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