Ch.

1: Introduction to
Business Statistics
Outline
 Introduction
 Overview of Statistics
 Why study Statistics?
 Population and Sample
 Type of data
 Data collection and Sampling
techniques
Introduction
- Statistics: the art and science of collecting,
analyzing, presenting, and interpreting data.
- Descriptive statistics: a science of
describing the important aspects of a set of
measurements.
- Statistical inference: a science of using a
sample of measurements to make
generalizations about the important aspects of
a population of measurements.
 Overview of Statistics

Statistics

Describing Making Inferences

Data from Samples

Visual Numerical Estimating Testing

Displays Summaries Parameters Hypotheses

1-4
Why study statistics?
 Numerical information is every where.
 Statistical techniques are used to make
many decisions that affect our daily lives.
Eg: set rate for insurance products..
 The knowledge of statistics methods will
help you understand why decisions are
made and give you a better understanding of
how they affect you.
Population and sample
- A population: a set of existing units
(consist of all subjects that are being
studied).
Eg: people, objects, or events.
Population and sample
- Finite population: a population that
contains a finite number of units.
- Infinite population: a population that
is defined so that there is no limit to
the number of units that could
potentially belong to the population.
- Sample: a subset unit in a population.
Population and sample
-A parameter: a numerical measurement
describing some characteristic of a population.
-A Statistic: a numerical measurement
describing some characteristic of a sample.
-Measurement: the process of assigning a
value of a variable to each unit (subject) in a
population or sample.
Type of variables
- A variable: a characteristic or attribute
that can assume different value.
Data: collections of observations (facts
and figures that are collected.
Type of variables
 Variables can be classified as qualitative and
quantitative.
 Qualitative variables are variables that can be
place into distinct categories according to some
characteristics or attributes.
 Eg: Gender (male, female)…
 Quantitative variables are numerical and can be
ordered or ranked.
 Eg: age, height, weight…
Type of variables
 Discrete variables can be assigned value
such as 0, 1, 2, and are said to be countable.
 Eg: number of children in a family, number
of students in a class,…
 Continuous variables can assume an infinite
number of values between two specific
values. They often include fractions and
decimals.
Measurement level of each
variable
 In addition to being classified as qualitative
or quantitative, variables can be classified
by how they are categorized, counted, or
measured. This type of classification is
called measurement scales. There are four
common types of scales are used. Nominal,
ordinal, interval, and ratio.
Measurement level of each
variable
 Nominal level of measurement: classifies
data into mutually exclusive (non
overlapping), exhausting categories in
which no order or ranking can be imposed
on the data.
Eg: marital status (single, married, divorce…)
Measurement level of each
variable
 Ordinal level of measurement: classifies
data into categories that can be ordered or
ranked.
Eg: Grade (A, B, C,..), Rating scale (Poor,
Good, Excellent,…)…
Measurement level of each
variable
 Interval level of measurement: ranks data
and precise difference between units of
measure do exist; however there is no
meaningful zero.
 Eg: Temperature, IQ…
Measurement level of each
variable
 Ratio level of measurement: possess all the
characteristics of interval measurement and
there exists a true zero.
 Eg: Height, Weight, Salary,..
Eg:
Transportation Number of job related
industry injuries
Railroad 4520
Intercity bus 5100
Subway 6850
Trucking 7144
Airline 9950
Data collection and sampling
techniques
 Data collection
 Survey
 the telephone survey
 the mailed questionnaire

 the personal interview

 Directobservation of a situation
 Experiment
Sampling methods
 Researchers use samples to collect data and
information about a particular variable from
a large population. Using samples saves
time and money.
 There are four methods of sampling:
random, systematic, stratified, and cluster
sampling.
Sampling methods
 Random method: subjects are selected by
random numbers.
 Systematic: subjects are selected by using
every k th number after the first subject is
randomly selected from 1 through k.
Sampling methods
 Stratified method: subjects are selected by
dividing up the population into groups
(strata) and subjects within group are
randomly selected.
 Cluster method: subjects are selected by
using an intact group that is representative
of the population.
Other sampling method
 Convenience method
 Judgment method, …