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Introduction and Data Collection

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**Using Microsoft® Excel
**

4th Edition

Chapter 1

Introduction and Data Collection

Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc.

Chap 1-1

Chapter Goals

After completing this chapter, you should be

able to:

**Explain key definitions:
**

Population vs. Sample

Primary vs. Secondary Data

Parameter vs. Statistic

Descriptive vs. Inferential Statistics

Describe key data collection methods

**Describe different sampling methods
**

Probability Samples vs. Nonprobability Samples

Select a random sample by computer generation

Identify types of data and levels of measurement

Describe the different types of survey error

**Why a Manager Needs to
**

Know about Statistics

To know how to:

properly present information (describe things)

**draw conclusions about populations based on
**

sample information (make decisions)

improve processes

obtain reliable forecasts

Key Definitions

**A population is the collection of all items or
**

things under consideration –people or objects

**A sample is a portion of the population
**

selected for analysis

**A parameter is a summary measure that
**

describes a characteristic of the population

**A statistic is a summary measure computed
**

from a sample

Population vs. Sample

Population

a b

Sample

cd

b

ef gh i jk l m n

o p q rs t u v w

x y

z

**Measures used to describe
**

the population are called

parameters

c

gi

o

n

r

u

y

Measures computed from

sample data are called

statistics

Key Definitions

**A survey is the gathering of data about a
**

particular group of people or items

A census is a survey of the entire population

**A sample is a survey of a portion of the
**

population

**Two Branches of Statistics
**

Descriptive statistics

Collecting, summarizing, and describing data

Inferential statistics

**Drawing conclusions and/or making decisions
**

concerning a population based only on sample

data

Descriptive Statistics

Collect data

Present data

e.g. Survey

e.g. Tables and graphs

Characterize data

e.g. Sample mean =

X

n

i

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 over

120 pounds

**Drawing conclusions and/or making decisions
**

concerning a population based on sample results.

**Why We Need Data
**

To provide input to study a situation

**To measure performance of service or
**

production processes

To evaluate conformance to standards

**To assist in formulating alternative courses of
**

action

To satisfy curiosity

Data Sources

Primary

Secondary

Data Collection

Data Compilation

Print or Electronic

Observation

Survey

Experimentation

Types of Data

Data

Categorical

(Qualitative)

Numerical

(Quantitative)

Examples:

Marital Status

Political Party

Eye Color

(Defined categories)

Discrete

Examples:

Number of Children

Defects per hour

(Counted items)

Continuous

Examples:

Weight

Voltage

(Measured characteristics)

Levels of Measurement

and Measurement Scales

Differences between

measurements, true

zero exists

Ratio Data

Differences between

measurements but no

true zero

Interval Data

Ordered Categories

(rankings, order, or

scaling)

Ordinal Data

Categories (no

ordering or direction)

Nominal Data

Highest Level

Strongest forms of

measurement

Higher Level

Lowest Level

Weakest form of

measurement

Example Data

Subject

1

2

3

4

5

6

7

8

9

10

Name Height

Mary

62

John

72

Jill

64

Donna

59

Sam

73

Bill

70

Mario

71

Carol

73

Betty

70

Linda

68

Income

10,350

30,500

35,600

20,700

15,300

52,800

19,400

12,500

30,200

22,700

**Gender Eye color
**

Female

Blue

Male

Brown

Female

Green

Female

Brown

Male

Blue

Male

Black

Male

Blue

Female

Brown

Female

Brown

Female

Brown

**Data in Frequency Distributions
**

Height

Category Frequency

>54 to 60

1

>60 to 66

2

>66 to 72

5

>72 to 78

2

Gender

Category Frequency

Female

6

Male

4

Income

Category

Frequency

20K

4

>20K to 50K

5

> 50K

1

Category

Black

Blue

Brown

Green

Eye Color

Frequency

1

3

5

1

Statistical Data

**Numerical Data can be gathered as grouped or
**

converted after gathering.

Categorical data is by nature always grouped

Classes for numerical data are usually a range

of values

Classes for categorical data are usually single

valued

Numerical data is usually grouped for graphical

presentation

**Reasons for Drawing a Sample
**

Less time consuming than a census

Less costly to administer than a census

**Types of Samples Used
**

(continued)

Samples

Non-Probability

Samples

Judgement

Quota

Chunk

Convenience

Probability Samples

Simple

Random

Stratified

Systematic

Cluster

Probability Sampling

**Items in the sample are chosen based on
**

known probabilities

Probability Samples

Simple

Random

Systematic

Stratified

Cluster

**Simple Random Samples
**

**Every individual or item from the frame has an
**

equal chance of being selected

**Selection may be with replacement or without
**

replacement

**Samples obtained from computer random
**

number generators

Systematic Samples

Decide on sample size: n

**Divide 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
**

N = 64

n=8

k=8

First Group

Stratified Samples

**Population divided into two or more subgroups
**

(called strata) according to some common

characteristic

**Simple random sample selected from each
**

subgroup

Samples from subgroups are combined into one

Population

Divided

into 4

strata

Sample

Cluster Samples

**Population is divided into “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

Population

divided into

16 clusters.

Randomly selected

clusters for sample

**Advantages and Disadvantages
**

**Simple random sample and systematic sample
**

Stratified sample

Simple to use

May not be a good representation of the population’s

underlying characteristics that have small probabilities

Ensures representation of individuals across the entire

population

Cluster sample

**More cost effective
**

Less efficient (need larger sample to acquire the same

level of precision)

**Types of Survey Errors
**

**Coverage error or selection bias
**

**Non response error or bias
**

**People who do not respond may be different from those
**

who do respond

Sampling error

**Exists if some groups are excluded from the frame and
**

have no chance of being selected

Variation from sample to sample will always exist

Measurement error

**Due to weaknesses in question design, respondent
**

error, and interviewer’s effects on the respondent

**Evaluating Survey Worthiness
**

**What is the purpose of the survey?
**

Is the survey based on a probability sample?

Are there coverage errors – (appropriate frame)?

Is there Non-response error – (follow up)

Is there Measurement error – (good questions

elicit good responses)

Is the sampling error acceptable – (always exists)

Chapter Summary

Reviewed why a manager needs to know statistics

Introduced key definitions

Examined descriptive vs. inferential statistics

Described different types of samples

**Reviewed data types and measurement levels
**

Examined survey worthiness and types of survey

errors

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