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MB0040 Q1. Statistics plays a vital role in almost every facet of human life. Describe the functions of Statistics. Explain the applications of statistics.

Statistics plays an important role in almost every facet of human life. In business context, managers are required to justify decisions on the basis of data. They need statistical models to support these decisions. Statistical skills enable managers to collect, analyse and interpret data in order to take suitable decisions.

Statistics is used for various purposes. It is used to simplify mass data and to make comparisons easier. It is also used to bring out trends and tendencies in the data, and the hidden relations between variables. All these help in easy decision making. 

1.    Statistics simplifies mass data: The use of statistical concepts helps in simplification of complex data. Using statistical concepts, the managers can make decisions more easily. The statistical methods help in reducing the complexity of the data and in the understanding of any huge mass of data.

2.    Statistics makes comparison easier: Without using statistical methods and concepts, collection of data and comparison would be difficult. Statistics helps us to compare data collected from various sources. Grand totals, measures of central tendency and measures of dispersion, graphs and diagrams and coefficient of correlation all provide ample scopes for comparison.
3.    Statistics brings out trends and tendencies in the data: After data is collected, it is easy to analyse the trend and tendencies in the data by using the various concepts of Statistics.
4.    Statistics brings out the hidden relations between variables: Statistical analysis helps in drawing inferences on the data. Statistical analysis brings out the hidden relations between variables.
5.    Decision making power becomes easier: With the proper application of Statistics and statistical software packages on the collected data, managers can take effective decisions, which can increase the profits in a business.

Application of Statistics:
In Biology, Medicine and Agriculture, Statistical methods are applied in the following:
·         Study of the growth of plants
·         Movement of fish population in the ocean
·         Migration pattern of birds
·         Analysis of the effect of newly invented medicines
·         Theories of heredity
·         Estimation of yield of crop
·         Study of the effect of fertilizers on yield
·         Population growth
·         Birth rate
·         Death rate
·         Growth of bacteria

Insurance companies decide on the insurance premiums based on the age composition of the population and the mortality rates. Actuarial science is used for the calculation of insurance premiums and dividends.


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