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Lecture 1

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11 views

Lecture 1

Uploaded by

Ana Munteanu
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 PPT, PDF, TXT or read online on Scribd
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Statistics for Business

Lecture 1

Why Study Statistics?

Prof. Miruna Mazurencu Marinescu Pele, Ph.D, MBA Chap 1-1


Rules and regulations

 Exam 60% of the final grade- see Syllabus;


 For face to face classes only: Handouts should
be printed in advance and brought in the class,
both lectures and seminars;
 Sources of information;
 Stats for fun.

Prof. Miruna Mazurencu Marinescu Pele, Ph.D, MBA Chap 1-2


Chapter Goals
After completing this chapter, you should be
able to:
 Explain how decisions are often based on incomplete
information
 Explain key definitions:
 Population vs. Sample
 Parameter vs. Statistic
 Descriptive vs. Inferential Statistics
 Describe random sampling
 Explain the difference between Descriptive and
Inferential statistics

Prof. Miruna Mazurencu Marinescu, Ph.D, MBA Chap 1-3


Dealing with Uncertainty

Everyday decisions are based on incomplete


information

Consider:
 The price of IBM stock will be higher in six months
than it is now.

 If the federal budget deficit is as high as predicted,


interest rates will remain high for the rest of the year.

Prof. Miruna Mazurencu Marinescu, Ph.D, MBA Chap 1-4


Dealing with Uncertainty
(continued)

Because of uncertainty, the statements


should be modified:

 The price of IBM stock is likely to be higher in six


months than it is now.

 If the federal budget deficit is as high as predicted, it


is probable that interest rates will remain high for the
rest of the year.

Prof. Miruna Mazurencu Marinescu, Ph.D, MBA Chap 1-5


Key Definitions

 A population is the collection of all items of interest or


under investigation
 N represents the population size
 A sample is an observed subset of the population
 n represents the sample size

 A parameter is a specific characteristic of a population


 A statistic is a specific characteristic of a sample

Prof. Miruna Mazurencu Marinescu, Ph.D, MBA Chap 1-6


Population vs. Sample

Population Sample

a b cd b c
ef gh i jk l m n gi n
o p q rs t u v w o r u
x y z y

Values calculated using Values computed from


population data are called sample data are called
parameters statistics
Prof. Miruna Mazurencu Marinescu, Ph.D, MBA Chap 1-7
Examples of Populations

 Names of all registered voters in the United


States
 Incomes of all families living in Daytona Beach
 Annual returns of all stocks traded on the New
York Stock Exchange
 Grade point averages of all the students in
your university

Prof. Miruna Mazurencu Marinescu, Ph.D, MBA Chap 1-8


Random Sampling

Simple random sampling is a procedure in which

 each member of the population is chosen strictly by


chance,
 each member of the population is equally likely to be

chosen,
and
 every possible sample of n objects is equally likely to

be chosen

The resulting sample is called a random sample

Prof. Miruna Mazurencu Marinescu, Ph.D, MBA Chap 1-9


Descriptive and Inferential Statistics

Two branches of statistics:


 Descriptive statistics
 Collecting, summarizing, and processing data to
transform data into information
 Inferential statistics
 provide the bases for predictions, forecasts, and
estimates that are used to transform information into
knowledge

Prof. Miruna Mazurencu Marinescu, Ph.D, MBA Chap 1-10


Descriptive Statistics

 Collect data
 e.g., Survey
 Present data
 e.g., Tables and graphs
 Summarize data
X i
 e.g., Sample mean = n

Prof. Miruna Mazurencu Marinescu, Ph.D, MBA Chap 1-11


Inferential Statistics
 Estimation
 e.g., Estimate the population
mean weight using the sample
mean weight
 Hypothesis testing
 e.g., Test the claim that the
population mean weight is 120
pounds

Inference is the process of drawing conclusions or


making decisions about a population based on
sample results
Prof. Miruna Mazurencu Marinescu, Ph.D, MBA Chap 1-12
The Decision Making Process
Decision

Knowledge
Experience, Theory,
Literature, Inferential
Statistics, Computers
Information
Descriptive Statistics,
Begin Here: Probability, Computers
Data
Identify the
Problem

Prof. Miruna Mazurencu Marinescu, Ph.D, MBA Chap 1-13


Chapter Summary

 Reviewed incomplete information in decision


making
 Introduced key definitions:
 Population vs. Sample
 Parameter vs. Statistic
 Descriptive vs. Inferential statistics
 Described random sampling
 Examined the decision making process

Prof. Miruna Mazurencu Marinescu, Ph.D, MBA Chap 1-14

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