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MR Statistics Basics of Data

The document provides an overview of business statistics, focusing on scales of measurement including nominal, ordinal, interval, and ratio. It distinguishes between qualitative and quantitative data, discusses data collection methods, and introduces descriptive and inferential statistics. Additionally, it highlights the importance of statistical software like Minitab and Excel for data analysis.

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2 views

MR Statistics Basics of Data

The document provides an overview of business statistics, focusing on scales of measurement including nominal, ordinal, interval, and ratio. It distinguishes between qualitative and quantitative data, discusses data collection methods, and introduces descriptive and inferential statistics. Additionally, it highlights the importance of statistical software like Minitab and Excel for data analysis.

Uploaded by

valechany9113
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Business Statistics

Introduction
Dr M K BARUA
DEPARTMENT OF MANAGEMENT STUDIES

1
Scales of Measurement
 Nominal

Example:
Students of a university are classified by the school in which they are enrolled
using a nonnumeric label such as Business, Humanities, Education, and so on.
Alternatively, a numeric code could be used for the school variable
(e.g. 1 denotes Business,2 denotes Humanities, 3 denotes Education, and so on).
Scales of Measurement
• Ordinal
The data have the properties of nominal data and
the order or rank of the data is meaningful.

A nonnumeric label or numeric code may be used.


Scales of Measurement
• Ordinal

Example:
Students of a university are classified by their class standing using a nonnumeric label
such as Freshman, Sophomore, Junior, or Senior.
Alternatively, a numeric code could be used for the class standing variable (e.g. 1 denotes
Freshman, 2 denotes Sophomore, 3 denotes Junior, 4 denotes Senior).
Scales of Measurement
 Interval

The data have the properties of ordinal data, and


the interval between observations is expressed in
terms of a fixed unit of measure.

Interval data are always numeric.


Scales of Measurement
• Interval Example:
Melissa has an SAT score of 1205, while Kevin
has an SAT score of 1090. Melissa scored 115
points more than Kevin.
Scales of Measurement
• Ratio
The data have all the properties of interval data
and the ratio of two values is meaningful.

Variables such as distance, height, weight, and time


use the ratio scale.

This scale must contain a zero value that indicates


that nothing exists for the variable at the zero point.
Scales of Measurement
• Ratio
Example:
Melissa’s college record shows 36 credit hours
earned, while Kevin’s record shows 72 credit
hours earned. Kevin has twice as many credit
hours earned as Melissa.
Qualitative and Quantitative Data

Data can be further classified as being qualitative


or quantitative.

The statistical analysis that is appropriate depends


on whether the data for the variable are qualitative
or quantitative.

In general, there are more alternatives for statistical


analysis when the data are quantitative.
Qualitative Data
Labels or names used to identify an attribute of each element

Often referred to as categorical data

Use either the nominal or ordinal scale of measurement

Can be either numeric or nonnumeric

Appropriate statistical analyses are rather limited


Quantitative Data
Quantitative data indicate how many or how much:

discrete, if measuring how many

continuous, if measuring how much

Quantitative data are always numeric.

Ordinary arithmetic operations are meaningful for quantitative data.


Scales of Measurement
Data

Qualitative Quantitative

Numerical Nonnumerical Numerical

Nominal Ordinal Nominal Ordinal Interval Ratio


Cross-Sectional Data

Cross-sectional data are collected at the same or


approximately the same point in time.

Example: data detailing the number of building


permits issued in June 2017 in each of the District
of India
Time Series Data

Time series data are collected over several time


periods.

Example: data detailing the number of building


permits issued in a city in the last 36 months
Data Sources
• Existing Sources

Within a firm – almost any department


Business database services – NSE.
Government agencies – Ministries

Industry associations – FICCI,CII,etc

Special-interest organizations – AICTE,MCI,Graduate Management


Admission Council

Internet – more and more firms


Data Sources
• Statistical Studies
In experimental studies the variables of interest
are first identified. Then one or more factors are
controlled so that data can be obtained about how
the factors influence the variables.

In observational (nonexperimental) studies no


attempt is made to control or influence the
variables of interest.
a survey is a
good example
Data Acquisition Considerations
Time Requirement
• Searching for information can be time consuming.
• Information may no longer be useful by the time it is available.
Cost of Acquisition
• Organizations often charge for information even when it is not their
• primary business activity.
Data Errors

• Using any data that happens to be available or that were acquired with
• little care can lead to poor and misleading information.
Descriptive Statistics
• Descriptive statistics are the tabular, graphical,
and numerical methods used to summarize data.
Example: Hudson Auto Repair
The manager of Hudson Auto
would like to have a better
understanding of the cost
of parts used in the engine
tune-ups performed in the
shop. He examines 50
customer invoices for tune-ups. The costs of parts,
rounded to the nearest Rs, are listed on the next
slide.
Example: Hudson Auto Repair

91 78 93 57 75 52 99 80 97 62
71 69 72 89 66 75 79 75 72 76
104 74 62 68 97 105 77 65 80 109
85 97 88 68 83 68 71 69 67 74
62 82 98 101 79 105 79 69 62 73
Tabular Summary:
Frequency and Percent Frequency

Parts Parts Percent


Cost (Rs) Frequency Frequency
50-59 2 4
60-69 13 26
??????
70-79 16 32
80-89 7 14
90-99 7 14
100-109 5 10
50 100
Graphical Summary: Histogram
Tune-up Parts Cost
18
16
14
Frequency 12
10
8
6
4
2
Parts
50-59 60-69 70-79 80-89 90-99 100-110 Cost (Rs)
Numerical Descriptive Statistics
 The most common numerical descriptive statistic is the average (or mean).

 Hudson’s average cost of parts, based on the 50 tune-ups studied, is Rs79


(found by summing the 50 cost values and then dividing by 50).
Statistical Inference

Population - the set of all elements of interest in a


particular study
Sample - a subset of the population

Statistical inference - the process of using data obtained


from a sample to make estimates
and test hypotheses about the
characteristics of a population
Census - collecting data for a population

Sample survey - collecting data for a sample


Process of Statistical Inference
1. Population
consists of all 2. A sample of 50
tune-ups. Average engine tune-ups
cost of parts is is examined.
unknown.

4. The sample average


3. The sample data
provide a sample
is used to estimate the average parts cost
population average. of Rs79 per tune-up.
Personal Computer Programs Used For Statistics

• Minitab
– A statistical package to perform statistical analysis
– Designed to perform analysis as accurately as possible

• Microsoft Excel
– A multi-functional data analysis tool
– Can perform many functions but none as well as programs that are dedicated to a single
function.

• Both Minitab and Excel use worksheets to store data


You are using programs properly if you can

• Understand how to operate the program

• Understand the underlying statistical concepts

• Understand how to organize and present information

• Know how to review results for errors

• Make secure and clearly named backups of your work


Lecture Summary
 Reviewed why a manager needs to know statistics
 Introduced key definitions:
 Population vs. Sample
 Primary vs. Secondary data types
 Categorical vs. Numerical data

 Examined descriptive vs. inferential statistics


 Reviewed data types
 Discussed Minitab and Microsoft Excel terms

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