Application of Statistics in Business & Management - Statistics

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Assignment – Statistics Name- Sanjim Ghansham Ahuja Enrollment Number – AUD0492 Topic – Application of Statistics in Business & Management Statistics are an aid to business and commerce. In fact today the situation is that a businessman succeeds or fails according as his forecasts prove to be accurate or otherwise. When a man enters business he enters the profession of forecasting because success in business is always the result of precision in forecasting and failure in business is very often due to wrong expectations, which arise in turn due to faulty reasoning and inaccurate analysis of various causes affecting a particular phenomenon. Modern devices have made business forecasting more definite and precise. Economic barometers are the gifts of statistical methods and businessmen all over the world make extensive use of them. A producer estimates probable demand of his goods, analyses the effects of trade cycles and seasonal variations as also of changes in habits and customs of people on the demand of his wares, and after taking all these factors into consideration finally takes decision about the quantum of production. A businessman who ignores the effects of booms and depressions can never succeed and is bound to face frustrations as his calculations are sure to be faulty. A study of all these things is in reality a study of statistics and hence we say that all types of businessman have to make use of statistics in one form or the other if they want any success in their profession. For the solution of problems connected with the internal organization and administration of business units and with the processes of buying and selling that bring the businessman into contact with the price-system, methods of statistical analysis are very appropriate. Various branches of commerce utilize the services of statistics in different forms. Promoters of new business make extensive use of statistical data to arrive at conclusions which are vital from the point of view of starting a new concern. In fact in the absence of statistical data it would be impossible to carry on the activities of promotion of new concerns on sound lines and the number of business failures would be much more than at present. Again, cost accounting is entirely statistical in outlook and it is with the help of this technique that producers are in a position to decide about the prices of various commodities. We thus find that the science of statistics is of extreme importance to business and commerce and in its absence the growth of these things would be lopsided and very slow, and business uncertainties would considerably increase. Statistics provide managers with more confidence in dealing with uncertainty in spite of the flood of available data, enabling managers to more quickly make smarter decisions and provide more stable leadership to staff relying on them.

Statistical analysis of a representative group of consumers can provide a reasonably accurate, costeffective snapshot of the market with faster and cheaper statistics than attempting a census of very single customer a company may ever deal with. The statistics can also afford leadership an unbiased outlook of the market, to avoid building strategy on uncorroborated presuppositions. Statistics back up assertions. Leaders can find themselves backed into a corner when persuading people to move in a direction or take a risk based on unsubstantiated opinions. Statistics can provide objective goals with stand-alone figures as well as hard evidence to substantiate positions or provide a level of certainty to directions to take the company. Statistics can point out relationships. A careful review of data can reveal links between two variables, such as specific sales offers and changes in revenue or dissatisfied customers and products purchased. Delving into the data further can provide more specific theories about the connections to test, which can lead to more control over customer satisfaction, repeat purchases and subsequent sales volume. Statistics provide the means to measure and control production processes to minimize variations, which lead to error or waste, and ensure consistency throughout the process. This saves money by reducing the materials used to make or remake products, as well as materials lost to overage and scrap, plus the cost of honoring warranties due to shipping defective products.

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