Business statistics chapter 1/ lecture 4

1. What is business statistics?

A collection of procedures and techniques used to convert data into
meaningful information in a business environment
1. Types of statistical procedures:
Descriptive Statistics
Procedures and techniques designed to describe data
Inferential Statistics
Tools and techniques that help decision makers to draw inferences from a set
of data
2. Procedures for collecting data
Experiment, telephone surveys, written questionnaires, surveys, direct
observations and personal interviews
3. What is Experiment?
A process that produces a single outcome whose result cannot be predicted
with certainty.
4. Telephone surveys include close end and demographic questions
5. What is close end question?
Responded can select from a short list of defined choices
6. What is demographic questions?
Questions about respondents characteristics, backgrounds and attributes.
7. Written survey can be open end and close end. Open-end questions are
selected by respondents free of choices.
8. Data collection techniques advantages and disadvantages:
Advantages: For experiment provide controls and preplanned objectives
For telephone surveys timely and relatively inexpensive
For questionnaires/surveys inexpensive, can expand length, can
use open end question
Disadvantages: For experiment costly time consuming requires planning
For telephone surveys poor reputation, limited scope and
length
For questionnaires and surveys potential observer bias and
costly
9. What is the data collection issues?
Data accuracy, interviewer bias (interjecting questions), nonresponsive bias
(unreturned surveys, for example, mail surveys), selection bias (the way of
subjects), observer bias (observers different views), measurement error,
internal validity, external validity.
10.Populations, samples and sampling techniques
11.What is sample?
A subset of the population
12.What is population?
The set of all objects or individuals of interest or the measurements obtained
from all objects or individuals of interest
13.What is census?
An enumeration of the entire set of measurements taken from the whole
population
14.What is parameters and statistics?
Parameter: Descriptive numerical measures, such as an average or a proportion,
that are computed from an entire population
Business statistics chapter 1/ lecture 4

Statistics: Corresponding measures computed for a sample.

15.What are the sampling techniques?

a) Statistical
Sampling methods that use selection techniques based on chance selection
b) Nonstatistical
Methods of selecting samples that use convenience, judgment, or other non-
chance processes
16.Types of non statistical sampling:
a) Convenience: Collected in the most convenient manner for the researcher
(there is no attempt to randomize the selection of the selected items
b) Judge: Based on judgments about who in the population would be most
likely to provide the needed information
c) Ratio
17.What is Statistical sampling and types of this?
Allows every item in the population to
have a known or calculable chance of being included in the sample

a. simple random sampling

b. stratified random sampling
c. systematic sampling
d. cluster sampling

18.What is 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.
19.What is stratified 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
20.What is systematic random sampling?
Decide on sample size: n
Divide ordered (e.g., alphabetical) 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. For example past range=population
size/sample size
21.What is Cluster sampling
Divide population into several clusters, each representative of the
population, for example population divided by 16, and then choosing
randomly 4 of them

22.Data types and data measurement levels

Quantitative: measurements whose values are inherently numerical
Business statistics chapter 1/ lecture 4

For example: discrete (e.g. number of children) continuous (e.g. weight, volume)
Qualitative: data whose measurement scale is inherently categorical (e.g. marital
status, political affiliation, eye color)
Time-Series: a set of consecutive data values observed at successive points in time
(e.g. stock price on daily basis for a year)
Cross-Sectional: A set of data values observed at a fixed point in time (e.g. bank
data about its loan customers)
23.What is descriptive statistics
The procedures and techniques that comprise business statistics include
those specially designed to describe data, such as charts, graphs, numerical
measures
24.What is Arithmetic mean or average?
Average=sum of all data values/number of data values
25.What is the role of business statistics
Convert data to meaningful information
26.What is statistical inference procedures?
Allow decision maker to reach a conclusion about a set of data based on a
subset of that data. Has 2 primary categories: estimation and hypothesis
testing
Estimation: formed by looking closely at a subset of the larger data set.
27.Data measurement levels: nominal data: 1)lowest level basic analysis and
categorical codes and ID numbers 2) ordinal data higher level mid level
analysis ranking ordered categories 3) ratio/interval data measurement and
highest level

Self questions/answers
1) Indicate whether the data is cross sectional or time series
Quarterly unemployment rate-time-series
Unemployment rates by state-cross sectional
Monthly sales-time series
Employment satisfaction data for company-cross sectional
2) Indicate data measurement level:
a. Product rating-ordinal
b. Home ownership-nominal
c. College gpa-ratio
d. Marital status-nominal