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Introduction and Data Collection: Dr. Sanjay Rastogi, IIFT, New Delhi

This document discusses introductory concepts in statistics including why statistics is important in business, different types of data and levels of measurement, and how statistics can be used in various business functions and applications. It defines key terms like population, sample, descriptive statistics, inferential statistics, parameters and statistics. Finally, it outlines the different operations and statistical methods that can be used depending on the level of measurement of the data.

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Sanchi Monga
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87 views

Introduction and Data Collection: Dr. Sanjay Rastogi, IIFT, New Delhi

This document discusses introductory concepts in statistics including why statistics is important in business, different types of data and levels of measurement, and how statistics can be used in various business functions and applications. It defines key terms like population, sample, descriptive statistics, inferential statistics, parameters and statistics. Finally, it outlines the different operations and statistical methods that can be used depending on the level of measurement of the data.

Uploaded by

Sanchi Monga
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Introduction and data

Collection

Dr. Sanjay Rastogi, IIFT, New Delhi


Statistics is a science dealing with
collection, analysis, interpretation,
and presentation of numerical data.

Dr. Sanjay Rastogi, IIFT, New Delhi


Reasons for studying Statistics:
• To properly collect, present and describe business data
and information.
• To draw conclusions about large populations on the
basis of information collected from samples.
• To make reliable forecasts about business trends.
• To improve business processes.
• To make better decisions under the conditions of
uncertainty.

Dr. Sanjay Rastogi, IIFT, New Delhi


Statistics in Business
• Accounting — auditing and cost estimation
• Economics — regional, national, and international
economic performance
• Finance — investments and portfolio management
• Management — human resources, compensation, and
quality management
• Management Information Systems — performance of
systems which gather, summarize, and disseminate
information to various managerial levels
• Marketing — market analysis and consumer research
• International Business — market and demographic
analysis
Dr. Sanjay Rastogi, IIFT, New Delhi
Population Versus Sample

• Population — the whole


– a collection of persons, objects, or items
under study
• Census — gathering data from the entire
population
• Sample — a portion of the whole
– a subset of the population

Dr. Sanjay Rastogi, IIFT, New Delhi


Descriptive vs. Inferential Statistics

• Descriptive Statistics — using data


gathered on a group to describe or reach
conclusions about that same group only

• Inferential Statistics — using sample data


to reach conclusions about the population
from which the sample was taken
Dr. Sanjay Rastogi, IIFT, New Delhi
Parameter vs. Statistic

• Parameter — descriptive measure of the


population
– Usually represented by Greek letters

• Statistic — descriptive measure of a


sample
– Usually represented by Roman letters

Dr. Sanjay Rastogi, IIFT, New Delhi


Symbols for Population
Parameters

 denotes population parameter


2
denotes population variance
 denotes population standard deviation

Dr. Sanjay Rastogi, IIFT, New Delhi


Symbols for Sample Statistics

x denotes sample mean


S
2
denotes sample variance
S denotes sample standard deviation

Dr. Sanjay Rastogi, IIFT, New Delhi


Process of Inferential Statistics

Calculate x
to estimate 
Population Sample
 x
(parameter) (statistic)

Select a
random sample
Dr. Sanjay Rastogi, IIFT, New Delhi
Levels of Data Measurement

• Nominal — Lowest level of measurement


• Ordinal
• Interval
• Ratio — Highest level of measurement

Dr. Sanjay Rastogi, IIFT, New Delhi


Nominal Level Data
• Numbers are used to classify or categorize
Example: Employment Classification
– 1 for Educator
– 2 for Construction Worker
– 3 for Manufacturing Worker
Example: Ethnicity
– 1 for African-American
– 2 for Anglo-American
– 3 for Hispanic-American

Dr. Sanjay Rastogi, IIFT, New Delhi


Ordinal Level Data
• Numbers are used to indicate rank or order
– Relative magnitude of numbers is meaningful
– Differences between numbers are not comparable

Example: Ranking productivity of employees


Example: Taste test ranking of three brands of soft drink
Example: Position within an organization
– 1 for President
– 2 for Vice President
– 3 for Plant Manager
– 4 for Department Supervisor
– 5 for Employee

Dr. Sanjay Rastogi, IIFT, New Delhi


Interval Level Data
• Distances between consecutive integers are equal
– Relative magnitude of numbers is meaningful
– Differences between numbers are comparable
– Location of origin, zero, is arbitrary
– Vertical intercept of unit of measure transform
function is not zero
Example: Fahrenheit Temperature
Example: Calendar Time
Example: Monetary Utility

Dr. Sanjay Rastogi, IIFT, New Delhi


Ratio Level Data
• Highest level of measurement
– Relative magnitude of numbers is meaningful
– Differences between numbers are comparable
– Location of origin, zero, is absolute (natural)
– Vertical intercept of unit of measure transform function
is zero
Examples: Height, Weight, and Volume
Example: Monetary Variables, such as Profit and Loss,
Revenues, and Expenses
Example: Financial ratios, such as P/E Ratio, Inventory
Turnover, and Quick Ratio .

Dr. Sanjay Rastogi, IIFT, New Delhi


Usage Potential of Various
Levels of Data
Ratio
Interval
Ordinal

Nominal

Dr. Sanjay Rastogi, IIFT, New Delhi


Data Level, Operations,
and Statistical Methods
Statistical
Data Level Meaningful Operations
Methods

Nominal Classifying and Counting Nonparametric

Ordinal All of the above plus Ranking Nonparametric

Interval All of the above plus Addition, Parametric


Subtraction, Multiplication, and
Division

Ratio All of the above Parametric

Dr. Sanjay Rastogi, IIFT, New Delhi

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