An Introduction to Business Statistics

1
An Introduction to Business Statistics

• 1.1 Populations and Samples
• 1.2 Sampling a Population of Existing Units
• 1.3 Sampling a Process
• 1.4 Ratio, Interval, Ordinal, and Nominative
  Scales of Measurement

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Populations and Samples

• Population
• A set of existing units (people, objects, or
  events)
• Variable
• A measurable characteristic of the population
• Quantitative (real-valued) Qualitative
  (categorical)
• Census
• An examination of the entire population of
  measurements
• Sample
• A selected subset of the units of a population

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Populations and Samples

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Descriptive Statistics and Statistical Inference

• Descriptive Statistics
• The science of describing important aspects of a
  set of measurements
• Statistical Inference
• The science of using a sample of measurements to
  make generalizations about important aspects of a
  population

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Sampling a Population of Existing Units

• Random Sampling
• A procedure for selecting a subset of the
  population units in such a way that every unit in
  the population has an equal chance of selection
• Sampling with replacement
• When a unit is selected as part of the sample,
  its value is recorded and placed back into the
  population for possible reselection
• Sampling without replacement
• Units are not placed back into the population
  after selection

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Approximate Random Samples
Frame A list of all population units. Required
for random sampling, but not for approximate
random sampling methods like systematic and
voluntary response sampling. Systematic
Sample Every k-th element of the population is
selected for the sample Voluntary Response
Sample Sample units are self-selected (as in
radio/TV surveys)
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Sampling a Process
Process A sequence of operations that takes
inputs (labor, raw materials, methods, machines,
and so on) and turns them into outputs (products,
services, and the like.)

A process is in statistical control if it
displays constant level and constant variation.
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Runs Plot

• A runs plot is a graph of individual process
  measurements over time.

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Runs Plot Payment Time Example
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Scales of Measurement

• Ratio
• Quantitative scale, ratios are meaningful,
  inherently defined zero. (e.g. salary, height,
  distance.)
• Interval
• Quantitative scale, but ratios not meaningful
  nor is there an inherently defined zero. (e.g.
  temperature)
• Ordinal
• Qualitative or categorical scale with meaningful
  ordering or ranking of categories. (e.g. income
  classification)
• Nominative
• Qualitative scale without meaningful ordering
  among categories (e.g. gender, ethnic
  classification)

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An Introduction to Business Statistics
Summary

• 1.1 Populations and Samples
• 1.2 Sampling a Population of Existing Units
• 1.3 Sampling a Process
• 1.4 Ratio, Interval, Ordinal, and Nominative
  Scales of Measurement