AGW 615 Advanced Business Statistics

E-mail: ramayah@gmail.com, arumugamveeri@hotmail.com e! "age: ramayah@gmail.com, htt#:$$%%%.management.usm.my$ramayah arumugamveeri@hotmail.com htt#:$$%%%.management.usm.my$ra &'(ECTIVE) mayah Among others this course e*#oses stu+ents to statistical techni,ues -or !usiness +ecisions an+ !usiness research. In #articular, it e*#oses stu+ents to use an+ inter#ret +ata -or +ecision ma.ing enhance their s.ills in using statistical techni,ues -or !usiness research, enhance their s.ills an+ a!ility to use these techni,ues, an+ use ostatistical #ac.ages /)")) etc.0 EVA12ATI&3 This course %ill !e evaluate+ !y the -ollo%ing com#onents:

COURSE CONTENT AND OUTLINE OF SESSIONS

SESSION NO. 1 $ * 3 16 #6 ( ) 2 15 11 1$ 1* TOPICS REFERENC E CHAPTERS Statistics & & 1"# (") 1"2 15"11"1$

Overview to Business Introductory Pro a i!ity Rando% &aria !es 'istri utions

Pro a i!ity

Sa%+!in, -et.ods/ Sa%+!e Si0e and Sa%+!in, 'istri ution Statistica! In4erence/ Esti%ation and Testin, o4 Hy+ot.esis/ Basic Princi+!es 7sin, SPSS 89a : 7sin, SPSS 89a : Two Sa%+!es Test Two Sa%+!es Test/ Non;+ara%etric = Sa%+!es Test/ ANO&A & Non;Para%etric C.i;S>uare Test" Corre!ation & Si%+!e Re,ression -u!ti+!e Re,ression & 'ia,nostics 'iscri%inant Ana!ysis Factor Ana!ysis

1* $1.1 <$1.* 11"$1.3;$1.1 1#"1( 12 Hair et a!. Hair et a!

* Session 5 & 6 will be conducted in the Lab on a Sunday

=ERE3CE TE>T ler, @ an+ arrac., '. /:6650. tistics for Management and Econom e+., Thomson 'roo.s$Cole: Australia

r, (. =., (r. An+erson R. E., Tatham, 1. & 'lac., . C. /:6650. tivariate Data Analysis, 5th e+., ntice Ball International, Inc.: % (ersey, 2)A.

&TBER RE=ERE3CE)
Ac9el, A. D. & )oun+er#an+ian, (. /:66:0. Complete Business Statistics, 5th e+., Cc@ra%-Bill: 2)A. 'o%erman, '. & &DConnel, R. T. /:66<0. Business Statistics in Practice, <r+ e+., Cc@ra%-Bill: 2)A. Cohen, (., Cohen, "., est ). @. & Ai.en, 1. ). /:66<0. A##lie+ Culti#le Regression$Correlation Analysis -or the 'ehavioral )ciences, 1a%rence Erl!aum Associates, "u!lishers: 2)A. ?ohler B. /:66:0. Statistics for Business and Economics: Minitam Enhancecd, )outh- estern Thomson 1earning: 2)A. 1evin, R. I. & Ru!in D. /4EEF0. Statistics for Management, Ath e+., "rentice Ball International, Inc: 3e% (ersey, 2)A. CcClave, (. T., 'enson, ". @. & )incich, T. /:6640. )tatistics -or 'usiness an+ Economics, Fth

Session 1 : Lesson 1

Intr ducti n t Statistics

O!"ectives
T de#ine statistics T discuss t$e %ide ran&e # a''(icati ns # statistics in !usiness T understand t$e !ranc$es # statistics T descri!e t$e (eve(s # )easure)ent # data

hat is )tatisticsG

Science # c ((ectin&* r&ani+in&* 'resentin&* ana(,+in&* and inter'retin& data # r t$e 'ur' se # assistin& in )a-in& ) re e##ective decisi n Branc$ # )at$e)atics Facts and #i&ures A su!"ect r disci'(ine C ((ecti ns # data A %a, t &et in# r)ati n #r ) data

hat is )tatisticsG

.Statistics is a %a, t &et in# r)ati n #r ) data/ Statistics Data In# r)ati n
Information: Knowledge communicated concerning some particular fact.

Data: Facts, especially numerical facts, collected together for reference or information.

Statistics is a tool for creating new understanding from a set of numbers.

Definitions: Oxford English Dictionary

E0a)'(e 1 Stats An0iet,2

A !usiness sc$ ( student is an0i us a! ut t$eir statistics c urse* since t$e,3ve $eard t$e c urse is di##icu(t4 T$e 'r #ess r 'r vides (ast ter)3s #ina( e0a) )ar-s t t$e student4 W$at can !e discerned #r ) t$is (ist # nu)!ers5 Statistics Data
List of last terms marks.

Information
New information about the statistics class.

95 89 70 65 78 57 :

E.g. Class average, Proportion of class receiving As Most frequent mark, Marks distribution, etc.

A##lications o- )tatistics in 'usiness

Acc untin& 6 auditin& and c st esti)ati n Finance 6 invest)ents and ' rt# (i )ana&e)ent 7u)an res urce 6 c )'ensati n* " ! satis#acti n* 'er# r)ance )easure O'erati n 6 8ua(it, )ana&e)ent* # recastin&* 9IS* ca'acit, '(annin&* )ateria(s c ntr ( 9ar-etin& 1 )ar-et ana(,sis* c nsu)er researc$* 'ricin& Ec n )ics 6 re&i na(* nati na(* and internati na( ec n )ic 'er# r)ance Internati na( Business1 )ar-et and de) &ra'$ic ana(,sis4

?ey )tatistical Conce#tsH

: 'u(ati n ; a population is t$e &r u' # a(( ite)s #

interest t a statistics 'ractiti ner4 ; #re8uent(, ver, (ar&e< s )eti)es in#inite4
E4&4 A(( B(ue c ((ar % r-ers in 9a(a,sia

Sa)'(e ; A sample is a set # data dra%n #r ) t$e ' 'u(ati n4 ; : tentia((, ver, (ar&e* !ut (ess t$an t$e ' 'u(ati n4
E4&4 a sa)'(e # =65 !(ue c ((ar % r-ers

?ey )tatistical Conce#tsH

:ara)eter
; A descri'tive )easure # a population.

Statistic
; A descri'tive )easure # a sample.

?ey )tatistical Conce#tsH

"o#ulation )am#le

)u!set

"arameter

)tatistic

"o#ulations have "arameters, )am#les have )tatistics.

'ranches o- )tatistics
Statistics
Descri'tive Statistics In#erentia( Statistics

:ara)etric Statistics

N n1:ara)etric Statistics

Descri'tive Statistics2

2are methods # r&ani+in&* su))ari+in&* and 'resentin& data in a c nvenient and in# r)ative %a,4 T$ese )et$ ds inc(ude>

Gra'$ica( Tec$ni8ues Nu)erica( Tec$ni8ues

T$e actua( )et$ d used de'ends n %$at information %e % u(d (i-e t e0tract4 Are %e interested in2

)easure?s@ # centra( ( cati n5 andA r )easure?s@ # varia!i(it, ?dis'ersi n@5

Descri'tive Statistics $e('s t ans%er t$ese 8uesti ns2

In#erentia( Statistics2

Descri'tive Statistics descri!e t$e data set t$at3s !ein& ana(,+ed* !ut d esn3t a(( % us t dra% an, c nc(usi ns r )a-e an, inter#erences a! ut t$e data4 7ence %e need an t$er !ranc$ # statistics> inferential statistics4 In#erentia( statistics is a(s a set # )et$ ds* !ut it is used t dra% c nc(usi ns r in#erences a! ut c$aracteristics # populations !ased n data #r ) a sample4

)tatistical In-erenceH
"o#ulation

Statistica( in#erence is t$e process # )a-in& an esti)ate* 'redicti n* r decisi n a! ut a ' 'u(ati n !ased n a sa)'(e4
)am#le
In-erence

)tatistic "arameter

What can we infer about a Populations Parameters based on a Samples Statistics?

)tatistical In-erenceH
We use statistics t )a-e in#erences a! ut 'ara)eters4 T$ere# re* %e can )a-e an esti)ate* 'redicti n* r decisi n a! ut a ' 'u(ati n !ased n sa)'(e data4 T$us* %e can a''(, %$at %e -n % a! ut a sa)'(e t t$e (ar&er ' 'u(ati n #r ) %$ic$ it %as dra%nB

)tatistical In-erenceH

Rati na(e>
CLar&e ' 'u(ati ns )a-e investi&atin& eac$ )e)!er i)'ractica( and e0'ensive4 CEasier and c$ea'er t ta-e a sa)'(e and )a-e esti)ates a! ut t$e ' 'u(ati n #r ) t$e sa)'(e4

7 %ever>
Suc$ c nc(usi ns and esti)ates are n t a(%a,s & in& t !e c rrect4 F r t$is reas n* %e !ui(d int t$e statistica( in#erence .)easures # re(ia!i(it,/* na)e(, c n#idence (eve( and si&ni#icance (eve(4

Con-i+ence & )igni-icance 1evelsH

T$e confidence level is t$e 'r ' rti n # ti)es t$at an esti)atin& 'r cedure %i(( !e c rrect4 E4&4 a c n#idence (eve( # D5E )eans t$at* esti)ates !ased n t$is # r) # statistica( in#erence %i(( !e c rrect D5E # t$e ti)e4 W$en t$e 'ur' se # t$e statistica( in#erence is t dra% a c nc(usi n a! ut a ' 'u(ati n* t$e significance level )easures $ % #re8uent(, t$e c nc(usi n %i(( !e %r n& in t$e ( n& run4 E4&4 a 5E si&ni#icance (eve( )eans t$at* in t$e ( n& run* t$is t,'e # c nc(usi n %i(( !e %r n& 5E # t$e ti)e4

"rocess o- In-erential )tatistics

Calculate x to estimate

Population (parameter)

Sample x (statistic)

Select a random sample

T,'es # Data and In# r)ati n

De#initi ns2 A varia!(e is s )e c$aracteristic # a ' 'u(ati n r sa)'(e4 E4&4 student &rades< % r-ers sa(ar, T,'ica((, den ted %it$ a ca'ita( (etter>A*A1* BF* B* B12 T$e va(ues # t$e varia!(e are t$e ran&e # ' ssi!(e va(ues # r a varia!(e4 E4&4 student )ar-s ?G441GG@ Data are t$e observed values # a varia!(e4 E4&4 student )ar-s> H6=* =I* =1* JK* DK* 55* IJL

Ty#es o- Data & In-ormation

Data ?at (east # r 'ur' ses # Statistics@ #a(( int t$ree )ain &r u's>

Interva( Data

N )ina( Data

Ordina( Data

Interval DataH
Interva( data C Rea( nu)!ers* i4e4 $ei&$ts* %ei&$ts* 'rices* etc4 C A(s re#erred t as 8uantitative r nu)erica(4 Arit$)etic 'erati ns can !e 'er# r)ed n Interva( Data* t$us its )eanin&#u( t ta(a! ut MN7ei&$t* r :rice F O1* and s n4

3ominal DataH
N )ina( Data C T$e va(ues # n )ina( data are categories. E4&4 res' nses t 8uesti ns a! ut )arita( status* c ded as> Sin&(e P 1* 9arried P M* Div rced P K* Wid %ed P I Because t$e nu)!ers are ar!itrar,* arit$)etic 'erati ns d n3t )a-e an, sense ?e4&4 d es Wid %ed Q M P 9arried5B@
N )ina( data are a(s

ca((ed 8ua(itative r cate& rica(4

&r+inal DataH
Ordina( Data a''ear t !e cate& rica( in nature* !ut t$eir va(ues $ave an order< a ran-in& t t$e)> E4&4 C ((e&e c urse ratin& s,ste)> ' r P 1* #air P M* & d P K* ver, & d P I* e0ce((ent P 5 W$i(e its sti(( n t )eanin&#u( t d arit$)etic n t$is data ?e4&4 d es MN#air P ver, & d5B@* %e can sa, t$in&s (i-e> e0ce((ent R ' r r #air S ver, & d T$at is* rder is )aintained n )atter %$at nu)eric va(ues are assi&ned t eac$ cate& r,4

Ty#es o- Data & In-ormationH

Data
CategoricalG I &r+ere+G Categorica l Data 3 I 3

Interval Data

&r+inal Data

3ominal Data

E.g. Re#resenting )tu+ent @ra+esH

Data
CategoricalG I &r+ere+G Categorica l Data 3 I 3

Interval Data e.g. J6..466K &r+inal Data e.g. J=, D, C, ', AK

Rank order to data

3ominal Data e.g. J"ass L =ailK

NO rank order to data

Calculations -or Ty#es oData As )enti ned a! ve*

C A(( ca(cu(ati ns are 'er)itted n interva( data4 C On(, ca(cu(ati ns inv (vin& a ran-in& 'r cess are a(( %ed # r rdina( data4 C N ca(cu(ati ns are a(( %ed # r n )ina( data* n(, c untin& t$e nu)!er # !servati ns in eac$ cate& r, is ' ssi!(e4

T$is (ends itse(# t t$e # (( %in& .$ierarc$, # data/2

Bierarchy o- DataH
Interva( Ta(ues are rea( nu)!ers4 A(( ca(cu(ati ns are va(id4 Data )a, !e treated as rdina( r n )ina(4 Ordina( Ta(ues )ust re'resent t$e ran-ed rder # t$e data4 Ca(cu(ati ns !ased n an rderin& 'r cess are va(id4 Data )a, !e treated as n )ina( !ut n t as interva(4 N )ina( Ta(ues are t$e ar!itrar, nu)!ers t$at re'resent cate& ries4 On(, ca(cu(ati ns !ased n t$e #re8uencies # ccurrence are va(id4 Data )a, n t !e treated as rdina( r interva(4

an+ )tatistical Cetho+s

Data Leve( N )ina( Ordina( 9eanin&#u( O'erati ns C(assi#,in& and C untin& A(( # t$e a! ve '(us Ran-in& A(( # t$e a! ve '(us Additi n* Su!tracti n* 9u(ti'(icati n* and Divisi n Statistica( 9et$ ds N n'ara)etric N n'ara)etric

:ara)etric