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MBA 504
Business Statistics
Chapter 1 – Introduction to Statistics
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Assignments
Read the following sections from Chapter 1:

• 1, 2, 3, 4, 5

Complete the following problems from Chapter 1:

• 4, 12, 16a, 20, 22

Be able to do the following in Excel:

1.Create a dataframe
2.Generate a random number
3.Write an IF statement
4.Use filters
5.Use the SUM function
6.Use the COUNT function
7.Create a pivot table (move rows/columns; organize by percent of all data)
8.Show equations
9.Paste values
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1. Define statistics and explain why it is important for business.

2. Be able to define and identify the following: data, data set,
elements, variable, observation.
3. Differentiate between the four scales of measurement.
4. Differentiate between categorical and quantitative data.

Learning 5. Define and differentiate between cross-sectional and time

series data.
objectives 6. Define and explain the following data sources: existing data
sources, observational study, and experiment.
7. Explain how samples and populations, as well as sample
statistic and population parameter, differ.
8. Define and distinguish between the two types of statistics:
descriptive and inferential.
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Define statistics  Statistics is a branch of mathematics used to

and explain summarize, analyze, and interpret what we observe.

why it is  Statistics is important because it is used to make sense

of the observations we make. This will allow us to
important for critically evaluate information presented to us, which
will allow us to make better business decisions.
business.
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Be able to define  Data – facts and information collected, analyzed, and

summarized for interpretation.
and identify the  Dataset – all data collected for a given study.
following: data,  Element – entities on which data are collected (e.g.,
data set, elements, people, countries, companies, machines).

variable,  Variable – a characteristic of interest for the elements.

 Observation – a set of measurements for variables for a
observation. given element.
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Variable

Be able to define
and identify the
following: data, Element
data set, elements,
variable, Observation

observation.
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Differentiate  Nominal – when the data consist of labels/names.

 Ordinal – nominal and order/rank is meaningful.
between the  Interval – ordinal and the interval between values is expressed in
four scales of terms of a fixed unit of measure.
 For example: SAT, GRE, GMAT scores
measurement*.  Ratio – interval and has a true zero.

*Note: You can remember the four scales with the acronym NOIR, which means black in French.
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 Properties of scales of measurement:

Differentiate 1. Order: Does a larger number indicate a greater value

between the
than a smaller number?
2. Difference: Does subtracting two numbers represent

four scales of some meaningful value?

3. Ratio: Does dividing (or taking the ratio of) two

measurement*. numbers represent some meaningful value?

  Nominal Ordinal Interval Ratio

Order No Yes Yes Yes
Difference No No Yes Yes
Ratio No No No Yes

*Note: You can remember the four scales with the acronym NOIR, which means black in French.
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Nominal Ratio Ordinal Nominal

Differentiate
between the
four scales of
measurement*.   Nominal Ordinal Interval Ratio
Order No Yes Yes Yes
Difference No No Yes Yes
Ratio No No No Yes

*Note: You can remember the four scales with the acronym NOIR, which means black in French.
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Differentiate
between  Categorical data – data that can be grouped by
category or class; also called qualitative data; use
categorical and either nominal or ordinal scales of measurement.

quantitative  Quantitative data – data that uses numeric values; uses

either interval or ratio scales of measurement.

data.
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Categorical Quantitative Categorical Categorical

Differentiate
between
categorical and
quantitative
data.
 Variables Categorical vs. Scale of 12
Quantitative Measurement
Sex (male, female) Categorical Nominal
CEO tenure (in years) Quantitative Ratio
Ranking of favorite restaurant beverages Quantitative Ordinal
Ratings of a movie (from 1 to 4 stars) Quantitative Ordinal
Employee hours worked per week Quantitative Ratio
Score (from 0-100) on a safety test Quantitative Ratio
Number of competitors in a 30-mile radius Quantitative Ratio
Temperature (degrees Fahrenheit) Quantitative Interval
Time (in seconds) to manufacture a widget Quantitative Ratio
Examples of The size of a candy bar (in grams)
Position standing in line
Quantitative
Quantitative
Ratio
Ratio
categorical/quantitative Market type (bull, bear)
Type of good (complementary, substitute)
Categorical
Categorical
Nominal
Nominal
data and scales of A letter grade (A, B, C, D, F)
Weight limit (in pounds) of a truck
Categorical
Quantitative
Ordinal
Ratio

measurement. A college student’s SAT score

Number of recalls per year
Quantitative
Quantitative
Interval
Ratio
Score (from 0% to 100%) on an exam Quantitative Ratio
Type of distraction (auditory, visual) Categorical Nominal
Number of accidents on a job site Quantitative Ratio
Satisfaction ratings (1 to 7 Likert scale) Quantitative Interval
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Define and  Cross-sectional data – data collected at the same or

differentiate about the same point in time.

between cross-  For example: A one-time satisfaction survey.

 Time series data – data collected over several time
sectional and periods.

time series data.  For example: Daily stock price data.

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Time series data

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Define and explain  Existing data sources – interval company data; external
the following data data sources from other companies (Bloomberg,
sources: existing Nielsen, Yahoo, Pew Research Center, Census Bureau)

data sources,  Observational study – surveys, polls, focus group

observational study,  Experiment – study conducted under controlled

conditions; can demonstrate cause-effect relationship.
and experiment.
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 Population – the set of all elements of interest in a

Explain how particular study

samples and  Sample – a subset of a population

populations, as  We sample from the population because it is often

difficult, if not impossible, to study every element in a
well as sample population. It can be too timely and costly to gather

statistic and that much data.

 A sample statistic is a characteristic (usually numeric)
population that describes a sample.

parameter, differ.  A population parameter is a characteristic (usually

numeric) that describes a population.
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Define and
distinguish  Descriptive statistics – summaries of data; often in
between the two tabular, graphical, or numerical form

types of statistics:  Inferential* statistics – a process of using data from a

sample to make estimates and test hypotheses about a
descriptive and population.

inferential.

*Infer means to deduce or conclude from evidence

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The process of
inferential
statistics.

Population parameter (unknown) – we often use the sample statistic

to estimate the population parameter because we cannot possibly Sample statistic
collect data on an entire population.
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Examples of descriptive statistics in various forms.

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 Statistics is a branch of mathematics used to make sense of

data.

 Statistics helps managers make better decisions. Takeaways

 It’s important to know what type of data you are working
with because it will affect the type of analyses you use.