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Contents
1. The Science of Statistics 2. Types of Statistical Applications in Business 3. Fundamental Elements of Statistics 4. Processes
5. Types of Data
6. Collecting Data 7. The Role of Statistics in Managerial Decision Making
2011 Pearson Education, Inc
Learning Objectives
1. Introduce the field of statistics 2. Demonstrate how statistics applies to business 3. Establish the link between statistics and data 4. Identify the different types of data and datacollection methods 5. Differentiate between population and sample data 6. Differentiate between descriptive and inferential statistics
2011 Pearson Education, Inc
1.1
What Is Statistics?
1. Collecting Data
e.g., Survey
Data Analysis
Why?
2. Presenting Data
e.g., Charts & Tables
1984-1994 T/Maker Co.
3. Characterizing Data
e.g., Average
DecisionMaking
What Is Statistics?
Statistics is the science of data. It involves collecting, classifying, summarizing, organizing, analyzing, and interpreting numerical information.
1.2
Application Areas
Economics
Forecasting Demographics
Engineering
Construction Materials
Sports
Individual & Team Performance
Business
Consumer Preferences Financial Trends
Statistical Methods
Statistical Methods
Descriptive Statistics
Inferential Statistics
Descriptive Statistics
1. Involves
Collecting Data Presenting Data Characterizing Data
50
25
0 Q1 Q2 Q3 Q4
2. Purpose
Describe Data
X = 30.5 S2 = 113
2011 Pearson Education, Inc
Inferential Statistics
1. Involves
Estimation Hypothesis Testing
Population?
2. Purpose
Make decisions about population characteristics
1.3
Fundamental Elements
1. Experimental unit
Object upon which we collect data All items of interest
P in Population & Parameter
2. Population
3. Variable
4. Sample
Subset of the units of a population
2011 Pearson Education, Inc
Fundamental Elements
1. Statistical Inference
Estimate or prediction or generalization about a population based on information contained in a sample
2. Measure of Reliability
Statement (usually qualified) about the degree of uncertainty associated with a statistical inference
1.4
Processes
Process
A process is a series of actions or operations that transforms inputs to outputs. A process produces or generates output over time.
Process
A process whose operations or actions are unknown or unspecified is called a black box.
1.5
Types of Data
Types of Data
Quantitative data are measurements that are recorded on a naturally occurring numerical scale.
Qualitative data are measurements that cannot be measured on a natural numerical scale; they can only be classified into one of a group of categories.
Types of Data
Types of Data
Quantitative Data
Qualitative Data
Quantitative Data
Measured on a numeric scale. Number of defective items in a lot. Salaries of CEOs of oil companies. Ages of employees at a company.
4 943 21 120 52
12
8
71
Qualitative Data
Classified into categories. College major of each student in a class. Gender of each employee at a company. Method of payment (cash, check, credit card).
$
Credit
1.6
Collecting Data
Obtaining Data
1. 2. 3. 4. Data from a published source Data from a designed experiment Data from a survey Data collected observationally
Obtaining Data
Published source: book, journal, newspaper, Web site Designed experiment: researcher exerts strict control over units Survey: a group of people are surveyed and their responses are recorded Observation study: units are observed in natural setting and variables of interest are recorded
2011 Pearson Education, Inc
Samples
A representative sample exhibits characteristics typical of those possessed by the population of interest.
A random sample of n experimental units is a sample selected from the population in such a way that every different sample of size n has an equal chance of selection.
2011 Pearson Education, Inc
Random Sample
Every sample of size n has an equal chance of selection.
1.7
Statistical Thinking
Statistical thinking involves applying rational thought and the science of statistics to critically assess data and inferences. Fundamental to the thought process is that variation exists in populations and process data. A random sample of n experimental units is a sample selected from the population in such a way that every different sample of size n has an equal chance of selection.
2011 Pearson Education, Inc
Real-World Problem
Key Ideas
Types of Statistical Applications Descriptive 1. Identify population and sample (collection of experimental units) 2. Identify variable(s) 3. Collect data 4. Describe data
2011 Pearson Education, Inc
Key Ideas
Types of Statistical Applications Inferential 1. Identify population (collection of all experimental units) 2. Identify variable(s) 3. Collect sample data (subset of population) 4. Inference about population based on sample 5. Measure of reliability for inference
2011 Pearson Education, Inc
Key Ideas
Types of Data
1. Quantitative (numerical in nature) 2. Qualitative (categorical in nature)
Key Ideas
Data-Collection Methods
1. Observational 2. Published source 3. Survey 4. Designed experiment
Key Ideas
Problems with Nonrandom Samples 1. Selection bias 2. Nonresponse bias 3. Measurement error