Business Statistics: A Decision-Making Approach
7th Edition
Chapter 1 The Where, Why, and How of Data Collection
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Chap 1-1
Chapter Goals
After completing this chapter, you should be able to:
Describe key data collection methods Know key definitions:
Population vs. Sample Qualitative vs. Qualitative data Primary vs. Secondary data types Time Series vs. Cross-Sectional data
Explain the difference between descriptive and inferential statistics Describe different sampling methods
Chap 1-2
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Tools of Business Statistics
Descriptive statistics
Collecting, presenting, and describing data
Inferential statistics
Drawing conclusions and/or making decisions concerning a population based only on sample data
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Chap 1-3
Descriptive Statistics
Collect data
e.g., Survey, Observation, Experiments
Present data
e.g., Charts and graphs
Characterize data
x e.g., Sample mean = n
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Chap 1-4
Inferential Statistics
Making statements about a population by examining sample results
Population parameters
(unknown, but can be estimated from sample evidence) (known)
Sample statistics
Inference
Sample
Population
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Chap 1-5
Inferential Statistics
Drawing conclusions and/or making decisions concerning a population based on sample results.
Estimation
e.g., Estimate the population mean weight using the sample mean weight e.g., Use sample evidence to test the claim that the population mean weight is 120 pounds
Chap 1-6
Hypothesis Testing
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Tools for Collecting Data
Data Collection Methods
Experiments Telephone surveys
Written questionnaires Direct observation and personal interview
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Chap 1-7
Survey Design Steps
Define the issue
what are the purpose and objectives of the survey?
Define the population of interest Develop survey questions
make questions clear and unambiguous use universally-accepted definitions limit the number of questions
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Chap 1-8
Survey Design Steps
(continued)
Pre-test the survey
pilot test with a small group of participants assess clarity and length
Determine the sample size and sampling method Select sample and administer the survey
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Chap 1-9
Types of Questions
Closed-end Questions
Select from a short list of defined choices
Example: Major: __business __liberal arts __science __other Open-end Questions
Respondents are free to respond with any value, words, or statement
Example: What did you like best about this course?
Demographic Questions
Questions about the respondents personal characteristics
Example: Gender: __Female __ Male
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc. Chap 1-10
Populations and Samples
A Population is the set of all items or individuals of interest
Examples:
All likely voters in the next election All parts produced today All sales receipts for November
A Sample is a subset of the population
Examples:
1000 voters selected at random for interview A few parts selected for destructive testing Every 100th receipt selected for audit
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Chap 1-11
Key Definitions
A population is the entire collection of things under consideration
A parameter is a summary measure computed to describe a characteristic of the population
A sample is a portion of the population selected for analysis
A statistic is a summary measure computed to describe a characteristic of the sample
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Chap 1-12
Population vs. Sample
Population
a b cd
Sample
b gi o r y c n u
ef gh i jk l m n o p q rs t u v w x y z
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Chap 1-13
Why Sample?
Less time consuming than a census Less costly to administer than a census It is possible to obtain statistical results of a sufficiently high precision based on samples.
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Chap 1-14
Sampling Techniques
Sampling Techniques
Nonstatistical Sampling Convenience Judgment
Statistical Sampling Simple Random Systematic Cluster
Stratified
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Chap 1-15
Statistical Sampling
Items of the sample are chosen based on known or calculable probabilities Statistical Sampling
(Probability Sampling)
Simple Random
Stratified
Systematic
Cluster
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Chap 1-16
Simple Random Sampling
Every possible sample of a given size has an equal chance of being selected Selection may be with replacement or without replacement The sample can be obtained using a table of random numbers or computer random number generator
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Chap 1-17
Stratified Random Sampling
Divide population into subgroups (called strata) according to some common characteristic Select a simple random sample from each subgroup Combine samples from subgroups into one
Population Divided into 4 strata
Sample
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc. Chap 1-18
Systematic Random Sampling
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
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Chap 1-19
Cluster Sampling
Divide population into several clusters, each representative of the population Select a simple random sample of clusters
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
Chap 1-20
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Data Types
Data
Qualitative (Categorical)
Examples:
Quantitative (Numerical)
Marital Status Political Party Eye Color (Defined categories)
Discrete
Examples:
Continuous
Examples:
Number of Children Defects per hour (Counted items)
Weight Voltage (Measured characteristics)
Chap 1-21
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Data Types
Time Series Data
Ordered data values observed over time
Cross Section Data
Data values observed at a fixed point in time
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Chap 1-22
Data Types
Sales (in $1000s) 2003 Atlanta Boston Cleveland Denver 435 320 405 260 2004 460 345 390 270 2005 475 375 410 285 2006 490 395 395 280 Time Series Data
Cross Section Data
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc. Chap 1-23
Data Measurement Levels
Measurements
Ratio/Interval Data
Highest Level Complete Analysis
Rankings Ordered Categories
Ordinal Data
Higher Level Mid-level Analysis
Categorical Codes ID Numbers Category Names
Nominal Data
Lowest Level Basic Analysis
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Chapter Summary
Reviewed key data collection methods Introduced key definitions:
Population vs. Sample
Qualitative vs. Quanitative data Primary vs. Secondary data types Time Series vs. Cross-Sectional data
Examined descriptive vs. inferential statistics Described different sampling techniques Reviewed data types and measurement levels
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
Chap 1-25
