Question

Plagirism is Prohibited

Question: Investigating the major uses of the Statistics in the following field:

1. Finance (200 words)

2. Economics (200 words)

3. Management (200 words)

4. Marketing (200 words)

5. Accounting (200 words)

Answer 1

Solution :--

1). Use of statistics in Finance :--

(i) modern probability and statistics is essential for the development of economic theories and for the testing of their validity through robust analysis of real-world data .

   (ii) istochastic processes would be required for working in Market risk or for pricing derivatives. (iii) Extreme value theory and order statistics play a role major in quantifying operational risk.
(iv) Pricing and portfolio management need to have a good understanding of the distribution of risks in a portfolio so that appropriate actions can be taken.
(v) Marketing often use statistical modelling techniques to identify prospects in sales campaigns or even in managing attrition.
(vi)Fraud detection makes use of a multitude of statistical models from rules based approaches to more sophisticated modelling.
(vii) Lastly, with so many models, management may require an independent validation team to given them comfort that model have been built properly and continue to work.

2). Use of statistics in Economics :--

Statistics is efficiently and effectively utilized in various fields. Let’s begin with a known field i.e. ECONOMICS. In this statistics facilitates inter-sectoral and inter-temporal comparisons along with help in economic forecasting. Apart from this various economic theories like Demand-Supply, etc. are all verified through actual statistics.

Next let’s take BUSINESS. Statistics helps businessmen to plan production according to the taste of the customers, and the quality of the products can also be checked more efficiently by using statistical methods. Thus, it can be seen that all business activities are based on statistical information. Businessmen can make correct decisions about the location of business, marketing of the products, financial resources, etc.

Another notable field is BANKING.Bankers use statistical approaches based on probability to estimate the number of deposits and their claims for a certain day. This enables smooth functioning in their daily operations.

3). Use of statistics in Management :--

Statistics back up assertions. Leaders can find themselves backed into a corner when persuading people to move in a direction or take a risk based on unsubstantiated opinions. Statistics can provide objective goals with stand-alone figures as well as hard evidence to substantiate positions or provide a level of certainty to directions to take the company.

Statistics can point out relationships. A careful review of data can reveal links between two variables, such as specific sales offers and changes in revenue or dissatisfied customers and products purchased. Delving into the data further can provide more specific theories about the connections to test, which can lead to more control over customer satisfaction, repeat purchases and subsequent sales volume.

Anyone who has looked into continuous improvement or quality assurance programs, such as Six Sigma or Lean Manufacturing, understands the necessity for statistics. Statistics provide the means to measure and control production processes to minimize variations, which lead to error or waste, and ensure consistency throughout the process. This saves money by reducing the materials used to make or remake products, as well as materials lost to overage and scrap, plus the cost of honoring warranties due to shipping defective products.

4.) Use of statistics in Marketing :--

  The use of marketing mix modeling helps marketers identify the correct combination of marketing communications channels to use to reach the target market and provide the best return on the marketing investment. Modeling works by analyzing information and using the technique of statistical regression to determine the effectiveness of sales on the market. The formula for modeling includes creation of a model using sales volumes and value as a dependent variable, and then using various marketing channels to represent the independent variables.

Statistics are applied in market tracking to measure customer satisfaction, brand loyalty and support, and to assess the relationship of the marketer’s company with its customers. To implement a market-tracking program, the marketer needs access to company as well as industry statistics.

Marketers use statistics on household parameters to target buyers for customized promotions or to cross-sell secondary products

5.) Use of statistics in Accounting :--

  Forensic accountants depend on statistical methods to analyze financial instruments that may be used to perpetrate financial fraud. By understanding statistical principles, forensic accountants correctly estimate whether the valuation of the risk associated with financial instruments was appropriate.Accountants who conduct audits use samples that are statistically representative of a data base because it is almost impossible to collect all the data needed in a short period of time.

Controllers are typically in charge of all the financial operations of a company. Some of their main responsibilities are to perform cost analyses, provide financial forecasts and compile budget reports. Controllers apply their knowledge of statistics to develop the appropriate forecasts and analyses that promote the success of the company.
Risk management accountants use the statistical principles of distribution and correlation to account for risks when setting a valuation. Risk accountants also apply statistics principles to limit the range of valuation errors and to specify a premium that is appropriate for the risk associated with a particular forecast.