When you have completed this chapter, you will be able to:

1. Understand why we 3.Distinguish between 5. Distinguish among

study statistics. a qualitative variable the nominal, ordinal,
and a quantitative interval, and ratio
2. Explain what is
variable levels of
meant by measurement.
descriptive 4. Distinguishbetween a
discrete variable and a 6. Define the terms
statistics and
inferential statistics continuous variable. parameter, statistic,
sample,population,
census and survey.
 statistics Statistics
statistics refers to
numerical facts such as Statistics is science of
averages, medians, collecting, analyzing,
percentages, presenting,
and maximums that help and interpreting data.
us understand a variety
of business and
economic situations.
 What is Statistics?

Statistics is the science of collecting,

organizing, presenting, analyzing, and
interpreting data to assist in making more
effective decisions.
 Who uses Statistics?
Statistical techniques are used extensively by
marketing, accounting, quality control,
consumers, professional sports people,
hospital administrators, educators, politicians,
physicians, and many others.
Who uses Statistics?
 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

 Descriptive Statistics Inferential Statistics
Phases - comprise those methods
- comprise those
of concerned with organizing,
presenting, summarizing,
methods concerned with
the analysis of sample
Statistics and analyzing a set of
data without drawing
data leading to
predictions or inferences
conclusions or inferences about the population.
about a population.
• Collect data
– e.g., Survey
• Present data
– e.g., Tables and graphs


• Characterize data
X i
– e.g., Sample mean =
n
 Examples of Common Research Questions
that will require Descriptive Statistics

1. What is the total monthly sales of books at the XU

Bookcenter?
2. What is the distribution of employees in a shoe factory in
terms age?
3. What are the common products sold online?
4.How many of the call center agents are college graduates?
 • Estimation
– e.g., Estimate the population
mean weight using the sample
mean weight
• Hypothesis testing
– e.g., Test the claim that the
Drawing conclusions
about a large group of population mean weight is 120
individuals based on a pounds
subset of the large
group.
Examples of Common Research Questions
that will require Inferential Statistics

1. Is there a significant decrease in the weight before and

after enrolling in a Zumba class?
2. Is there a significant linear relationship between weather
temperature and sales of ice cream?
3. Is there a significant association between gender and the
choice of brand of shoes?
4. Is there a significant difference in the mean lifespan
between Oppo and Samsung cellphones?
 Basic Vocabulary of Statistics

Population: A collection, or set, of individuals or objects or

events whose properties are to be analyzed.
Two kinds of populations: finite or infinite.

Sample: A portion or part or subset of the population of interest.

 Basic Vocabulary of Statistics

Parameter – a numerical characteristic of the

population

Statistic – a numerical characteristic of the sample

 Basic Vocabulary of Statistics
VARIABLE
A variable is a characteristic of an item or
individual element in a population or sample.

DATA
Data are the different values associated with a
variable.
 Quantitative Data -
Types of ▪Qualitative
(categorical) data have
(Numerical) are data
that can be expressed
Data values that can only be in numbers.
placed into categories,
such as “yes” and “no.”
No numerical values
exist.
 Car color Gender
Qualitative
Data
Examples
brand of laptop
Eye
Color
 Balance in your checking
Quantitative account
Data Time (in minutes) remaining
Examples in class

Number of children in a
family
 Discrete Variables: A Continuous Variable
Types of can be measured using
can only assume certain
Quantitative values and there are some units of
Data usually “gaps” between measurements, which
values. It can be counted, may take some
thus can assume a value decimal numbers
which is a whole number
 Discrete Variables Continuous Variables
Types of Number of employees The pressure in a tire

Quantitative
Data The weight of a pork chop
or the number of
hammers sold at the local
Home Depot
The height of students in a class.
Types of Data Data

Quantitative Qualitative

Discrete Continuous

•For each of the following,
indicate whether the
appropriate variable would
be qualitative or quantitative.
If the variable is
quantitative, indicate
whether it would be discrete
or continuous.
a) Whether you own b)Your status as a
an RCA Colortrak full-time or a part-
television set time student
Qualitative Variable Qualitative
two levels: yes/no two levels: full/part
no measurement no measurement
Number of people Sam’s travel time
who attended your from his dorm to the
senior high school’s
Student Union
graduation
•Quantitative, Continuous
any number
•Quantitative, Discrete
a countable number time is measured
only whole numbers can take on any value
greater than zero
 Levels of Measurements

Ordinal Scale
Nominal Scale

Interval Scale Ratio Scale

 Levels of Measurements
Nominal Scale
consists of named categories
but no implied ranking of
categories
contains the property of identity,
order, and equality of scale but does
not possess the absolute zero
property and multiples of measures
are not meaningful.
Interval Scale
Ordinal Scale
the categories of a
variable can be ranked
contains the property of identity, order,
equality of scale and the absolute zero
property and multiples of measures
are meaningful.
Ratio Scale
 Levels of Measurements
Nominal Scale Ordinal Scale
Personal Computer Ownership Student Class designation
Brand of alcohol Product satisfaction
Internet Provider Faculty rank
Gender Student grades
Religious affiliation Level of agreement

Temperature (in degrees Celsius Height

and Fahrenheit) Weight
Salary( in pesos or dollars)
Standardized exam score Age ( in years or days)

Interval Scale Ratio Scale

 Primary Sources Secondary Sources
The person performing
The data collector is the one data analysis is not the
Sources using the data for analysis data collector

Of ▪Data from a political ▪Analyzing census

survey data
Data ▪Data collected from an ▪Examining data
experiment from print journals
▪Observed data or data published
on the internet.
 The sampling frame is a listing of items that make up
the population
Frames are data sources such as population lists,
A Sampling Process directories, or maps
Begins With A Inaccurate or biased results can result if a frame
excludes certain portions of the population
Sampling Frame Using different frames to generate data can lead to
dissimilar conclusions
 Sampling Techniques

Samples

Probability Nonprobability
Samples samples

Simple Quota Convenience

Systematic Stratified Cluster
Random
 Non -Probability
Probability Sampling Sampling
In probability sampling In non-probability
every element in the sampling - not all
Sampling population is given a elements in the population
(known non-zero) chance
Techniques of being included in the
are given the chance of
being included in the
population sample
Simple Random, Convenience, purposive,
Systematic, stratified and quota and snowball
Cluster Sampling sampling
• Every individual or item from the frame
has an equal chance of being selected

• Selection may be with replacement

(selected individual is returned to frame
for possible reselection) or without
replacement (selected individual isn’t
returned to the frame).

• Samples obtained from table of random

numbers or computer random number
generators.
 Simple Random Sampling
using Random Numbers

Sampling Frame For

Population With 850 Items
Item Name Item #
The First 5 Items in a simple random
Bev R. 001
sample
Ulan X. 002
. .
Item # 492
. .
Item # 808
. . Item # 892 -- does not exist so ignore
. . Item # 435
Joann P. 849 Item # 779
Paul F. 850 Item # 002
a method of selecting a sample by taking
every kth unit from an ordered
population, the first unit being selected at
random.
 Systematic Sampling

N = 40
Decide on sample size: n
n=4
Divide frame of N individuals into k = 10
groups of k individuals: k=N/n
Randomly select one individual
from the 1st group
Select every kth individual
thereafter
the population is divided or stratified into
more or less homogenous subpopulations
(stratum) before sampling is done.

A simple random sample is selected from

each subgroup, with sample sizes
proportional to strata sizes
 Stratified Random Sampling

Population
Divided
into k
strata
This is a common technique when sampling population
of voters, stratifying across racial or socio-economic
lines.
When natural groupings are evident in
the population, these groupings are called
clusters, may be randomly selected and
all elements (or subselection) from each
selected cluster can be included in the
sample.
 Cluster Sampling

• Population is divided into several “clusters,” each

representative of the population
• A simple random sample of clusters is selected
• All items in the selected clusters can be used, or items can
be chosen from a cluster using another probability sampling
technique
• A common application of cluster sampling involves election
exit polls, where certain election districts are selected and
sampled.
 Cluster Sampling

Population divided into 16 clusters.

Randomly selected
clusters for sample
 Probability Sample:
Comparing Sampling Methods

Simple random sample Stratified sample Cluster sample

and Systematic sample Ensures More cost
• Simple to use representation of effective
• May not be a individuals across Less efficient
good the entire (need larger
representation population sample to acquire
of the
the same level of
population’s
precision)
underlying
characteristics
Basic Business Statistics, 11e ©
Chap 7-42
2009 Prentice-Hall, Inc..