Statistics for Managers Using Microsoft Excel® 7th Edition, Global Edition Let’s Get Started Copyright ©2014 Pearson Education

Learning Objectives In this chapter you learn: That the volume of data that exists in the world makes learning about statistics critically important That statistics is a way of thinking that can help you make better decisions What business analytics is and how these techniques represent an opportunity for you How the DCOVA framework for applying statistics can help you solve business problems How to make best use of this book How to prepare for using Microsoft Excel® with this book Copyright ©2014 Pearson Education

In Today’s Business World You Cannot Escape From Data In today’s digital world ever increasing amounts of data are gathered, stored, reported on, and available for further study. You hear the word data everywhere. Data are facts about the world and are constantly reported as numbers by an ever increasing number of sources. Copyright ©2014 Pearson Education

Each Business Person Faces A Choice Of How To Deal With This Explosion Of Data They can ignore it and hope for the best. They can count on other people’s summaries of data and hope they are correct. They can develop their own capability and insight into data by learning about statistics and its application to business. Copyright ©2014 Pearson Education

Statistics Is Evolving So Businesses Can Use The Vast Amount Of Data Available The emerging field of Business Analytics makes “extensive use of: Data Statistical and quantitative analysis Explanatory & predictive models Fact based management to drive decisions and actions.” Copyright ©2014 Pearson Education

In this book we will use DCOVA To Properly Apply Statistics You Should Follow A Framework To Minimize Possible Errors In this book we will use DCOVA Define the data you want to study in order to solve a problem or meet an objective Collect the data from appropriate sources Organize the data collected by developing tables Visualize the data by developing charts Analyze the data collected to reach conclusions and present results Copyright ©2014 Pearson Education

Using The DCOVA Framework Helps You To Apply Statistics To: Summarize & visualize business data Reach conclusions from those data Make reliable forecasts about business activities Improve business processes Copyright ©2014 Pearson Education

Developing Operational Definitions Is Crucial To Avoid Confusion / Errors An operational definition is a clear and precise statement that provides a common understanding of meaning In the absence of an operational definition miscommunications and errors are likely to occur. Arriving at operational definition(s) is a key part of the Define step of DCOVA Copyright ©2014 Pearson Education

Operational Definitions Of Terms VARIABLE A characteristic of an item or individual. DATA The set of individual values associated with a variable. STATISTICS The methods that help transform data into useful information for decision makers. Copyright ©2014 Pearson Education

Are These Numbers Useful In Making Decisions A survey of 1,179 adults 18 and over reported that 54% thought that 15 seconds was an acceptable online ad length before seeing free content. A survey of more than 3,000 full-time traditional-age students found that the students spent 51% of their time on socializing, recreation, and other activities; 9% of their time attending class/lab; and 7% of their time studying. Copyright ©2014 Pearson Education

Without Statistics You Can’t Determine if the numbers in these studies are useful information Validate claims of causality See patterns that large amounts of data sometimes reveal Copyright ©2014 Pearson Education

Two Different Branches Of Statistics Are Used In Business The branch of mathematics that transforms data into useful information for decision makers. Descriptive Statistics Collecting, summarizing, presenting and analyzing data Inferential Statistics Using data collected from a small group to draw conclusions about a larger group Copyright ©2014 Pearson Education

Business Analytics: The Changing Face Of Statistics Use statistical methods to analyze and explore data to uncover unforeseen relationships. Use management science methods to develop models that impact an organization’s strategy, planning, and operations. Use information systems methods to collect and process data sets of all sizes, including very large data sets that would otherwise be hard to examine efficiently. Copyright ©2014 Pearson Education

Business Analytics Has Already Been Applied In Many Business Decision-Making Contexts Human resource managers (HR) understanding relationships between HR drivers, key business outcomes, employee skills, capabilities, and motivation. Financial analysts determining why certain trends occur to predict future financial environments. Marketers driving loyalty programs and customer marketing decisions to drive sales. Supply chain managers planning and forecasting based on product distribution and optimizing sales distribution based on key inventory measures. Copyright ©2014 Pearson Education

The Growth Of “Big Data” Spurs The Use Of Business Analytics “Big Data” is still a fuzzy concept. Very large data sets are arising because of the automatic collection of high volumes of data at very fast rates. Older statistical techniques are often times impractical with big data. Copyright ©2014 Pearson Education

How To Use This Book The Using Statistics scenario at the beginning and end of each chapter provide A real business situation that the chapter’s topics can help address Context which is an important part of the learning process Downloadable example Excel® worksheets are provided throughout each chapter Numerous case studies are provided so you can Apply what you have learned Enhance your analytical & communication skills Copyright ©2014 Pearson Education

Microsoft Excel Is The Primary Data Analysis Application In Microsoft Office Excel uses worksheets (spreadsheets) to both store data and present analysis results A worksheet has rows and columns The intersection of a specific row and column is called a cell and is where data is stored Standard business practice is to store the data associated with a variable in a column Excel saves files that it calls workbooks A workbook is a collection of worksheets and chart sheets An excel file is typically saved in an .xlsx or .xls format Copyright ©2014 Pearson Education

How Can I Use Excel With This Book Excel can be used to learn and apply the statistical methods discussed in this book Excel can be used by utilizing the Excel add-in PHStat PHStat is available free for users of this book PHStat simplifies the task of operating Excel Excel can also be used via In-Depth Excel In-Depth Excel instructions use templates for a specific statistical solution The Excel Guides explain how to use either method Copyright ©2014 Pearson Education

Computing Skills Needed For This Book Basic Computing Skills Specifics Identification of Excel Title bar, minimize/resize/close buttons, scroll bars, application window objects formula bar, workbook area, cell pointer. Office Ribbon parts: tab, group, gallery, launcher button Shortcut (popup) menu Knowledge of mouse Click (also called select), check and clear, doubleclick, operations right-click, drag/drag-and-drop Identification of dialog box Command button, list box, drop-down list, edit box, Objects option button, check box Basic Microsoft Office Skills Specifics Excel data entry Organizing worksheet data in columns, entering numerical and categorical data File operations Open, save, print Worksheet operations Create, copy Copyright ©2014 Pearson Education

Excel Skills Needed For The In-Depth Excel Approach Skill Specifics Formula skills Concept of a formula, cell references absolute and relative cell references, how to enter a formula, how to enter an array formula Workbook presentation How to apply format changes that affect the display of worksheet cell contents Chart formatting correction How to correct the formatting of charts that Excel improperly creates Discrete histogram creation How to create a properly formatted histogram for a discrete probability distribution Copyright ©2014 Pearson Education

Chapter Summary In this chapter we have seen: That the volume of data that exists in the world makes learning about statistics critically important That statistics is a way of thinking that can help you make better decisions What business analytics is and how these techniques represent an opportunity for you How the DCOVA framework for applying statistics can help you solve business problems How to make best use of this book How to prepare for using Microsoft Excel with this book Copyright ©2014 Pearson Education

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