BUSS1020

1. Uses of Statistics
Statistics are used in business to:
To summarise data
To draw conclusions from data
To make reliable forecasts about business
activity
To improve business processes
Descriptive statistics: the methods that help collect,
summarize, present and analyse data.
Inferential statistics: the methods that use data
collected from a smaller group to draw conclusions
about a larger group.
Predictive analytics: Using data from the past and
present to predict future events.
Population: All the items or individuals which your
data set concerns.
Sample: The portion of the population selected for
your data analysis.
Parameter: A measure that describes a characteristic
of a population.
Statistic: A measure that describes a characteristic of
a population.
2.Types of Variable
Categorical Variable: Data that has variables
that can be arranged in categories (qualitative).

Numerical Variable: Data that has variables that

can represent quantities.
Discrete: A variable that must take on an
exact value such as an integer.
Continuous: A variable that occurs from of a
measuring process. This variable has no exact
value and can change over time. It can take
on any value within a given interval.
Scales of measurement
Categorical measures:
Nominal: A scale in which no ranking is
implied.
Ordinal: A scale in which the data is ranked.
Numerical measures:

Interval: An ordered scale in which the data

represents a quantity but does not involve a
true zero point but rather an arbitrary zero
point or none at all.
Ratio: An ordered scale in which a true zero
point exists, such as height, weight or age.
True zero point: When a zero in a data set
represents the absence of any data.
3. Data Collection
DCOVA
Define: The variables you want to study
Collect: The appropriate data
Organise: Data into relevant sets.
Visualise: Represent the data in charts

Analyse: Draw conclusions about the information

collected.
Sources of Data:
Data distributed by an organisation or
individual
As outcomes of a designed experiment
As responses from a survey
As a result of conducting an observational
study
3.1 Organising Categorical Data
Single Variable:
Summary Table: Presents tallied responses
as frequencies or percentages for each
category.
Multiple Variables:
Contingency Table: Presents joint tallied
responses for each of the variables. Shows
more than one variable by using more rows.
Allows one to study patterns between
responses of 2 or more variables.
3.2 Organizing Numerical Data
Stacked Data: When all of the values for a
numerical value appear in one column, whilst a
second separate column identifies the
categorical responses which coincide with them.

Unstacked Data: The values for each subgroup

of a numerical variable are segregated and
placed into separate columns.
The Ordered Array: Arranges the values of a
numerical variable in rank order.
The Frequency Distribution: Organises
numerical values by placing them into a set of
classes (known as bin values or class interval)
and calculating the frequency within each class
boundary.
Interval width= (Highest value lowest
value) /number of classes
Class Midpoints: The points in the middle of
each class interval.
Relative Frequency Distribution: Organises
data by calculating the number of values for
each data point as a proportion of the total
number of data points in a set.
Percentage Distribution: Multiplying the
relative frequency by 100 to express it as a
percentage.
Cumulative Distribution: Displays the
accumulation of data below a certain data point
as a percentage of the total number of data
points.
2.4 Visualising Categorical Data

Types of Charts:

The Bar Chart

The Pie Chart
The Pareto Chart: Displays a bar chart in
order from highest to lowest frequency and
a line which displays the cumulative
frequency on top.
The Pareto principle: When the majority
of values in a set of data are grouped
around a few points.

The Side By Side Chart: Compares the

responses for two separate categorical
variables next to one another and sideways.
2.5 Visualising Numerical Data

Stem and leaf display

Histogram
The percentage polygon
The cumulative percentage polygon
(ogive)

2.6 Visualising two numerical variables

The scatter plot

The time series plot
2.7 Organising Multidimensional Data