Statistics for Managers using Microsoft Excel

6th Global Edition

Chapter 1 Introduction

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Learning Objectives
In this chapter you learn:

How business uses statistics The basic vocabulary of statistics

How to use Microsoft Excel with this book

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Why Learn Statistics

Make better sense of the world

Make better business decisions

Internet articles / reports Magazine articles Newspaper articles Television & radio reports

Business memos Business research Technical journals Technical reports

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In Business, Statistics Has Many Important Uses

To summarize business data

To draw conclusions from business data To make reliable forecasts about business activities To improve business processes

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Two Different Branches Of Statistics Are Used In Business

Statistics
The branch of mathematics that transforms data into useful information for decision makers.

Descriptive Statistics
Collecting, summarizing, presenting and analyzing data

Inferential Statistics
Using data collected from a small group to draw conclusions about a larger group

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These Two Branches Are Used In The Important Activities

To summarize business data

Descriptive methods used to create charts & tables

Inferential methods used to reach conclusions about a large group based on data from a smaller group

To draw conclusions from business data

To make reliable forecasts about business activities

Inferential methods used to develop, quantify, and improve the accuracy of predictive models Involves managerial approaches like Six Sigma
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To improve business processes

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Descriptive Statistics

Collect data

e.g., Survey

Present data

e.g., Tables and graphs

Characterize data

e.g., The sample mean

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Inferential Statistics

Estimation

e.g., Estimate the population mean weight using the sample mean weight
e.g., Test the claim that the population mean weight is 120 pounds

Hypothesis testing

Drawing conclusions about a large group of individuals based on a smaller group.

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Basic Vocabulary of Statistics

VARIABLES Variables are a characteristics of an item or individual and are what you analyze when you use a statistical method. DATA Data are the different values associated with a variable. OPERATIONAL DEFINITIONS Data values are meaningless unless their variables have operational definitions, universally accepted meanings that are clear to all associated with an analysis.

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Basic Vocabulary of Statistics

POPULATION A population consists of all the items or individuals about which you want to draw a conclusion. The population is the large group SAMPLE A sample is the portion of a population selected for analysis. The sample is the small group PARAMETER A parameter is a numerical measure that describes a characteristic of a population. STATISTIC A statistic is a numerical measure that describes a characteristic of a sample.
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Population vs. Sample

Population Sample

Measures used to describe the population are called parameters

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Measures used to describe the sample are called statistics

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This Book Is Organized To Show The Four Uses Of Statistics

To summarize business data (Chapters 2 & 3)

To draw conclusions from business data (Chapters 4 12) To make reliable forecasts about business activities (Chapters 13 16) To improve business processes (Chapter 18)
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Chapter Summary
In this chapter, we have Introduced the basic vocabulary of statistics and the role of statistics in turning data into information to facilitate decision making Examined the use of statistics to:
Summarize data Draw conclusions from data

Make reliable forecasts

Improve business processes

Examined descriptive vs. inferential statistics

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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

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