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Business Stats Chapter 1

This document provides an introduction to basic business statistics, highlighting the importance of statistical methods in decision-making and data analysis. It covers key concepts such as types of statistics, data collection methods, and the distinction between populations and samples. Additionally, it emphasizes the use of tools like Microsoft Excel for statistical analysis and outlines the various levels of measurement for data.

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kanhu charan Sahu
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5 views

Business Stats Chapter 1

This document provides an introduction to basic business statistics, highlighting the importance of statistical methods in decision-making and data analysis. It covers key concepts such as types of statistics, data collection methods, and the distinction between populations and samples. Additionally, it emphasizes the use of tools like Microsoft Excel for statistical analysis and outlines the various levels of measurement for data.

Uploaded by

kanhu charan Sahu
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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Basic Business Statistics

Introduction and Data Collection


Statistics

In the face of increasing complexity in business &


industry , intuition alone has no place in decision
making when the decision involves the choice
amongst several courses of action & each of which
can achieve several management objectives
simultaneously.
Quantitative techniques have made valuable
contribution towards arriving at an effective decision
in various functional areas of management.
Learning Objectives

In this chapter you learn:

How Statistics is used in business


The sources of data used in business
The types of data used in business
The basics of Microsoft Excel
Why Learn Statistics?

So you are able to make better sense of the


ubiquitous use of numbers:
Business memos
Business research
Technical reports
Technical journals
Newspaper articles
Magazine articles
What is statistics?

A branch of mathematics taking and


transforming numbers into useful information for
decision makers

Methods for processing & analyzing numbers

Methods for helping reduce the uncertainty


inherent in decision making
What is statistics?

The word statistics is mainly described in two senses


viz.
1. Plural sense ---Statistical data. –e.g. statistics of
student of a college include count of number of
students , & a separate counts of no. of various kinds
such as male / females, undergraduates / post
graduates. They may also include measurements
such as heights / weights.
2. Singular sense --- Statistical methods – The
large volume of numerical information or data gives
rise to the need for systematic methods which can be
What is statistics?

used to collect, organize or classify , present,


analyze & interpret the information effectively for
the purpose of making wise decisions.
Why Study Statistics?

Decision Makers Use Statistics To:

Present and describe business data and information


properly
Draw conclusions about large groups of individuals or
items, using information collected from subsets of the
individuals or items.
Make reliable forecasts about a business activity
Improve business processes
Types of Statistics

Statistics
The branch of mathematics that transforms data into
useful information for decision makers.

Descriptive Statistics Inferential Statistics


Collecting, summarizing, and Drawing conclusions and/or
describing data making decisions concerning a
population based only on
sample data
Descriptive Statistics

Collect data
e.g., Survey
Present data
e.g., Tables and graphs
Characterize data
e.g., Sample mean =
Inferential Statistics

Estimation
e.g., Estimate the population
mean weight using the sample
mean weight
Hypothesis testing
e.g., Test the claim that the
population mean weight is 120
pounds

Drawing conclusions about a large group of


individuals based on a subset of the large group.
Basic Vocabulary of Statistics

VARIABLE
A variable is a characteristic of an item or individual.

DATA
Data are the different values associated with a variable.

OPERATIONAL DEFINITIONS
Data values are meaningless unless their variables have operational
definitions, universally accepted meanings that are clear to all associated
with an analysis.
Basic Vocabulary of Statistics

POPULATION
A population consists of all the items or individuals about
which you want to draw a conclusion.

SAMPLE
A sample is the portion of a population selected for analysis.

PARAMETER
A parameter is a numerical measure that describes a
characteristic of a population.

STATISTIC
A statistic is a numerical measure that describes a
characteristic of a sample.
Population vs. Sample

Population Sample

Measures used to describe the Measures computed from


population are called parameters sample data are called
statistics
Why Collect Data?

A marketing research analyst needs to assess the


effectiveness of a new television advertisement.
A pharmaceutical manufacturer needs to determine
whether a new drug is more effective than those
currently in use.
An operations manager wants to monitor a
manufacturing process to find out whether the quality
of the product being manufactured is conforming to
company standards.
An auditor wants to review the financial transactions
of a company in order to determine whether the
company is in compliance with generally accepted
accounting principles.
Sources of Data

Primary Sources: The data collector is the one using the


data for analysis
Data from a political survey
Data collected from an experiment
Observed data
Secondary Sources: The person performing data analysis
is not the data collector
Analyzing census data
Examining data from print journals or data published on the
internet.
Sources of data fall into four
categories

Data distributed by an organization or an


individual

A designed experiment

A survey

An observational study
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 Data

Data

Categorical Numerical

Examples:
Marital Status
Political Party
Eye Color
Discrete Continuous
(Defined categories)
Examples: Examples:
Number of Children Weight
No. of Employees Voltage
(Counted items) (Measured
characteristics)
Levels of Measurement

A nominal scale classifies data into distinct categories in


which no ranking is implied.

Categorical Variables Categories

Personal Computer Yes / No


Ownership
Growth Value / Other
Type of Stocks Owned

Internet Provider Microsoft Network / AOL/ Other


Levels of Measurement

An ordinal scale classifies data into distinct


categories in which ranking is implied

Categorical Variable Ordered Categories

Freshman, Sophomore, Junior,


Student class designation
Senior
Product satisfaction Satisfied, Neutral, Unsatisfied
Professor, Associate Professor,
Faculty rank
Assistant Professor, Instructor
AAA, AA, A, BBB, BB, B, CCC, CC,
Standard & Poor’s bond ratings
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.
Levels of Measurement
Personal Computer Programs
Used For Statistics

Minitab
A statistical package to perform statistical analysis
Designed to perform analysis as accurately as possible
IBMSPSS
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.

All of the above use worksheets to store data


Minitab & Microsoft Excel Terms

When you use Minitab or Microsoft Excel, you place the data
you have collected in worksheets.

The intersections of the columns and rows of worksheets form


boxes called cells.

If you want to refer to a group of cells that forms a contiguous


rectangular area, you can use a cell range.

Worksheets exist inside a workbook in Excel and inside a Project


in Minitab.

Both worksheets and projects can contain both data,


summaries, and charts.
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


Chapter Summary

In this chapter, we have


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 and measurement levels
Discussed Minitab and Microsoft Excel terms

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