Business Statistics:

Do you conduct statistics in your workplace? If yes, what kind of statistics are you using? How does it affect your
work?

What is statistics?
Statistics has both plural and singular sense.
In its plural sense, it refers to the numerical facts that are systematically collected and analyzed.
In its singular sense, it refers to scientific discipline consisting theory and methods for processing numerical
information that one can use when making decisions in times of uncertainty.

What are the two major areas of Statistics?

 Descriptive Statistics – used to describe the basic features of data in a study. It provides simple summaries
about the sample and the measures. You are simply describing what is or what the data show.
 Inferential Statistics – you are trying to reach conclusions that extend beyond the immediate data alone. We
use inferential statistics to make inferences from our data to more general conditions.

Differentiate population from sample, parameter from statistic?

 Population – is the collection of data whose properties are analyzed; Sample – is a part of the population
of interest, a sub-collection selected from a population.
 Parameter – numerical measurement that describes a characteristic of a population; Statistic – is a
numerical measurement that describes a characteristic of a sample, we use statistic to infer something
about a parameter.

Differentiate variables from constant?

 Variables – is any property or characteristic of some event, or person that may have different values at
different times depending on the conditions. Example: age, reaction time, and drug dosage;
 Constant – opposite of variables, which does not have different values at different times. Example: # of
days in a week, # of millimeter in one centimeter.

What are the different types of variables?

 Independent variables – variable that is systematically manipulated by the investigator; it is independent of
any change in the other variables.
 Dependent variables – variable that the investigator measured to determine the effect of the independent
variable. It is a variable that can be measured.
 Extraneous variables – undesirable variables that influence the relationship between the variables that an
investigator is examining.

What are the classifications of data?

1. Qualitative Data–data that answer questions of “what kind”. Example: gender, region of residence,
occupation, political affiliation.
2. Quantitative Data – data that answer questions such as “how much” and “how many”. It is also known as
numerical data. Example: height, weight, # of registered cars, household sizes, total household expenses.
3. Discrete Data – are those data that can be counted. Example: # of days before equipment fails, ages of
respondents in a survey, # of patients in the hospital.
4. Continuous Data – are those data that can be measured. Example: exact height of the survey respondents,
exact volume of some liquid substance

What are the four levels of measurement?

 Nominal – made up of values that are distinguished by name only. Example: gender, taste, colors.
 Ordinal – similar to nominal data, it is distinguished by name, but it is different because the attributes can be
rank-ordered. Example: Educational attainment; 0=not HS graduate, 1=HS graduate, 2=college level, 3=college
graduate, 4=post college
 Interval – similar to ordinal data that has an ordering scheme, but it differ because the differences between
data is meaningful and can be measured. It lacks 0 stating point. Example: percentage scores in exam, letter
grades in English essay, # of bicycles ridden by students.
  Ratio- is just like interval data, except that it makes sense, because it has an absolute 0. Example: weight,
height.

What are the methods of summarizing data?

Tabular Methods
 Frequency Distribution Table – most common way to tabulate data by grouping the raw data into
categories along with the number of observations falling into each category.
 Simple Frequency Distribution – provides a useful way to present data when the dependent measure
is discrete or nominal-level variable.
 Ungrouped Frequency Distribution – used when there are small numbers of observations.
 Grouped Frequency Distribution–used when there are so many values of the variable being analyzed;
presentation of data is improved by grouping the values of variables into non-overlapping or mutually
exclusive categories.

Graphical Methods – one of the most widely used media of transferring information.
 Bar Graphs – used for the distribution of nominal or ordinal level data.
 Histogram – used to represent frequency distributions composed of interval or ratio data.
 Line Graphs – used to summarize how to pieces of information are related and how they vary
depending on one another.
 Frequency Polygon –is also used to represent interval or ratio data.
 Ogive (Cumulative Frequency Polygon) – used to estimate percentiles.
 Pie Chart – circle graph divided into pieces, each displaying the size of some related piece of
information. It is used to display the sizes of parts that make up some whole.

Numerical Methods
Measure of Central Tendency – value around which data has a tendency to congregate or cluster.
 Mean – is the most widely used central measure of distribution; average. It is the sum of the
data divided by the number of data values.
 Median – it is the measure of central-ness.
 Mode – is the measure of common-ness or typical-ness.

Measures of variation - Value w/c measures the degree to w/c data are spread out/not.
 Range – the difference between the highest value and the lowest value in a data set.
 Variance – the average of the squared variations of the observations from their mean.
 Standard Deviation – shows how much variation or dispersion exists from the average
(mean, or expected value).
 Coefficient of Variation – is the ratio of standard deviation to the mean, expressed in
percent.

1. Using the given data; 12,9,10,12,9,11,12,10,12,12, solve for the following:

a. Mean =Σn/n
= 12+9+10+12+9+11+12+10+12+12
= 109/10
=10.9

b. Median = center of the given frequency/2 ; Note: arrange the given data from smallest to largest.
= 9,9,10,10,11,12,12,12,12,12
= 11+12
= 23/2
= 11.5

c. Mode = the numbers that are repeated so many times

= 12

d. Range = Highest value/Lowest value

= 12-9
 =3

e. Interval = range/# of classes

= 3/10
= .30

f. Variance= total of n-mean^2 /n-1 ; Note: ^ means to squared a number

= 12-10.9+9-10.9+10-10.9+12-10.9+9-10.9+11-10.9+12-10.9+10-10.9+12-10.9+12-10.9^2/9
= 1.1+-1.9+-.9+1.1+-1.9+.1+1.1+-.9+1.1+1.1^2/9
= 1.21+3.61+.81+1.21+3.61+.01+1.21+.81+1.21+1.21/9
= 14.9/9
= 1.66

g. SD = √ of variance
= √ 1.66
= 1.29

h. CV = SD/mean
= 1.29/10.9
= .12