Statistics for Managers using Microsoft Excel 6th Edition Chapter 1 Introduction Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall 1-1 1-1

Learning Objectives In this chapter you learn: How business uses statistics The basic vocabulary of statistics How to use Microsoft Excel with this book Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall 1-2 1-2

Why Learn Statistics Internet articles / reports Magazine articles Make better sense of the world Make better business decisions Internet articles / reports Magazine articles Newspaper articles Television & radio reports Business memos Business research Technical journals Technical reports Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall 1-3 1-3

In Business, Statistics Has Many Important Uses To summarize business data To draw conclusions from business data To make reliable forecasts about business activities To improve business processes Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall 1-4 1-4

Two Different Branches Of Statistics Are Used In Business The branch of mathematics that transforms data into useful information for decision makers. Descriptive Statistics Collecting, summarizing, presenting and analyzing data Inferential Statistics Using data collected from a small group to draw conclusions about a larger group Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall 1-5 1-5

These Two Branches Are Used In The Important Activities To summarize business data Descriptive methods used to create charts & tables To draw conclusions from business data Inferential methods used to reach conclusions about a large group based on data from a smaller group To make reliable forecasts about business activities Inferential methods used to develop, quantify, and improve the accuracy of predictive models To improve business processes Involves managerial approaches like Six Sigma Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall 1-6 1-6

Descriptive Statistics Collect data e.g., Survey Present data e.g., Tables and graphs Characterize data e.g., The sample mean Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall 1-7 1-7

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 Drawing conclusions about a large group of individuals based on a smaller group. Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall 1-8 1-8

Basic Vocabulary of Statistics VARIABLES Variables are a characteristics of an item or individual and are what you analyze when you use a statistical method. DATA Data are the different values associated with a variable. OPERATIONAL DEFINITIONS Data values are meaningless unless their variables have operational definitions, universally accepted meanings that are clear to all associated with an analysis. Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall 1-9 1-9

Basic Vocabulary of Statistics POPULATION A population consists of all the items or individuals about which you want to draw a conclusion. The population is the “large group” SAMPLE A sample is the portion of a population selected for analysis. The sample is the “small group” PARAMETER A parameter is a numerical measure that describes a characteristic of a population. STATISTIC A statistic is a numerical measure that describes a characteristic of a sample. Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall 1-10 1-10

Population vs. Sample Population Sample Measures used to describe the population are called parameters Measures used to describe the sample are called statistics Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall 1-11 1-11

This Book Is Organized To Show The Four Uses Of Statistics To summarize business data (Chapters 2 & 3) To draw conclusions from business data (Chapters 4 – 12) To make reliable forecasts about business activities (Chapters 13 – 16) To improve business processes (Chapter 18) Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall 1-12 1-12

Chapter Summary In this chapter, we have Introduced the basic vocabulary of statistics and the role of statistics in turning data into information to facilitate decision making Examined the use of statistics to: Summarize data Draw conclusions from data Make reliable forecasts Improve business processes Examined descriptive vs. inferential statistics Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall 1-13 1-13

Printed in the United States of America. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall 1-14