stats

1. Introduction
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2. Learning Objectives
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In this chapter you learn:
 How business uses statistics
 The basic vocabulary of statistics

3. Why Learn Statistics
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Make better sense of the world
 Internet articles / reports
 Magazine articles
 Newspaper articles
 Television & radio reports
Make better business decisions
 Business memos
 Business research
 Technical journals
 Technical reports

4. In Business, Statistics Has
Many Important Uses
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 To summarize business data
 To draw conclusions from business data
 To make reliable forecasts about business
activities
 To improve business processes

5. Two Different Branches Of
Statistics Are Used In Business
Statistics
The branch of mathematics that transforms data into
useful information for decision makers.
Descriptive Statistics
Collecting, summarizing,
presenting and analyzing data
Inferential Statistics
Using data collected from a
small group to draw conclusions
about a larger group
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6. These Two Branches Are Used
In The Important Activities
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 To summarize business data
 Descriptive methods used to create charts & tables
 To draw conclusions from business data
 Inferential methods used to reach conclusions about
a large group based on data from a smaller group
 To make reliable forecasts about business
activities
 Inferential methods used to develop, quantify, and
improve the accuracy of predictive models
 To improve business processes

7. Descriptive Statistics
 Collect data
 e.g., Survey
 Present data
 e.g., Tables and graphs
 Characterize data
 e.g., The sample mean
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8. Inferential Statistics
 Estimation
 e.g., Estimate the population
mean weight using the sample
mean weight
 Hypothesis testing
 e.g., Test the claim that the
population mean weight is 120
pounds
Drawing conclusions about a large group of
individuals based on a smaller group.
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9. Basic Vocabulary of Statistics
VARIABLES
Variables are a characteristics of an item or individual and are what you
analyze when you use a statistical method.
DATA
Data are the different values associated with a variable.
OPERATIONAL DEFINITIONS
Data values are meaningless unless their variables have operational
definitions, universally accepted meanings that are clear to all associated
with an analysis.
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10. Basic Vocabulary of Statistics
POPULATION
A population consists of all the items or individuals about which
you want to draw a conclusion. The population is the “large
group”
SAMPLE
A sample is the portion of a population selected for analysis. The
sample is the “small group”
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.
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11. Population vs. Sample
Population Sample
Measures used to describe the
population are called parameters
Measures used to describe the
sample are called statistics
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