Table of Contents
The literal meaning of statistics is numbers and it comes from the Latin word ‘status’. ‘Status’ translates to ‘Political Science’. In old times the kings used to analyze data of wealth possessed by the people to calculate tax liability.
At the current time, the field of statistics has grown to almost every field. It includes the collection, storage, and manipulation of data to analyze and make predictions for the organization.
In simpler words, the right answer to the question ‘What is Business Statistics?’ would be collecting and analyzing data to generate insights using statistics for refining the current strategy to fit the market demands.
Types of Business Statistics:
Descriptive/Diffrential Statistics
Here we summarize data in a more convenient way for the business to make strategic decisions. Descriptive statistics consist of numbers, charts, graphs, and tables. It helps to analyze the outcome of a specific action, hence aiding decision-making.
For example:
Assume your family has a supermarket, for a couple of months, you have seen a steady decrease in the deals on a specific item.
You examined and reasoned that it isn’t beneficial to sell this item any longer and you eliminated it. Here you are gathering, and examining information to close, thus utilizing Descriptive Statistics.
Inferential Statistics
We draw small samples from large data to analyze patterns and customer behavior. The motive is to generalize sample data from large data sets so by analyzing it we can conclude for large data.
For example:
Let’s assume that you and your family own a food manufacturing business in your hometown. The product is well-established and sales have hit a saturation point for the past few months.
In your analysis, you found that customers are trying other products for new flavors. you also decide to introduce new flavors to fight this situation. you distributed free samples and recorded their suggestions to analyze responses.
by analyzing feedback received we are drawing public opinion, hence using Inferential Statistics.
Now you have understood ‘What is Business Statistics?’ let’s dive into its Applications:
Marketing
Marketing is all about growing and maintaining the existing customers for the business. it helps generate insight into operations and analyze the results of strategic moves.
Retail
It helps a business with customer profiling and identifying their buying behavior. Which in turn helps the retailers in better product placements. it helps retailers in inventory management by ensuring the availability of optimal inventory.
Finance
It is vital for finances, any financial operation can not function without statistics. It helps to analyze return on investment, EPS, Stock volatility, and many more.
Operations
It helps in the operation process by aiding efficient production and reducing errors. It also helps inventory management by ensuring optimal storage to avoid losses.
Human Resource
It helps to analyze the performance of an employee and aids the appraisal process. which in turn boosts the morale of employees and motivates them to work more.
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Conclusion
Business statistics includes the collection and analysis of data to generate insights. based on these insights we refine strategies to cater to demands and performance. Descriptive type uses numbers, charts, graphs, and tables to present and in Inferential type, we draw small samples from large data to understand patterns. One should choose a career in this field if he/she is very fond of statistics.
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Most Asked Questions
Q.1 What is Business Statistics?
Ans. Business Statistics involves collecting and analyzing data to generate insights using statistics and refining the current strategy to fit the market demands based on those insights.
Q.2 What are the Types of Business Statistics?
Ans. It is of two types:
- Descriptive statistics
- Inferential Statistics.
Q.4 What is the Inferential Statistics?
Ans. We draw small samples from large data to analyze patterns and customer behavior. The motive is to generalize sample data from large data sets so by analyzing it we can conclude for large data.
Q.5 How does Business Statistics help in retail?
Ans. It helps a business with customer profiling and identifying their buying behavior. Which in turn helps the retailers in better product placements. it helps retailers in inventory management by ensuring the availability of optimal inventory.
Q.6 Explain Descriptive/Differential Statistics with an appropriate example.
Ans. Assume your family has a supermarket, for a couple of months, you have seen a steady decrease in the deals on a specific item.
You examined and reasoned that it isn’t beneficial to sell this item any longer and you eliminated it. Here you are gathering, and examining information to close, thus utilizing Descriptive Statistics.
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