Chapter01-business statistics and probability for freshman students

8/11/2019 Chapter01-business statistics and probability for freshman students

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Chap 1-1Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall Chap 1-1

Basic Business Statistics

12thEdition

Chapter 1

Introduction


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Learning Objectives

In this chapter you learn:

How businesses use statistics The basic vocabulary of statistics

The types of data used in business

How to use Microsoft Excel and / orMinitab with this book


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Chap 1-3Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall

Why Learn Statistics

Make better sense of the world

Internet articles / reports

Magazine articles

Newspaper articles

Television & radio reports

Make better business decisions

Business memos

Business research

Technical journals

Technical reports

Chap 1-3


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In Business, Statistics Has

Many Important Uses

To summarize business data

To draw conclusions from business data

To make reliable forecasts about business

activities

To improve business processes

Chap 1-4


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Two Different Branches Of

Statistics Are Used In Business

StatisticsThe branch of mathematics that transforms data intouseful information for decision makers.

Descriptive Statistics

Collecting, summarizing,presenting and analyzing data

Inferential Statistics

Using data collected from asmall group to draw conclusionsabout a larger group


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These Two Branches Are Used

In The Important Activities

To summarize business data

Descriptive methods used to create charts & tables

To draw conclusions from business data

Inferential methods used to reach conclusions abouta large group based on data from a smaller group


activities

Inferential methods used to develop, quantify, and

improve the accuracy of predictive models

To improve business processes

Involves managerial approaches like Six SigmaChap 1-6


7/19Chap 1-7Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall Chap 1-7

Descriptive Statistics

Collect data

e.g., Survey

Present data

e.g., Tables and graphs

Characterize data

e.g., The 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 ofindividuals based on a smaller group.



Basic Vocabulary of Statistics

VARIABLES

Variables are characteristics of an item or individual and are what you

analyze when you use a statistical method.

DATADataare 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 associatedwith an analysis.



Basic Vocabulary of Statistics

POPULATION

A population consists of all the items or individuals about which

you want to draw a conclusion. The population is the large

group.

SAMPLE

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

sample is the small group.

PARAMETER

A parameter is a numerical measure that describes a characteristicof 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

population are called parameters

Measures used to describe the

sample are called statistics


12/19Chap 1-12Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall

This Book Is Organized To Show

The Four Uses Of Statistics

To summarize business data (Chapters 2 & 3)

To draw conclusions from business data(Chapters 412)


activities (Chapters 1316)

To improve business processes (Chapter 18)

Chap 1-12



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.

Discretevariables arise from a counting process

Continuousvariables arise from a measuring process

Chap 1-13



Types of Variables

Chap 1-14

Variables

Categorical Numerical

Discrete Continuous

Examples:

Marital Status

Political Party

Eye Color

(Defined categories) Examples:

Number of Children

Defects per hour

(Counted items)

Examples:

Weight

Voltage

(Measured characteristics)



Levels of Measurement

Anominal scaleclassifies data into distinct

categories in which no ranking is implied.

Chap 1-15

Categorical Variables Categories

Personal Computer

Ownership

Type of Stocks Owned

Internet Provider

Yes / No

Microsoft Network / AOL/ Other

Growth / Value / Other



Levels of Measurement (cont.)

An ordinal scale classifies data into distinct

categories in which ranking is implied

Chap 1-16

Catego rical Variable Ordered Categories

Student class designationFreshman, Sophomore, Junior,

Senior

Product satisfaction Satisfied, Neutral, Unsatisfied

Faculty rankProfessor, Associate Professor,

Assistant Professor, Instructor

Standard & Poors bond ratingsAAA, AA, A, BBB, BB, B, CCC, CC,

C, DDD, DD, D

Student Grades A, B, C, D, F



Levels of Measurement (cont.)

An interval scaleis an ordered scale in which thedifference between measurements is a meaningfulquantity but the measurements do not have a true

zero point.

A ratio scale is an ordered scale in which thedifference between the measurements is a

meaningful quantity and the measurements have atrue zero point.

Chap 1-17



Interval and Ratio Scales

Chap 1-18


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Chapter Summary

Introduced the basic vocabulary and definitions of statistics, and

the role of statistics in turning data into information to facilitate

decision making

Examined the use of statistics to:

Summarize data

Draw conclusions from data

Make reliable forecasts

Improve business processes

Examined descriptive vs. inferential statistics

Reviewed data types and measurement level

In this chapter, we have

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Chapter01-business statistics and probability for freshman students