Basic Business Statistics, 10e © 2006 Prentice-Hall, Inc. Chap 1-1

Chapter 1

Introduction and Data Collection

Basic Business Statistics10th Edition

Basic Business Statistics, 10e © 2006 Prentice-Hall, Inc.. Chap 1-2

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

Basic Business Statistics, 10e © 2006 Prentice-Hall, Inc.. Chap 1-3

Basic Concepts of Statistics

Statistics is concerned with:

Processing and analyzing data Collecting, presenting, and transforming

data to assist decision makers

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Key Definitions

A population (universe) is the collection of all members of a group

A sample is a portion of the population selected for analysis

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

A statistic is a numerical measure that describes a characteristic of a sample

Basic Business Statistics, 10e © 2006 Prentice-Hall, Inc.. Chap 1-5

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

Population Sample

b c

g i n

o r u

y

Measures used to describe a population are called parameters

Measures computed from sample data are called statistics

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Two Branches of Statistics

Descriptive statistics Collecting, summarizing, and presenting data

Inferential statistics Drawing conclusions about a population based

only on sample data

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Descriptive Statistics

Collect data e.g., Survey

Present data e.g., Tables and graphs

Characterize data

e.g., Sample mean = iX

n∑

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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 population based on sample results.

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Collecting Data

SecondaryData Compilation

Observation

Experimentation

Print or Electronic

Survey

PrimaryData Collection

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Types of Data

Data

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)

Basic Business Statistics, 10e © 2006 Prentice-Hall, Inc..

Levels of Measurementand Measurement Scales

Interval Data

Ordinal Data

Nominal Data

Highest Level

(Strongest forms of measurement)

Higher Levels

Lowest Level

(Weakest form of measurement)

Categories (no ordering or direction)

Ordered Categories (rankings, order, or scaling)

Differences between measurements but no true zero

Ratio DataDifferences between measurements, true zero exists

Basic Business Statistics, 10e © 2006 Prentice-Hall, Inc..

Levels of Measurementand Measurement Scales

Interval Data

Ordinal Data

Nominal Data

Height, Age, Weekly Food Spending

Service quality rating, Standard & Poor’s bond rating, Student letter grades

Marital status, Type of car owned

Ratio Data

Temperature in Fahrenheit, Standardized exam score

Categories (no ordering or direction)

Ordered Categories (rankings, order, or scaling)

Differences between measurements but no true zero

Differences between measurements, true zero exists

EXAMPLES:

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Chapter Summary

Reviewed basic concepts of statistics:♦ Population vs. Sample♦ Parameter vs. Statistic♦ Primary vs. Secondary data sources

Defined descriptive vs. inferential statistics Reviewed types of data and measurement scales

♦ Categorical vs. Numerical data♦ Discrete vs. Continuous data♦ Nominal and Ordinal scales♦ Interval and Ratio scales