Furthermore, managers using predictive analysis of statistical techniques (such as data mining and modeling) can predict future possibilities and trends based on historical data. Results following these limitations are not accurate but approximate. The business might then pull random samples from the order and perform statistical analysis to decide whether to accept or reject the microchips. Helps in business planning on the basis of sound predictions and assumptions By. 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. Statistics works hand-in-hand with Mathematics. Note that only persons having a fundamental knowledge of statistical methodology can handle the data properly. Rational Decision Making. In this post, I cover two main reasons why studying the field of statistics is crucial in modern society. First, statisticians are guides for learning from data and navigating common problems that can lead you to incorrect conclusions. The Usage of Statistics in business and management are limitless, with the proper skill to implement statistical methods. Business managers use statistics as an aid to making decisions in the face of uncertainty. 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. Some questions are vital in market research that is if there is enough demand to justify spending money to develop a product? A business may buy hundreds of thousands of microchips, for example, so many that it would take years to inspect each one. These and more are the relevance of business statistics. But here in this blog, we are talking about the importance of statistics. Better planning and predictions are made through statistical analysis of data and figures. 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. The importance of business analytics (BA) was revealed in a recent Bloomberg survey, which found that BA has been effective in decision making for three out of four enterprises. “We use statistics to measure the unique users who interact with our video streaming platform. Show More. Business statistics play a vital role in areas such as tax preparation, budgeting, proposals, and data mining. Definitely, Business statistics involve aspects of mathematics, management, and market research. However, by using historical data, managers can analyze past successes and failures. It is also the navigation compass that guides a company on the road path to take, in other to avoid shipwreck. Today, there is hardly any business that functions without the use of statistics and statistical tools. Nevertheless, some common applications of predictive analytics include fraud detection and security, risk assessment, marketing, and operations. Statistics is used every now and then even outside the field of core Education such as Diagnosis and Programming. Notably, there are limitations in business statistics. An important role of statistics in business is that it is expressed as a percentage ratio, average, a medium, and even a raw number. They collect the data and process their customer’s data with the help of statistics. Statistics is used every now and then even outside the field of … Various accounting techniques can be used for the purpose of financial analysis. 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 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. Many business enterprises are on the verge of collapse due to the absence of statistical analysis in measuring business performances. Among the improvements are increased profitability, reduced cost, faster decision making, and critical performance improvements. Therefore, data that cannot be expressed numerically are incapable of statistical analysis. Business companies use statistics in market research, evaluation, and product development. Required fields are marked *. Furthermore, statistics focuses on aggregates and not with individuals. The relevance or importance of statistics in business, cannot be overemphasized. Meaning can be found in data. Save my name, email, and website in this browser for the next time I comment. Importance of Business Statistics . Managers would want to monitor the demands of a product. It can also be established that statistics can be misused by data placed on an inexperienced person which may lead to wrong results. This is because statistics focus only on quantitative characteristics, this is to say that statistics are numerical propositions or statements of facts. This wonderful article explains, in detail, the relevance, role, and importance of statistics in Business. Statistics can be used for marketing and market analysis. by Pereere Smart | Jan 14, 2020 | Articles, Blogs, Learn | 0 comments. Statistical analysis enables an enterprise to measure the performances of a business and identify trends. Every business small or big uses statistics for its daily function. Statistics are crucial for the business to make future decisions. He knows what his customers want; he should therefore know what to produce and sell and in what quantities. A successful businessman must be very quick and accurate in decision making. This goes beyond reporting what has happened to create best estimates for what will happen. 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. Running away from Statistics is like running away from mathematics, you will be tired. Also, statistical laws are not perfectly accurate. This is known as “cause and effect analysis“. Next time I comment characteristics, this is because statistics focus only on quantitative characteristics this... Profit targets, are graphically illustrated by events at Cisco blog, are. 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