Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Statistics for ManagersUsing Microsoft Excel 4th EditionChapter 1

Introduction and Data Collection

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Chapter GoalsAfter completing this chapter, you should be able to: Explain key definitions: Population vs. Sample Primary vs. Secondary Data Parameter vs. Statistic Descriptive vs. Inferential StatisticsDescribe key data collection methodsDescribe different sampling methodsProbability Samples vs. Nonprobability SamplesSelect a random sample using a random numbers tableIdentify types of data and levels of measurementDescribe the different types of survey error

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Why a Manager Needs to Know about StatisticsTo know how to: properly present informationdraw conclusions about populations based on sample informationimprove processesobtain reliable forecasts

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Key DefinitionsA population (universe) is the collection of all items or things under considerationA sample is a portion of the population selected for analysisA parameter is a summary measure that describes a characteristic of the populationA statistic is a summary measure computed from a sample to describe a characteristic of the population

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Population vs. Sample a b c d ef gh i jk l m n o p q rs t u v w x y z

PopulationSample b c g i n o r u y

Measures used to describe the population are called parametersMeasures computed from sample data are called statistics

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Two Branches of StatisticsDescriptive statisticsCollecting, summarizing, and describing dataInferential statisticsDrawing conclusions and/or making decisions concerning a population based only on sample data

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Descriptive StatisticsCollect datae.g., SurveyPresent datae.g., Tables and graphsCharacterize datae.g., Sample mean =

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Inferential StatisticsEstimatione.g., Estimate the population mean weight using the sample mean weightHypothesis testinge.g., Test the claim that the population mean weight is 120 poundsDrawing conclusions and/or making decisions concerning a population based on sample results.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Why We Need DataTo provide input to surveyTo provide input to studyTo measure performance of service or production processTo evaluate conformance to standardsTo assist in formulating alternative courses of actionTo satisfy curiosity

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Data SourcesSecondaryData CompilationObservationExperimentationPrint or Electronic SurveyPrimaryData Collection

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Reasons for Drawing a SampleLess time consuming than a censusLess costly to administer than a censusLess cumbersome and more practical to administer than a census of the targeted population

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Nonprobability SampleItems included are chosen without regard to their probability of occurrence

Probability SampleItems in the sample are chosen on the basis of known probabilitiesTypes of Samples Used

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Types of Samples UsedQuotaSamplesNon-Probability SamplesJudgementChunkProbability SamplesSimple RandomSystematicStratifiedClusterConvenience(continued)

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Probability SamplingItems in the sample are chosen based on known probabilitiesProbability SamplesSimple RandomSystematicStratifiedCluster

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Simple Random SamplesEvery individual or item from the frame has an equal chance of being selectedSelection may be with replacement or without replacementSamples obtained from table of random numbers or computer random number generators

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Decide on sample size: nDivide frame of N individuals into groups of k individuals: k=N/nRandomly select one individual from the 1st group Select every kth individual thereafterSystematic SamplesN = 64n = 8k = 8First Group

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Stratified SamplesDivide population into two or more subgroups (called strata) according to some common characteristicA simple random sample is selected from each subgroup, with sample sizes proportional to strata sizesSamples from subgroups are combined into onePopulationDividedinto 4strataSample

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Cluster SamplesPopulation is divided into several clusters, each representative of the populationA simple random sample of clusters is selectedAll items in the selected clusters can be used, or items can be chosen from a cluster using another probability sampling techniquePopulation divided into 16 clusters.Randomly selected clusters for sample

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Advantages and DisadvantagesSimple random sample and systematic sampleSimple to useMay not be a good representation of the populations underlying characteristicsStratified sampleEnsures representation of individuals across the entire populationCluster sampleMore cost effectiveLess efficient (need larger sample to acquire the same level of precision)

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Types of DataExamples:Marital StatusPolitical PartyEye Color (Defined categories)Examples:Number of ChildrenDefects per hour (Counted items)Examples:WeightVoltage (Measured characteristics)

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Levels of Measurementand Measurement ScalesInterval DataOrdinal Data Nominal DataHighest LevelStrongest forms of measurementHigher LevelLowest LevelWeakest form of measurementCategories (no ordering or direction)Ordered Categories (rankings, order, or scaling) Differences between measurements but no true zeroRatio DataDifferences between measurements, true zero exists

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Evaluating Survey WorthinessWhat is the purpose of the survey?Is the survey based on a probability sample?Coverage error appropriate frame?Nonresponse error follow upMeasurement error good questions elicit good responsesSampling error always exists

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Types of Survey ErrorsCoverage error or selection biasExists if some groups are excluded from the frame and have no chance of being selectedNon response error or biasPeople who do not respond may be different from those who do respondSampling errorVariation from sample to sample will always existMeasurement errorDue to weaknesses in question design, respondent error, and interviewers effects on the respondent

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Types of Survey ErrorsCoverage errorNon response errorSampling errorMeasurement errorExcluded from frameFollow up on nonresponsesRandom differences from sample to sampleBad or leading question(continued)

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.Chap 1-*Chapter SummaryReviewed why a manager needs to know statisticsIntroduced key definitions: Population vs. Sample Primary vs. Secondary data types Qualitative vs. Qualitative data Time Series vs. Cross-Sectional dataExamined descriptive vs. inferential statisticsDescribed different types of samplesReviewed data types and measurement levelsExamined survey worthiness and types of survey errors

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.