Business Statistics and decisions making contains
➢ Introduction.
➢ Data Collection, Experimental Design and Frequency
Distributions.
➢ Measures of central tendency & dispersion
➢ Correlation and Regress.
➢ Probability.
1. Basic concept of Probability.
2. Complements, Intersections, and Unions.
3. Independent event ,Conditional Probability.
➢ Random Variables.
Business Statistics: A First Course, 5e © 2009 Prentice-Hall, Inc. Chap 1-1
1. Discrete Random Variables.
2. Continuous Random Variables.
➢ probability Distribution.
1. Discrete Probability Distribution.
I. Binomial Distribution.
II. Bernoulli distribution.
III. Poisson distribution.
2. Continuous probability Distribution.
1. Normal Distributions.
2. Continuous Uniform Distribution.
3. Exponential distribution.
➢ Hypothesis testing ( Z-test, T-test, F-test ).
Business Statistics: A First Course, 5e © 2009 Prentice-Hall, Inc. Chap 1-2
Business Statistics and decisions
making
Chapter 1
Introduction and Data Collection
Business Statistics. And decisions making, 2019
Chap 1-3
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
Business Statistics. And decisions making.2019 Chap 1-4
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 in
decision making
◼ Science concerned with developing and
studying methods for collecting analyzing,
interpreting, and presenting data.
Business Statistics. And decisions making, 2019 Chap 1-5
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
Business Statistics. And decisions making, 2019
Chap 1-6
Types of Statistics
Statistics
◼ The branch of statistics that transforms data into useful
information for decision makers.
Descriptive Statistics Inferential Statistics
Collecting, summarizing, and Drawing conclusions and/or
describing data making decisions relating a
population based only on sample
data
Business Statistics. And decisions making, 2019
Chap 1-7
1.1 Data
◼ Data: facts and figures from which conclusions can be
drawn.
◼ Data set: the data that are collected for a particular
study.
◼ Elements: may be people, objects, events, or other
entries.
◼ Variable: any characteristic of an element.
Business Statistics. And decisions making, 2019 Chap 1-8
1.2 Data
◼ Cross-sectional data: Data collected at the
same or approximately the same point in
time
◼ Time series data: data collected over
different time periods
Business Statistics. And decisions making, 2019
Chap 1-9
Descriptive Statistics
◼ Collect data
◼ e.g., Survey
◼ Display data
◼ e.g., Tables and graphs
◼ Characterize data
◼ e.g., Sample mean =
X i
Business Statistics. And decisions making, 2019 Chap 1-10
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.
Business Statistics. And decisions making, 2019 Chap 1-11
Basic concepts 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 part 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.
Business Statistics. And decisions making, 2019 Chap 1-12
Population vs. Sample
Population Sample
Measures used to describe the Measures computed from
population are called parameters sample data are called statistics
Business Statistics. And decisions making, 2019
Chap 1-13
Terms:
◼ Process: a sequence of operations that
takes inputs and turns them into outputs
◼ Finite population: a population of limited
size
◼ Infinite population: a population of
unlimited size
Business Statistics. And decisions making, 2019
Chap 1-14
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.
Business Statistics. And decisions making, 2019 Chap 1-15
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.
Business Statistics. And decisions making, 2019
Chap 1-16
Sources of data fall into four categories
◼ Data distributed by an organization or an individual
◼ A designed experiment
◼ A survey
◼ An observational study
Business Statistics. And decisions making, 2019 Chap 1-17
Types of Variables (Data)
▪ Categorical (qualitative) variables have values that
can only be placed into categories, such as “yes” and
“no.”
o Nominal
o Ordinal
▪ Numerical (quantitative): variables have values that
represent quantities.
Business Statistics. And decisions making, 2019 Chap 1-18
Types of Data:
Data
Categorical Numerical
Examples:
◼ Marital Status
◼ Political Party Discrete Continuous
◼ Eye Color
(Defined categories) Examples: Examples:
◼ Number of Children ◼ Weight
◼ Defects per hour ◼ Number of peoples
(Counted items) (Measured characteristics)
Business Statistics. And decisions making, 2019
Chap 1-19
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
Business Statistics. And decisions making, 2019 Chap 1-20
