Business Statistics

Fourth Edition

Chapter 1
An Introduction
to Business
Statistics

Copyright © 2026 Pearson Education, Inc. All Rights Reserved

Chapter 1 Introduction
1.1 Business Statistics and Their Uses
1.2 Data
1.3 Branches of Statistics
1.1 Business Statistics and Their
Uses
Statistics
The mathematical science that deals with the collection,
analysis, and presentation of data, which can then be
used as a basis for inference and induction

Examples of how business statistics can help an

organization’s decision makers:
1.1 Business Statistics and Their
Uses
Marketing Research
• Focus group data, customer surveys
Advertising
• Household surveys, TV viewing habits
Operations
• Quality control, reliability
Finance
• Data on income, credit risk, unemployment
Weather
• Forecasting, planning, risk minimization
1.2 Data
Data
• Values assigned to observations or measurements

Information
• Data that are transformed into useful facts that can be
used for a specific purpose, such as making a decision
Data
Data: Raw facts or measurements of interest
Temperatures in NYC in January 2023*
Date Actual Temp High/Low (°F) Open Parenthesis Degrees Fahrenheit Close Parenthesis.

Sun 1/ 1 1 divided by 1.
55° / 49°
55 degrees divided by 49 degrees.

Mon 1/ 2 One-half
56° / 49°
56 degrees divided by 49 degrees.

Tue 1/ 3 One-third

58° / 47°
58 degrees divided by 47 degrees.

Wed 1/ 4 One-fourth. 66° / 49°

66 degrees divided by 49 degrees.

Thu 1/ 5 One-fifth.
50° / 44°
50 degrees divided by 44 degrees.

Fri 1/ 6
One-sixth.
49° / 39°
49 degrees divided by 39 degrees.

Sat 1/ 7
One-seventh.
45° / 37°
45 degrees divided by 37 degrees.

* [Link]
Data Sets and Databases
Data set
• A collection of data points

Database
• A collection of data points that contains multiple rows
(records) and columns (fields)
Data
Analyzing the data can provide information:
Weather Forecast Database for January 2023

Day Actual Temp High/Low (°F) * Open Parenthesis Degrees Fahrenheit Close Parenthesis. Wind Speed (MPH) ** Humidity (%) **
Mon 1 / 1 1 divided by 1. 55 / 
55 degrees divided by 49 degrees.

5.8 64%
Tues 1/ 2 One-half
56 / 
56 degrees divided by 49 degrees.

4.3 67%
Wed 1/ 3 One-third
58 / 
58 degrees divided by 47 degrees.

3.1 98%
Thurs 1 / 4 One-fourth.
66 / 
66 degrees divided by 49 degrees.

2.5 79%
Fri 1 / 5
One-fifth. 50 / 
50 degrees divided by 44 degrees.

2.9 80%

Sat 1 / 6 One-sixth.
49 / 
49 degrees divided by 39 degrees.

3.4 89%

Sun 1/ 7 One-seventh. 45 / 

45 degrees divided by 37 degrees.

7.4 51%

* [Link]
** [Link]
The Sources of Data
Primary data
• Data that you have collected for your own use

Secondary data
• Data collected by someone else
The Sources of Data
Primary data Secondary data
Advantages: Advantages:
• collected by the person or • Readily available
organization who uses the data • Less expensive to collect
Disadvantages: Disadvantages:
• Can be expensive and time- • No control over how the data was
consuming to gather collected
• Less reliable unless collected and
recorded accurately
Primary Data

Observing subjects Treatments are Subjects are asked to

in their natural applied in controlled respond to questions or
environment conditions. discuss attitudes.

Example: Watching Example: Crop Example: E-mail surveys

to see if drivers stop growth from different to customers to assess
at a stop sign plots using different service quality
fertilizers
An Example of a Survey
The Two Main Types of Data

Classified by descriptive terms

Examples:
• Name of respondent Described by numerical values
• Level of education
Examples: Examples:
• Number of • Weight
customers • Height
• Repeat customers • Distance
Classifying Data by Their Level of
Measurement
The Two Main Types of Data and Their Corresponding
Levels
Classifying Data by Their Level of
Measurement
The Four Levels of Data Measurement: A Summary

Level Description Example

Nominal Arbitrary labels for data Zip Codes (19808, 76137)
No ranking allowed
Ordinal Ranking allowed Education level (master’s
No measurable meaning to degree, doctorate degree)
the number differences
Interval Meaningful differences Calendar year (2018, 2019)
No true zero point
Ratio Meaningful differences Income ($48,000, $0)
True zero point
1.3 Branches of Statistics
Descriptive statistics
• collecting, summarizing, and displaying data

Inferential statistics
• making claims or conclusions about the data based on a
sample
Population v s Sampleersu

Population
• represents all possible subjects that are of interest in a
particular study

Sample
• refers to a portion of the
population that is
representative of the
population from which it
was selected
Inferential Statistics
Making claims about a population by examining sample
results
• Example:
Inferential
Statistics
Using Inferential Statistics for
Quality Control Purposes: An
Example