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BUS172

Instructor: Nahid Farnaz (Nhn)


North South University

BUS172:
Introduction to Statistics
Chapter 1
Why Study Statistics?

Chap 1-1

Dealing with Uncertainty


Everyday decisions are based on incomplete
information

Decision makers cannot be certain of the future behavior of


factors that affect the outcome

Why Study Statistics?

Numerical information is everywhere


Statistical techniques are used to make many decisions
Business decisions are made in an uncertain environment.

An understanding of statistical methods will help you make these decisions


more effectively.

Chap 1-2

Importance of Statistics

To draw conclusions about the wider population.

Statistics is the study of how to make decisions


about a population when our information has
been obtained from a sample.

Some uncertainty will always remain.

Statistics for Business and Economics, 6e 2007 Pearson Education, Inc.

Chap 1-3

Key Definitions

A population is the collection of all items of interest that


interest an investigator.

N represents the population size

For e.g. All students in your university

A sample is an observed subset of the population

n represents the sample size

For example: students majoring in Finance.

A parameter is a specific characteristic of a population

A statistic is a specific characteristic of a sample

Chap 1-4

Population vs. Sample


Population
a b

Sample

cd

ef gh i jk l m n
o p q rs t u v w
x y

Values calculated using


population data are called
parameters

gi
o

n
r

y
Values computed from
sample data are called
statistics
Chap 1-5

Example:
Sample vs. Population

Suppose you want to find out the average age of


voters in Bangladesh.
The population size is so large that we might take
only a random sample, perhaps 500 registered
voters and calculate their average age.
Since the average age is based on sample data,
it is called a statistic
If the average age of the whole population was
calculated, then the average age would be called
a parameter.

Statistics for Business and Economics, 6e 2007 Pearson Education, Inc.

Chap 1-6

Random Sampling
Simple random sampling is a procedure in which
each member of the population is chosen strictly by chance,
each member of the population is equally likely to be chosen,
and
every possible sample of n objects is equally likely to be chosen

The resulting sample is called a random sample

Chap 1-7

Descriptive and Inferential Statistics


Two branches of statistics:

Descriptive statistics

Collecting, summarizing, and processing data to


transform data into information

Inferential statistics

provide the bases for predictions, forecasts, and


estimates that are used to transform information
into knowledge
Chap 1-8

Descriptive Statistics

Collect data

Present data

e.g., Survey

e.g., Tables and graphs

Summarize data

e.g., Sample mean =

Chap 1-9

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

Inference is the process of drawing conclusions or


making decisions about a population based on
sample results
Chap 1-10

Exercise 1.8

a)

b)

c)

Determine if descriptive statistics or inferential


statistics should be used to obtain the following
information:
A graph that shows the number of defective
bottles produced during the day shift over one
weeks time.
An estimate of the percentage of employees who
arrive to work late.
An indication of the relationship between years of
employee experience and pay scale.
Chap 1-11