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1 DEFINE STATISTICS?
2 STATISTICS IN BUSINESS:
➢ DESCRIPTIVE STATISTICS.
➢ ESTIMATION.
➢ HYPOTHESIS TESTING.
3 FREQUENCY DISTRIBUTION.
4 MANAGEMENT SCIENCES.
5 RELATIONSHIP BETWEEN STATISTICS AND
MANAGEMENT SCIENCES.
➢ PRESENTATION.
➢ ANALYSIS.
➢ INTERPRETATION.
6 AREAS OF KEEN INTEREST.
➢ OMISSION OF IMPORTANT FACTORS.
➢ CARELESSNESS.
➢ NON SEQUITUR.
➢ CONCEALED
➢ RESEARCH METHODS.
7 TOOLS OF QUALITY.
➢ HISTOGRAM & ITS IMPORTANCE.
➢ JOINT FREQUENCY DISTRIBUTION & ITS
IMPORTANCE.
➢ BAR CHARTS & ITS IMPORTANCE.
➢ PARETO CHARTS & ITS IMPORTANCE.
➢ PIE CHARTS & ITS IMPORTANCE.
➢ LINE CHARTS & ITS IMPORTANCE.
➢ FORECASTS.
➢ TIME SERIES ANALYSIS.
➢ TIME SERIES PLOT.
➢ SCATTER DIAGRAM.
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STATISTICS:
The term statistics is used in either of two senses. In common parlance it is
generally employed synonymously with the word data. Thus someone may say that
he has seen “statistics of industrial accidents in the united states.” It would be
conducive to greater precision of meaning if we were not to use statistics in this
sense, but rather to say “data of industrial accidents in the united states.”
“Statistics” also refers to the statistical principles and methods which have been
developed for handling numerical data and which form the subject matter of this
text. Statistical methods or statistics range from the most elementary descriptive
devices which may be understood by anyone to those extremely complicated
mathematical procedures which are comprehended by only the most expert’s
theoreticians. It is the purpose of this volume not to enter into the highly
mathematical and theoretical aspects of the subject but rather to treat of its more
elementary and more frequently used phases.
Statistics may be defined as the collection, presentation, analysis and interpretation
of the numerical data. The facts which are dealt with must be capable of numerical
expressions. We can make little use statistically of the information that dwellings
are built of bricks, stone, wood and other materials, however if we are able to
determine how many or what proportion o dwellings are constructed of each type
material we have numerical data suitable for statistical analysis.
The inferential tools includes two things the estimation and hypothesis testing.
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ESTIMATION: In situations where one would like to know about all the data in
large data sets but it is impractical to work with all the data, decision makers can
use techniques to estimate what the larger data set looks like. The estimates are
formed by looking closely at a subset of the larger data set.
PRESENTATION:
Either for one’s own use or for the use of others the data is presented in some
suitable form. Usually the figures are arranged in tables or represented by graphic
devices as discussed below:
➢ Text presentation .
➢ Tabular presentation .
➢ Semi tabular presentation.
➢ Graphic presentation.
TEXT PRESENTATION: Combining figures and text is not a particularly
effective device, since it is necessary to read, or at least scan, all of the paragraphs
before one can grasp the meaning of the entire set of figures. Most person cannot
easily comprehend the data when set forth in this manner, and it is especially
difficult for the reader to single out individuals. There is an advantage, however
that the writer can direct attention to, and thus emphasize, certain figures and can
also attention to comparisons of importance.
ANALYSIS:
In the process of analysis, data is classified into useful and logical categories. The
possible categories must be considered when plans are made for collecting the
data, the data is classified as they are tabulated and before they can be shown
graphically. Thus the process of analysis is partially concurrent with collection and
presentation. There are four important bases of classification of statistical data:
➢ Qualitative
➢ Quantitative
➢ Chronological
➢ Geographical
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GEOGRAPHICAL: The geographical distribution is essentially a type of
qualitative distribution, but is generally considered as a distinct classification.
Sometimes a geographical distribution may be put into the form of a frequency
distribution.
EXPLANATION:
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TOOLS OF QUALITY:
➢ Histogram.
➢ Joint frequency distribution.
➢ Bar charts.
➢ Pareto charts.
➢ Pie charts.
➢ Line charts.
➢ Forecasts.
➢ Time series analysis.
➢ Time series plot.
➢ Scatter diagram.
PARETO CHARTS: Pareto charts is a bar chart that is sorted so that the
categories or classes are arranged from highest to the lowest with respect to the
magnitude of the displayed variable associated with each category or class.
These charts are used for ascending and descending order data i.e. four products
are being manufactured in an organization and their respective sales is to be shown
for deciding to give away the least selling commodity. Pareto chart is used in
ascending order hence the least or the last bar drawn will show the least selling
commodity. Yet it is another important tool of decision making.
PIE CHARTS: A pie chart is a graph in the shape of a circle. The circle is divided
into slices corresponding to the categories or classes to be displayed. The size of
the slices is proportional to the magnitude of the displayed variable associated with
each category or class.
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These charts represents the different sales volume of many things such as sales of
car in a given year, sales of costumes etc. when total of a given data is known and
it required to show the proportion of various value in the whole or share of
individual items in the whole then pie chart is used for determining the larger or
smaller share. Pie charts also helps the organization in decision making because the
suggestions given by different employees can easily be accumulated by such charts
and it also represents the most weighted opinion or the suggestion which helps the
organization to be stuck at the best option.
Example diagram:
Sales
1st Qtr 8.2
2nd Qtr 3.2
3rd Qtr 1.4
4th Qtr 1.2
LINE CHARTS: Line charts are two dimensional charts showing time on the
horizontal axis and the variable of interest on the vertical axis.
When trends are require to deciding about the future, decision making or
determining the future performance of the sales, production, employees turnover
etc line charts are used. They represents comparisons between trends of previous
year in different phases i.e. months, forth night, quarters, semis etc. with the
previous year’s trends with similar backups.
Example:
Series Series Series
1 2 3
Categor
y1 4.3 2.4 2
Categor
y2 2.5 4.4 2
Categor
y3 3.5 1.8 3
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Categor
y4 4.5 2.8 5
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The qualitative forecasting technique are based upon expert opinion and judgment.
Qualitative forecasting techniques are based on statistical methods for analyzing
quantitative historical data.
In general quantitative forecasting techniques are used whenever the following
conditions are true:
a) Historical data relating to the variable to b forecast exist.
b) The historical data can be quantified.
c) One can assume that the historical pattern will continue in the future.
If these conditions do not exist qualitative forecasting techniques may be
employed.
TIME SERIES PLOT: Time series plot is a two dimensional plot of time series.
The vertical axis measures the variable of interest and the corresponds to the time
period. In plotting the time series the following steps are to be followed:
➢ Model fitting.
➢ Model diagnosis.
➢ Forecasting period.
➢ Forecasting intervals.
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