Statistics for Managers

using Microsoft Excel

4th Edition
Chapter 1
Introduction and
Data Collection

© 2002 Prentice-Hall, Inc. Chap 1-1

 Chapter Topics
 Why a manager needs to know about
statistics
 The growth and development of modern
statistics
 Key definitions
 Descriptive versus inferential statistics

Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.

Chap 1-2
 Chapter Topics
(continued)

 Why data are needed

 Types of data and their sources
 Design of survey research
 Types of sampling methods
 Types of survey errors

Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.

Chap 1-3
 Why a Manager Needs to
Know about Statistics
 To know how to properly present
information
 To know how to draw conclusions
about populations based on sample
information
 To know how to improve processes
 To know how to obtain reliable
forecasts

Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.

Chap 1-4
 The Growth and Development
of Modern Statistics
Needs of government to
collect data on its citizens

The development of the

mathematics of probability
theory

The advent of the computer

Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.
Chap 1-5
 Key Definitions
 A population (universe) is the collection of things
under consideration
 A sample is a portion of the population selected for
analysis
 A parameter is a summary measure computed to
describe a characteristic of the population
 A statistic is a summary measure computed to
describe a characteristic of the sample

Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.

Chap 1-6
 Population and Sample

Population Sample
Use statistics to
summarize features

Use parameters to
summarize features

Inference on the population from the sample

Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.
Chap 1-7
 Statistical Methods
 Descriptive statistics
 Collecting and describing data
 Inferential statistics
 Drawing conclusions and/or making
decisions concerning a population based
only on sample data

Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.

Chap 1-8
 Descriptive Statistics
 Collect data
 e.g. Survey
 Present data
 e.g. Tables and graphs
 Characterize data
X i
 e.g. Sample mean = n

Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.

Chap 1-9
 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 and/or making decisions
concerning a population based on sample results.
Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.
Chap 1-10
 Why We Need Data
 To provide input to survey
 To provide input to study
 To measure performance of service or
production process
 To evaluate conformance to standards
 To assist in formulating alternative courses
of action
 To satisfy curiosity
Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.
Chap 1-11
 Data Sources
Primary Secondary
Data Collection Data Compilation

Print or Electronic
Observation Survey

Experimentation

Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.

Chap 1-12
 Types of Data

D a ta

Categorical Num erical

(Q ualitative) (Q uantitative)

Discrete Continuous

Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.

Chap 1-13
 Design of Survey Research
 Choose an appropriate mode of response
 Reliable primary modes
 Personal interview
 Telephone interview
 Mail survey
 Less reliable self-selection modes (not appropriate
for making inferences about the population)
 Television survey
 Internet survey
 Printed survey on newspapers and magazines
 Product or service questionnaires

Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.

Chap 1-14
 Design of Survey Research
(continued)
 Identify broad categories
 List complete and non-overlapping categories
that reflect the theme
 Formulate accurate questions
 Make questions clear and unambiguous. Use
universally-accepted definitions
 Test the survey
 Pilot test the survey on a small group of
participants to assess clarity and length

Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.

Chap 1-15
 Design of Survey Research
(continued)

 Write a cover letter

 State the goal and purpose of the survey
 Explain the importance of a response
 Provide assurance of respondent’s anonymity
 Offer incentive gift for respondent participation

Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.

Chap 1-16
 Reasons for Drawing a Sample
 Less time consuming than a census
 Less costly to administer than a census
 Less cumbersome and more practical to
administer than a census of the targeted
population

Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.

Chap 1-17
 Types of Sampling Methods
Samples

Non-Probability Probability Samples

Samples
Simple
Random Stratified
Judgement Chunk
Cluster
Systematic
Quota
Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.
Chap 1-18
 Probability Sampling
 Subjects of the sample are chosen based on
known probabilities

Probability Samples

Simple
Systematic Stratified Cluster
Random

Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.

Chap 1-19
 Simple Random Samples
 Every individual or item from the frame has
an equal chance of being selected
 Selection may be with replacement or without
replacement
 Samples obtained from table of random
numbers or computer random number
generators

Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.

Chap 1-20
 Systematic Samples
 Decide on sample size: n
 Divide frame of N individuals into groups of k
individuals: k=n/n
 Randomly select one individual from the 1st
group
 Select every k-th individual thereafter
N = 64
n=8 First Group
k=8
Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.
Chap 1-21
 Stratified Samples
 Population divided into two or more groups
according to some common characteristic
 Simple random sample selected from each
group
 The two or more samples are combined into
one

Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.

Chap 1-22
 Cluster Samples
 Population divided into several “clusters,”
each representative of the population
 Simple random sample selected from each
 The samples are combined into one

Population
divided
into 4
clusters.
Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.
Chap 1-23
 Advantages and Disadvantages
 Simple random sample and systematic sample
 Simple to use
 May not be a good representation of the
population’s underlying characteristics
 Stratified sample
 Ensures representation of individuals across the
entire population
 Cluster sample
 More cost effective
 Less efficient (need larger sample to acquire the
same level of precision)
Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.
Chap 1-24
 Evaluating Survey Worthiness
 What is the purpose of the survey?
 Is the survey based on a probability sample?
 Coverage error – appropriate frame
 Nonresponse error – follow up
 Measurement error – good questions elicit
good responses
 Sampling error – always exists

Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.

Chap 1-25
 Types of Survey Errors
Excluded from
 Coverage error frame.

Follow up on
 Non response error non responses.

 Sampling error Chance

differences from
sample to sample.
 Measurement error
Bad Question!
Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.
Chap 1-26
 Chapter Summary
 Addressed why a manager needs to know
about statistics
 Discussed the growth and development of
modern statistics
 Addressed the notion of descriptive versus
inferential statistics
 Discussed the importance of data

Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.

Chap 1-27
 Chapter Summary
(continued)

 Defined and described the different types of

data and sources
 Discussed the design of survey
 Discussed types of sampling methods
 Described different types of survey errors

Statistics for Managers using Excel, 3e © 2002 Prentice-Hall, Inc.

Chap 1-28