Bruce L.

Bowerman
Miami University

Richard T. O’Connell
Miami University

Emily S. Murphree
Miami University

J. B. Orris
Butler University

Essentials of Business Statistics

FIFTH EDITION

with major contributions by

Steven C. Huchendorf
University of Minnesota

Dawn C. Porter
University of Southern California

Patrick J. Schur
Miami University
 Brief Table of Contents
Chapter 1 2 Chapter 11 406
An Introduction to Business Statistics Experimental Design and Analysis of Variance

Chapter 2 34 Chapter 12 440

Descriptive Statistics: Tabular and Graphical Chi-Square Tests
Methods
Chapter 13 464
Chapter 3 98 Simple Linear Regression Analysis
Descriptive Statistics: Numerical Methods
Chapter 14 524
Chapter 4 150 Multiple Regression and Model Building
Probability
Appendix A 598
Chapter 5 184 Statistical Tables
Discrete Random Variables
Answers to Most Odd-Numbered
Chapter 6 220 Exercises 619
Continuous Random Variables
References 626
Chapter 7 258
Sampling and Sampling Distributions Photo Credits 628

Chapter 8 290 Index 629

Confidence Intervals
Chapter 15 On Website
Chapter 9 326 Process Improvement Using Control Charts
Hypothesis Testing

Chapter 10 370
Statistical Inferences Based on Two Samples
Table of Contents
Chapter 1 Appendix 3.1 ■ Numerical Descriptive Statistics Using
Excel 142
An Introduction to Business Statistics
Appendix 3.2 ■ Numerical Descriptive Statistics Using
1.1 Data 3
■
MegaStat 145
1.2 Data Sources 5
■
Appendix 3.3 ■ Numerical Descriptive Statistics Using
1.3 Populations and Samples 7
■ MINITAB 147
1.4 Three Case Studies That Illustrate Sampling
■
and Statistical Inference 8 Chapter 4
1.5 ■ Ratio, Interval, Ordinal, and Nominative Scales Probability
of Measurement (Optional) 14
4.1 ■ Probability and Sample Spaces 151
Appendix 1.1 ■ Getting Started with Excel 18
4.2 ■ Probability and Events 153
Appendix 1.2 ■ Getting Started with MegaStat 23
4.3 ■ Some Elementary Probability Rules 159
Appendix 1.3 ■ Getting Started with MINITAB 27
4.4 ■ Conditional Probability and Independence 165
4.5 ■ Bayes’ Theorem (Optional) 173
Chapter 2
4.6 ■ Counting Rules (Optional) 177
Descriptive Statistics: Tabular and Graphical
Methods Chapter 5
2.1 ■ Graphically Summarizing Qualitative Data 35
Discrete Random Variables
2.2 ■ Graphically Summarizing Quantitative Data 42
5.1 Two Types of Random Variables 185
■
2.3 ■ Dot Plots 54
5.2 Discrete Probability Distributions 186
■
2.4 ■ Stem-and-Leaf Displays 56
5.3 The Binomial Distribution 195
■
2.5 ■ Contingency Tables (Optional) 61
5.4 The Poisson Distribution (Optional) 205
■
2.6 ■ Scatter Plots (Optional) 67
5.5 The Hypergeometric Distribution (Optional) 209
■
2.7 ■ Misleading Graphs and Charts (Optional) 69
5.6 Joint Distributions and the Covariance
■
Appendix 2.1 ■ Tabular and Graphical Methods Using (Optional) 211
Excel 78
Appendix 5.1 ■ Binomial, Poisson, and
Appendix 2.2 ■ Tabular and Graphical Methods Using Hypergeometric Probabilities Using
MegaStat 86 Excel 216
Appendix 2.3 ■ Tabular and Graphical Methods Using Appendix 5.2 ■ Binomial, Poisson, and
MINITAB 90 Hypergeometric Probabilities Using
MegaStat 218
Chapter 3 Appendix 5.3 ■ Binomial, Poisson, and
Descriptive Statistics: Numerical Methods Hypergeometric Probabilities Using
3.1 ■ Describing Central Tendency 99 MINITAB 219
3.2 ■ Measures of Variation 108
3.3 ■ Percentiles, Quartiles, and Box-and-Whiskers
Chapter 6
Displays 118 Continuous Random Variables
3.4 ■ Covariance, Correlation, and the Least Squares 6.1 ■ Continuous Probability Distributions 221
Line (Optional) 125 6.2 ■ The Uniform Distribution 223
3.5 ■ Weighted Means and Grouped Data 6.3 ■ The Normal Probability Distribution 226
(Optional) 130 6.4 ■ Approximating the Binomial Distribution by
3.6 ■ The Geometric Mean (Optional) 135 Using the Normal Distribution (Optional) 242
Table of Contents xxi

6.5 ■ The Exponential Distribution (Optional) 246
6.6 ■ The Normal Probability Plot (Optional) 249
Appendix 6.1 ■ Normal Distribution Using Excel 254
Appendix 6.2 ■ Normal Distribution Using
MegaStat 255
Appendix 6.3 ■ Normal Distribution Using
MINITAB 256
Chapter 7
Sampling and Sampling Distributions
7.1 ■ Random Sampling 259
7.2 ■ The Sampling Distribution of the Sample
Mean 263
7.3 ■ The Sampling Distribution of the Sample
Proportion 275
7.4 ■ Stratified Random, Cluster, and Systematic
Sampling (Optional) 278
7.5 ■ More about Surveys and Errors in Survey
Sampling (Optional) 280
7.6 ■ Derivation of the Mean and the Variance of the
Sample Mean (Optional) 284
Appendix 7.1 ■ Generating Random Numbers Using
Excel 288
Appendix 7.2 ■ Generating Random Numbers Using
MegaStat 289
Appendix 7.3 ■ Generating Random Numbers Using
MINITAB 289
Chapter 8
Confidence Intervals
8.1 ■ z-Based Confidence Intervals for a Population
Mean: s Known 291
8.2 ■ t-Based Confidence Intervals for a Population
Mean: s Unknown 300
8.3 ■ Sample Size Determination 307
8.4 ■ Confidence Intervals for a Population
Proportion 311
8.5 ■ Confidence Intervals for Parameters of Finite
Populations (Optional) 318
Appendix 8.1 ■ Confidence Intervals Using
Excel 323
Appendix 8.2 ■ Confidence Intervals Using
MegaStat 324
Appendix 8.3 ■ Confidence Intervals Using
MINITAB 325
9.2 ■ z Tests about a Population Mean: s Known 334
9.3 ■ t Tests about a Population Mean: s Unknown 344
9.4 ■ z Tests about a Population Proportion 348
9.5 ■ Type II Error Probabilities and Sample Size
Determination (Optional) 353
9.6 ■ The Chi-Square Distribution 359
9.7 ■ Statistical Inference for a Population Variance
(Optional) 360
Appendix 9.1 ■ One-Sample Hypothesis Testing Using
Excel 366
Appendix 9.2 ■ One-Sample Hypothesis Testing Using
MegaStat 367
Appendix 9.3 ■ One-Sample Hypothesis Testing Using
MINITAB 368
Chapter 10
Statistical Inferences Based on Two Samples
10.1 ■ Comparing Two Population Means by Using
Independent Samples 371
10.2 ■ Paired Difference Experiments 381
10.3 ■ Comparing Two Population Proportions by
Using Large, Independent Samples 388
10.4 ■ The F Distribution 393
10.5 ■ Comparing Two Population Variances by Using
Independent Samples 395
Appendix 10.1 ■ Two-Sample Hypothesis Testing
Using Excel 401
Appendix 10.2 ■ Two-Sample Hypothesis Testing
Using MegaStat 402
Appendix 10.3 ■ Two-Sample Hypothesis Testing
Using MINITAB 404
Chapter 11
Experimental Design and Analysis of Variance
11.1 ■ Basic Concepts of Experimental Design 407
11.2 ■ One-Way Analysis of Variance 409
11.3 ■ The Randomized Block Design 419
11.4 ■ Two-Way Analysis of Variance 425
Appendix 11.1 ■ Experimental Design and Analysis of
Variance Using Excel 435
Appendix 11.2 ■ Experimental Design and Analysis of
Variance Using MegaStat 436
Appendix 11.3 ■ Experimental Design and Analysis of
Variance Using MINITAB 438

Chapter 9 Chapter 12
Hypothesis Testing Chi-Square Tests
9.1 ■ The Null and Alternative Hypotheses and Errors 12.1 ■ Chi-Square Goodness-of-Fit Tests 441
in Hypothesis Testing 327 12.2 ■ A Chi-Square Test for Independence 450
xxii Table of Contents

Appendix 12.1 ■ Chi-Square Tests Using Excel 459
Appendix 12.2 ■ Chi-Square Tests Using MegaStat 461
Appendix 12.3 ■ Chi-Square Tests Using
MINITAB 462
Chapter 13
Simple Linear Regression Analysis
13.1 ■ The Simple Linear Regression Model and the
Least Squares Point Estimates 465
13.2 ■ Model Assumptions and the Standard
Error 477
13.3 ■ Testing the Significance of the Slope and
y-Intercept 480
13.4 ■ Confidence and Prediction Intervals 486
13.5 ■ Simple Coefficients of Determination and
Correlation 492
13.6 ■ Testing the Significance of the Population
Correlation Coefficient (Optional) 496
13.7 ■ An F-Test for the Model 498
13.8 ■ Residual Analysis 501
Appendix 13.1 ■ Simple Linear Regression Analysis
Using Excel 519
Appendix 13.2 ■ Simple Linear Regression Analysis
Using MegaStat 521
Appendix 13.3 ■ Simple Linear Regression Analysis
Using MINITAB 523
14.3 ■ R2 and Adjusted R2 537
14.4 ■ The Overall F-Test 539
14.5 ■ Testing the Significance of an Independent
Variable 541
14.6 ■ Confidence and Prediction Intervals 545
14.7 ■ The Sales Representative Case: Evaluating
Employee Performance 548
14.8 ■ Using Dummy Variables to Model Qualitative
Independent Variables 550
14.9 ■ Using Squared and Interaction Variables 560
14.10 ■ Model Building and the Effects of
Multicollinearity 565
14.11 ■ Residual Analysis in Multiple Regression 575
14.12 ■ Logistic Regression 580
Appendix 14.1 ■ Multiple Regression Analysis Using
Excel 589
Appendix 14.2 ■ Multiple Regression Analysis Using
MegaStat 591
Appendix 14.3 ■ Multiple Regression Analysis Using
MINITAB 594
Appendix A
Statistical Tables 598
Answers to Most Odd-Numbered Exercises 619
References 626

Chapter 14 Photo Credits 628

Multiple Regression and Model Building
14.1 ■ The Multiple Regression Model and the Least Index 629
Squares Point Estimates 525 Chapter 15 On Website
14.2 ■ Model Assumptions and the Standard Error 535 Process Improvement Using Control Charts