INTRODUCTION

TO STATISTICS
Business Statistics
21st July 2020
INTRODUC
TION TO
STATISTIC
S
OBJECTIVES
 Understand the motivation behind DATA, DATA Analysis, Statistics in better Decision
making.
 Get familiar with the basic terminologies
 Sample , Population, Survey, Census
 Kinds of data

 Data specifically important in Business Decisions.

 Each decision may have potentially high impact.
 Decisions are important to be taken correctly best to the extent possible.
 Decisions made through data are better (why?)

 Understand the stages in decision making using data.

DECISION MAKING
 Key in any business role.

How to distribute product inventory in various regions?

How to figure out how much production of each product

should be done?

How to decide how much to invest in TV vs Internet vs

Print Media vs other advertising channels?

How to decide salaries of the employees?

How to improve quality of production?

DATA PLAYS A BIG ROLE IN
MAKING DECISIONS
 Right Decisions
 Critical Decisions
 Informed Decisions
 Easier Communication
DATA PLAYS A BIG ROLE IN
MAKING DECISIONS
Region Population (in Product consumption in millions
Millions)

2014 2015 2016

City A 100 130 130 130
City B 10 10 10 10
City C 110 140 140 140
City D 105 210 210 210
City E 200 140 140 140

- If I want to launch a new product, which city I should

choose?

- If I want to spend some additional advertising budget, I can

afford to go to 2 cities maximum, which 2 cities I should go
to?
MANAGERS ARE EQUIPPED
WITH LOT OF DATA NOW Context
 Lot of data is collected these days. History
 Technological Advancements
 Digitalization

 Collecting data has become easier. Indirect

 Doing surveys, reaching to more people

 It’s up to managers to use it.

This is where statistics is important for managers to

understand and make effective use of.
STATISTICS : WHAT IS IT?
 Set of tools to manage and analyze the information.
 Science of counting.
 Any information which can be represented in measurable form,
can be handled through statistics.
 What should we understand:
 Understand the basic concepts.
 Understand the application of concepts in real life situations.
 Understand the tools available to assist you.
 Understand how to use those tools

…… and make the decisions or help making decisions.

KEY
VOCABULA
RY
KEY VOCABULARY
 Population: Everything (or everyone) being studied.

 number of newborn babies in UP.

 number of tech startups in India
 all MAT exam candidates
KEY VOCABULARY
  Parameters :Characteristics of the population
 Greek Letters are used to represent parameters like
 We might be interested in learning about μ, the average weight of all middle-
aged female Indians.
 The population consists of all middle-aged female Indians, and the
parameter is µ.
KEY VOCABULARY
 Sample: Portion of the larger population.
 For example, let's say a denim apparel manufacturer wants to check the
quality of the stitching on its blue jeans before shipping them off to retail
stores.
 It is not cost effective to examine every single pair of blue jeans the
manufacturer produces (the population).
 Instead, the manufacturer looks at just 50 pairs (a sample) to draw a
conclusion about whether the entire population is likely to have been stitched
correctly.
KEY VOCABULARY
  Statistic :Characteristics of the sample
 English Letters are used to represent parameters like

 For instance, suppose we selected a sample of 100 students from a

school with 1000 students. The average height of the sampled students
would be an example of a statistic. 
  any measurable characteristic of the sample would be an example of a
statistic.
KEY VOCABULARY
 Variable : Characteristics of Interest gathered from each
item in the sample (the question)
 A variable may also be called a data item. Age, sex, business income
and expenses, country of birth, capital expenditure, class grades, eye
colour and vehicle type are examples of variables. It is called a
variable because the value may vary between data units in
a population, and may change in value over time.
KEY VOCABULARY
 Data: Actual Value of the variable.
KEY VOCABULARY
  Population: Everything (or everyone) being studied.
 Parameters :Characteristics of the population
 Greek Letters are used to represent parameters like

 Sample: Portion of the larger population.

 Statistic :Characteristics of the sample
 English Letters are used to represent parameters like

 Variable : Characteristics of Interest gathered from each item in the

sample (the question)
 Data: Actual Value of the variable.
IDENTIFY KEY VOCABULARY
 You want to know the average cost of Statistics Textbooks, so you
survey 25 books
 Population
 Parameters
 Sample
 Statistic
 Variable
 Data
IDENTIFY KEY VOCABULARY
 You want to know the average cost of Statistics Textbooks, so you
survey 25 books
 Population: All statistics Textbooks
 Parameters : Average Cost of all statistics textbooks
 Sample : 25 Textbooks
 Statistic : Average Cost of 25 textbooks
 Variable : Cost of a statistics textbook.
 Data: Actual cost od the textbook(may be Rs 1200/-)
IDENTIFY KEY VOCABULARY
 Let's suppose that there exists a population of 5 lakh MBA in India today. We
want to know the average GPA of the students, so we study 100 MBA students
randomly.
 Population
 Parameters
 Sample
 Statistic
 Variable
 Data
IDENTIFY KEY VOCABULARY
 Let's suppose that there exists 5 lakh MBA students in India today. We want
to know the average GPA of the students, so we study 100 MBA students
randomly.
 Population :5 lakh MBA students in India
 Parameters :Average GPA of 5 lakh MBA students in India
 Sample: 100 MBA students
 Statistic :Average GPA of 100 students
 Variable :GPA of a student
 Data: Actual GPA of a student ,may be 6.7
IDENTIFY KEY VOCABULARY
 The main campus at a University has a population of approximately 42,000
students. A research question is "what proportion of these students smoke
regularly?" A survey was administered to a sample of 987 Penn State students.
 Population
 Parameters
 Sample
 Statistic
 Variable
 Data
IDENTIFY KEY VOCABULARY
 The main campus ABC University has a population of approximately 42,000
students. A research question is "what proportion of these students smoke
regularly?" A survey was administered to a sample of 987 Penn State students.
 Population:42000 students of ABC university
 Parameters :Proportion of students at ABC University who smoke
regularly.
 Sample:987 students of ABC University
 Statistic :Proportion of 987 students at ABC University who smoke
regularly.
 Variable :Smoke regularly or not
 Data: Yes or No eg( may be 1 or 0)
IDENTIFY KEY VOCABULARY
 You want to know the mean income of the subscribers to India Today magazine.
 You survey 100 subscribers

 Population
 Parameters
 Sample
 Statistic
 Variable
 Data
IDENTIFY KEY VOCABULARY
 You want to know the mean income of the subscribers to India Today magazine.
 You survey 100 subscribers

 Population :All India Today Subscribers

 Parameters :Average income of all India Toda subscriber.
 Sample: 100 India today subscriber
 Statistic :Average income of 100 India Today Subscribers
 Variable :Income of a subscriber
 Data: Actual income of the subscriber may be Rs 60000/-
INFERENCE A GLIMPSE
 100 subscribers mean income may be Rs 42000/-
 You conclude that the population mean income μ is likely to be close to Rs 42000 as well.
 This example is one of statistical inference.
HOMEWORK
 Identify the population and the sample:
 a) A survey of 1353 American households found that 18% of the households own a
 computer.
 b) A recent survey of 2625 elementary school children found that 28% of the children
 could be classified obese.
 c) The average weight of every sixth person entering the mall within 3 hour period
 was 80kgs.
HOMEWORK
Tabulate the following information: -
In a sample study of coffee habits in two towns, following data was observed
Town X: 52% were males
25% were coffee drinkers
16% were male coffee drinkers
Town Y: 55% were males
28% were coffee drinkers and
18% were male coffee drinkers
Q&A