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Introduction To Business Statistics: Data, Types of Variables, Levels of Measurement, Data Sources, Types of Statistics

This document provides an introduction to business statistics including key concepts like data, variables, levels of measurement, data sources, and types of statistics. It defines data and different types of variables like categorical, quantitative, discrete, and continuous variables. It also describes different levels of measurement for variables including nominal, ordinal, interval, and ratio scales. The document outlines common data sources like internal vs external and primary vs secondary sources. It concludes by explaining the role of statistics in business for analyzing relationships, forecasting, presenting information, and drawing conclusions from samples.

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Hillary Mtandwa
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29 views16 pages

Introduction To Business Statistics: Data, Types of Variables, Levels of Measurement, Data Sources, Types of Statistics

This document provides an introduction to business statistics including key concepts like data, variables, levels of measurement, data sources, and types of statistics. It defines data and different types of variables like categorical, quantitative, discrete, and continuous variables. It also describes different levels of measurement for variables including nominal, ordinal, interval, and ratio scales. The document outlines common data sources like internal vs external and primary vs secondary sources. It concludes by explaining the role of statistics in business for analyzing relationships, forecasting, presenting information, and drawing conclusions from samples.

Uploaded by

Hillary Mtandwa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Introduction to business

statistics
Data, types of variables, levels of
measurement, data sources,types of
statistics
Data
• Data
Are the observed values of a variable
Specific observations of measured numbers
Data consist of individual values (observations or
measurements) on an issue.
• Individual data values convey no useful or
usable information
• Information: processed and summarized data
yielding facts and ideas
Types of variables

• Categorical/qualitative
• Categorical data
Data representing categories of outcomes of a random variable
Categorical data are number-like codes arbitrarily assigned to different
category labels
The codes have no numerical properties other than to distinguish one
category from another
The coded values cannot be manipulated using normal arithmetic
operations
Example:
• Gender
• Managerial level
• Denomination
Types of variables
• Quantitative/Numeric data
Are real numbers that can be manipulated using
arithmetic operations to produce meaningful
results
Example
• Number of company employees
• Hourly rate for cleaners
Types of variables
– Discrete (numeric and categorical)
• Discrete data consist of whole numbers (integers) only
• Example
– Number of telephone calls per day
– Management level
– Continuous
• Numeric data that can validly take on any value in an
interval.
• Example
– Age of employee
– Time to process a claim
– Distance from home to work
Levels of measurements
• Scale of measurement (Nominal, ordinal,
interval and ratio)
Nominal
• Is a sub-classification of categorical data
• The categories are of equal importance
• No response category is more, or less important than any
other category
• Example
– Gender
– Denomination
– Occupation
Levels of measurements
– Ordinal
• data that can be put into an ordered sequence
• There is an implied ranking between the categories
• Each consecutive category possesses either more or less,
than the previous category of a given characteristic
• The coded values only indicate the order in which the
categories appear
• Example:
– Ranking products from most preferred to least preferred
– Ranking product attributes from most important to least
important
Levels of measurements
Interval-scaled data
• Interval data is measured along a scale in which each position is
equidistant from one another.
• This allows for the distance between two pairs to be equivalent in some
way.
• Interval-scaled data has no absolute starting point of zero
• Interval data cannot be multiplied or divided
• Statistical techniques can be applied to interval-scaled data since it
possesses most of the numeric properties
• Examples
– Very poor to very good
– Very dissatisfied to very satisfied
– Strongly disagree to strongly agree
Levels of measurements
Ratio-scaled data
• Numeric data values are derived from direct
measurement where there is an absolute origin of zero
• Such data values can be any valid number on the
number line
• Example
– Age of an employee
– The zero origin permits relative comparisons through ratios,
(e.g. 6 is twice as great as 3)
– Weight of an employee
Data sources

• Internal vs External data sources


– Data from within an organization generated
during the normal course of business activities
and is relatively inexpensive to gather
– Examples
• Financial data
• Production data
• Human resource data
• Marketing data
Data sources

• External sources
– Data available from outside an organization
– Example
• Data from
 private research institutions
 Trade associations
 Government bodies
Data sources

• Primary vs secondary data sources


• Primary data
– Data captured at the point where it is generated (i.e. captured
for the first time and with a specific purpose in mind)
 Example
• Internal data sources
• Surveys
 Advantages
 Relevant to the problem at hand
 Control over data accuracy
 Disadvantages
 Time consuming to collect
 expensive to collect
Data sources
• Secondary data sources
 Data collected and processed by others for a purpose
other than the problem at hand
 Advantages
 Already exists
 Access time is relatively short
 Less expensive to acquire than primary data
 Disadvantages
 May not be problem specific
 Maybe outdated
 May be difficult to assess data accuracy
Role of statistics in business

Statistics is a way to get information from data


Analyzing relationships
Forecasting
Presenting and describing information
Drawing conclusions about large populations
based only on information obtained from
samples
Determining if the conclusions reported are
reasonable
Common statistical terminology and applications

• Population
– The entire set of individuals or objects of interest or the measurements
obtained from all individuals or objects of interest
• Sample
– A portion, or part of the population of interest
• Parameter
– Summary measure that is computed to describe a characteristic of an
entire population
– A descriptive measure computed from an entire population of data
• Statistic
– A summary measure that is computed to describe a characteristic from
only a sample of the population.
– A descriptive measure computed from a sample of data
Types of statistics

Descriptive statistics
• Methods of organizing, summarizing and presenting data
in an informative way
• Include graphical and numerical procedures that
summarize and process data and are used to transform
data to information
Inferential statistics
• The methods used to determine something about a
population on the basis of a sample
• Provide the bases for predictions, forecasts, and estimates
that are used to transform information to knowledge

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