Introduction

to Statistics
Chapter 1

Learning
Learning Objectives
Objectives
Define statistics
Become aware of a wide range of
applications of statistics in business
Differentiate between descriptive and
inferential statistics
Classify numbers by level of data and
understand why doing so is important

What
What is
is Statistics?
Statistics?
Science of gathering, analyzing,
interpreting, and presenting data
Branch of mathematics
Course of study
Facts
Measurement taken on a sample
Type of distribution being used to
analyze data

Population
Population Versus
Versus Sample
Sample
Population the whole
a collection of persons, objects, or items
under study

Census gathering data from the

entire population
Sample a portion of the whole
a subset of the population

Population
Population

Population
Population and
and Census
Census Data
Data
Identifier

Color

MPG

RD1
RD2
RD3
RD4
RD5
BL1
BL2
GR1
GR2
GY1
GY2
GY3

Red
Red
Red
Red
Red
Blue
Blue
Gree
n
Gree
n
Gray
Gray
Gray

12
10
13
10
13
27
24
35
35
15
18
17

Sample
Sample and
and Sample
Sample Data
Data
Identifier

Color

MPG

RD2

Red

10

RD5

Red

13

GR1

Gree
n

35

GY2

Gray

18

Descriptive
Descriptive vs.
vs. Inferential
Inferential Statistics
Statistics
Descriptive Statistics using data
gathered on a group to describe or
reach conclusions about that same
group only
Inferential Statistics using sample
data to reach conclusions about the
population from which the sample was
taken

Parameter
Parameter vs.
vs. Statistic
Statistic
Parameter descriptive measure of
the population
Usually represented by Greek letters

Statistic descriptive measure of a

sample
Usually represented by Roman letters

Symbols
Symbols for
for Population
Population Parameters
Parameters
denotespopulationparameter

denotes population variance

denotespopulationstandarddeviation

Symbols
Symbols for
for Sample
Sample Statistics
Statistics
xdenotessamplemean

denotessamplevariance

Sdenotessamplestandarddeviation

Process
Process of
of Inferential Statistics

Population

Calculatex
toestimate

Sample
x

(parameter)

(statistic)

Selecta
randomsample

Levels
Levels of
of Data
Data Measurement
Measurement

Nominal - Lowest level of measurement

Ordinal
Interval
Ratio - Highest level of measurement

Nominal
Nominal Level
Level Data
Data
Numbers are used to classify or
categorize
Example: Employment Classification
1 for Educator
2 for Construction Worker
3 for Manufacturing Worker

Example: Ethnicity
1 for African-American
2 for Anglo-American
3 for Hispanic-American
4 for Oriental-American

Ordinal
Ordinal Level
Level Data
Data
Numbers are used to indicate rank or order
Relative magnitude of numbers is meaningful
Differences between numbers are not comparable
Example: Taste test ranking of three brands of soft
drink
Example: Position within an organization
1 for President
2 for Vice President
3 for Plant Manager
4 for Department Supervisor
5 for Employee

Example
Example of
of Ordinal
Ordinal Measurement
Measurement

1
6

f
i

2
4
3
5

n
i
s
h

Ordinal
Ordinal Data
Data
Faculty and staff should receive preferential
treatment for parking space.
Strongly
Agree

Agree

Neutral

Disagree

Strongly
Disagree

Interval
Interval Level
Level Data
Data
Distances between consecutive integers
are equal
Relative magnitude of numbers is
meaningful
Differences between numbers are
comparable
Location of origin, zero, is not absolute
Examples: Fahrenheit Temperature, Calendar
Time, Monetary Units

Ratio
Ratio Level
Level Data
Data
Highest level of measurement
Relative magnitude of numbers is meaningful
Differences between numbers are
comparable
Location of origin, zero, is absolute (natural)
Examples: Height, Weight, and Volume

Usage
Usage Potential
Potential of
of Various
Various
Levels
Levels of
of Data
Data
Ratio
Interval
Ordinal
Nominal

Data
Data Level, Operations,
Operations,
and
and Statistical
Statistical Methods
Methods
Data Level

Meaningful Operations

Statistical
Methods

Nominal

Classifying and Counting

Nonparametric

Ordinal

All of above plus Ranking

Nonparametric

Interval

All of above plus Addition,

Subtraction, Multiplication,
and Division

Parametric

Ratio

All of the above

Parametric

Qualitative vs Quantitative Data

Qualitative Data is data of the nominal or
ordinal level that classifies by a label or
category. The labels may be numeric or
nonnumeric.
Quantitative Data is data of the interval
or ratio level that measures on a naturally
occurring numeric scale.

Discrete and Continuous Data

Discrete Data is numeric data in which the
values can come only from a list of specific
values. Discrete data results from a
counting process.
Continuos Data is numeric data that can
take on values at every point over a given
interval. Continuous data result from a
measuring process.

Summary of Data Classifications

Data
Data

nal
Nominal

Ordinal

Ordinal

Qualitative
(Categorical)

Qualitative

Nonnumeric

Nonnumeric

Numeric
Numeric

Discrete
Discrete

Interval
Interl

Ratio
Ratio

Quantitative

Quantitative

Numeric

Numeric

Discrete or
Discrete
or
Continuous
Continuous