1.
BASIC CONCEPTS OF BUSINESS STATISTICS:
1.1 Statistics is concerned with:
• Processing and analysing data
• Collecting, presenting and transforming data to assist decision-makers
1.2 Key definitions:
• A population consists of all the members of a group about which you want to draw a
conclusion.
• A sample is the portion of the population selected for analysis.
• A parameter is a numerical measure that describes a characteristic of a population.
• A statistic is a numerical measure that describes a characteristic of a sample.
1.3 Descriptive statistics
• Collecting, summarizing and presenting data.
• Collect data E.g. survey
• Present data E.g. tables and graphs
• Characterize (Analyze) data
1.4 Inferential statistics
• Drawing conclusions about a population based on sample data, i.e. estimating a
parameter based on a statistic.
• Estimation. E.g. estimate the population mean weight (parameter) using the sample
mean weight (statistic).
• Hypothesis testing
E.g. Test the claim that the population mean height of Vietnamese male is 165cm
1.5 Sources of data:
• Secondary data - are data that were collected for some other purpose and are already
available
• Primary data - are data collected for a specific purpose or to address a specific need.
• Big data:
- Broad and deep data that arise from ongoing organic distributed processes.
- Data is generated, captured and stored from numerous available sources, quickly building
datasets.
- Everyday activities result in the production of data that are automatically stored in real
time.
- Automatic data capture from so many sources means that datasets are both broad (cover
numerous issues) and deep (provide great detail).
2. TYPES OF DATA:
2.1 Categorical (Defined categories):
Nominal
• Simply classifies data into categories e.g. marital status, hair colour, gender.
Ordinal
• Simply classifies data into categories where ranking is involved e.g. days of the week,
Likert scales, ranking
2.2 Numerical (Quantitative):
Discrete
• Counted items (finite number of items) e.g. number of children, number of people who
have type O blood.
Continuous
• Measured characteristics (infinite number of items) e.g. weight, height.
3. GRAPHIC TECHNIQUES:
For Categorical data:
- Summary Table:
- Graphing data : Bar charts and pie charts
Used for qualitative data (categories or nominal scale).
Length of bar or size of pie slice shows the frequency or percentage for each
category.
Bar charts are preferred for comparing categories.
Pie charts are preferred for observing portion of the total that lies in a particular
category (e.g. market share).
Tabulating and Graphing Multivariate Categorical Data:
• Side-by-side bar charts
Individual values could also be expressed as percentages of the overall total, percentages of the
row totals, or percentages of the column totals
For numerical data:
• Frequency distributors: a summary table in which data are arranged into numerically
ordered classes or intervals.
• The number of observations in each ordered class or interval becomes the
corresponding frequency of that class or interval.
• It is a way to summarize numerical data.
• It condenses the raw data into a more useful form.
• It allows for a quick visual interpretation of the data and first inspection of the shape of
the data.
Class intervals and class boundaries:
• Each data value belongs to one, and only one, class.
• Each class grouping has the same width.
• Usually at least 5 but no more than 15 groupings
• Class boundaries must be mutually exclusive
• Classes must be collectively exhaustive
Round up the interval width to get desirable endpoints
Histogram:
• A graph of the data in a frequency distribution is called a histogram.
• The class boundaries (or class midpoints) are shown on the horizontal axis.
• The vertical axis is either frequency, relative frequency or percentage.
• Bars of the appropriate heights are used to represent the frequencies (number of
observations) within each class or the relative frequencies (percentage) of that class
• A vertical bar chart based on the Class intervals and Frequencies
• X-axis has the class endpoints and Y-axis has the frequencies
Class Interval Frequency
(5.0, 5.4] 8
(5.4, 5.8] 8
(5.8, 6.2] 5
(6.2, 6.6] 14
(6.6, 7.0] 4
(7.0, 7,4] 1
Scatter diagrams:
• Scatter diagrams are used to examine possible relationships between two numerical
variables.
• In a scatter diagram one variable is measured on the vertical axis (Y) and the other
variable is measured on the horizontal axis (X).