Chapter 1 (introduction to statistics) lecturer

Lecturer: DAO MINH ANH
Faculty of Business and Administration
Foreign Trade University
Email:


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Textbook

Business Mathematics and Statistics – 5th
edition (A. Francis)
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References:

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Essentials of Statistics for Business and
Economics – 3rd edition, 2003 (Anderson
Sweeney Williams)
Statistics for Business and Economics – 4th
edition (Paul Newbold)

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Class attendance: 10%
Group Assignment and presentation: 30%
Final exam: 60%



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Tracking
information:
sales, inventory,
products being transported, refunded items,
customer information (demographic), business
performance of suppliers, etc.
Collecting and analyzing data “Market
basket”
Decision making on:
- Future trend
- Inventory Management
- Customer Relationship Management...


I.
II.
III.
IV.

V.

What is statistics?
Definitions
Descriptive statistics and Inferential statistics
Qualitative and Quantitative data
Scales of Measurement


-

What first appear in your mind when we
talk about “statistics”?
interest rates, population, stock market
prices, unemployment…
- In a very general way:
Statistic
s

numerical
information


- Furthermore:
Statistic
s

Statistical methods
- Collect
- describe

- summarize
- present
- analyze


Making sense of numerical information
 Dealing with uncertainty
 Sampling
 Analyzing relationships
 Forecasting
 Decision making in an uncertain
environment
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In order to make the right decision or
forecast, decision-makers require as much
information as possible.
 However, after being collected numerical
information is under the raw form.


impossible to comprehend thoroughly
These information need to be summarized,
organized and analyzed so that important features
emerges


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“Statistics is the science of uncertainty”
In statistics we have to deal with the
question what might be, what could be…
not what is
One task of statistics is to estimate the
level of uncertainty


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E.g: Before bringing a new product to
market, market research survey about the
likely level of demand of this product
maybe undertaken?
should the survey cover all potential
buyers (population)?
Absolutely impossible
due to the huge costs of
time, money, people…

Sampling


Let’s consider some examples below:
(i) Does the growth rate of money supply
influence the inflation rate?
(ii) If the price of a product rise by 5%, what

is the effect on the sales of this product?
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- The relationships between variables will
be analyzed in a quantitative way not
qualitative way based on the past
behaviors of these variables


Reliable predictions play a key role in
management and making decision
 For example: investment decisions must
be made well ahead of the time at which a
new product can be brought to market;
 Essentially, forecasts of future values are
obtained through the information of past
behaviors
 The analysis of this information suggests
future trend
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A particular problem for management:
making decisions in the condition of
incomplete information
 Therefore, under such circumstances,
possible options should be raised and
considered
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Accounting
Public accounting firms use
statistical sampling procedures
when conducting audits for
their clients.
Economics
Economists use statistical
information in making
forecasts about the future of
the economy or some
aspects of it.


Marketing
Electronic point-of-sale scanners
at retail checkout counters are
used to collect data for a variety
of marketing research
applications.

Production
A variety of statistical quality
control charts are used to
monitor the output of a
production process.


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Finance
Financial advisors use price-earnings ratios
and dividend yields to guide their
investment recommendations.


1/ Variable is a characteristic that changes
or varies over time for different individuals
or objects under consideration
2/ Experimental Units (elements) are
items or objects on which measurements
are taken
4/ Population is the WHOLE set of all items
or individuals of interest
5/ Sample is an observed subset of
population values


Population vs. Sample
Population
a b

Sample

cd

b

ef gh i jk l m n
o p q rs t u v

w
x y

z

c

gi
o

n
r
y

u


Statistics

Descriptive Statistics Inferential Statistics


Descriptive statistics: Methods used to
summarize and describe the main features
of the whole population in quantitative
term.
 Tabular, graphical, and numerical methods
(mean, median, variance, standard
deviation…)
 Used when we can enumerate the whole

population
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- Collect data
e.g., Survey, Observation,
Experiments

- Present data
e.g., Charts and
graphs
- Characterize data
e.g., Calculate mean
=

∑x
n

i


Inferential statistics: Procedures used to
draw conclusions or inferences about the
characteristics of a population from
information obtained from the sample.
 Making estimates, testing hypothesis…
 Used when we can not enumerate the
whole population
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Population
parameters

Sample statistics
(known)

Inference

Sample

(unknown, but can
be estimated from
sample evidence

Population