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Overview of Statistics What is Statistics? What is Statistics? Why Study Statistics? Why Study Statistics? Uses of Statistics Uses of Statistics Statistical Challenges Statistical Challenges Writing and Presenting Reports Writing and Presenting Reports Statistical Pitfalls Statistical Pitfalls Statistics: An Evolving Field Statistics: An Evolving Field Chapter 11 McGraw-Hill/Irwin© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

1-3 What is Statistics? Statistics is the science of collecting, organizing, analyzing, interpreting, and presenting data.Statistics is the science of collecting, organizing, analyzing, interpreting, and presenting data. A statistic is a single measure (number) used to summarize a sample data set. For example, the average height of students in this class.A statistic is a single measure (number) used to summarize a sample data set. For example, the average height of students in this class. A statistician is an expert with at least a master’s degree in mathematics or statistics or a trained professional in a related field.A statistician is an expert with at least a master’s degree in mathematics or statistics or a trained professional in a related field. McGraw-Hill/Irwin© 2008 The McGraw-Hill Companies, Inc. All rights reserved.

1-4 Why Study Statistics?  Communication  Computer Skills Understanding the language of statistics facilitates communication and improves problem solving.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 reports improves upon your existing skills.The use of spreadsheets for data analysis and word processors or presentation software for reports improves upon your existing skills.

1-5 Why Study Statistics?  Information Management  Technical Literacy Statistics help summarize large amounts of data and reveal underlying relationships.Statistics help summarize large amounts of data and reveal underlying relationships. Career opportunities are in growth industries propelled by advanced technology. The use of statistical software increases your technical literacy.Career opportunities are in growth industries propelled by advanced technology. The use of statistical software increases your technical literacy.

1-6 Why Study Statistics?  Career Advancement  Quality Improvement Statistical literacy can enhance your career mobility.Statistical literacy can enhance your career mobility. Statistics helps firms oversee their suppliers, monitor their internal operations and identify problems.Statistics helps firms oversee their suppliers, monitor their internal operations and identify problems.

1-7 Uses of Statistics  Two primary uses for statistics: Descriptive statistics – the collection, organization, presentation and summary of data.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.Inferential statistics – generalizing from a sample to a population, estimating unknown parameters, drawing conclusions, making decisions.

1-8 Uses of Statistics  Overview of Statistics Statistics Describing Data Making Inferences from Samples Visual Displays Numerical Summaries Estimating Parameters Testing Hypotheses

1-9 Uses of Statistics  Auditing  Marketing Sample from over 12,000 invoices to estimate the proportion of incorrectly paid invoices.Sample from over 12,000 invoices to estimate the proportion of incorrectly paid invoices. Identify likely repeat customers for Amazon.com and suggests co-marketing opportunities based on a database of 5 million Internet purchases.Identify likely repeat customers for Amazon.com and suggests co-marketing opportunities based on a database of 5 million Internet purchases.

1-10 Uses of Statistics  Health Care  Purchasing Evaluate 100 incoming patients using a 42-item physical and mental assessment questionnaire.Evaluate 100 incoming patients using a 42-item physical and mental assessment questionnaire. Determine the defect rate of a shipment and whether that rate has changed significantly over time.Determine the defect rate of a shipment and whether that rate has changed significantly over time.

1-11 Uses of Statistics  Medicine  Forecasting Determine whether a new drug is really better than the placebo or if the difference is due to chance.Determine whether a new drug is really better than the placebo or if the difference is due to chance. Manage inventory by forecasting consumer demand.Manage inventory by forecasting consumer demand.

1-12 Statistical Challenges  Working with Imperfect Data  Dealing with Practical Constraints State any assumptions and limitations and use generally accepted statistical tests to detect unusual data points or to deal with missing data.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 quantity of data you can collect.You will face constraints on the type and quantity of data you can collect.

1-13 Statistical Challenges  Upholding Ethical Standards  Using Consultants Know and follow accepted procedures, maintain data integrity, carry out accurate calculations, report procedures, protect confidentiality, cite sources and financial support.Know and follow accepted procedures, maintain data integrity, carry out accurate calculations, report procedures, protect confidentiality, cite sources and financial support. Hire consultants at the beginning of the project, when your team lacks certain skills or when an unbiased or informed view is needed.Hire consultants at the beginning of the project, when your team lacks certain skills or when an unbiased or informed view is needed.

1-14 Statistical Pitfalls  Pitfall 1: Making Conclusions about a Large Population from a Small Sample  Pitfall 2: Making Conclusions from Nonrandom Samples Be careful about making generalizations from small samples (e.g., a group of 10 patients).Be careful about making generalizations from small samples (e.g., a group of 10 patients). Be careful about making generalizations from retrospective studies of special groups (e.g., heart attack patients).Be careful about making generalizations from retrospective studies of special groups (e.g., heart attack patients).

1-15 Statistical Pitfalls  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).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 practical importance (e.g., Austrian military recruits born in the spring average 0.6 cm taller than those born in the fall).Statistically significant effects may lack practical importance (e.g., Austrian military recruits born in the spring average 0.6 cm taller than those born in the fall).