1. 1 Business 90: Business Statistics Professor David Mease Sec 03, T R 7:30-8:45AM BBC 204 Lecture 2 = Finish Chapter “Introduction and Data Collection” (IADC) Agenda: 1) Reminder about Homework 1 due Tuesday 2) Lecture over rest of Chapter IADC (take notes)

2. 2 Homework Assignment Homework #1: Due Tuesday, February 2 1) Read the chapter entitled “Introduction and Data Collection” 2) In that chapter do textbook questions 2, 3, 8(b), 14 (skip a), 16 (skip a), 18 (Note: Answers to textbook questions with even numbers are given in the chapter. Also, you will need to use Table 1 in the back of the book.)

3. 3 Statistics for Managers Using Microsoft ® Excel 4 th Edition Introduction and Data Collection

4. 4 Chapter Goals After completing this chapter, you should be able to: Explain key definitions:  Population vs. Sample  Primary vs. Secondary Data  Parameter vs. Statistic  Descriptive vs. Inferential Statistics Describe key data collection methods Construct a simple random sample and a systematic sample Identify types of data and levels of measurement

5. 5 Simple Random Samples Every individual or item from the frame has an equal chance of being selected Every sample of a fixed size has the same chance of selection as every other sample of that size Selection may be with replacement or without replacement Samples obtained from table of random numbers or computer random number generators

6. 6 In Class Exercise #1: Explain how to draw a simple random sample of n=10 students with replacement from the population of all N=800 students taking Bus 90. Use the random number Table 1 (in the back of your textbook) beginning in row 6 and column 5.

7. 7 Decide on sample size: n Divide frame of N individuals into groups of k individuals: k=N/n Randomly select one individual from the 1 st group of k individuals Select every k th individual thereafter Systematic Samples N = 64 n = 8 k = 8 First Group

8. 8 In Class Exercise #2: Explain how to draw a systematic sample of n=10 students from the population of all N=800 students taking Bus 90. Use the random number Table 1 (in the back of your textbook) beginning in row 8 and column 1.

9. 9 Divide population into two or more subgroups (called strata) according to some common characteristic A simple random sample is selected from each subgroup, with sample sizes proportional to strata sizes Samples from subgroups are combined into one Stratified Samples Population Divided into 4 strata Sample

10. 10 Cluster Samples Population is divided into several “clusters,” each representative of the population A simple random sample of clusters is selected All items in the selected clusters can be used, or items can be chosen from a cluster using another probability sampling technique Population divided into 16 clusters. Randomly selected clusters for sample

11. 11 Advantages and Disadvantages Simple random sample and systematic sample Simple to use May not be a good representation of the population’s underlying characteristics Stratified sample Ensures representation of individuals across the entire population Cluster sample More cost effective Less efficient (need larger sample to acquire the same level of precision)

12. 12 Types of Data Data CategoricalNumerical DiscreteContinuous Examples: Marital Status Political Party Eye Color (Defined categories) Examples: Number of Children Defects per hour (Counted items) Examples: Weight Voltage (Measured characteristics)

13. 13 Levels of Measurement and Measurement Scales Interval Data Ordinal Data Nominal Data Highest Level Strongest forms of measurement Higher Level Lowest Level Weakest form of measurement Categories (no ordering or direction) Ordered Categories (rankings, order, or scaling) Differences between measurements but no true zero Ratio Data Differences between measurements, true zero exists

14. 14 In Class Exercise #3: For each of the following random variables, determine whether the variable is numerical or categorical. If it is numerical, determine whether it is discrete or continuous. Also, determine the level of measurement. a) Number of telephones in your house b) Size of French Fries (Medium or Large or X-Large) c) Ownership of a cell phone d) Number of local phone calls you made in a month e) Length of longest phone call f) Length of your foot g) Zip Code h) Temperature in degrees Fahrenheit i) Temperature in degrees Celsius j) Temperature in kelvins