Discuss the importance of Statistics in Business.
One can understand the importance of Statistics in business from the following:
(i) Marketing - Statistical analysis is frequently used in providing information for making decisions in the field of marketing. It is necessary first to find out what can be sold and then to evolve suitable strategy, so that the goods reach to the ultimate consumer. A skilful analysis of data on production purchasing power, man power, habits of consumers, habits of consumer, transportation cost should be considered to take any attempt to establish a new market.
(ii) Production - In the field of production statistical data and method play a very important role. The decision about what to produce, how to produce, when to produce, and for whom to produce is based largely on statistical analysis.
(iii) Finance - The financial organization discharging their finance function effectively depend very heavily on statistical analysis of peat and tigers.
(iv) Banking - Banking Institute has found it increasingly necessary to establish research department within their organization for the purpose of gathering and analysis information, not only regarding their own business but also regarding the general economic situation and every segment of business in which they may have interest.
(v) Investment - Statistics greatly assists investors in making clear and valued judgment in his investment decision in selecting securities which are safe and have the best prospects of yielding a good income.
(vi) Purchase - The purchasing department in discharging their function makes use of statistical data to frame suitable purchase policies such as what to buy; What quantity to buy; What time to buy; Where to buy; Whom to buy;
(vii) Accounting - Statistical data are also the employer in accounting particularly in auditing function, the technique of sampling and destination is frequently used.
(viii) Control - The management control process combines statistical and accounting method in making the overall budget for the coming year including sales, materials, labour and other costs and net profits and capital requirement.