BUSINESS DATA ANALYSIS I
Content
• Statistics
– Descriptive statistics
• Graphical and numerical
techniques (Ch 2-4)
– Inferential statistics
• Sampling (Ch 5,8,9)
• Probability (Ch 6,7)
• Draw conclusions or
inferences (Ch 9-11)
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BUSINESS DATA ANALYSIS I
What is statistics
• Statistics is the body of techniques used to facilitate the
collection, organization, presentation, analysis, and
interpretation of data for the purpose of making better
decisions.
2
BUSINESS DATA ANALYSIS I
Who uses statistics
• Statistical techniques are used extensively by marketing,
accounting, quality control, consumers, professional
sports people, hospital administrators, educators,
politicians, physicians, etc....
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COURSE INTRODUCTION
• Text
• Lectures
• Computer lab
• Website: overheads, assignments, solutions,
computer lab documents, midterm and exam
information, and other announcements and
information
• Grading
– 4 Assignments
– Midterm
– Final exam (comprehensive)
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A WORD ABOUT CONDUCT
• Basic principles
1. Every student has the right to learn as well as
responsibility not to deprive others of their right to
learn.
2. Every student is accountable for his or her own
actions.
5
In order for you to get the most out of this class, please
consider the following:
a. Attend all scheduled classes and arrive on time. Late
arrivals and early departures are very disruptive and
violate the first basic principle.
b. Please do not schedule other activities during this class
time. I will try to make class as interesting and informative
as possible, but I can’t learn the material for you.
c. Please let me know immediately if you have a problem
that is preventing you from performing satisfactorily in this
class.
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STATISTICS
Statistical
Methods
Descriptive
Statistics
Inferential
Statistics
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DESCRIPTIVE STATISTICS
• Involves
– Collecting data
– Organizing or
summarizing data
– Presenting data
• Purpose
– Describe data
50
$
25
0
Q1 Q2 Q3 Q4
X = 30.5 S2 = 113
8
DESCRIPTIVE STATISTICS
• EXAMPLE 1: A survey conducted by the Financial
Post Magazine found that 50.08% of the people
wanted to vote “no” in Quebec referendum in 1995.
The statistic 50.08% describes the proportion of
voters who wanted to stay in Canada.
• EXAMPLE 2: According to Consumer Reports,
Whirlpool washing machine owners reported 9
problems per 100 machines during 1995. The
statistic 9 describes the number of problems out of
every 100 machines.
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DESCRIPTIVE STATISTICS
• Wesbster’s New Collegiate Dictionary has the
following definitions
– Describe – to represent by a figure, model, or
picture
– Statistics – a branch of mathematics dealing with
the collection, analysis, interpretation,
presentation of masses of numerical data.
• Descriptive statistics are the tabular, graphical, and
numerical methods used to summarize data.
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EXAMPLE: HUDSON AUTO REPAIR
The manager of Hudson Auto would like to have
a better understanding of the cost of parts used in the
engine tune-ups performed in the shop. She examines
50 customer invoices for tune-ups. The costs of parts,
rounded to the nearest dollar, are listed below.
91
71
104
85
62
78
69
74
97
82
93 57
72 89
62 68
88 68
98 101
75 52
66 75
97 105
83 68
79 105
99
79
77
71
79
What would you do?
80
75
65
69
69
97 62
72 76
80 109
67 74
62 73
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EXAMPLE: HUDSON AUTO REPAIR
TABULAR & GRAPHICAL
• Tabular Summary (Frequencies and Percent
Frequencies
Parts
Percent
Cost ($)
Frequency
Frequency
50-59
2
4
60-69
13
26
70-79
16
32
80-89
7
14
90-99
7
14
100-109
5
10
Total
50
100
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EXAMPLE: HUDSON AUTO REPAIR
TABULAR & GRAPHICAL
18
16
14
• Graphical Summary (Histogram)
12
10
8
6
4
2
50
60
70
80
90
100
Parts
Cost ($)
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EXAMPLE: HUDSON AUTO REPAIR
NUMERICAL
• Numerical Descriptive Statistics
– The most common numerical descriptive statistic
is the average (or mean).
– Hudson’s average cost of parts, based on the 50
tune-ups studied, is $79 (found by summing the
50 cost values and then dividing by 50).
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STATISTICS
Statistical
Methods
Descriptive
Statistics
Inferential
Statistics
15
INFERENTIAL STATISTICS
• Involves
– Estimation
– Hypothesis
testing
Population?
• Purpose
– Draw conclusions
or inferences
about population
characteristics
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INFERENTIAL STATISTICS
• EXAMPLE 1: TV networks constantly monitor the
popularity of their programs and sample the
preferences of TV viewers.
• EXAMPLE 2: The accounting department of a large
firm will select a sample of the invoices to check for
accuracy for all the invoices of the company.
• EXAMPLE 3: Wine tasters sip a few drops of wine to
make a decision with respect to all the wine waiting to
be released for sale.
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KEY TERMS
• Population (universe)
– The set of all items of interest
– The word population does not necessarily refer to a
group of people.
– In case of Hudson Auto population refer to the set of all
engine tune-ups.
• Sample
– A set of data drawn (or observed) from the population
– In case of Hudson Auto sample refers to the set of 50
tune-ups examined
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KEY TERMS
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KEY TERMS
• Parameter
– Summary measure about population
– Usually unknown or known from some published
sources
– In case of Hudson Auto a parameter is the average cost
of parts used in all engine tune-ups.
• Statistic
– Summary measure about sample
– Obtained from the sample
– In case of Hudson Auto a statistic is the average cost,
$79 of parts used in 50 engine tune-ups examined.
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STATISTICAL INFERENCE


Webster’s New Collegiate Dictionary
 Infer – to derive as a conclusion from facts of
premises.
 Inference – the act of passing from statistical sample
data to generalizations.
 Statistics – a branch of mathematics dealing with the
collection, analysis, interpretation, presentation of
masses of numerical data.
Statistical inference is the process of using data obtained
from a small group of elements (the sample) to make
estimates and test hypotheses about the characteristics
of a larger group of elements (the population).
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EXAMPLE: HUDSON AUTO REPAIR
• Process of Statistical Inference
1. Population
consists of all
tune-ups. Average
cost of parts is
unknown.
2. A sample of 50
engine tune-ups
is examined.
4. The value of the
sample average is used
to make an estimate of
the population average.
3. The sample data
provide a sample
average cost of
$79 per tune-up.
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