Ch01 - Statistics, Data & Statistical Thinking

Topics: Statistics, Data set, Data Pages: 24 (1101 words) Published: October 13, 2014
Chapter 1
Statistics & Data
I

Applications in Business and Economics

I

Descriptive Statistics

I

Inferential Statistics

Statistics

Data overload!
I need help!

Slide 1

Applications in
Business and Economics
I

I

Accounting
Public accounting firms use statistical
sampling procedures when conducting
audits for their clients.
Economics
Economists use statistical information
in making forecasts about the future of
the economy or some aspect of it.

Statistics

Slide 2

Applications in
Business and Economics
I

I

Marketing
Electronic point-of-sale scanners at
retail checkout counters are used to
collect data for a variety of marketing
research applications.
Production
A variety of statistical quality
control charts are used to monitor
the output of a production process.

Statistics

Slide 3

Applications in
Business and Economics
 Finance
Financial advisors use price-earnings ratios and
dividend yields to guide their investment
recommendations.

Statistics

Slide 4

Statistical Methods

St i i
at st cal
M et
hods

D escri i
pt ve
St i i
at st cs

Statistics

Inf
erent al
i
St i i
at st cs

Slide 5

What Is Statistics?
I

I

Statistics is the science of data. It involves collecting,
classifying, summarizing, organizing, analyzing, and
interpreting numerical information.
• Descriptive Statistics utilizes numerical and
graphical methods to look for patterns in the data
set, to summarize the information revealed in the
data set, and to present the information in the
convenient form
• Inferential Statistics utilizes sample data to make
estimates, decisions, predictions, or other
generalizations about the population that the
sample has come from
Let’s see an example

Statistics

Slide 6

Example: Hudson Auto Repair
The manager of Hudson Auto
would like to have a better
understanding of the cost
of parts used in the engine
tune-ups performed in the
shop. She examines 50
customer invoices for tune-ups. The costs of parts,
rounded to the nearest dollar, are listed on the next
slide.

Statistics

Slide 7

Example: Hudson Auto Repair
I

Sample of Total Parts Cost ($) for 50 Tune-ups
91
71
104
85
62

Statistics

78
69
74
97
82

93
72
62
88
98

57
89
68
68
101

75
66
97
83
79

52
75
105
68
105

99
79
77
71
79

80
75
65
69
69

97
72
80
67
62

62
76
109
74
73

Slide 8

Tabular Summary:
Frequency and Percent Frequency
Total Parts
Cost ($) Frequency
2
50-59
13
60-69
16
70-79
7
80-89
7
90-99
5
100-109
50

Statistics

Percent
Frequency
4
26
(2/50)100
32
14
14
10
100

Slide 9

Graphical Summary: Histogram
Tune-up Total Parts Cost
18
16

Frequency

14
12
10
8
6
4
2

Statistics

Total Parts
5059 6069 7079 8089 9099 100-110 Cost ($)
Slide 10

Numerical Descriptive Statistics
 The most common numerical (i.e., frequently used)
descriptive statistic is the average (or mean).
 Hudson’s average total cost of parts, based on the 50
tune-ups studied, is $79 (found by summing the
50 cost values and then dividing by 50).

Statistics

Slide 11

Inferential Statistics
1.

2.

Involves
• Estimation
• Hypothesis
Testing

Popul i
at on?

Purpose
• Make decisions about
population characteristics

Statistics

Slide 12

Statistical Inference
Population

 the set of all elements of interest in a
particular study

Sample  a subset of the population
Statistical inference  the process of using data obtained from a sample to make estimates
and test hypotheses about the
characteristics of a population
Census  collecting data for a population
Sample survey  collecting data for a sample

Statistics

Slide 13

Process of Statistical Inference
1. Population

consists of all
tune-ups. Average
cost of parts is
unknown.

2. A sample of 50...
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