What is Statistics?

“ By Statistics, we mean methods specially adapted

to the elucidation of quantitative data affected to a
marked extent by multiplicity of causes”.
Yule and Kendal

“Business Analytics(BA) can be defined as the broad

use of data and quantitative analysis for decision
making within organizations”.
Thomas Davenport
 Why Statistics is So Important?
Three significant events triggered the current meteoric growth in the
use of analytics in decision making and Statistics is Heart of Analytics
Event1
• Large Amount of Data resulting from Technological
developments, Revolution of Internet, social networks, and
from mobile phones requiring Analytics to derive insights

• The discovery of pattern and trends from these data can be

leveraged by organizations will pave the way for improving
profitability, and performance.

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Why Statistics is So Important?

Event 2
• Advances in enormous computing power to effectively
process and analyze massive amounts of data

• Sophisticated and faster algorithms for solving

problems

• Data Visualization for Business Intelligence

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Why Statistics is So Important?

Event 3

• Large data storage capability

• Parallel computing, and cloud computing coupled with

better computer hardware have enabled businesses to
solve large scale problems faster than ever before.

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Big Data
• A set of data that cannot be managed, processed, or
analyzed with traditional software/algorithms within a
reasonable amount of time.

• Big data revolves around Volume Velocity Variety Value

Veracity

Walmart handles over one million purchase

transactions per hour.

Facebook processes more than 250 million picture

uploads per day.

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 The Four Pillars of Business Analytics

• Descriptive Analytics
• Diagnostic Analytics
• Predictive Analytics
• Prescriptive Analytics

Statistical Methods will have to be positioned appropriately

within the ambit of these four pillars

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Course Objectives
After completing this course, you will be able to:

• Understand and appreciate the most widely used tools of business

statistics which form the basis for rational and sound business decisions

• Develop skills in analysis and interpretation of data

• Understand Probability and Probability Distribution with Application

• Focus on problem recognition and test hypotheses in the context of

managerial decision-making.

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Industry Example
A marketing manager of an enterprise is facing a decision whether
to introduce a new product into the market or not. Consumer
acceptance measured in a blind Comparison test is agreed upon as
an appropriate basis for evaluation. Marketing of the new product
will be pursued only if the acceptance rate exceeds 30%. Otherwise,
the new product will not be introduced in the market. A random
sample of 200 consumers reveals that the acceptance rate is 32%. At
95% confidence level, should the new product be launched?

Statistical evidence points that the confidence level is 73% for 32% sample
audience acceptance. If 95% confidence is needed, then the acceptance rate
should be 35% to 36% in the sample target audience. Hence the new
product should not be introduced.