CHAPTER 1 - QMT412.pdf

8/14/2019 CHAPTER 1 - QMT412.pdf

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Learning OutcomesWhat is statistics?

Uses of statistics

Types of statistics Common statistical terms

Sources of data

Types of variables

Scales of measurement

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Uses of Statistics

Education

Predict most favouritesubject

Predict CGPA

Law

Organize evidence tomake decision

Medicine

Effectiveness of drugs Predict diseases

Business/Marketing

Predict Sales

Consumer Preferences

Financial Trends


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TYPES OF STATISTICS

DESCRIPTIVE

INFERENTI L


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Types of STATISTICS

DESCRIPTIVE-describe and summarize

characteristics

-consist collecting, organizing,

summarizing and presentations

of data

Ex: percentage, mean, median

Bar chart, pie chart, frequency

table, box plot

INFERENTIAL-make inference from sample

populations

-involve statistical tests

-results used to make conclusion

Ex: estimation, hypothesis testing

(t- test, z-test, forecasting,

regression)


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Population and sample

PopulationSample

Population: consists ofALLsubjects/members/element (human or otherwise)that are being studied

Sample : group of subjects selected from population

Sampling frame: the LISTof population members

Variable : characteristic or attribute of interest in a population/sample.Ex: Gender, marital status, age, weight, income

Data : the values that can be obtained from measurements or observations

Subject or memberor element


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First hand data

Collected by the investigator

Ex: interview respondents, survey, experiment Advantage more accurate and consistent

Able to explain how the data are collected and thelimitation used

Disadvantage - Requires more time, manpower,high cost

PRIMARY

Taken from other investigators collection of figures

Data collected from other parties Ex : Bank Negara, Statistics Department

Advantage - 1) easily accessible from the internet,journals, books, annual report etc., 2) inexpensive, lesstime to collect

Disadvantage - 1) lack accuracy because method ofdata collection are not explained, 2) biased originalpurpose of data collection is not known

SECONDARY

SOURCE OF DATA


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Example 1

Advance Co. has established a new service to the customerscalled a "help-line". Customers can call the help-line on any

matter related to the company and the products. AdvanceCo. wants to investigate the effectiveness of the help-lineamong the customers who have purchased their products.The company intends to obtain a sample of 200 customers

using the warranty cards. The warranty cards containinformation about the products purchased, the telephonenumbers and the addresses of the customers. Thecategories of products and percentage of the warrantycards in each category are as follows:

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Categories Of Product %Of Warranty Cards

Washing MachinesRefrigerators

Vacuum CleanersFood Processors

40%30%20%10%


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Example 1questionsi) What is the populationunder study?

ii) What is the sampling frame?

iii) What is thevariableto be measured?

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Example 1.solution

i) What is the population under study?

A: ALLcustomers who have purchased the AdvanceCo. products

ii) What is the sampling frame?A: LISTof Advance Co. customers in warranty cards

iii) What is the variable to be measured?A: Effectiveness of helpline

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Types of variablesVariable

Quantitative Qualitative orcategorical (e.g.,

make of a computer,hair color, gender)

Continuous(e.g., length,age, height,weight, time)

Discrete (e.g.,number of

houses, cars,accidents)


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Levels of Measurement

When we observe and record a

variable, it has characteristicsthat influence the type ofstatistical analysis that we canperform on it.

The first step in any statisticalanalysis is to determine thelevel of measurement; it tells us

what statistical tests can and

cannot be performed

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Nominal

Ordinal

Interval

Ratio

Lowestscale

to

highestscale


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Nominal Scales

Nominal: - Represent observations that can be categorized,

do not have a meaningful numeric value

- Examples:

Gender Religion

Nationality

Favorite colour

Number on a football jerseyNote:

The values cannot be compared to see if one is larger than the other

Cannot calculate the MEAN

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Ordinal Scales Ordinal:

Represent observations that can be categorizedand rank ordered

The values can be compared to see if one is larger or smaller thanthe other

Examples:

Consumer satisfaction ratings

Military rank Private, Lieutenant, Captain, General

Class ranking

Grade (A, B, C, D, E, F)

Note: cannot assume the differences between adjacent scale values are

equal

cannot make this assumption even if the labels are number, notwords

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Interval Scales

Interval: Represent observations that can be categorized, rank

ordered, and have an unit of measure

An unit of measure implies that the difference between any twosuccessive values is identical

Examples:

- Farenheit temperature scale, shoe size

Note:

Can be added or subtracted (cannot be multiplied or divided) No true zero point (the value 0does not represent the

complete absence of the variable)

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Ratio Scales

Ratio: Highest and most informative scale

Observations that can be categorized, rank ordered, havean unit measureand have a true zero (an absolute zero

point) The true zero implies that a value zero represents the

complete absence of the variable

Examples:

amount of money zero money indicates the absence of money Weight, height, time

Note: Can be multiplied or divided

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Example 2

Traffic offence is a growing concern at Dewan

Bandaraya in Kuala Lumpur. A study wasconducted to determine the profile of these trafficoffenders. A researcher from this office collecteddata on the age, gender, race, types of offence, theamount of fine paid and the years of drivingexperience from a sample of traffic offenders asthey entered the building to pay their fines. The

researcher also checked the office database toobtain the number of traffic offences by thesedrivers.

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Example 2.cont.

i) State the population for the above study.

ii) Is the above study a census study or sample study?iii) Was any secondary data used for the above study?If there was, please state the data.

iv) State the variable (s) and measurement scale fromthis study.

v) What is the most suitable data collection method?Give ONE (1)advantage and ONE (1)disadvantage ofthis method.

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Example 2.solution

i) State the population for the above study.

A: ALL the traffic offenders in K.L.

ii) Is the above study a census study or sample study?

A: Sample

iii) Was any secondary data used for the above study? Ifthere was, please state the data.

A: Yes. Number of traffic offense by the drivers

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Example 2.solution

iv) State the variable(s) and measurement scale from thisstudy.

A:

v) What is the most suitable data collection method? Give

ONE (1)advantage and ONE (1)disadvantage of thismethod.

A:

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Variable Level of measurement

Age Ratio

Gender Nominal

Race Nominal

Types of offence NominalAmount of fine paid Ratio

Years of driving experience Ratio

Method Advantage Disadvantage

Personal interview Higher response

rate

expensive

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CHAPTER 1 - QMT412.pdf