Introduction of Statistic and Data Collection

Why a Manager Needs to Know About Statistic?

Managers needs an understanding of statistics for the following four key reasons: To know how to properly present and describe information To know how to draw conclusions about large population based only on information obtained from samples To know how to improve processes To know how to obtain reliable forecasts

The Growth and Development of Modern Statistics

Historically, the growth and development of modern statistics can be traced to three separate phenomena; 1. The needs of government to collect data on its citizenry 2. The development of the mathematics of probability theory 3. The evolution of electronic computing

Key Definitions
A population (or universe) is the totality of items or things under consideration. A parameter is a summary measure that describes a characteristic of an entire population. A sample is the portion of the population that is selected for analysis. A statistic is a summary measure computed from sample data that is used to describe or estimate a characteristic of the entire population.

Descriptive versus Inferential Statistics

Descriptive statistics are methods that focus on the collection, presentation, and characterization of a set of data in order to properly describe the various features of that set. Inferensial statistics make possible the estimation of a characteristic of a population or the making of a decision concerning a population based only on sample results.

Why data are needed

We can think of data as the information needed to help make a more informed decision in a particular situation. Data are needed in many instances, including the following: A market researcher needs to assess product characteristics to distinguish one product from another A pharmaceuticals manufacturs needs to determine whether a new drug is more effective than those currently in use. An operations manager wants to monitor a manufacturing process on a regular basis to find out whether the quality of the product that is being produced is conforming to company standards. An auditor wants to review the financial transactions of a company in order to ascertain whether it is in compliance with generally accepted accounting principles. A financial analyst wants to determine what companies within what industries are likely to have accelerated growth in the next five years. A student wants to get data on classmates favorite rock groups to satisfy a curiosity.

Why data are needed

Reason for Obtaining Data: 1. Data are needed to provide the necessary input to a survey 2. Data are needed to provide the necessary input to a study 3. Data are needed to measure performance of an ongoing service or production process 4. Data are needed to evaluate conformance to standards 5. Data are needed to assit in formulating alternative courses of action in a decision making process. 6. Data are needed to satisfy our curiosity.

Types of data and their sources

Data Type Question Types Responses

Categorical

Do you currently own stock or bonds?

Yes

No

Discrete Numerical Continuous

To how many magazines Do you currently subcribe?

Number

How tall are you?

Inches

Types of data and their sources

Data collectors are labeled primary sources; data compilers are called secondary sources. There are four method for data collection: Government, industrial, or individual sources Experimentation Surveys Observational study

1. 2. 3. 4.

Design of Survey Research

1.

Based on the reason:

Basic research Applied Research Deskriptive Research Explanation Research Exploratory Research Library Research Laboratory Research Field Research

2.

Based on the purpose:

3.

Based on the place:

Types of Sampling Methods

There are three main reasons for drawing a sample; 1. A sample is less time-consuming than a census. 2. A sample is less costly to administer than a census. 3. A sample is less cumbersome and more practical to administer than a census.

Types of Sampling Methods

Types of Samples Used

Nonprobability Samples

Probability Samples

Judgment Sample

Quota Sample

Chunk

Simple Systematic Stratified Cluster Random Sample Sample Sample Sample

Types of Survey Errors

Coverage Error occurs if certain groups of subjects are excluded from this frame listing so that they have no chance of being selected in the sample. Coverage error results in a selection bias. Nonresponse Error arises from the failure to collect data on all subjects in the sample and results in a nonresponse bias.

Types of Survey Errors

Sampling Error reflects the heterogenity, or chance differences, from sample to sample based on the probability of particular individuals or items being selected in the particular samples. Sampling error can be reduced by taking larger sample sizes, although this also increases the cost of conducting the survey. Measurement Error; obtaining meaningful measurements is often easier said than done. There are three sources of measurement error: ambiguous wording of questions, the halo effect, and respondent error.

Types of Survey Errors

Ethical Issues. Measurement error becomes an ethical issue in one of three ways:
1. A survey sponsor may purposely choose loaded, lead-in question that would guide the responses in a particular direction. 2. An interviewer, through mannerisms and tone, may purposely create a halo effect or otherwise guide the responses in a particular direction. 3. A respondent having disdain for the survey process may willfully provide false information.