An Introduction to Business

Statistics

Why a manager needs to know about statistics

Key definitions
Descriptive versus inferential statistics
Organization of Data

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School Jaipur
 Why a Manager Needs to
Know about Statistics

To know how to properly present information

To know how to draw conclusions about
populations based on sample information
To know how to improve processes
To know how to obtain reliable forecasts

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 Basic Vocabulary Terms

Statistics is the art and science of collecting,

analyzing, presenting and interpreting data
Data are the facts and figures that are
collected, summarized, analyzed, and
interpreted.

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 Populations and Samples
The population is the set of all elements of
interest in a particular study.
A sample is a subset of the population.

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Populations and Samples

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 Descriptive Statistics and
Inferential Statistics

Descriptive Statistics consists of methods for

organizing and summarizing information

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 Descriptive Statistics
Collect data
– e.g. Survey
Present data
– e.g. Tables and graphs
Characterize data
– e.g. Sample mean =
∑X i

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 Inferential Statistics

Statistical Inference is the process of using

information obtained from analyzing a sample
to make estimates about characteristics of the
entire population.

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 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
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 Variable & Data
Variable: A characteristic that varies from one person or
thing to another.
Qualitative variable: A non-numerically valued variable.
Quantitative variable: A numerically valued variable.
Discrete variable: A quantitative variable whose
possible values can be listed.
Continuous variable: A quantitative variable whose
possible values form some interval of numbers.

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Types of Variable

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 Data
Data: Values of a variable.

Qualitative data: Values of a qualitative

variable.

Quantitative data: Values of a quantitative

variable.

Discrete data: Values of a discrete variable.

Continuous data: Values of a continuous

variable
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 Variable & Data
Primary Secondary
Data Collection Data Compilation

Print or Electronic
Observation Survey

Experimentation

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 Organizing Qualitative Data

Frequency Distribution of Qualitative Data

A frequency distribution of qualitative data is
a listing of the distinct values and their
frequencies.

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 Organizing Qualitative Data

Political party affiliations of the students in

introductory statistics

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 Organizing Qualitative Data

Table for constructing a frequency distribution

for the political party affiliation

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 Organizing Qualitative Data

Relative-Frequency Distribution of
Qualitative Data

A relative-frequency distribution of
qualitative data is a listing of the distinct
values and their relative frequencies.

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 Organizing Qualitative Data

Relative-frequency distribution for the political party

affiliation data

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 Organizing Qualitative Data
Pie chart of the political party affiliation data

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 Organizing Qualitative Data

Bar chart of the political party affiliation data

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 Organizing Quantitative Data

Number of TV sets in each of 50 randomly selected

households.

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 Organizing Quantitative Data

Frequency and relative-frequency distributions, using

single-value grouping, for the number-of-TVs data

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 Organizing Quantitative Data

Days to maturity for 40 short-term investments

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 Organizing Quantitative Data

Frequency and relative-frequency distributions, using

limit grouping, for the days-to-maturity data

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 Organizing Quantitative Data

Terms Used in Limit Grouping

Lower class limit: The smallest value that
could go in a class.

Upper class limit: The largest value that could

go in a class.

Class width: The difference between the

lower limit of a class and the lower limit of the
next-higher class.

Class mark: The average of the two class

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limits of a class.Business School Jaipur
 Organizing Quantitative Data

Terms Used in Cutpoint Grouping

Lower class cutpoint: The smallest value that

could go in a class.

Upper class cutpoint: The largest value that

could go in the
next-higher class (equivalent to the lower
cutpoint of the next-higher class).

Class width: The difference between the

cutpoints of a class.
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 Organizing Quantitative Data

Histogram

A histogram displays the classes of the

quantitative data on a
horizontal axis and the frequencies (relative
frequencies, percents) of those classes on a
vertical axis. The frequency (relative frequency,
percent) of each class is represented by a
vertical bar whose height is equal to the
frequency (relative frequency, percent) of that
class.
The bars should be positioned so that they
touch each other. Business
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27
 Organizing Quantitative Data
Single-value grouping. Number of TVs per
household:
(a) frequency histogram; (b) relative-
frequency histogram

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