Discuss the limitations of statistics. Importance and use of Statistics.

Answer:

The limitations of statistics are:

(1) Statistics laws are true on average. Statistics are aggregates of facts. So single observation is not a statistics.

(2) Statistical methods are best only applicable on quantitative data.

(3) Statistical cannot be applied to heterogeneous data.

(4) It sufficient care is not exercised in collecting, analyzing and interpretation the data, statistical results might be misleading.

(5) Only a person who has an expert knowledge of statistics can handle statistical data efficiently.

(6) Some errors are possible in statistical decisions. Particularly the inferential statistics involves certain errors. We do not know whether an error has been committed or not.

Importance and use of Statistics:

Some significant uses of business statistics are below:

i) Determining business statistics: The first and foremost condition for the start of business is the determination of a business spot.

ii) Stoking commodity: For the stoking of proper amount of commodity proper planning and its implementation are necessary.

iii) Financial analysis in business: The average of the balance of the profit and loss and the financial affairs are use of statistics.

iv) Products marketing: Customer can take the new product in the market. So the necessity is a must for the proper observation and study of the condition of the market.

v) Solving business related problem: With the proper use of statistics we can estimate the overall condition, success, failure of the business. As a result, it is possible and easy for the businessman to take effective measures.