lOMoARcPSD|4156653

COMM 215 Chapter 1

Business Statistics (Concordia University)

StuDocu is not sponsored or endorsed by any college or university

Downloaded by Ariana Cojocaru (ariana.cojocaru@gmail.com)
 lOMoARcPSD|4156653

Chapter 1 2015-10-13 1:18 PM

Business Statistics: A collection of procedures and techniques used to convert data into
meaningful information in a business environment

Statistical Procedures:
• Descriptive Statistics
o Procedures and techniques designed to describe data
§ Charts and graphs
§ Numerical measures (mean, median, etc.)
• Inferential Statistics
o Tools and techniques that help decision makers to draw inferences from a set
of data
§ Estimation: e.g., Estimate the population
mean weight using the sample mean weight
§ Hypothesis Testing: e.g., Use sample evidence to test the claim that
the population mean weight is 120 pounds

Data Collection Methods

• Experiments
o Experiment: a process that produces a single outcome whose result cannot be
predicted with certainty.
o Experimental design: a plan for performing an experiment in which the
variable of interest is defined.
• Telephone Surveys
• Written Questionnaires & Surveys
• Direct Observation & Personal Interviews
o Direct Observations
§ Data are being collected is physically observed and the data recorded
based on what takes place in the process.
§ Subjective and time-consuming
o Personal Interviews
§ Structured: questions are scripted

Downloaded by Ariana Cojocaru (ariana.cojocaru@gmail.com)

 lOMoARcPSD|4156653

§ Unstructured: begin with one or more broadly stated questions, with

further questions being based on the responses

• Other Data Collection Methods: barcode scanning, credit card use, etc.

Data Collection Issues

• Data Accuracy: when using already found data, source may not be trustworthy
• Interviewer Bias: tone of voice, body language that may skew interview answers
• Nonresponse Bias: responders may have common opinions that skew results
• Selection Bias: interview location (football game), time (day: miss on day-workers)
• Observer Bias: subjective views & judgements, “we see what we want to see”
• Measurement Error: defective measuring tools, human error
• Internal Validity: an experiment where the subjects were controlled for other factors
that may have affected the results (in a cholesterol test: smoking, diet, weight, etc.)
• External Validity: an experiment’s results can be replicated with different groups

Population: the set of all objects or individuals of interest or the measurements obtained from all
objects or individuals of interest
Sample: a subset of the population
Census: an enumeration of the entire set of measurements taken from the whole population
Frame: the list of all objects/individuals in the population
Sampling Unit: each object/individual in the frame
Parameters: descriptive numerical measures computed from an entire population (e.g. average)
Statistics: descriptive numerical measures computed from a sample

Downloaded by Ariana Cojocaru (ariana.cojocaru@gmail.com)

 lOMoARcPSD|4156653

Sampling Techniques
• Nonstatistical: methods of selecting samples that use convenience, judgment, or
other non-chance processes
o Convenience: Collected in the most convenient manner for the researcher
o Judgment: Based on judgments about who in the population would be most
likely to provide the needed information
o Ratio
• Statistical: sampling methods that use selection techniques based on chance
selection. Items of the sample are chosen based on known or calculable probabilities.
Also called probability sampling, it allows every item in the population to
have a known or calculable chance of being included in the sample.
o Simple Random Sampling:
§ Every possible sample of a given size has an equal chance of being
selected
§ Selection may be with replacement or without replacement
§ The sample can be obtained using a table of random numbers or
computer random number generator
o Stratified Random Sampling:
§ Divide population into subgroups (called strata) according to some
common characteristic
§ e.g., gender, income level
§ Select a simple random sample from each subgroup
§ Combine samples from subgroups into one
o Systematic Sampling:
§ Decide on sample size: n
§ Divide ordered (e.g., alphabetical) frame of N individuals into groups
of k individuals: k = N / n
§ Randomly select one individual from the 1st group
§ Select every kth individual thereafter
o Cluster Sampling:
§ Divide population into several “clusters,” each representative of the
population (e.g., county)
§ Select a simple random sample of clusters
§ All items in the selected clusters can be used, or items can be chosen
from a cluster using another probability sampling technique

Downloaded by Ariana Cojocaru (ariana.cojocaru@gmail.com)

 lOMoARcPSD|4156653

Data Types and Measurement Levels

Data Types:
• Quantitative: measurements whose values are inherently numerical
o discrete (e.g. number of children)
o continuous (e.g. weight, volume)
• Qualitative: data whose measurement scale is inherently categorical (e.g. marital
status, political affiliation, eye color)
• Time-Series: a set of consecutive data values observed at successive points in time
(e.g. stock price on daily basis for a year)
• Cross-Sectional: a set of data values observed at a fixed point in time (e.g. bank data
about its loan customers)

Downloaded by Ariana Cojocaru (ariana.cojocaru@gmail.com)

 lOMoARcPSD|4156653

Ratio: true zero (weight, height)

Interval: not true zero
(temperature, time)

Ordinal: categories that can be

ranked (poor, good, excellent)
Nominal: categories, can’t be
ranked (hair color, gender)

Categorizing Data
• Identify each factor in the data set
• Determine whether the data are time- series or cross-sectional
• Determine which factors are quantitative data and which are qualitative data
• Determine the level of data measurement for each factor.

Downloaded by Ariana Cojocaru (ariana.cojocaru@gmail.com)