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Summary Introduction to statistics
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BUSINESS STATISTICS CLASS NOTES
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BUSINESS STATISTICS
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MATH 225N - Week_5_Lab_Assignment
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BUSINESS STATISTICSDefinition:
It is the science of collecting, organizing, presenting, analyzing and interpreting data to assist in
making more effective decisions.
Types of Statistics
(a) Descriptive statistics: it’s a tabular, graphical and numerical method for organizing and
summarizing information clearly and effectively relating to either a population or sample.
(b) Inferential statistics: are the methods of drawing and measuring the reliability of
conclusions about a statistical population based on information from a sample data set.
A population is a collection of all possible individuals, objects or measurements
of interest.
A sample part or sub set of the population of interest.
Variables:
A variable is a measurable characteristic that assumes different values among the subjects.
Types of variables
(a) Independent variables: It is a variable that a researcher manipulates in order to determine
its effect or influence on another variable. They predict the amount of variation that occurs
in other variables.
(b) Dependent variables: It is the variable that is measured, predicted or monitored and is
expected to be affected by manipulation of an independent variable. They attempt to indicate
the total influence arising from the effects of the independent variable. It varies as a function
of the independent variable e.g. influence of hours studied on performance in a statistical
test, influence of distance from the supply center on cost of building materials.
(c) Qualitative variables: Are variables that are non-numeric i.e. attributes e.g. Gender,
Religion, Colour, State of birth etc.
(d) Quantitative variables: are numeric variables. They can either be discrete or continuous.
i. Discrete variables: Are variables, which can only assume certain values i.e. whole
numbers. Are always counted.
ii. Continuous variables: Are variables, which can assume any value within a specific
range. Are always measured e.g. height, temperature, weight, radius etc.
(e) Controllable variables: Are those factors which lie within a manager’s domain e.g. price,
budget etc
(f) Uncontrollable variables: are those, which are beyond the control of any organisation e.g.
behaviour of competitors, effects of natural calamities etc.
, Levels of measurement
There are four levels of measurement; nominal, ordinal, interval and ratio.
(a) Nominal level. The observations are classified under a common characteristic e.g. sex, race,
marital status, employment status, language, religion etc. Helps in sampling.
(b) Ordinal level: Items or subjects are not only grouped into categories, but they are ranked
into some order e.g. greater than, less than, superior, happier than, poorer, above etc. Helps
in developing a likert scale.
(c) Interval level: numerals are assigned to each measure and ranked. The intervals between
numerals are equal. The numerals used represent meaningful quantities but the zero point is
not meaningful e.g. test scores, temperature.
(d) Ratio level: Has all the characteristics of the other levels and in addition the zero point is
meaningful. Mathematical operations can be applied to yield meaningful values e.g. height,
weight, distance, age, area etc.
Characteristics of statistical data
They are aggregate of facts e.g. total sales of a firm for one year.
They are affected to a marked extent by a multiplicity of causes e.g. volume of wheat
production depends on rainfall, soil fertility, seeds etc
They are numerically expressed e.g. population of Kenya increased by 4 million during the
year 2004.
They are estimated according to a reasonable standard of accuracy e.g. 90% accuracy
They are collected in a systematic manner.
They are collected for a predetermined purpose
They should be placed in relation to each other.
Users and uses of statistics
1. Government :
Monitoring economic and social trends
Forecasting
Policy making
2. Individuals
Leisure activities
Community work
Personal finances
Gambling
3. Academia
Testing hypothesis
Developing new theories
Consultancy services
4. Businesses
Planning and control
Quality control especially for the manufacturers
Forecasting i.e. planning production schedules, advertising expenditures etc.
Auditing
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