Business Statistics I

BBA 1303
Muktasha Deena Chowdhury
Assistant Professor, Statistics, AUB
Topic: Introduction to
Statistics
 After completing this section
Students will be able to:
Understand the concept of Statistics
and Business Statistics
explain the importance of learning
statistics and scope of Statistics.
 Introduction To Statistics
 What is Business Statistics?
Business statistics takes the data analysis tools from
elementary statistics and applies them to business.
For example, estimating the probability of a defect
coming off a factory line, or seeing where sales are
headed in the future. Many of the tools used in
business statistics are built on ones you’ve probably
already come across in basic math: mean, mode and
median, bar graphs and the bell curve, and basic
probability. Hypothesis testing (where you test out
an idea) and regression analysis (fitting data to an
equation) builds on this foundation.
 Introduction
 Business managers use statistics as an aid
to making decisions in the face of
uncertainty.
 Using statistics provides real data about
complex situations rather than making
decisions based on unsubstantiated
hunches.
 Outline
Phase-I
• Business Statistics
What and Why?

Phase-II
• Statistical Tools and
Techniques
 Phase-I
Business Statistics What & Why?
 What is Business Statistics?
 Business statistics is the science of
good decision making in the face of
uncertainty and is used in many
disciplines  econometrics, auditing & 
production and operations, including
services improvement and marketing
research.
 Why Business Statistics?
 Statistics can be used for
Making sales projections,
Financial analysis of capital expenditure
projects,
Constructing profit projections for a new
product,
Setting up production quantities, &
Making a sampling analysis to determine the
quality of a product. 
 Why…
 Performance Measurement: A common
use of statistics is to measure
performance.
 Forecasting: Managers analyze past data to
find statistical trends and make
predictions about the future. 
 Risk/Return on Investments
 Market Research: Companies use statistics
in market research and new product
development.
 Branches Of Statistics
 Descriptive Statistics
 Inferential Statistics
 Cont…
 Every student of statistics should know
about the different branches of
statistics to correctly understand
statistics from a more holistic point of
view. Often, the kind of job or work one
is involved in hides the other aspects of
statistics, but it is very important to
know the overall idea behind statistical
analysis to fully appreciate its
importance and beauty.
 Cont…
 Descriptive statistics implies a simple quantitative
summary of a data set that has been collected. It
helps us understand the experiment or data set in
detail and tells us everything we need to put the data
in perspective.
 Inferential Statistics is the attempt to apply the
conclusions that have been obtained from one
experimental study to more general populations.
This means inferential statistics tries to answer
questions about populations and samples that have
not been tested in the given experiment.
Topic: Data Collection
 After completing this section
 Students will be able to
Define data, types of data, population
sample and explain the techniques of
collecting data.
 Data
 What is Data?
factual information (such as
measurements or statistics) used as a
basis for reasoning, discussion, or
calculation.
Types of Data:
1. Qualitative data 2. Quantitative data
 Data Collection
Primary Sources
Secondary Sources
Topic: Presentation of
Data
After completing this section

Students will be able to present data

in a tabular form and graphical form
where necessary.
 Presentation of Data
 Tabulation
Tables are devices for presenting data simply from
masses of statistical data. Tabulation is the first step
before data is used for analysis. Tabulation can be in
form of Simple Tables or Frequency distribution table
(i.e., data is split into convenient groups).
 Charts and Diagrams
They are useful methods in presenting simple statistical
data. Diagrams are better retained in the memory than
statistical tables.
 Cont…
 Some common diagrams are: Bar
diagram, histogram, Frequency
Polygon, Pie diagram etc..
 Phase-II
Statistical Tools and Techniques
 Phase-2: Tools and Techniques
 Sampling Techniques.
 Data Collection.
 Measurement of Data.
What all  Data Analysis.
will be • Measure of Central Tendency
covered? • Measures of dispersion
• Correlation
• Regression
• Index Number…
Sampling Technique
 Population and Sample
 Population is the
collection of all
objects of interest. Sample
 Sample is the
representative Population

part of the
population.
 Sampling
 The technique of collecting samples
from Population.
 Statistical method of obtaining
representative data or observation
from a Population.
Probability Non-Probability
Sampling Sampling
Types of sampling
 Non-Probability Sampling
• Convenience Sampling (ease of access)
• Sample is selected from elements of a population that
are easily accessible
• Snowball Sampling (friend of friend..etc.)
• Purposive Sampling (judgmental)
• You chose who you think should be in the study
• Quota Sampling
 Probability Sampling

 Simple random sampling

 Systematic sampling
 Stratified sampling
 Cluster sampling
 Determining Sample Size

Quantitative Qualitative

2
Z σ 2 Z2 π(1 π)
n n
D2 D2

(σ12  σ22 )xF 2 P (1- P) F

n 2
n
D D2
Data Collection
 Types of Data

• You collect for

Primary
your Research
data

• Someone else
Secondary
has collected
data
 Primary Data - Examples
• Focus groups
• Questionnaires
• Personal interviews
• Observations
 Secondary Data – Examples
• Country health departments.
• Hospital, clinic, school nurse records.
• Private and foundation databases.
• Surveillance data from government
programs.
• BBS, ICDDRB etc.
 Presentation of Data
 Tabular Presentation
 Graphical Presentation
Bar Diagram, Histogram, Pie-chart
etc….
Measures of Central
Tendency
 Learning Outcomes
 Recognize, describe, and calculate the
measures of location of data: quartiles
and percentiles.
 Recognize, describe, and calculate the
measures of the center of data: mean,
median, and mode.
Measures of Central Tendency
 A measure of central tendency is a
summary statistic that represents the
center point or typical value of a
dataset. These measures indicate
where most values in a distribution
fall and are also referred to as the
central location of a distribution. 
 Cont…
 In statistics, the three most common
measures of central tendency are the 
mean, median, and mode. Each of
these measures calculates the
location of the central point using a
different method.
 Cont…
 Mean: It is the average of any data set.
 Median: It is the middle most value of
any data set.
 Mode: It is that value which has the
highest frequency i.e which occurs
most in any given data set.
 Cont…
 Calculating the Mean
When you think of averaging, you are
most likely to think of finding the mean.
You add all of the numbers in the set
and divide by how many numbers are in
the list. For example, suppose you have
the numbers 3, 7, 10 and 16. Add them
up to get 36. Divide that number by 4 to
get the average: 9.
 Cont…
 Median: Think Middle
To determine the median, the list of
numbers should be arranged in order
from lowest to highest. The number in
the middle, or the average of the two
middle numbers, is the median. For
example, if you have the numbers 1, 3, 5
and 7, the middle numbers are 3 and 5,
so the median is 4.
 Cont…
 Understanding the Mode
Mode refers to the number in a list
that occurs most often. For example,
in the group 12, 12, 16, 16, 16, 25 and
36, the number 16 is the mode.
Measures of Variation
 Learning Outcomes
 Recognize, describe, and calculate the
measures of the spread of data:
variance, standard deviation, and
range.
 Measures of Variation
 Measures of variation describe the
width of a distribution. They define
how spread out the values are in a
dataset. They are also referred to as
measures of dispersion/spread.
 Types
In this article, we will look at 4
measures of variation.
 Range
 Interquartile Range (IQR)
 Variance
 Standard Deviation
 Cont…
 Range
The range is the simplest measure of
variation to find. It is simply the
highest value minus the lowest value.
RANGE = MAXIMUM - MINIMUM
 Cont…
 Variance
 "Average Deviation"
 The range only involves the smallest and largest
numbers, and it would be desirable to have a
statistic which involved all of the data values.
 The first attempt one might make at this is
something they might call the average deviation
from the mean and define it as:
 Cont…
 The problem is that this summation is
always zero. So, the average deviation
will always be zero. That is why the
average deviation is never used.
 Cont…
 Population Variance
 So, to keep it from being zero, the
deviation from the mean is squared
and called the "squared deviation
from the mean". This "average
squared deviation from the mean" is
called the variance.
Cont…
 Cont…
 Standard Deviation
 There is a problem with variances.
Recall that the deviations were
squared. That means that the units
were also squared. To get the units
back the same as the original data
values, the square root must be taken.
Cont…