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Ranjit Roy/Sharad Bhattacharya

Science of data

collecting, processing, presentation, analysing interpretation of data numbers with context

Data

Statistical Tools

Information

**Why a Manager Needs to Know about Statistics
**

• To know how to properly present information • To know how to draw conclusions about populations based on sample information • To know how to improve processes • To know how to obtain reliable forecasts

**Why We Need Data
**

• To provide input to survey • To provide input to study • To measure performance of service or production process • To evaluate conformance to standards • To assist in formulating alternative courses of action • To satisfy curiosity

Statistics • • • • Data Collection Summarizing Data Interpreting Data Drawing Conclusions from Data .

20 Scale of measurement for ex is nominal coz labels are used.Scales of Measurement • Nominal Scale: When the data for a variable consist of labels or names used to identify an attribute of the element. .50 SBIN BSE 795.36 898. Example Stock Exchange Opening Closing RIL NSE 895.25 800. the scale of measurement is considered a nominal scale.

In addition.excellent. good or poor. Data for an ordinal scale may be numeric or nonnumeric. good or poor.Scales of Measurement •Ordinal Scale: If data exhibit the properties of nominal data and the order or rank of the data is meaningful.the data has the properties of nominal data. Each customer provides a rating of excellent. . Example: Jalan Motors sends customers a questionnaire designed to obtain data on the quality of its automotive repair service. Thus the scale was ordinal. Because the data obtained ate the labels . data was ranked: excellent – best service(1) followed by good (2) and poor(3).

Data Categories Data Quantitative (numerical) Qualitative (categorical) .

Defective of non-defective .Qualitative Data • Ideas • Opinions • Categorical Evaluation Examples: Color Preference Favored Political Candidate Quality Evaluation .

Quantitative Data Annual Income Football Attendance Interest Rates Industrials Average Number of Defective Parts in a Shipment Number of Late Deliveries Last Month Percentage of Satisfied Customers Discrete Continuous .

Examples? • Time series data: Data collected over several time periods. Examples? .Cross-sectional and Time series data • Cross-sectional data: Data collected at the same or approximately the same point in time.

Data Sources Primary Data Collection Secondary Data Compilation Print or Electronic Observation Survey Experimentation .

Methods of Obtaining Data • Observation • Personal Interviews – Structured – Unstructured Primary Data • Telephone Surveys • Mail Questionnaires • Bar Codes • Scanners • Reproduced Secondary Data .

Patil’s approval rating .Data Collection • Designing experiments – Does aspirin help reduce the risk of heart attacks? • Observational studies – Polls .

Statistical Methods • Descriptive statistics – Collecting and describing data • Inferential statistics – Drawing conclusions and/or making decisions concerning a population based only on sample data .

Descriptive Statistics • Collect data – e. Tables and graphs • Characterize data – e.g. Sample mean = ∑X n i . Survey • Present data – e.g.g.

g.g.: Test the claim that the population mean weight is 120 pounds Drawing conclusions and/or making decisions concerning a population based on sample results. .: Estimate the population mean weight using the sample mean weight • Hypothesis testing – e.Inferential Statistics • Estimation – e.

Population consists of all bulbs manufactured with the new filament. Sample data provide a sample average lifetime of 80 hrs per bulb . Average lifetime is unknown A sample of 200 bulbs is manufactured with the new filament. The sample average is used to estimate the population average.

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-. collected in a systematic manner for a predetermined purpose and placed in relation to each other.H Secrist-- . enumerated or estimated according to a reasonable standard of accuracy.Statistics Aggregate of facts affected to a marked extent by a multiplicity of causes. numerically expressed.

Population The set of data (numerical or otherwise) corresponding to the entire collection of units about which information is sought OR A population (universe) is the collection of things under consideration. .

MAT scores of EVERY person that took the part during February 2007 • Responses of ALL currently enrolled underage college students as to whether they have consumed alcohol in the last 24 hours. • MAT Scores . .Population Examples • Unemployment . unemployed) in the India.Status of ALL employable people (employed.

Population Examples cont. Again: Population Defined: The Collection of All Items of Interest (Universe) • • • • All People Living in Ghaziabad All HP Laser-jet Printers Sold in 2006 All Accounts Receivable Balances All Homeowners in NCR – over 35 years old – employed – married – 2 or more children .

Sample A subset of the population data that are actually collected in the course of a study. OR A sample is a portion of the population selected for analysis. .

• MAT Scores .MAT scores of 20 people that took the February MAT during 2007 • Responses of 538 currently enrolled underage college students as to whether they have consumed alcohol in the last 24 hours .Sample Examples • Unemployment .Status of the 1000 employable people interviewed.

Sample Population Sample .Population vs.

Populations and Samples Sample Population Sample Sample .

. A Representative Sample – Has the characteristics of the population • Census .A Sample that Contains all Items in the Population.Samples Again Sample Defined: A Subset of a population.

Other Definitions • A parameter is a summary measure computed to describe a characteristic of the population • A statistic is a summary measure computed to describe a characteristic of the sample .

We rely on samples to make estimates or inferences related to the population. .WHO CARES? In most studies. it is difficult to obtain information from the entire population.

Types of Statistical Analysis • Descriptive Statistics – Graphical Tools – Numerical Measures • Inferential Statistics – Populations – Samples • Probability – Linking Descriptive and Inferential Statistics .

Statistical Inference Drawing Conclusions (Inferences) about a Population Based on an examination of a Sample taken from the population .

The Concept of Statistical Inference .

Statistical Inference Examples • • • • • Nielson TV Ratings Exit Polls Market Research Financial Auditing Opinion Surveys .

.... ..Tools for Describing Data • Graphical Tools – – – – – – Pie Charts Bar Charts Histograms Stem and Leaf Diagrams Trend Charts Many Variations of the above.

) Raw Data: 0 2 3 4 1 0 0 3 0 3 1 1 0 0 2 2 0 0 0 1 2 4 1 0 1 0 0 0 1 0 0 0 0 1 3 N = 40 shipments 1 0 0 1 1 .Analyzing Quantitative Data On-Time Delivery Example Variable x = Number of days Delivery is Late (Each data point represents one shipment.

Organizing the Data Step 1 Raw Data: 0 2 3 0 2 2 4 1 1 0 3 3 0 0 0 4 1 0 1 0 1 1 0 0 0 0 0 1 0 1 0 0 2 0 3 1 0 0 1 1 Form a Data Array: Sort the data in numerical ord Data Array Low 0 0 0 0 0 0 1 1 2 2 0 0 0 1 3 0 0 1 1 3 0 0 1 1 3 0 0 1 1 3 0 0 1 2 4 0 0 1 2 4 High .

Organizing the Data Step 2 Construct a Frequency Distribution • Ungrouped Frequency Distribution – When the variable has only a few different values – Number of data values may be high or low • Grouped Data Frequency Distribution – When the variable has more than a few different values – Number of data values is high .

Frequency Distribution A table that divides the data into classes and shows the number of observed values that fall into each class. .

Frequency Distribution On-Time Delivery Example Data Array Low 0 0 0 1 2 0 0 0 1 2 0 0 0 1 3 0 0 1 1 3 0 0 1 1 3 0 0 1 1 3 0 0 1 2 4 0 0 1 2 4 Use ungrouped Frequency Distribution since the variable takes on only a few different values. High x 0 1 2 3 4 Frequency 19 11 4 4 2 Frequency Distribution N = 40 values .

Presenting Data Forming a Histogram On-Time Delivery Example 25 Frequency 20 15 10 0 0 1 2 3 4 x Days Late .

Relative Frequency Distribution On-Time Delivery Example Frequency 19 11 4 4 2 x Relative Frequency 19/40 11/40 4/40 4/40 2/40 = = = = = .100 .100 .275 .000 Relative Frequency Distributions are useful for comparing wo or more data sets which have different volumes of data. .475 .050 0 1 2 3 4 40 1.

675 .Relative Frequency Histogram On-Time Delivery Example Relative Frequency .375 .50 .25 0 0 1 2 3 4 x Days Late .

x 0 1 2 3 4 Comparing Two Companies: On-Time Delivery Distributions 1 2 Frequency 19 11 4 4 2 40 Frequency 190 110 40 40 20 400 .

X F 19 11 4 4 2 40 Comparing Two Companies: On-Time Delivery Distributions 1 2 RF F RF .2 0.050 0.475 0.050 20 .3 .4 .1 400 0 0 1 2 3 4 0 1 2 3 4 Comp 1 Comp 2 Not a Histogram !!! .100 40 .5 .275 110 .100 40 .475 190 .275 .275 0.275 0.

Cumulative Frequency Distribution On-Time Delivery Example X 0 1 2 3 4 F 19 11 4 4 2 CF 19 30 34 38 40 Cumulative Frequency Histogram 40 .

Design of Survey Research • Choose an appropriate mode of response – Reliable primary modes • Personal interview • Telephone interview • Mail survey – Less reliable self-selection modes (not appropriate for making inferences about the population) • • • • Television survey Internet survey Printed survey on newspapers and magazines Product or service questionnaires .

Design of Survey Research(continue • Identify broad categories • Formulate accurate questions – Make questions clear and unambiguous. Use universally-accepted definitions d) – List complete and non-overlapping categories that reflect the theme • Test the survey – Pilot test the survey on a small group of participants to assess clarity and length .

Design of Survey Research(continue d) • Write a cover letter – – – – State the goal and purpose of the survey Explain the importance of a response Provide assurance of respondent’s anonymity Offer incentive gift for respondent participation .

Reasons for Drawing a Sample • Less time consuming than a census • Less costly to administer than a census • Less cumbersome and more practical to administer than a census of the targeted population .

Types of Sampling Methods Samples Non-Probability Samples Probability Samples Simple Random Stratified Cluster Judgement Quota Chunk Systematic .

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 table of random numbers or 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 k-th individual thereafter N = 64 n=8 k=8 First Group .

Stratified Samples • Population divided into two or more groups according to some common characteristic • Simple random sample selected from each group • The two or more samples are combined into one .

.” each representative of the population • Simple random sample selected from each • The samples are combined into one Population divided into 4 clusters.Cluster Samples • Population divided into several “clusters.

Advantages and Disadvantages • Simple random sample and systematic sample – Simple to use – May not be a good representation of the population’s underlying characteristics • Stratified sample – 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) .

Evaluating Survey Worthiness • • • • • What is the purpose of the survey? Is the survey based on a probability sample? Coverage error – appropriate frame Non response error – follow up Measurement error – good questions elicit good responses • Sampling error – always exists .

Bad Question! Excluded from frame. .Types of Survey Errors • Coverage error • Non response error • Sampling error • Measurement error Chance differences from sample to sample. Follow up on non responses.

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