Q No 1.

Statistics plays a vital role in almost every

facet of human life. Discuss the characteristics of
statistics. What is the importance of statistic in
business and management?
Ans: meaning of statistics:
The term statistics is used to mean either
statistical data or statistical method. Statistical data refers to
the quantitative aspects of things, and is a numerical
description. Thus the distribution of family incomes is a
quantitative distribution. For example , when saying that
45% of males are employed In Sikkim. This information then
comes from the realm of statistics.
Characteristics of statistics:
The character of statistical information
collected from a group of individuals or objects, is of two
type-quantitative and qualitative. The quantitative character
is technically called variable . a variable takes different
values and these values can be measured numerically in
suitable units. on the other hand, the qualitative character is
called attribute .
Statistics are the aggregate of facts:
Single or isolated facts or figures can not be called statistics
as they cannot be compared or related to other figures
within the same frame work. accordingly, it must be an
aggregate of these figure.
Statistics are affected by multiple causes:
The term statistical data can be used only when we cannot
predict exactly the values of the various physical quantities.
Statistics are expressed numerically:
Statistics are expressed in numbers. The qualitative
statement do not show accurate interpretations and hence
cannot be called statistics. for example, statements like,

Bangladesh is a poor country would not be considered

statistical statements.
Statics are collected in a systematic manner for a
predetermined purpose.
Statistical data must be according to reasonable standards of
accuracy
Statistics should be placed in relation to each other
1. Importance of statistics in business and
management / statistics in business and
management:
With the gradual industrialization and consequent expansion
of trade , businessmen can no longer rely on the old system
or leave their future on chances.
Entrepreneurs: it is necessary to study the market
before start a new business. To ensure the success of a
new venture, a businessman has to collect the past
records and current market trends scientifically.
Statistics will help to analyze the data and predict the
future course of action.
Production: after a new business is launched , the
business head has to plan its production so that he is
able to meet the demand of its product and incur
minimum losses on account of over or under
production.
Marketing: an optimum marketing strategy would
require a skilful analysis of data on population.
Purchasing : the purchasing department of an
organization makes decision regarding the purchase of
raw materials and other supplies from different supplier.
Investment : statistics have been almost indispensable
in making a sound investment whether it be in buying
or selling of stocks and securities or real estate.

 Quality control: statistics are used in quality control so

extensively that even the phenomenon is known as
statistical quality control.
Personal: study of statistical data regarding wage rates,
employment treads, accident rates , employee
grievances , labor turnover rate etc.and the proper
analysis of such data assists the personnel department
in formulating the personnel policies and in the process
of manpower planning.
Q No 2. A differentiate between primary and
secondary data.
Explain the concept of correlation and
regression.
Ans: differentiate between primary and secondary
data:
Primary data:
Primary data are those data which are collected by the
researcher him self for the purpose of a specific study.
Such data are original in character and are generated
by surveys conducted by individuals or research
institutions.
Publication containing primary data: reserve bank of
India bulletin issued monthly by the reserve bank of
India , Mumbai
Secondary data:
When an investigator uses data, which have already
been collected by others, such data called secondary
data.
Such data are primary data for the agency that
collected them, and become secondary for others who
use these data for their own purpose.
Publications containing the secondary data: statistical
abstract of the Indian union

Concept of correlation analysis:

Correlation analysis helps us decide the strength of
the linear relationship between two variables.

Let us consider the following problem, which will explain the

concept of variation.
Mother [x]

Mother [Y]

63

66

65

68

66

65

67

67

67

69

68

70

The computed value of y which is designated as yc and is

calculated from the linear regression equation. The closeness
between y yc determines the degree of correlation between
them,the perfect correlation being when =tc for all values of
and there is no variation at all.
Properties of correlation coefficient
The correlation coefficient is independent of the choice
of both origin and scale of observation.
The correlation coefficient is a pure number, it is
independent of the units of the units of measurement.
The correlation coefficient lies in between -1 and +1.
Concept of regression analysis:
The term regression is used to denote estimation or prediction
of the average value of one variable for a specified value of the
other variable.the estimation is done by means of suitable
equations, derived on the basis of available bivariate data.

Such an equation is known as regression equation and its

geometrical representation is used called regression curve.
Q no 3. Describe the meaning of index numbers. Explain
the different methods of construction of index numbers.
Ans: meaning of index numbers:
Index numbers are a specialized type of average. It measures
how much a variable changes over time. They are designed to
measure the relative change in the level of phenomenon with
respect to time. Geographical locations or some other
characteristic. It is an indicator which reflects the relative
changes in the level of certain phenomenon in any given
period called the current period with respect to its value in
some fixed period called base period selected for comparison.
Methods of constructing index numbers:
The different methods of constructing index numbers are as
follows:
They are unweighted index numbers & weighted index
numbers.
Unweighted index numbers consists of simple aggregative
method and simple average of relative method.
Similarly weighted index numbers consists of weighted
aggregative method & weighted average of relative method.

Methods of
constructing index
numbers

Unweighted
index numbers

Weighted
aggregative
method
Simple
aggregative
method
Weighted
average of
relative method

Weighted index
numbers

Unweighted index numbers: an

unweighted index numbers is one
where weights are not assigned or
equal importances are given to all the
commodities taken for computing index
numbers.

Simple aggregative
method: this is the
simplest method of
Simple average
constructing index
of relative
numbers. To fid a price
method
index numbers by this
method we divide the total
of current year prices by the total of base year
prices and multiply it by 100.
Add the current year prices for different
commodities or find p1
Add the base year prices for same commodities of
fond p0
Divide the total of current year prices by the total
of base year prices and multiply the quotient by
100 that is p01=p1/p0*100
Where p01is the simple price index of current year
1based on base year 0
1. Simple average of relative methods:

 In this method the price relative of each

commodity is calculated separately and averaged.
The steps to construct a price index by the method
of simple average of relative method are as
follows.
Obtain the price relative for each commodity
which is calculated as
price relative for current year=price of item
in current year/price of item in base year*100
p=p1/p0*100
Calculation by the geometric mean:
P01=antilog [log p1/p0*100]/N
Calculation by the arithmetic mean:
P01=[p1/p0*100]/N
2. Weighted index numbers:
In this method weights are assigned to various
commodities according to their significance and
consequently weighted index improves the accuracy of
the index number as compared to the unweighted one.
Laspeyres price index:the laspeyres price
index is a weighted aggregate price index
where the weights are the base years
quantities.
Paasches method: paasches method is
based on current years quantities. Current
years quantities are used as weights.
Dorbish and bowleys method: the third
method of calculate the weighted aggregate
numbers is the arithmetic mean of laspeyres
index and paasches index.