Page 17 - DCOM203_DMGT204_QUANTITATIVE_TECHNIQUES_I

Quantitative Techniques – I

Notes undertake a particular investment or not. The answer to such problems are provided by
the statistical techniques of decision-making under uncertainty.

Did u know? Among the noteworthy Indian scholars who contributed to statistics are P.C.
Mahalnobis, V.K.R.V. Rao, R.C. Desai and P.V. Sukhatme.
Self Assessment

State whether the following statements are true or false:
11. Honesty, intelligence, colour of eyes, beauty, etc. all are examples of qualitative
characteristics.
12. Statistics deals only with groups and not with individuals.
13. Statistical results are surely true.
14. Statistics are liable to be misused.
15. Statistics must be used by anybody.

Task Elucidate the following statements:
1. “The successful businessman is one whose estimates closely approaches accuracy.”

2. “All its best science is statistical.”
3. “Statistical results are very general estimates rather than exact statements”.

1.4 Limitations of Statistics

Like every other science, statistics also has its limitations. In order to have maximum advantage
from the use of statistical methods, it is necessary to know their limitations. According to
Newshome, “It (statistics) must be regarded as an instrument of research of great value, but
having severe limitations, which are not possible to overcome and as such they need our careful
attention.” The science of statistics suffers from the following limitations:

1. Statistics deals with numerical facts only: Broadly speaking there are two types of facts,
(a) quantitative and (b) qualitative facts.
Quantitative facts are capable of being represented in the form of numerical figures and
therefore, are also known as numerical facts. These facts can be analysed and interpreted
with the help of statistical methods. Qualitative facts, on the other hand, represent only
the qualitative characteristics like honesty, intelligence, colour of eyes, beauty, etc. and
statistical methods cannot be used to study these types of characteristics. Sometimes,
however, it is possible to make an indirect study of such characteristics through their
conversion into numerical figures. For example, we may assign a number 0 for a male and
1 for a female, etc.
2. Statistics deals only with groups and not with individuals: Statistical studies are
undertaken to study the characteristics of a group rather than individuals. These studies
are done to compare the general behaviour of the group at different points of time or the
behaviour of different groups at a particular point of time. For example, the economic
performance of a country in a year is measured by its national income in that year and by

12 LOVELY PROFESSIONAL UNIVERSITY