©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Data Analysis and Decision Making Mathematics and Management Basic Math and Measurement Systems Understanding and Using Basic Statistics Using Data in Decision Making CHAPTER 14

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e 14.1 Mathematics and Management GOALS ● Describe ways that mathematics is used by managers to improve decision making. ● Identify several common and specialized mathematical applications used by business managers. 2 CHAPTER 14

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Mathematics Skills for Managers ● Math for decision making ● Data-based decisions – use information facts, and measures, usually in numerical form, as the primary basis for choosing among alternatives ● Inductive and deductive reasoning ● Statistics ● Communicating findings ● Raw data ● Processed data (Information) 3 CHAPTER 14

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Checkpoint ● Why should managers use data to aid them in decision making? CHAPTER 14 4

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Checkpoint ● Why should managers use data to aid them in decision making? ● Managers gather and analyze information to keep decisions objective and as free from bias as possible. CHAPTER 14 5

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Business Applications of Mathematics ● Developing Math Skills ● Electronic database programs and spreadsheets have become the primary tools for analyzing data ● Math Applications in Business ● Accounting and Finance ● Production and Operations ● Marketing ● Human Resources 6 CHAPTER 14

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Common Business Activities that Require Math Skills

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Checkpoint ● What are five common activities managers complete that require mathematics skills? CHAPTER 14 8

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Checkpoint ● What are five common activities managers complete that require mathematics skills? ● Calculate ● Compare ● Plan ● Analyze ● Project CHAPTER 14 9

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Basic Math and Measurement Systems GOALS ● Demonstrate understanding of basic mathematical operations. ● Recognize common units of U.S. and metric measurement. 10 CHAPTER 14

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Basic Mathematic Operations ● Adding and subtracting ● Multiplying and dividing ● Fractions, ratios, decimals, and percentages 11 CHAPTER 14

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Checkpoint ● What are the equations for addition, subtraction, multiplication, and division? CHAPTER 14 12

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Checkpoint ● What are the equations for addition, subtraction, multiplication, and division? ● Addend + Addend = Sum ● Minuend – Subtrahend = Difference ● Multiplicand x Multiplier = Product ● Dividend / Divisor = Quotiuent CHAPTER 14 13

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Measurement Systems in Business ● Traditional U.S. measures ● Different from most other countries ● Developed from the traditional English system ● Metric measures ● Based on the decimal system, meaning that all measures are in common units of ten 14 CHAPTER 14

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Checkpoint ● What is the preferred system of weights and measures for United States trade and commerce? CHAPTER 14 15

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Checkpoint ● What is the preferred system of weights and measures for United States trade and commerce? ● The metric system CHAPTER 14 16

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Understanding and Using Basic Statistics GOALS ● Explain why statistics is important to managers and identify two types of statistics. ● Recognize important types of statistical information. 17 CHAPTER 14

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Understanding Numerical Information ● The importance of statistics ● Managers frequently use statistics to help them understand, interpret, communicate, and apply numerical information. ● By using statistics, managers can make decisions more quickly, with greater confidence, and with a higher probability that the best choice has been made. 18 CHAPTER 14

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Statistics Terms and Concepts ● Descriptive statistics ● Provide managerial summaries of data to help managers understand the current situation ● Inferential statistics ● Use the analysis of information to help managers make predictions about similar circumstances or about the future. 19 CHAPTER 14

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Checkpoint ● How are descriptive statistics different from inferential statistics? CHAPTER 14 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Checkpoint ● How are descriptive statistics different from inferential statistics? ● Descriptive help explain the current situation ● Inferential help make predictions for similar circumstances CHAPTER 14 21

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Common Descriptive Statistics ● Range ● Frequency distribution ● Central tendency ● Mean ● Median ● Mode 22 CHAPTER 14

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Common Inferential Statistics ● Population ● All people or objects ● Sample ● Probability ● Correlation ● A connection or relationship between two things being studied 23 CHAPTER 14

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Checkpoint ● Explain the relationship between a sample and a population? CHAPTER 14 24

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Checkpoint ● Explain the relationship between a sample and a population? ● A sample is a smaller but representative part of the larger population being studied. CHAPTER 14 25

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Using Data in Decision Making GOALS ● Describe how to identify and communicate the results of data analysis. ● Discuss how data should be used in effective decision making. 26 CHAPTER 14

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Communicating Results of Data Analysis ● Completing data analysis ● Focus on the problem or question ● Recognize the purpose of data analysis ● Summarize the information accurately ● Look for changes, differences, and unexpected results ● Search for patterns or relationships ● Summarizing results ● Written summaries ● Tables, charts, and graphs 27 CHAPTER 14

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Example of a Table 28 CHAPTER 14 © Cengage Learning 2013.

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Example of a Chart 29 CHAPTER 14 © Cengage Learning 2013.

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Example of a Graph 30 CHAPTER 14 © Cengage Learning 2013.

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Checkpoint ● What should tables, charts, graphs be used when analyzing and communicating information? CHAPTER 14 31

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Checkpoint ● What should tables, charts, graphs be used when analyzing and communicating information? ● Many people can more easily study and understand information when it is summarized and presented visually. CHAPTER 14 32

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Making Data-Based Decisions ● Reading and interpreting information 1. Read the title carefully 2. Determine what is represented in the data set 3. Review the row and column headings of a table ● Answering questions and solving problems ● Data ● Representative ● Significant 33 CHAPTER 14

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Checkpoint ● What are the two important characteristics of data? CHAPTER 14 34

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Checkpoint ● What are the two important characteristics of data? ● Representative – consistent with other similar data that could be collected ● Significant – meaningful and not happen due to chance CHAPTER 14 35