What Is Statistics?
When you have completed
this chapter, you will be
LO 1-1 List ways that
1 Organize data into a frequency distribution.
statistics is used.
LO 1-2 Know the differences
2 Portray a frequency distribution in a histogram, frequency between descriptive and
polygon, and cumulative freinferential statistics.
LO 1-3 Understand the differ3 Present data a sample and a
ences between using such
graphical techniques as line
charts, bar charts, and pie
charts. Explain the difference
between qualitative and
LO 1-5 Compare discrete and
LO 1-6 Recognize the levels
of measurement in data.
Barnes & Noble recently began selling an electronic book reader called the Nook Color. With this device, you can download from a selection of over two million ebooks, newspapers, and magazines. It displays downloaded materials in full color. Assume you know the number of Nook Color units sold each day for the last month at the Barnes & Noble store at the Market Commons Mall in Riverside, California. Describe a condition in which this information could be considered a sample. Illustrate a second situation in which the same data would be regarded as a population. (See Exercise 11 and LO 1-3.)
More than 100 years ago, H. G. Wells, an English author and historian, suggested that one day quantitative reasoning will be as necessary for effective citizenship as the ability to read. He made no mention of business because the Industrial Revolution was just beginning. Mr. Wells could not have been more correct. While “business experience,” some “thoughtful guesswork,” and “intuition” are key attributes of successful managers, today’s business problems tend to be too complex for this type of decision making alone.
One of the tools used to make decisions is statistics. Statistics is used not only by businesspeople; we all also apply statistical concepts in our lives. For example, to start the day you turn on the shower and let it run for a few moments. Then you put your hand in the shower to sample the temperature and decide to add more hot water or more cold water, or determine that the temperature is just right and then enter the shower. As a second example, suppose you are at Costco Wholesale and wish to buy a frozen pizza. One of the pizza makers has a stand, and they offer a small wedge of their pizza. After sampling the pizza, you decide whether to purchase the pizza or not. In both the shower and pizza examples, you make a decision and select a course of action based on a sample. Businesses face similar situations. The Kellogg Company must ensure that the mean amount of Raisin Bran in the 25.5-gram box meets label specifications. To do so, it sets a “target” weight somewhat higher than the amount specified on the label. Each box is then weighed after it is filled. The weighing machine reports a distribution of the content weights for each hour as well as the number “kicked-out” for being under the label specification during the hour. The Quality Inspection Department also randomly selects samples from the production line and checks the quality of the product and the weight of the contents of the box. If the mean product weight differs significantly from the target weight or the percent of kick-outs is too large, the process is adjusted.
As a student of business or economics, you will need basic knowledge and skills to organize, analyze, and transform data and to present the information. In this text, we will show you basic statistical techniques and methods that will develop your ability to make good personal and business decisions.
statistics is used.
1.2 Why Study Statistics?
Examples of why we
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