Introduction and Data Collection
Statistics for Managers Using Microsoft Excel, 5e © 2008 Pearson Prentice-Hall, Inc. Chap 1-1
Learning Objectives
In this chapter, you will learn:
How statistics is used
The sources of data
The types of data used
The basics of Microsoft Excel
Statistics for Managers Using Microsoft Excel, 5e © 2008 Pearson Prentice-Hall, Inc. Chap 1-2
Why Study Statistics?
Decision Makers Use Statistics To:
Present and describe data and information properly
Draw conclusions about large populations, using
information collected from samples
Make reliable forecasts
Improve processes
Statistics for Managers Using Microsoft Excel, 5e © 2008 Pearson Prentice-Hall, Inc. Chap 1-3
Types of Statistics
Statistics
The branch of mathematics that transforms data
into useful information for decision makers.
Descriptive Statistics Inferential Statistics
Collecting, summarizing, and Drawing conclusions and/or
describing data making decisions concerning a
population based only on sample
data
Statistics for Managers Using Microsoft Excel, 5e © 2008 Pearson Prentice-Hall, Inc. Chap 1-4
Descriptive Statistics
Collect data
ex. Survey
Present data
ex. Tables and graphs
Characterize data
X i
ex. Sample mean = n
Statistics for Managers Using Microsoft Excel, 5e © 2008 Pearson Prentice-Hall, Inc. Chap 1-5
Inferential Statistics
Estimation
ex. Estimate the population
mean weight using the
sample mean weight
Hypothesis testing
ex. Test the claim that the
population mean weight is
120 pounds
Drawing conclusions and/or making decisions
concerning a population based on sample results.
Statistics for Managers Using Microsoft Excel, 5e © 2008 Pearson Prentice-Hall, Inc. Chap 1-6
Basic Vocabulary of Statistics
VARIABLE
A variable is a characteristic of an item or individual.
DATA
Data are the different values associated with a variable.
OPERATIONAL DEFINITIONS
Variable values are meaningless unless their variables have
operational definitions, universally accepted meanings that are
clear to all associated with an analysis.
Statistics for Managers Using Microsoft Excel, 5e © 2008 Pearson Prentice-Hall, Inc. Chap 1-7
Basic Vocabulary of Statistics
POPULATION
A population consists of all the items or individuals about which
you want to draw a conclusion.
SAMPLE
A sample is the portion of a population selected for analysis.
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.
Statistics for Managers Using Microsoft Excel, 5e © 2008 Pearson Prentice-Hall, Inc. Chap 1-8
Population vs. Sample
Population Sample
Measures used to describe the Measures computed from
population are called parameters sample data are called statistics
Statistics for Managers Using Microsoft Excel, 5e © 2008 Pearson Prentice-Hall, Inc. Chap 1-9
Why Collect Data?
A marketing research analyst needs to assess the
effectiveness of a new television advertisement.
A pharmaceutical manufacturer needs to determine
whether a new drug is more effective than those currently
in use.
An operations manager wants to monitor a manufacturing
process to find out whether the quality of product being
manufactured is conforming to company standards.
An auditor wants to review the financial transactions of a
company in order to determine whether the company is in
compliance with generally accepted accounting
principles.
Statistics for Managers Using Microsoft Excel, 5e © 2008 Pearson Prentice-Hall, Inc. Chap 1-10
Sources of Data
Primary Sources: The data collector is the one using
the data for analysis
Data from a political survey
Data collected from an experiment
Observed data
Secondary Sources: The person performing data
analysis is not the data collector
Analyzing census data
Examining data from print journals or data published on
the internet.
Statistics for Managers Using Microsoft Excel, 5e © 2008 Pearson Prentice-Hall, Inc. Chap 1-11
Types of Variables
Categorical (qualitative) variables have
values that can only be placed into
categories, such as “yes” and “no.”
Numerical (quantitative) variables have
values that represent quantities.
Statistics for Managers Using Microsoft Excel, 5e © 2008 Pearson Prentice-Hall, Inc. Chap 1-12
Types of Variables
Data
Categorical Numerical
Examples:
Marital Status
Political Party
Discrete Continuous
Eye Color
Examples: Examples:
(Defined categories)
Number of Children Weight
Defects per hour Voltage
(Counted items) (Measured
characteristics)
Statistics for Managers Using Microsoft Excel, 5e © 2008 Pearson Prentice-Hall, Inc. Chap 1-13
Levels of Measurement
A nominal scale classifies data into distinct
categories in which no ranking is implied.
Categorical Variables Categories
Personal Computer Yes / No
Ownership
Type of Stocks Owned Growth Value Other
Internet Provider Microsoft Network / AOL
Statistics for Managers Using Microsoft Excel, 5e © 2008 Pearson Prentice-Hall, Inc. Chap 1-14
Levels of Measurement
An ordinal scale classifies data into distinct
categories in which ranking is implied
Categorical Variable Ordered Categories
Student class designation Freshman, Sophomore, Junior,
Senior
Product satisfaction Satisfied, Neutral, Unsatisfied
Faculty rank Professor, Associate Professor,
Assistant Professor, Instructor
Standard & Poor’s bond ratings AAA, AA, A, BBB, BB, B, CCC, CC,
C, DDD, DD, D
Student Grades A, B, C, D, F
Statistics for Managers Using Microsoft Excel, 5e © 2008 Pearson Prentice-Hall, Inc. Chap 1-15
Levels of Measurement
An interval scale is an ordered scale in which the
difference between measurements is a meaningful
quantity but the measurements do not have a true
zero point.
A ratio scale is an ordered scale in which the
difference between the measurements is a
meaningful quantity and the measurements have a
true zero point.
Statistics for Managers Using Microsoft Excel, 5e © 2008 Pearson Prentice-Hall, Inc. Chap 1-16
Interval and Ratio Scales
Statistics for Managers Using Microsoft Excel, 5e © 2008 Pearson Prentice-Hall, Inc. Chap 1-17
Microsoft Excel Terms
When you use Microsoft Excel, you place the data you
have collected in worksheets.
The intersections of the columns and rows of worksheets
form boxes called cells.
If you want to refer to a group of cells that forms a
contiguous rectangular area, you can use a cell range.
Worksheets exist inside a workbook, a collection of
worksheets and other types of sheets, including chart
sheets that help visualize data.
Statistics for Managers Using Microsoft Excel, 5e © 2008 Pearson Prentice-Hall, Inc. Chap 1-18
Designing Effective Worksheets
You should associate column cell ranges with variables.
You do not skip any rows as you enter data, so column
cell ranges will never contain any empty cells.
Place all the variables on a worksheet that is separate
from the worksheet containing the statistical results.
Allow the user to be able to explicitly see the chain of
calculations from the starting data.
Create two copies of your worksheets: one optimized for
the screen, the other for the printer.
Statistics for Managers Using Microsoft Excel, 5e © 2008 Pearson Prentice-Hall, Inc. Chap 1-19
Chapter Summary
In this chapter, we have
Reviewed why a manager needs to know statistics
Introduced key definitions:
Population vs. Sample
Primary vs. Secondary data types
Categorical vs. Numerical data
Examined descriptive vs. inferential statistics
Reviewed data types and measurement levels
Discussed Microsoft Excel terms and tips
Statistics for Managers Using Microsoft Excel, 5e © 2008 Pearson Prentice-Hall, Inc. Chap 1-20
