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This document provides an overview of key concepts in business statistics including: - Descriptive statistics is used to collect, summarize, and present quantitative and qualitative data, while inferential statistics allows conclusions to be drawn about populations based on samples. - There are various data sources and collection methods including primary data from surveys/experiments and secondary data from previous studies. - Data can be qualitative (categorical) or quantitative (discrete or continuous), and can be organized longitudinally as time series data or laterally as cross-sectional data. - Data has different measurement levels from nominal to ratio, where higher levels support more complex statistical analysis.

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Hassan Al-eid
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99 views5 pages

Chapter 1 PDF

This document provides an overview of key concepts in business statistics including: - Descriptive statistics is used to collect, summarize, and present quantitative and qualitative data, while inferential statistics allows conclusions to be drawn about populations based on samples. - There are various data sources and collection methods including primary data from surveys/experiments and secondary data from previous studies. - Data can be qualitative (categorical) or quantitative (discrete or continuous), and can be organized longitudinally as time series data or laterally as cross-sectional data. - Data has different measurement levels from nominal to ratio, where higher levels support more complex statistical analysis.

Uploaded by

Hassan Al-eid
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Chapter One

Introduction and Data Collection


Chapter Goals:
After completing this chapter, you should be able to:
How Statistics is used in business.
The sources of data used in business.
The types of data used in business
Describe key data collection methods
Know key definitions:
Population vs. Sample
Primary vs. Secondary data types
Qualitative vs. Qualitative data Time Series vs. Cross-Sectional data
Explain the difference between descriptive and inferential statistics

1.1 & 1.2 : Why Learn Business Statistics & Statistics in the Business World.

Statistics:
A collection of tools and techniques that are used to convert data into meaningful
information for decision makers.
Statistics provides a way to understanding and then reducing but not eliminating the
variation that part of any decision making process, and also can tell you the know risks
associated with making a decision.
In the business world, Statistics has four important applications
1. to summarize data.
2. to draw conclusions from the data.
3. to make reliable forecasts about business activities.
4. to improve business processes

Tools of Business Statistics:


The field of statistics consists of two branches
1. Descriptive statistics:
Collecting, summarizing, presenting, and describing data numerically.
Collect data
e.g. Survey, Observation, Experiments
Present data
e.g. Charts and graphs
Characterize data
n

x
e.g. Sample mean =

2. Inferential statistics:

i 1

Drawing conclusions and/or making decisions concerning a population based only on


sample data
Tools that allow a decision maker to reach a conclusion about a population of data
based on a subset of data from the population, there are two catagories of statistical
inference tools: estimation and hypothesis testing
Estimation
Estimate the population mean weight using the sample mean weight
Hypothesis Testing
Use sample evidence to test the claim that the population mean weight is
120 pounds
1

1.3: Populations and Samples and sampling techniques:


( Basic Vocabulary Of Statistics)
Objective:
to defined the population, the sample, parameter and statistics .
Population: is the set of all items or individuals of interest. i.e. A population is the entire
collection of things under consideration.
A parameter is a summary measure computed to describe a
characteristic of the population
Examples:All likely voters in the next election.
All parts produced today.
All sales receipts for November.
All students in this section.

Sample is a subset of the population. i.e. 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
Examples:1000 voters selected at random for interview
A few parts selected for destructive testing
Every 100th receipt selected for audit
Census: an enumeration of the entire of measurements taken
from the whole population.

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
Less error than census.
Note:
1. Ay numarical measures ( average, variance ) that are computed from an entire
population are called parameters.
2. Ay numarical measures ( average, variance ) that are computed from a sample
are called statistics.

1.4: Data collection:


Objective:
to defined the methods of collecting data.
Data Sources
Data sources are classified as:
1. Primary Data Collection: the data that obtained by
a. observations,
b. survey
c. or by experimentations.
2. Secondary Data Compilation: any data from previous study

Note:
1. when te data collector is the one using the data for analysis, the source is primary
2. when the person performing the statistical analysis is not the data collector, the
source is secondary
2

Data collection methods:


There are many methods to collecting data. the moest useful methods are:
1. Experiments:
any process that generate data as its outcome.
Experemental design: it is a plan for performing an experement in which variable of
interest is defined, the variable can measured or observed.
2. Written survey:
It is most frequentlly used method. It can be low cost, effective means of
collecting data.
3. Direct observation and personal interviews: (common tool for data collection in business)
it is method to collecting data, any interview can be
a. Structured interview: the questions are scripted (written).
b. Unstructured interview: interviews with different questions based on the
responses.
Example: studying human behavior about a new product on the market
4. Data distributed by an organization or an individual

Types of Questions
A written survey can contain
1. Closed end questions:
questions that require the respondents to select from a short list of defined
questions.
Example: What is your Major: __business__liberal arts __science
__other
2. Open - end Questions:
Respondents are free to respond with any value, words, or statement
Example: What did you like best about this course?
3. Demographic Questions:
Questions about the respondents personal characteristics.
Example: Gender: __Female __ Male

1.5: Data type and data Measurement Levels:


Objective:
1. To defined types of data.
2. to defined the data measurement levels.
Data Types
1. Qualitative data (Categorical data): Defined categories.
Marital Status, Political Party, Eye Color,
2. Quantitative data (Numerical data).
It is two parts
a. Discrete: Counted items
number of children, Defects per hour,
b. Contenuous: Measured characteristics
Weight,
Sales (in $1000s)
Voltage,
2003
2004
2005
2006
3. Time Series Data (Ordered data
Atlanta
435
460
475
490
values observed over time).
4. Cross Section Data (Data Boston
320
345
375
395
values observed at a fixed point Cleveland
405
390
410
395
in time).
Denver
260
270
285
280
Cross Section
3

Time Series

Data Measurement Levels:


There are typically four levels of measurement that are defined:
1. Nominal: Lowest Level
We can do basic Aanalysis
ategorical Codes
ID Numbers
Category Names
2. Ordinal: Higher Level
We can do Mid-level Analysis
Rankings
Ordered Categories
3. Interval
4. Ratio: Highest Level
We can do complete analysis
Measurements

In nominal measurement the numerical values just "name" the attribute uniquely. No
ordering (ranking) of the cases is implied.

In ordinal measurement the attributes can be rank-ordered. Here, distances between


attributes do not have any meaning.

For example, on a survey you might code Educational Attainment as 0=less than H.S.;
1=some H.S.; 2=H.S. degree; 3=some college; 4=college degree; 5=post college. In this
measure, higher numbers mean more education. But is distance from 0 to 1 same as 3 to 4?
Of course not. The interval between values is not interpretable in an ordinal measure.

In interval measurement the distance between attributes does have meaning but does
not involve a true zero opint.

For example, when we measure temperature (in Fahrenheit), the distance from 30-40 is
same as distance from 70-80. The interval between values has meaning. Because of this, it
makes sense to compute an average of an interval variable, where it doesn't make sense to
do so for ordinal scales. But note that in interval measurement ratios don't make any sense 80 degrees is not twice as hot as 40 degrees (although the attribute value is twice as large).

Finally, in ratio measurement there is always an absolute zero that is meaningful. This
means that you can construct a meaningful fraction (or ratio) with a ratio variable.
Weight, height, age, or salary are ratio variable. In applied social research most "count"
variables are ratio,

for example, the number of clients in past six months. Why? Because you can have zero
clients and because it is meaningful to say that "...we had twice as many clients in the past
six months as we did in the previous six months."
Note:
1. the difference between ordinal and nominal is in ordinal it contains both (=) and (>)
relationship, but nominal only contain (=) relationship.
2. the interval data has ordinal properties (> or < or =).
3. an interval data does not have a true zero.
4. the ratio data has all charasteristics of interval data but also have a true zero
meaning (zero means nothing)

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