Hence, statistics, if clearly understood, is a fascinating subject that has tremendous importance in computer, philosophy, medical sciences, psychology, and most especially, in business. Designed by Pereere Codes | Copywright @ Machinep 2018-2020. Statistics is used every now and then even outside the field of … Business statistics play a vital role in areas such as tax preparation, budgeting, proposals, and data mining. Furthermore, managers using predictive analysis of statistical techniques (such as data mining and modeling) can predict future possibilities and trends based on historical data. He knows what his customers want; he should therefore know what to produce and sell and in what quantities. Every business small or big uses statistics for its daily function. Results following these limitations are not accurate but approximate. The Usage of Statistics in business and management are limitless, with the proper skill to implement statistical methods. This is because statistics focus only on quantitative characteristics, this is to say that statistics are numerical propositions or statements of facts. ... Business statistics is a science of intelligent decision making in uncertain situations and is applied in several disciplines such as econometrics, marketing research, auditing, financial analysis, production, and business operations. A business enterprise that is void of statistical analysis in its mode of operation is like a blind man leading a group of fellow blind men. A business may buy hundreds of thousands of microchips, for example, so many that it would take years to inspect each one. Therefore, data that cannot be expressed numerically are incapable of statistical analysis. It may interest you to knot that no subjects, other than statistics, demonstrate and explain, so clearly, that there are several kinds of intelligence. This wonderful article explains, in detail, the relevance, role, and importance of statistics in Business. Save my name, email, and website in this browser for the next time I comment. Furthermore, statistics focuses on aggregates and not with individuals. This enables the enterprise to make a sound or rational decision, knowing that their judgment is based on data and facts and not on mere assumptions. Today, there is hardly any business that functions without the use of statistics and statistical tools. By. The business might then pull random samples from the order and perform statistical analysis to decide whether to accept or reject the microchips. Statistics could be as a science of Average, a numerical statement of facts in any department of inquiry placed in relation to each other. An important role of statistics in business is that it is expressed as a percentage ratio, average, a medium, and even a raw number. Statistics plays an important role in business. Statistics works hand-in-hand with Mathematics. For Fehzan Ali, CEO and co-founder of the Austin digital marketing company Adscend Media, the role of statistics in business decision making is equally important. Related. Importance Of Financial Performance Analysis 992 Words | 4 Pages. An important role of statistics in business is that it is expressed as a percentage ratio, average, a medium, and even a raw number. This information may relate to objects, subjects, activities, phenomena, or regions of space. Statistical analysis enables an enterprise to measure the performances of a business and identify trends. What is vital is that the method used to calculate the statistics is uniform in each time. Show More. Hence, statistics, if clearly understood, is a fascinating subject that has tremendous importance in computer, philosophy, medical sciences, psychology, and most especially, in business. 1.6 Importance of Statistics in Business 1.7 Limitations of statistics 1.8 Summary 1.9 Self-Test Questions 1.10 Suggested Readings 1.1 INTRODUCTION For a layman, ‘Statistics’ means numerical information expressed in quantitative terms. Importance of Studying Business Statistics. These and more are the relevance of business statistics. The use of tools like Microsoft Excel to store, organise, and present data is a typical example of the use of statistics in business. Note that only persons having a fundamental knowledge of statistical methodology can handle the data properly. It can also be established that statistics can be misused by data placed on an inexperienced person which may lead to wrong results. Almost every business uses business statistics to perform its day to day operations. Statistical analysis enables an enterprise to measure the performances of a business and identify trends. Business statistics is the science of good decision making in the face of uncertainty and is used commonly in many disciplines which involve Economics, auditing, etc. Some questions are vital in market research that is if there is enough demand to justify spending money to develop a product? Statistics is used every now and then even outside the field of core Education such as Diagnosis and Programming. This is to say that since statistics deals with such characteristics that are affected by a multiplicity of causes, so it is not possible to study the effect of these factors. Among the improvements are increased profitability, reduced cost, faster decision making, and critical performance improvements. Business companies use statistics in market research, evaluation, and product development. Growing a business without the use of statistics is virtually impossible. But here in this blog, we are talking about the importance of statistics. Statistics in business can be likened to the third eye through which any business enterprise can see the future. Statistics can be used for making sales projections, financial analysis of capital expenditure projects, constructing profit projections for a new product, setting up production quantities, and making a sampling analysis to determine the quality of a product. The measurement of profitability is as the essential as the earning of profit itself for a business firm. Better planning and predictions are made through statistical analysis of data and figures. The importance of accuracy, and the dangers of profit targets, are graphically illustrated by events at Cisco. Just relax and keep scrolling. However, statistics in business, involves the application of statistical tools in the area of marketing, production, finance, research development, manpower planning, which is used to extract relevant information for the purpose of decision making. Role Of Statistics In Business Organization. First, statisticians are guides for learning from data and navigating common problems that can lead you to incorrect conclusions. Running away from Statistics is like running away from mathematics, you will be tired. Also, statistical laws are not perfectly accurate. “We use statistics to measure the unique users who interact with our video streaming platform. Various accounting techniques can be used for the purpose of financial analysis. Statistics can be used for marketing and market analysis. Managers would want to monitor the demands of a product. by Pereere Smart | Jan 14, 2020 | Articles, Blogs, Learn | 0 comments. This is known as “cause and effect analysis“. In a last-ditch effort (which proved futile as well as dotty) to achieve predicted second quarter profits, warehouse people at San Jose were ordered to pile boxed-up machines onto trucks before the final midnight. Business managers use statistics as an aid to making decisions in the face of uncertainty. SCOPE AND IMPORTANCE OF STATISTICS IN BUSINESS Statistics is an. Statistics are crucial for the business to make future decisions. Nevertheless, some common applications of predictive analytics include fraud detection and security, risk assessment, marketing, and operations. Business Statistics helps a business to: Deal with uncertainties by forecasting seasonal, cyclic and general economic fluctuations Helps in Sound Decision making by providing accurate estimates about costs, demand, prices, sales etc. This goes beyond reporting what has happened to create best estimates for what will happen. Required fields are marked *. Managers can increase the production capacity of any plant or find out the optimum production capacity, efficient management of work and employee performance, limit the wastage of resources, etc. Rational Decision Making. Your email address will not be published. In fact, SMEs in the UK have collectively seen their profits drop within each size bracket. These stats highlight the importance of expanding your business over time if you want to significantly increase your profit margins and your chances of actually making a profit (see chart on the right). Importance of Business Statistics . Many business enterprises are on the verge of collapse due to the absence of statistical analysis in measuring business performances. Companies, from a statistical analysis, use a break-even model, which is constructed to determine the volume of sales necessary for the product to succeed. However, by using historical data, managers can analyze past successes and failures. Meaning can be found in data. 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