Study Guide: Business Statistics
Unit-I: Introduction to Business Statistics
1. Introduction to Statistics
Definition: Statistics is the science of collecting, organizing, analyzing, and interpreting
data to make informed decisions.
Applications in Business: Used for forecasting, quality control, market research, and
decision-making.
2. Scope and Limitations
Scope: Statistics is used in economics, management, banking, insurance, social sciences,
and quality control.
Limitations:
Only works with quantitative data, not qualitative.
Can be misused if methods are applied incorrectly.
Only predicts probability, not certainty.
3. Arranging Data & Frequency Distribution
Arranging Data: Organize raw facts into tables or frequency distributions for easier
analysis.
Frequency Distribution: Shows how frequently each value (or group/interval of values)
occurs.
Example: Grouping test scores into intervals (70–80, 81–90, etc.).
4. Types of Variables
Qualitative (Categorical) Variables: Non-numeric, such as gender, color, or categories.
Quantitative Variables:
Discrete: Whole numbers (e.g., number of employees).
Continuous: Can take any value within a range (e.g., height, weight).
5. Types of Data: Collection of Primary and Secondary Data
Primary Data: Firsthand data collected by the researcher (surveys, interviews,
experiments).
Advantages: Relevant, specific.
Disadvantages: Time-consuming, expensive.
Secondary Data: Data already collected by others (reports, websites, books).
Advantages: Quick, easy to access, inexpensive.
Disadvantages: May not be as relevant, possible reliability issues.
6. Population and Sample
Population: Full group you are studying (e.g., all customers).
Sample: Subset selected from the population for analysis (e.g., 100 customers).
7. Graphic and Diagrammatic Representation of Data
Graphs and Diagrams: Used to visually present data for easier understanding.
Types: Bar chart, pie chart, line graph, histogram, pictogram, frequency polygon.
Purpose: Identify patterns, trends, and differences.
Unit-II: Descriptive Measures
1. Measures of Central Tendency
Measure Definition Formula/Method
Mean Arithmetic average of all values
Odd n: middle value; Even n: average of two
Median Middle value when data is sorted
middles
Mode Value that occurs most frequently Most repeating value
Geometric n-th root of the product of n values (growth
Mean rates, etc.)
Harmonic Reciprocal of the average of reciprocals
Mean (rates, speeds)
2. Measures of Dispersion
Measure Definition Formula
Range Difference between highest and lowest values Range = Max − Min
Variance Average of squared differences from mean
Measure Definition Formula
Standard Deviation Average deviation from mean
Coefficient of Variation (CV) Standard deviation as percent of mean
3. Skewness and Kurtosis
Concept Definition Notes
Skewness Measures how symmetrical a distribution is Positive: tail right, Negative: tail left
Kurtosis Measures "peakedness" of the distribution High: sharp peak, wide tails; Low: flat
Key Formulas Cheat Sheet
Mean:
Median: Arrange values, find middle; if even n, average two middle values.
Geometric Mean:
Harmonic Mean:
Range: Max − Min
Variance:
Standard Deviation:
Coefficient of Variation:
Quick Tips
Always identify variable type: Qualitative or Quantitative.
Know when to use each measure of central tendency (mean for general, median for skewed
data, mode for categorical).
Plot data for visual understanding using diagrams/charts.
Sample carefully to represent the population fairly.
Interpret dispersion for risk, consistency, and reliability in business data.
Use skewness and kurtosis to understand distribution shape.
To deepen your understanding, practice calculating each measure and creating charts/graphs
using sample data. If you need worked examples for any topic, just ask!
