Statistics is a field of knowledge that enables an investigator to derive and evaluate conclusions about a population from sample data. In other words, statistics allow us to make generalizations about a large group based on what we find in a smaller group. The field of statistics deals with gathering, selecting, classifying data; interpreting, analysing data, deriving, evaluating the validity and reliability of conclusions based on data. Strictly speaking, the term "parameter" describes a certain aspect of a population, while a "statistic" describes a certain aspect of a sample (a representative part of the population). In common usage, most people use the word "statistic" to refer to research figures and calculations, either from information based on a sample or an entire population. Statistics means different things to different people. To a baseball fan, statistics are information about a pitcher's earned run average or a batter's slugging percentage or home run count. To a plant manager at a distribution company, statistics are daily reports on inventory levels, absenteeism, labour efficiency, and production. To a medical researcher investigating the effects of a new drug, statistics are evidence of the success of research efforts. And to a college student, statistics are the grades made on all the exams and quizzes in a course during the semester. Today, statistics and statistical analysis are used in practically every profession, and for managers in particular, statistics have become a most valuable tool.
The Advantages of Statistics in Business
1. Performance Management
Statistics have many applications in business, such as in a manager's role in performance management. A manager collects data about employee productivity, such as the number of tasks completed or the number of units produced. He must analyse data to find ways in which an employee should improve to achieve maximum productivity. For example, if a manager finds that an...