doane chapter 01

7/30/2019 Doane Chapter 01

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Overview of Statistics

What is Statistics?Why Study Statistics?

Uses of Statistics

Statistical Challenges

Writing and Presenting Reports

Statistical Pitfalls

Statistics: An Evolving Field

Chapter

1


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What is Statistics?

Statistics is the science of collecting, organizing,

analyzing, interpreting, and presenting data.

A statisticis a single measure (number) used tosummarize a sample data set. For example, the

average height of students in this class.

A statisticianis an expert with at least a masters

degree in mathematics or statistics or a trained

professional in a related field.

McGraw-Hill/Irwin 2007 The McGraw-Hill Companies, Inc. All rights reserved.


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Why Study Statistics?

Communicat ion

Compu ter Ski lls

Understanding the language of statistics facilitates

communication and improves problem solving.

The use of spreadsheets for data analysis and word

processors or presentation software for reportsimproves upon your existing skills.


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Info rmat ion Management

Technical L i teracy

Statistics help summarize large amounts of data

and reveal underlying relationships.

Career opportunities are in growth industries

propelled by advanced technology. The use ofstatistical software increases your technical

literacy.


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Career Advancement

Quali ty Improvement

Statistical literacy can enhance your career mobility.

Statistics helps firms oversee their suppliers,

monitor their internal operations and identifyproblems.


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Uses of Statistics

Two p r imary u ses for statis t ics:

Descriptive statistics the collection, organization,

presentation and summary of data.

Inferential statistics generalizing from a sample

to a population, estimating unknown parameters,

drawing conclusions, making decisions.


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Uses of Statistics

Overview o f Stat ist ic s

Statistics

Describing

DataMaking Inferences

from Samples

Visual

Displays

Numerical

Summaries

Estimating

Parameters

Testing

Hypotheses


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Uses of Statistics

Audi t ing

Marketing

Sample from over 12,000 invoices to estimate the

proportion of incorrectly paid invoices.

Identify likely repeat customers for Amazon.comand suggests co-marketing opportunities based

on a database of 5 million Internet purchases.


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Uses of Statistics

Health Care

Purchasing

Evaluate 100 incoming patients using a 42-item

physical and mental assessment questionnaire.

Determine the defect rate of a shipment andwhether that rate has changed significantly over

time.


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Uses of Statistics

Medicine

Forecast ing

Determine whether a new drug is really better

than the placebo or if the difference is due to

chance.

Manage inventory by forecasting consumerdemand.


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Is technically current (e.g., software-wise).

Communicates well. Is proactive.

Has a broad outlook.

Is flexible.

Focuses on the main problem.

The Ideal Statist ic ian


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Meets deadlines.

Knows his/her limitations and is willing to ask for help.

Can deal with imperfect information.

Has professional integrity.

The Ideal Statist ic ian


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Work ing w ith Imperfect Data

Deal ing w ith Pract ical Constraints

State any assumptions and limitations and use

generally accepted statistical tests to detect

unusual data points or to deal with missing data.

You will face constraints on the type and quantityof data you can collect.


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Upho lding Ethical Standards

Using Consu l tants

Know and follow accepted procedures, maintain

data integrity, carry out accurate calculations,

report procedures, protect confidentiality, citesources and financial support.

Hire consultants at the beginningof the project,when your team lacks certain skills or when an

unbiased or informed view is needed.


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Ski lls Needed fo r Success in Bus iness

Forinitial

job success

Forlong-range

job success

Most common

weaknesses

Report-writing Managerial accounting Communication skills

Accounting principles Managerial economics Writing skills

Mathematics Managerial finance Immaturity

Statistics Report writing Unrealistic expectations

Oral communication


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Rules for Power Wri t ing

Outline the report before you begin.

Complete the report in sections.

Ask trusted peers to review the report and make

any necessary revisions.

Be prepared to make multiple revisions.


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Writ ing Style

Answer research question succinctly.

List most important results first.

Include section headings and avoid lengthy

paragraphs.

Provide clear data sources.

Use appendices for technical information.

Be stylistically consistent.


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Avoid Jargon

Spel ling and Grammar

Present technical concepts so that others can

understand them.

Dont rely on software to catch all spelling and

grammar errors.


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Make it Attract ive

Descriptive title.

Date

Author(s)

Page number.

Wide margins.

Typeface and point size. Bullets and subheadings.

Bold face, italics, color.


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Organizing a Techn ical Repo rt

Typical business report style includes:

Executive Summary (1 page maximum)

- Briefly describe task and goals, data anddata sources, methods that were used,

main findings and any limitations.

Introduction (1 to 3 paragraphs)

- Statement of the problem

- Data sources and definitions

- Methods utilized


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Body of the Report (as long as necessary)

- Discussion, explanations, interpretations- Tables and graphs, as needed

Conclusions (1 to 3 paragraphs)

- Statement of findings (in order of importance)- Limitations (if necessary)

- Future research suggestions


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Bibliography and Sources

Appendices (if needed for lengthy or technical

material)


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Tables and Graphs

Embed in the narrative

near the paragraph in

which they are interpreted.

Number and title each table

above the table, each graphbelow the graph


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Rules for Present ing Oral Repo rts

Select a few key points to convey.

Use simple charts and diagrams.

Emphasize using color and fonts creatively.

Have backup slides or transparencies.

Rehearse timing. Refer audience to written report for details.

Imagine yourself in the audience.


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Pictures Help Make the Poin t


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The Three Ps

Pace yourself when presenting. Take your time,

introduce yourself, your data and your project.

Make the first minute count.

Plan what your are going to present. Organize

your ideas with an outline. Keep it simple!

Practice before presenting to get the timing right.

Consider videotaping yourself or practicing in front

of peers.


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Pitfall 3: Attaching Importance to RareObservations from Large Samples

Pitfall 4: Using Poor Survey Methods

Be careful about drawing strong inferences from

events that are not surprising when looking at theentire population (e.g., winning the lottery).

Be careful about using poor sampling methods or

vaguely worded questions (e.g., anonymous

survey or quiz).


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Pitfall 5: Assuming a Causal Link Based onObservations

Pitfall 6: Making Generalizations about

Individuals from Observations about Groups

Be careful about drawing conclusions when no

cause-and-effect link exists (e.g., most sharkattacks occur between 12p.m. and 2p.m.).

Avoid reading too much into statistical

generalizations (e.g., men are taller than

women).


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Pitfall 7: Unconscious Bias

Pitfall 8: Attaching Practical Importance to

Every Statistically Significant Study Result

Be careful about unconsciously or subtly allowing

bias to color handling of data (e.g., heart disease

in men vs. women).

Statistically significant effects may lack practicalimportance (e.g., Austrian military recruits born in

the spring average 0.6 cm taller than those born

in the fall).


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Statistics: An Evolving Field

Statistics is a relatively young field, having beendeveloped mostly during the 20th century.

Its mathematical frontiers continue to expand with the

aid of computers.

Major recent developments include

- Exploratory data analysis (EDA)

- Computer-intensive statistics

- Design of experiments- Robust product design

- Advanced Bayesian methods

- and more


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Applied Statistics inBusiness and Economics

End of Chapter 1

doane chapter 01

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