Chapter 1

Introduction to Statistics

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 Learning Objectives

• Definition of statistics

• Applications of statistics in business

• Descriptive and inferential statistics - Difference

• Levels of data measurement

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 What is Statistics?

Science of gathering, presenting,

analyzing, and interpreting data.

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 Statistics in Business
 Accounting — auditing and cost estimation
 Economics — regional, national, and international economic
performance
 Finance — investments and portfolio management
 Management — human resources, compensation, and quality
management
 Management Information Systems — performance of systems which
gather, summarize, and disseminate information to various
managerial levels
 Marketing — market analysis and consumer research
 International Business — market and demographic analysis
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 Population Vs Sample

• Population — the whole

– a collection of persons, objects, or items under study

• Sample — a portion of the whole

– a subset of the population

• Census — gathering data from the entire population

• Sample Study – study undertaken on sample

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 Descriptive Vs. Inferential Statistics

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 Parameter Vs. Statistic

• Parameter — descriptive measure of the population

– Usually represented by Greek letters or capital letters

– Mean (µ), Standard deviation (σ), Proportion (P)

• Statistic — descriptive measure of a sample

– Usually represented by Roman letters

x Standard deviation (s), Proportion (p)
– Mean (),
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 Levels of Data Measurement

• Nominal — Lowest level of measurement

• Ordinal

• Interval

• Ratio — Highest level of measurement

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 Nominal and Ordinal Level Data

• In nominal level, numbers are used to classify or categorize

Example:
Players sporting numbers on their tops
Roll numbers of students
• In ordinal, numbers are used to indicate rank or order
• Relative magnitude of numbers is meaningful
• Differences between numbers are not comparable
Example:
Ranking productivity of employees
Rank of students in examination
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 Interval and Ratio Level Data
 In interval level, distances between consecutive integers are equal
 Relative magnitude of numbers is meaningful
 Differences between numbers are comparable
 Location of origin, zero, is arbitrary
Example: Fahrenheit Temperature, Calendar Time
 In ratio level, highest level of measurement
 Relative magnitude of numbers is meaningful
 Differences between numbers are comparable
 Location of origin, zero, is absolute (natural)
Examples: Height, Weight, and Volume
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