decisions in solving the problems. The secondary objectives of
statistics are:

1. Used in various research studies.

2. Estimating the future trend and tendencies using the past data.
3. Interpret the data based on analysis.
4. Finding out the unknown values with statistical methods.
5. It gives solution for various economic problems.

Functions:

1. It simplifies the complexity of the date

2. It reduces the bulk of the data
3. It helps in comparing different sets of figures
4. It adds precision of thinking
5. It helps in formulating policies
6. It is used to collect the facts and figures in a systematic manner
7. It indicates trends and tendencies
8. It helps in studying relationship between different factors

Scope of Statistics:
1. Statistics and planning: Statistics in indispensable into planning in the modern age which is termed as “the
age of planning”. Almost all over the world the govt. are re-storing to planning for economic development.

2. Statistics and economics: Statistical data and techniques of statistical analysis have to immensely useful
involving economical problem. Such as wages, price, time series analysis, demand analysis.

3. Statistics and business: Statistics is an irresponsible tool of production control. Business executive are
relying more and more on statistical techniques for studying the much and desire of the valued customers.

4. Statistics and industry: In industry statistics is widely used inequality control. In production engineering to
find out whether the product is confirming to the specifications or not. Statistical tools, such as inspection plan,
control chart etc.

5. Statistics and mathematics: Statistics are intimately related recent advancements in statistical technique
are the outcome of wide applications of mathematics.

6. Statistics and modern science: In medical science the statistical tools for collection, presentation and

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analysis of observed facts relating to causes and incidence of dieses and the result of application various drugs
and medicine are of great importance.

7. Statistics, psychology and education: In education and physiology statistics has found wide application
such as, determining or to determine the reliability and validity to a test, factor analysis etc.

8. Statistics and war: In war the theory of decision function can be a great assistance to the military and
personal to plan “maximum destruction with minimum effort.”

Importance of Statistics
The importance of statistics can be defined in different parts i.e. statistics in planning in economics, in business
etc., because statistical methods are used in every economic related area.

1. Statistics in planning: Modern age is the age of planning every objective plan depends upon the correct
and sound statistical data. Planning is the pre-determined sets of program and policies, which is formulated
in order to meet the targeted objectives, to formulate the plan and details study of the existing situation is
needed which is possible only thorough the statistical tools.

2. Statistics in Economics: Statistics is very essential to develop and prove the principles and laws of
economics. It has great importance to understand the economics problems like production, consumption,
distribution etc. as they can be solved by using statistical data.

3. Statistics in business: For the smooth operation of the business, statistical information is very useful. It
simplifies the complex situation of business. It helps to study about the situation of market demand, supply,
price etc. Without a very careful study of market it is difficult to success in business. Therefore the statistics
is very essential in business sector also.

Limitation of statistics
Statistics is extremely useful in economics field but it has some limitations in itself which are as follow:

1. Statistics doesn’t deal with the individual: Statistics deals with aggregate of facts not with individual.
Individual fact or figure is out of its scope. For e.g. if we say Ram’s height is 5 feet, is not statistics. For
statistics we must say the height of Ram, Hari or any other folk is 5 ft.

2. Statistics doesn’t study qualitative phenomenon: Statistics study only quantitative statement of fact,
numerical numbers, such as income, production etc. It never studies qualitative statement such as
intelligence, beauty etc.

3. Statistical laws are not exact: Statistics gives result only on average. It is not 100 % reliable. Therefore, it
is the law of average.

4. Statistics is liable to be misused: The greatest limitation of statistics is that, it must be used by exports
only. If it is used by unskilled or inexperienced person, the result may occur wrong.

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5. Statistics is only means: Statistics is only the means, which provide a method of studying problem. But is
should not be considered as the best because this method should be supplement by other techniques to
derive conclusion

Basic Concepts of the Statistics:

1. Data: They are numerical facts recognised in a raw form carrying no meaning at all. They have to be
collected, classified, condensed, refined, analysed, interpreted and presented. They are converted into
information to gain knowledge, from which conclusions can be arrived at.

2. Primary data: It is collected for first time in its original form by an investigator organisation from the
original source.

3. Secondary data: It is a data that has already been collected by someone else and for some other
purpose and now reused for our own purpose as a secondary data.

4. Population: It is the total set of variables or items of interest. It is called mass or universe, which is
widespread in a large scale.

5. Census: It is a method of collection of data, which involves a complete enumeration and recording of
every unit of the population.

6. Parameters: They are descriptive measures of a population that are derived and measured
mathematically showing characteristics of the items containing in the population.

7. Sample: It is a finite subset or small portion of items drawn from the population that is used to
represent the entire group as a whole. It is selected for study with a particular aim.

8. Sampling: It is a method of collection of data, which involves a selection of only a few units of the
population.

9. Unit: It is a quantity or amount used as a standard measurement in statistical analysis.

10. Collection: It is the process of counting or enumerating and recording of data.

11. Variable: It is a quantitative characteristic of the object or event that can take on different values. It
varies from one observation to another within a given set of data. Ex: age, wages, prices and marks.

12. Frequency: it is a rate of occurrence of a particular value of variable that occurs in a series or
arrangement of data.

13. Analysis: It is a process of examining and dissolving data. It refers to the separation of data into parts
mathematically or critically with judgement and comment with the purpose of drawing conclusions as
regards the nature of data.
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