Statistics: Uses and Limitations
USES OF STATISTICS IN BUSINESS
- Decision making: Statistics provides a value base for making decisions
- Planning: Statistical methods are used in making forecasts which are important components in planning.
- Quality control: Statistics is used in setting standards within which the business operates
- Auditing: standards expected verses Actual performance. Statistics helps in determining the deviations of actual performance from expected standards and how to correct them
- Marketing research: Used in collecting data/ consumer want and how best to satisfy them
LIMITATIONS OF STATISTICS
- Deals with quantitative characteristics hence Qualitative characteristics cannot be studied directly *Quantitative can be measured > Numerical such as weight, distance
- *Qualitative cannot be measured >Non numerical such as honesty
- Statistics deals with aggregates hence statistical results may not be true for all individuals
- Statistics does not provide solutions to problems. It only presents the situations as it is or situations as they are.
- Statistics require expertise to understand hence it can easily be misused.