3 - Measure Phase - Introduction To Statistics - 14!1!15 (Autosaved) (Compatibility Mode)

IBM-09: Six Sigma Tools and
Techniques
Measure Phase
Introduction to Basic Statistics
A.RameshPhD
DepartmentofManagementStudies
IndianInstituteofTechnologyRoorkee
ramesh.anbanandam@gmail.com
Measure Phase Basic Statistics

What is Data?:
Refer to facts usually collected as the result of experience, observation or
measurement
Consist of numbers, words, or images
Lowest level of abstraction from which information and knowledge are
derived
DATA
Information
Knowledge
I believe in God - Rest bring data! A famous quote

WHAT DO THESE WORDS & NUMBERS MEAN TO YOU ?
ROOF
WIRES
TREE
TREE
FLOWERS
SKY
GLASS
LAMP
POLE
GRASS
TILES
WINDOWS
2.87, 2.85, 2.88, 2.85, 2.86, 2.85,

2.81, 2.82, 2.83, 2.85, 2.84, 2.84,
2.85, 2.86, 2.85, 2.84, 2.85, 2.85,
2.87, 2.81, 2.85, 2.82, 2.83, 2.85,
2.85, 2.86, 2.85, 2.86, 2.89, 2.85,
2.84, 2.84, 2.85, 2.85, 2.83, 2.82,
2.86, 2.83, 2.85, 2.86, 2.85, 2.84,
2.84, 2.87, 2.85, 2.86, 2.85, 2.84,
2.90, 2.88
PROBABLY NOTHING
MUCH !

How about following pictures?
Statistics helps in summarizing and understanding the data
CanStatisticsBeTrusted?
Therearethreekindsoflies:
Lies,damnedlies,andstatistics.
MarkTwain
Itiseasytoliewithstatistics.Butitiseasierto
liewithoutthem.
FrederickMosteller
Figureswontliebutliarswillfigure.
CharlesGrosvenor
Statistics..
Plays an important role in many facets of
human endeavour
Occurs remarkably frequently in our everyday
lives
It is often incorrectly thought of as just a
collection of data, graphs and diagrams
What is Statistics?
Science of gathering, analyzing, interpreting, and
presenting data
Branch of mathematics
Facts and figures
Statistics is the scientific method that enables us to
make decisions as responsibly as possible.
Statistics: Science of variability..?

Virtually everything varies
Variation occurs among individuals
Variation occurs within any one individual as
time passes

Concept of Variation:
Variation is natural and can not be avoided
Customer experiences the variation not the average.
Lower the variation, better the customer experience
What Customer wants
What
customer
experiences
(Variation)
What we measure
(Average)

Sources of Variation:
Any changes to the above factors would directly impact the

process performance and causes for variation

Variation Example:
A man wants to reach his work
place exactly by 7:00 a.m
6.55
7.05
One day he reaches little earlier

(6:55)
Another day he reaches little late
(7:05)
Can we identify cause for this

variation?
No ! We may not be !
It may be affected by factors which
Affects the time he takes to travel
He cannot control
Vary randomly
E.g..) The normal traffic he encounters
under normal course of travel
These Variation is called as

Inherent Variation or
Common Cause Variation or
White Noise

Variation Example:
TODAY HE IS VERY
EARLY !
6.00
Can We find out what is cause

for this?
YES. We Can !
It may be because of some specific
circumstances which do not occur in
the normal scheme of actions.
E.g..)
His watch was running fast
He got a lift
He had a Client Call
He had some important work to be
finished before 7.30
These variations are called as

Special Cause Variation or
Black Noise

Reacting to common cause vs. special cause:

Sampling:
Sampling is the process of:
Collecting only a portion of the data that is available or could be available,
and drawing conclusions about the total population (statistical inference)
Population
x
x x
x
x
x
x x
x
x x
x
x x
Sample
x
x x
x
x
x
n = 3 days
N = 567 days
What is the Average
Resolution time?
From the sample,

we infer that the
average resolution
time (x) is 1.2 days
*Within a certain
confidence band or
margin of error
Population Versus Sample

Population the whole
a collection of persons, objects, or items under study
The entire group of individuals in a statistical study we
want information about.
Census gathering data from the entire population

Sample a portion of the whole
a subset of the population
a part of the population from which we actually collect
information, used to draw conclusions about the whole
(statistical inference
16
Statistics can be split into two broad

categories
1. Descriptive statistics
2. Statistical inference
17
Descriptive Statistics
Collect data
ex. Survey
Present data
ex. Tables and graphs
Characterize data
ex. Sample mean = n
Descriptive statistics..
Encompasses the following:
Graphical or pictorial display
Condensation of large masses of data into a form
such as tables
Preparation of summary measures to give a
concise description of complex information (e.g.
an average figure)
Exhibition of patterns that may be found in sets of
information
19
Inferential Statistics
Estimation
ex. Estimate the population
mean weight using the
sample mean weight
Hypothesis testing
ex. Test the claim that the
population mean weight is
120 pounds
Drawingconclusionsand/ormakingdecisionsconcerninga
population basedonsample results.
Inferential Statistics..
Especially relates to:
Determining whether characteristics of a situation
are unusual or if they have happened by chance
Estimating values of numerical quantities and
determining the reliability of those estimates
Using past occurrences to attempt to predict the
future
21
Process of Inferential Statistics
Population
Calculate x
to estimate
Sample
x
(statistic )
(parameter)
Select a
random sample
22
Population vs. Sample

Population
Measures used to describe the

population are called parameters
Sample
Measures computed from

sample data are called statistics
Parameter vs. Statistic

Parameter descriptive measure of the
population
Usually represented by Greek letters
Statistic descriptive measure of a sample

Usually represented by Roman letters
24
Symbols for Population Parameters

denotes population parameter
denotes population variance
denotes population standard deviation
25
Symbols for Sample Statistics

x denotes sample mean
denotes sample variance
S denotes sample standard deviation
26
Types of Variables
Categorical (qualitative) variables have values
that can only be placed into categories, such as
yes and no.
Numerical (quantitative) variables have values
that represent quantities.
Types of Variables
Data
Categorical
Numerical
Examples:
MaritalStatus
PoliticalParty
EyeColor
(Definedcategories)
Discrete
Examples:
NumberofChildren
Defectsperhour
(Counteditems)
Continuous
Examples:
Weight
Voltage
(Measuredcharacteristics)
Levels of Data Measurement
Nominal Lowest level of measurement

Ordinal
Interval
Ratio Highest level of measurement
29
Levels of Measurement
A nominal scale classifies data into distinct
categories in which no ranking is implied.
CategoricalVariablesCategories
PersonalComputerOwnership
TypeofStocksOwned
Yes / No
Growth Value Other
InternetProvider
MicrosoftNetwork/AOL
LevelsofMeasurement
An ordinal scale classifies data into distinct
categories in which ranking is implied
CategoricalVariable
OrderedCategories
Student class designation
Freshman, Sophomore, Junior,

Senior
Product satisfaction
Satisfied, Neutral, Unsatisfied
Faculty rank
Professor, Associate Professor,

Assistant Professor, Instructor
Standard & Poors bond ratings
AAA, AA, A, BBB, BB, B, CCC, CC,

C, DDD, DD, D
Student Grades
A, B, C, D, F
Levels of Measurement
An interval scale is an ordered scale in which the
difference between measurements is a meaningful
quantity but the measurements do not have a true
zero point.
A ratio scale is an ordered scale in which the
difference between the measurements is a
meaningful quantity and the measurements have a
true zero point.
Interval and Ratio Scales
Usage Potential of Various

Levels of Data
Ratio
Interval
Ordinal
Nominal
34
Data Level, Operations,

and Statistical Methods
DataLevel
MeaningfulOperations
Statistical
Methods
Nominal
ClassifyingandCounting
Nonparametric
Ordinal
AlloftheaboveplusRanking
Nonparametric
Interval
AlloftheaboveplusAddition,
Subtraction
Parametric
Ratio
Alloftheaboveplus
multiplicationanddivision
Parametric
35
Data preparation rules

Data presented must be
factual
relevant
Before presentation always check:

the source of the data
that the data has been accurately transcribed
the figures are relevant to the problem
36
Methods of visual presentation of data

Table
East
West
North
1st Qtr
2nd Qtr 3rd Qtr
4th Qtr
20.4
27.4
90
20.4
30.6
38.6
34.6
31.6
45.9
46.9
45
43.9
37

Graphs
90
80
70
60
East
West
North
50
40
30
20
10
0
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
38

Pie chart
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
39

Multiple bar chart
4th Qtr
3rd Qtr
North
West
East
2nd Qtr
1st Qtr
0
20
40
60
80
100
40

Simple pictogram
100
80
60
40
North
20
0
East
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
West
41
Frequency distributions
Frequency tables
Class Interval
< 20
<40
<60
<80
<100
Observation Table
Frequency
Cumulative Frequency
13
13
18
31
25
56
15
71
9
80
42
Frequency diagrams
Frequency
30
Frequency
25
20
15
90
80
70
60
50
40
30
20
10
0
10
5
0
< 20
<40
<60
<80
<100
< 20
<40
<60
<80
<100
Frequency
30
25
20
Frequency
15
10
5
0
< 20
<40
<60
<80
<100
43
Ungrouped Versus Grouped Data

Ungrouped data
have not been summarized in any way
are also called raw data
Grouped data
have been organized into a frequency
distribution
44
Example of Ungrouped Data

42
26
32
34
57
30
58
37
50
30
53
40
30
47
49
50
40
32
31
40
52
28
23
35
25
30
36
32
26
50
55
30
58
64
52
49
33
43
46
32
61
31
30
40
60
74
37
29
43
54
Ages of a Sample of
Managers from
XYZ
45
Frequency Distribution of Ages

Class Interval
20-under 30
30-under 40
40-under 50
50-under 60
60-under 70
70-under 80
Frequency
6
18
11
11
3
1
46
Data Range
42
26
32
34
57
30
58
37
50
30
53
40
30
47
49
50
40
32
31
40
52
28
23
35
25
30
36
32
26
50
55
30
58
64
52
49
33
43
46
32
61
31
30
40
60
74
37
29
43
54
Range = Largest - Smallest

= 74 - 23
= 51
Smallest
Largest
47
Number of Classes and Class Width
The number of classes should be between 5 and 15.

Fewer than 5 classes cause excessive summarization.
More than 15 classes leave too much detail.
Class Width
Divide the range by the number of classes for an approximate
class width
Round up to a convenient number
51
Approximate Class Width = = 8.5
6
Class Width = 10
48
Class Midpoint
beginning class endpoint + ending class endpoint
Class Midpoint =
2
30 + 40
=
2
= 35
1
Class Midpoint = class beginning point + class width
2
1
= 30 + 10
2
= 35
49
Relative Frequency
Class Interval
20-under 30
30-under 40
40-under 50
50-under 60
60-under 70
70-under 80
Total
Frequency
6
18
6
11
50
11
18
3
50
1
50
Relative
Frequency
.12
.36
.22
.22
.06
.02
1.00
50
Class Interval
20-under 30
30-under 40
40-under 50
50-under 60
60-under 70
70-under 80
Total
Frequency
6
18
11
11
3
1
50
Cumulative
Frequency
6
24
18 + 6
35
11 + 24
46
49
50
51
Class Midpoints, Relative Frequencies, and

Cumulative Frequencies
Class Interval
20-under 30
30-under 40
40-under 50
50-under 60
60-under 70
70-under 80
Total
Frequency
6
18
11
11
3
1
50
Midpoint
25
35
45
55
65
75
Relative
Cumulative
Frequency
.12
.36
.22
.22
.06
.02
1.00
Frequency
6
24
35
46
49
50
52
Cumulative Relative Frequencies
Class Interval
20-under 30
30-under 40
40-under 50
50-under 60
60-under 70
70-under 80
Total
Frequency
6
18
11
11
3
1
50
Relative Cumulative
Frequency Frequency
.12
6
.36
24
.22
35
.22
46
.06
49
.02
50
1.00
Cumulative Relative
Frequency
.12
.48
.70
.92
.98
1.00
53
Common Statistical Graphs
Histogram -- vertical bar chart of frequencies

Frequency Polygon -- line graph of frequencies
Ogive -- line graph of cumulative frequencies
Pie Chart -- proportional representation for
categories of a whole
Stem and Leaf Plot
Pareto Chart
Scatter Plot
54
10
0
Frequency
Class Interval Frequency

20-under 30
6
30-under 40
18
40-under 50
11
50-under 60
11
60-under 70
3
70-under 80
1
20
Histogram
10 20 30 40 50 60 70 80
Years
55
10
0
Frequency

20-under 30
6
30-under 40
18
40-under 50
11
50-under 60
11
60-under 70
3
70-under 80
1
20
Histogram Construction
10 20 30 40 50 60 70 80
Years
56
10
0
Frequency

20-under 30
6
30-under 40
18
40-under 50
11
50-under 60
11
60-under 70
3
70-under 80
1
20
Frequency Polygon
10 20 30 40 50 60 70 80
Years
57
40
20
0
Frequency
Class Interval
20-under 30
30-under 40
40-under 50
50-under 60
60-under 70
70-under 80
Cumulative
Frequency
6
24
35
46
49
50
60
Ogive
10
20
30
40
50
60
70
80
Years
58
Class Interval
20-under 30
30-under 40
40-under 50
50-under 60
60-under 70
70-under 80
Cumulative
Relative
Frequency
.12
.48
.70
.92
.98
1.00
Cumulative Relative Frequency
Relative Frequency Ogive
1.00
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
0
10
20
30
40
50
60
70
80
Years
59
ComplaintsbyPassengers
COMPLAINT
NUMBER
PROPORTION
DEGREES
Stations,etc.
28,000
.40
144.0
Train
Performance
Equipment
14,700
.21
75.6
10,500
.15
50.4
Personnel
9,800
.14
50.6
Schedules,
etc.
Total
7,000
.10
36.0
70,000
1.00
360.0
60
ComplaintsbyPassengers
Personnel
14%
Schedules,
Etc.
10%
Equipment
15%
Train
Performance
21%
Stations, Etc.
40%
61
Company
Second Quarter
Truck
Production
2dQuarter
Truck
Production
357,411
354,936
160,997
34,099
12,747
920,190
Totals
62
Second Quarter
Truck Production
17%
4%
1%
39%
39%
63
Pie Chart Calculations for Company A
Company
A
B
C
357, 411
=
920,190
2dQuarter
Truck
Production
Degrees
357,411
.388
140
354,936
.386
139
160,997
.175
63
34,099
12,747
920,190
Totals
Proportion
.388 .037
360 =
.014
1.000
13
5
360
64
Frequency
Pareto Chart
100
100%
90
90%
80
80%
70
70%
60
60%
50
50%
40
40%
30
30%
20
20%
10
10%
0%
Poor
Wiring
Short in
Coil
Defective
Plug
Other
65
ScatterPlot
Gasoline Sales
(1000's of
Gallons)
60
15
120
90
15
140
60
200
Gasoline Sales
Registered
Vehicles
(1000's)
100
0
0
10
15
Registered Vehicles
20
66
Principles of Excellent Graphs

The graph should not distort the data.
The graph should not contain unnecessary
adornments (sometimes referred to as chart junk).
The scale on the vertical axis should begin at zero.
All axes should be properly labeled.
The graph should contain a title.
The simplest possible graph should be used for a
given set of data.
Graphical Errors: Chart Junk

BadPresentation
MinimumWage
1960:$1.00
GoodPresentation
MinimumWage
1970:$1.60
2
1980:$3.10
0
1990:$3.80
1960
1970
1980
1990
Graphical Errors:
Compressing the Vertical Axis
BadPresentation
200
QuarterlySales
50
100
25
0
Q1
Q2
Q3
Q4
GoodPresentation
QuarterlySales
Q1
Q2
Q3
Q4
Graphical Errors: No Zero Point on the

Vertical Axis
BadPresentation
GoodPresentations
45
45
42
42
39
39
36
36
MonthlySales
MonthlySales
M J
Graphing the first six months of sales
Thank You
71
http://www.stats.gla.ac.uk/steps/glossary/prese
nting_data.html
http://www.ilir.uiuc.edu/courses/lir593/

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IBM-09: Six Sigma Tools and

Measure Phase Basic Statistics

I believe in God - Rest bring data! A famous quote

Measure Phase Basic Statistics

2.87, 2.85, 2.88, 2.85, 2.86, 2.85,

Measure Phase Basic Statistics

Statistics helps in summarizing and understanding the data

Statistics: Science of variability..?

Measure Phase Basic Statistics

Measure Phase Basic Statistics

Any changes to the above factors would directly impact the

Measure Phase Basic Statistics

One day he reaches little earlier

Can we identify cause for this

These Variation is called as

Measure Phase Basic Statistics

Can We find out what is cause

These variations are called as

Measure Phase Basic Statistics

Measure Phase Basic Statistics

From the sample,

Population Versus Sample

Census gathering data from the entire population

Statistics can be split into two broad

ex. Sample mean = n

Process of Inferential Statistics

Population vs. Sample

Measures used to describe the

Measures computed from

Parameter vs. Statistic

Statistic descriptive measure of a sample

Symbols for Population Parameters

denotes population variance

denotes population standard deviation

Symbols for Sample Statistics

denotes sample variance

S denotes sample standard deviation

Levels of Data Measurement

Nominal Lowest level of measurement

Student class designation

Freshman, Sophomore, Junior,

Satisfied, Neutral, Unsatisfied

Professor, Associate Professor,

Standard & Poors bond ratings

AAA, AA, A, BBB, BB, B, CCC, CC,

Interval and Ratio Scales

Usage Potential of Various

Data Level, Operations,

Data preparation rules

Before presentation always check:

Methods of visual presentation of data

Methods of visual presentation of data

Methods of visual presentation of data

Methods of visual presentation of data

Methods of visual presentation of data

Ungrouped Versus Grouped Data

Example of Ungrouped Data

Frequency Distribution of Ages

Range = Largest - Smallest

Number of Classes and Class Width

The number of classes should be between 5 and 15.

Round up to a convenient number

Class Midpoints, Relative Frequencies, and