Statistics for Decision Making

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Statistics for Decision Making
QM 2113 -- Fall 2003

• Bivariate Descriptive Statistics

Instructor John Seydel, Ph.D.
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Student Objectives

• Plot two related quantitative variables on a
  scatterplot
• Estimate the equation of the best fitting line
  through a set of points
• Relate the equation of a line through a set of
  points to the relationship between the variables
  being plotted
• Use Excel to
• Determine the best fitting regression line
• Quantify the fit of a straight line through
  points
• Examine the relationship between two qualitative
  variables

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Administrative Chores

• Homework from last week
• Return
• Comments
• This weeks homework
• Not being collected
• Use to study for exam
• Basis for discussion tonight
• First exam is next week (descriptive statistics)
• Chapters 1-3 (selected portions, per assignments)
• Chapter 11 (pages 425-429,434-446)
• Excel procedures as discussed in class

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Review Data and Analysis
The analyses can be univariate (one variable at a
time), bivariate, or multivariate
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Lets Look at the Homework

• Chapter 1 questions
• At this point, all you can do is quote the text
• However, these are good final exam questions
• Chapter 3
• Lets look at 15
• Any others?
• How about other aspects of the assignment?

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Bivariate Analyses Quantitative Variables

• Informal analysis
• Scatterplot
• Can infer relationship by looking at points
• Formal analysis
• Regression
• Involves formal means of describing plotted line
  through points
• Example Great Northern Insurance

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Bivariate Analyses Qualitative Variables

• Informal analysis
• Joint frequency tables (crosstabulation)
• Pie bar charts
• Formal analysis
• Requires understanding of basic probability
• Beyond our scope for the moment
• Example KIVZ Television

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Miscellaneous Statistics

• Less important but need to be familiar with
• Location
• Median
• Mode
• Quantiles (percentiles, quartiles)
• Variation
• Range
• Min and Max
• CV
• Both (?)
• Z-score
• Empirical Rule
• Other skew
• Lets look at the homework related to this

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Another Notation Quiz

• Mean
• Sample
• Population
• Standard deviation
• Sample
• Population
• Variance
• Range
• Number of
• Observations
• Elements in the population
• Slope coefficient
• Intercept
• Proportion of variation explained by relationship
• Average error from using regression equation for
  prediction

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Summary of Objectives

• Plot two related quantitative variables on a
  scatterplot
• Estimate the equation of the best fitting line
  through a set of points
• Relate the equation of a line through a set of
  points to the relationship between the variables
  being plotted
• Use Excel to
• Determine the best fitting regression line
• Quantify the fit of a straight line through
  points
• Examine the relationship between two qualitative
  variables

11
Appendix
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Recall Our Purposes Here

• What is statistics all about?
• Its about dealing with variation
• Summarizing information (description)
• Making decisions based upon that summarization
• Type of analysis depends on data type
• Quantitative
• Qualitative
• Description
• Formal
• Numeric data average and standard deviaiton
• Categorical data percentages
• Informal frequency tables and charts data