CHAPTER 1: STATISTICS

STATISTICS

• Every minute of the working day, businesses around the world make decisions that
determine whether they will stagnate and die.
• They make most of these decisions with the assistance of information about the
marketplace, the economic and financial environment, the workforce, the competition
and other factors.
• statistical concepts and techniques are used for an orderly comparison of decision
alternatives.
• the demands of management often require the interpretation of statistical result
reported by others

1. Statistics is the sciences of data. This involves collecting, classifying, summarizing,

organizing, analyzing, and numerical information of data.

2. There are 2 type of statistic in mathematics, which is:

Descriptive statistics Inferential statistics

Consists of methods for organizing, displaying Consists of methods that use sample
and describing data by using tables, graphs and results to help make decisions or
summary measures predictions about a population

DATA
Data is raw materials or information which is gathered for statistical use which can be in the
form of qualitative or quantitative magnitude.

PRIMARY DATA SECONDARY DATA

• Data or information collected at • Data that were collected for some other
first hand for a specific purpose and purpose and are already available.
is not analyzed as yet. • The data are available from external and
internal sources.
• We can say it as the raw materials
of the enquiry 1) External sources- include government
departments, industrial associations, academic
institutions and commercial research organizations.

2) Internal sources- might include sale figures,

production records or customer evaluations.
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Differences between primary data and secondary data

Primary Data Secondary Data

Advantages: Advantages:

1) Data more up to date 1) Cheaper

2) The data collector may be aware of any 2) Less time consuming
limitation. 3) Easier

Disadvantages: Disadvantages:

1) extra cost 1) Data may be outdated

2) Some data may be too personal or
2) time taken and effort confidential
3) The data collector may not be aware of
limitations.
∴ bias and misunderstanding

1) Data which are numerical form are considered quantitative data. Quantitative data can be
divided in two:

a)Discrete data

-integers only.
-e.g: number of cars, number of children.

b)Continuous data

-integers, decimals or fractions

-e.g: height of building, weight of students.

2) Data which refers to the property or attribute of items will be considered as qualitative data
(e.g: colors of vehicles, gender or grade)
CHAPTER 1: STATISTICS
METHODS OF COLLECTING DATA

Basically, there are five methods of collecting data which is:

• Interview
• Postal questionnaire or email/sms/fax the questionnaire.
• Telephone calls
• Direct observation
• Abstraction from Published Data

No Method Advantages Disadvantages

1 • The enumerator can • The enumerator might

Interview
The enumerator
(interviewer) will ask the
required questionnaire
face to face to the
respondent
explain the questions if ask leading questions
respondent do not (that questions already
understand. prepared answers)
• Answer may not be
• This method provides recorded.
lower non response • False data may be given
rate because the to the enumerator due
process of ‘probing’ to:
-forgetfulness
-misunderstanding
-deliberate intend to
mislead.

2 • Not enough response.

Postal Questionnare
A set of questions are
prepared on a piece of
paper and are given to
respondents to be
answered.
• The first part of
questionnaire normally
requires the details of
the respondents, age,
sex, marital status and
occupation.
• An advantage of this
method is, it does not
require traveling and • Respondents might just
thus at the same time ignore the questionnaire
reduces the cost. It can or they might have
reach remote places. forgotten to mail back
the answer in timer or
the questionnaires might
have been lost or torn on
the way.
• Questions might be
misunderstood

• The second part has • It might take some time

the questions relating before the response is
to the subject matter of sent back to the
the enquiry. enumerators.
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3 Telephone Calls
• Get the telephone
number and call the
respondents.
• It generally used within
local area and is often
connected with selling a
product or a service (for
example, insurance)
4 Direct Observation
• Getting results
• In certain situations,
the person personally
collects the data
• Information is accurate
directly from the
population concerned
• The result is recorded
from what the data
collector had observed
• This method is used in
traffic censuses
5 Absraction from
published statistics • Cheap
• does not consume too
• The data are collected
from books, internet,
magazines,
newspapers, journals
or reports
• Such as:Digest of
Statistics, Economic
Trends, Financial
Statistics, Employment
Gazette
• This method of
collection the data are
secondary data.
• Used to reduce cost • Only short question
because no need to can be asked
travel • Only people with
• A high response rate telephones can be
(can get the answer contacted and
directly without interviewed
having to wait) • Expensive for long
•Less time consuming distance calls
• Can cause
aggravation and the
interviewer needs to
be very skilled.
• Requires more time to
spontaneously carry out actual
experiment.
• It can be very expensive.
and in actual situation
• In summarizing the
information, the data
much time and effort collector might
misunderstood what he
had read
• Some articles written in
newspapers are really
biased
∴ The opinion expressed may
be one-sides
• Some reports may not
published confidential
information which might
be very useful to the data
collector.
CHAPTER 1: STATISTICS
SAMPLING

1) Sampling is a systematic approach of selecting a few elements (a sample) from an entire

collection of data (a population) in order to make inferences about the total collection.

2) It is also defined as a method that helps to ensure that samples represent the entire
collection.

Area of distinction Population Sample

A total of the items under A portion of the population
Definition consideration by the researchers selected for study

Characteristics Parameters Statistics

Symbols µ = population mean X= sample mean

σ = population standard deviation S= sample standard deviation
N= population size N= sample size

-There are 3 types of sampling:

Sample survey survey where only samples are used for examination

Census a data are gathered from the whole population

Pilot survey a trial survey carried out prior to the actual survey

There are 2 design of samplings:

Random Sampling
-all items in the population has same Non Random Sampling
chance of being selecting as samples -items are chosen depending on the
judgment or the opinion of the person.

There are 5 types of random sampling There are 3 types of non random sampling

1)Simple random sampling 1)Quota sampling

2)Systematic sampling 2)Judgment sampling
3)Stratified Sampling 3)Convenience Sampling
4)Cluster Sampling
5)Multi Stage Sampling
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RANDOM SAMPLING
1) SIMPLE RANDOM SAMPLING
• Definition: every items in the population have equal chance of being
included in the sample.
• 2 types of process of selecting samples:

i)with replacement - if the population is very small (finite)

ii)without replacement -if the population is infinite (unspecified/ large)

-commonly applied in reality
-2 types of technique:
i)Random Numbers Table
- used either horizontally, vertically or diagonally.
-N = 3 digits number (select a 3 digits number from the table until the sample size is achieved)
ii)Using Slips of Papers
-write names/reference number on slips of paper and place them in a container.
-draw a slip at a time after shuffling the container till the sample size is obtained.

Advantages:

1)efficient procedure if the population small.

2)the selection of sample members being unbiased.

Disadvantages:
1)tedious.
2)extremely costly
3)physically impossible.

2)SYSTEMATIC SAMPLING (QUASI SAMPLING)

• Definition: elements are selected from the population at a uniform interval (i.e.
measured in time, order or space)
• Interval -If sample size; n=50 from population size; N=5000
So interval =N/n
=5000/50 = 100th element (one element for every 100th
element in the population.)

Example
Select a random starting point in the first 20 names from the students’name list and then pick
every 20th name thereafter.
In a production line:-select one item randomly and later pick every 10th item thereafter.
Advantages: 1)easy to draw the sample (less time and lower cost than SRS)
2)sample is evenly spread over the population.

Disadvantages: 1)Only the first start is at random, then it fix to the rule.
∴ biased sample.
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3) STRATIFIED SAMPLING
• Defination : Sometimes we are dealing with a population that has various subgroups.
-the data will differ among various groups (strata)
-the basis for forming the various strata, such as department, location, age,
industry type, ethnic group, income and so on.
-So sampling from these strata is known as stratified sampling.

1) The procedure is to divide the population into a number of different strata and then
randomly select samples from each stratum, then it’s combined into a single sample.
2)The strata is usually non-overlapping subpopulation.

Example: KPM students -grouping according to courses

Course No. of students Proportion (%)
DIA 1 70 35
DBS 1 50 25
DIA 2 50 25
DBS 2 30 15
200 100

Advantages:
1)When properly designed, more accurately reflect characteristics of the population.
2)Sampling error also reduced.
3)Every single units or elements is included in the sample.

Disadvantages:
1)Tedious to divide population into a perfect or good strata.

4) CLUSTER SAMPLING
• Defination : Divide the population into groups (cluster) and select a random sample
from clusters. Each cluster is representative of the population as a whole.

Example: Car industry.

Cluster 1 (Ford) : 2WD, 4WD, lorry, bus,
van etc.
Cluster 2 (Toyota) : 2WD, 4WD, lorry, bus, van etc.

-a well designed cluster sampling procedure can produce a more precise sample at
considerably less cost than that of SRS.

• Cluster vs Stratified:
1)Similarity -both dividing population into smaller groups
2)Stratified -each group has small variation (difference)within itself but a wide
variation among the groups.
3)Cluster -considerable variation within each group but are essentially similar
among the groups.

Advantages: 1) Can be used for large population.

2) Easy and cheaper than other methods.

Disadvantages: 1) No control on the size of the population.

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5) MULTI STAGE
SAMPLING
• Defination : In case where the elements in the population are very widely spread
(scattered over the country)

• ∴ Cost and time (incurred and taken) for taking such sample is prohibitive especially
where urbanization has yet to develop.

• To overcome the above problem, multi stage sampling is developed/designed.

1) Method of selection equal with stratified sampling but geographical factor is taken into
consideration rather than on the basis of social characteristics.
2) Every stage, a random sample is selected.

Example:
A country Several states Districts Towns

Advantages: 1) Less time and man power is needed and thus it is cheaper than SRS.
Disadvantages: 1) Possible bias if a very small number of region is selected
2) Not truly random since once particular regions for sampling have been
selected (no member of the population in any other region can be
selected).

NON RANDOM
SAMPLING

• Defination : the process of selecting sample without randomization.

• 3 designs of sampling:-

1) QUOTA SAMPLING
a) Enumerators given quota which is divided into sub quota.
Advantage: Once respondent has refused to be interviewed, replacement is allowed

2)JUDGMENT SAMPLING
a) Use by experts or specialists for personal judgment to choose/select a representative sample but
errors could involved.

3)CONVENIENCE SAMPLING
a) Very easy and no randomness at all.

Advantages: - can establish the most satisfactory form of the questionnaire for actual survey.
CHAPTER 1: STATISTICS
-in production line, the default/discrepancy could not be noticed until the next
sample is taken.

Example: The quality controller who takes the first 20 item off the production line as his
sample.