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# MBA 1st Year Business Statistics Unit 1 Long Question Answer Study Notes

MBA 1st Year Business Statistics Unit 1 Long Question Answer Study Notes:- In this Post, you will see about MBA 1st Year Business Statistics Unit 1 Long Question Answer Study Notes Study Material Unit wise Chapter Wise Notes Syllabus Scope, function and limitations of statistics, Measures of Central Tendency-Mean, Median, Mode, Percentiles, Quartiles, Measures of Dispersion-Range, Interquartile range, Mean Deviation, Mean absolute deviation, Standard Deviation, Variance, Coefficient of Variation. Measures of Shape and Relative location; Skewness and Kurtosis; Chebyshev’s Theorem. Topic Wise Syllabus Of The Content Study Notes.

Section

MBA Topic Chapter Semester Wise Sample Model Practice Question Answer Papers

Q.1. ‘Statistics plays an important role not only in the study of economics and commerce, but also in managerial decision-making.’ Explain briefly.(2007-08)

Ans. Statistics and Economics: Statistics is widely used in economics study and research. The subject of economics is mainly concerned with production and distribution of wealth as well as with saving and investment. Some of the areas of economic interest in which statistical tools are used are as follows:

1. Statistical methods are extensively used in measuring and forecasting Gross National Product

(GNP).

2. Economic stability is primarily judged by statistical studies of business cycle.

3. Econometric models which involve applications of statistical methods are used for optimum utilisation of resources available.

4. Financial statistics are necessary in the fields of money and banking including consumer

saving and credit availability.

Statistics in Commerce

Statistics influence the operations of business and management in many dimensions. Statistical applications include the area of production, marketing, promotion of product, financing, distribution accounting, marketing research, manpower planning, forecasting, research and development and so on. As the organisational structure has become more complex and the market is highly competitive, it has become necessary for executives to base their decisions on the basis of elaborate information systems and analysis instead of Intutive judgement. In such situations, statistics are used to analyse this vast data base for extracting relevant information.

Apart from economics and commerce, statistics plays an important role in managerial decision-making also. It includes:

1. Qualitative Change in Product: A soap manufacturer found that his product was losing ground to a competitor who had introduced a new quality. He decided to make a survey of consumers preference so as to provide the basis for introducing qualitative changes in his own product.

2. Seasonal Behaviour: A business firm engaged in the sale of certain products has to decide how much stock of that product should be kept. If the product is subject to seasonal fluctuation, then it must know the nature of seasonal fluctuations in demand. For this purpose, seasonal index of consumption may be required.

3. Export Marketing: Developing countries have started giving considerable importance to their exports. Here, quality is also an important factor on which exports depend. Apart from this, the concerned firm must know the probable countries where its product can be exported. Before that, it must select the right product, which has considerable demand in the overseas markets.

4. Sales Control: A manufacturer of electrical appliances was warned about the declining trend in take off from the factory. The only information available in his records is related to monthly dispatches. A statistical interpretation of the processed data showed that the wholesaler has drastically reduced their stocks due to two reasons, viz. credit, squeeze exercised by banks and reduced order from retailers.

5. Issue of Bonus Shares: A statistical analysis of price movements and development outlay showed that a positive and a high correlation existed between the two. It was concluded that it could be sarely assumed that prices were not likely to decline in future. The company could on the basis, take the decision of making a revaluation of its fixed and floating assets and issuing bonus shares.

Q.2. Define the term statistics. Explain the scope of statistics in various areas. Or Discuss the scope of statistics.(2014-15)

Ans. Definition of Statistics: Statistics may be defined as “The systematic and scientific treatment of quantitative measurements precisely.’

By statistics we mean aggregates of facts affected to a marked extent by multiplicity of causes numerically expressed or estimated according to reasonable standards of accuracy, collected in a systematic manner for a pre-determined purpose and placed in relation to each other. -Harace Secrot

‘Statistics may be defined as a science of collection, presentation, analysis and interpretation of numerical data.’

Scope of Statistics

The scope of statistics is indeed very vast. It covers all fields of study wherein quantitative data appear and hence need analysis. Statistics is an indispensable tool for any scientific enquiry, right from the state of planning to the stage of conclusions. It applies to almost all sciences- pure and applied, physical, natural, medical, agricultural and engineering. It also finds applications in some fields related to economics, business, agricultural and commerce, industry, etc.

1. Statistics and Economics: Statistics as ‘data’ and ‘methodology’ have proved immensely useful in solving a variety of economic problems related to wages, prices, analysis of time series, income and demand analysis. The development of various economic theories owe greatly to statistical methods. ‘Engel law of family expenditure’ and ‘Mathusian theory of population’ have been formulated with statistical analysis of the related data.

2. Statistics and Economic Planning: Statistics is the most important tool in economic planning which is essential for making proper utilisation of natural resources, both human and natural. Success at every stage of planning, viz. drawing a plan, execution and review is based on statistical analysis. Priorities of expenditure of a national budget can be determined through the proper understanding of arious economic problems, viz. balance of trade, industrial growth, disparities in income and wealth, gricultural production, etc.

The evaluation of progress made is also important in planning. Statistical methods help in eveloping such evaluation procedures both at the state and national level.

With the growing size and increasing competition, the problems of business enterprises have come complex. Statistics is now considered an indispensible tool in the analysis of activities in the field business, commerce and industry. In business, the manufacturer is always interested in estimating the

immediate and future demand of his product. The object can achieved by properly conducted market survey and research greatly depends on statistical methods. The trends in sale production can be determined by statistical methods like series analysis which are essential for future planning of the phenomenas. Similarly, the correlation and regression analysis be used to judge the effectiveness of various sales promo measures.

Statistics with Psychology and Education

Statistics has found wide application in psychology and education. It forms the basis of scientif approach to problem in which inductive inference is commonly used. Students of psychology an education cannot remain ignorant of such methods of problem solving in their disciplines. Statistice helps the professional psychologist, whether a counsellor, guidance worker or a clinical psychologist, in doing his work efficiently, since in the course of his work he has to administer test, interpret test score and maintain a record of such cases.

Q.3. Explain briefly what do you understand by the science of statistics.

Or Statistics affects everybody and touches life at many points. It is both a science and an art Comment. (2005-06, 13-14

Ans. Science of Statistics: Statistics is the science which deals with the methods of collecting classifying, comparing and interpreting numerical data collected to throw some light on any sphere of enquiry.

Statistical methods are common ways of thinking and hence used by all type of persons. A man who opens and slams the door of a car before he buys it is using the techniques of statistical analysis as much as the scientist tries to access the impact of increased solar activity on the onset of monsoon. When a person wishes to purchase a car or a radio and he goes through the price list of various companies to arrive at any decision, what he really wants is to have an idea about the average level and the range within which the prices vary. Similarly, when a farmer wishes to have a particular quantity of rain in a season for a good crop, he has in fact an idea of correlation that exists between rainfall and crop yields and the regression line of crop yields on rainfall. In all the above examples, the persons concerned had known a single word about these terms.

Even human behaviour is so closely connected with statistical methods that almost every human activity can be explained by statistical methods. Statistics touches all fields of life. Thus, we can say that statistics affects everybody and touches life at many points,

Statistics as a Science and an Art

Is statistics a science or an art is a question which is very often asked but not adequately answered Science refers to a systematic study of knowledge and studies cause and effect relationship between different variables and on the basis of analysis, attempts to draw generalisations which are popularly known as principles or laws which are supposed to have a very high degree of precision. It is on account of the high degree of precision of scientific laws that man could safely land on moon. Art, on the other hand, refers to the skill of collecting and handling of data in order to draw logical inference and to arrive at certain conclusions. The degree of precision in such inferences is not as high as it is in scientific laws.

Regarding definitions of the words–science and art, statistics could lay its claim on both of them However, statistics is not a science in the same sense in which physics or astronomy are, for the reason that the degree of precision arrived at in statistics is not as high as it is in natural or physical sciences, The reason for this is that statistics deals with such variables whose individual effects cannot be studied in isolation as is possible in natural and physical sciences, which are experimental in nature. Under such circumstances, it would be more appropriate to call statistics not as a science but as a scient method. Statistical methods can be and are applied in all sciences, natural or social and as such they should be regarded as indispensable tools for the study of any quantitative phenomenon.

Statistics is an art as much as it is concerned with the skill of handling facts and figures for the purpose of analysis, interpretation and policy formulation. Researches are going on to achieve a higher degree of precision in the collection and analysis of data to arrive at more meaningful conclusions so that future policy formulation may become more rational and dependable.(2015-16)

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