UNIT - 42
Statistics For Management
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Unit Outline
Part (1) Evaluate Business and Economic Data/Information Obtained
from Published Sources
Part (2) Analyze and Evaluate Raw Business Data Using a Number
of Statistical Methods
Part (3) Apply Statistical Methods in Business Planning
Part (4) Communicate Findings Using Appropriate Charts and Tables
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PART (1)
Evaluate Business and Economic
Data/Information
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Contents
• What Is Statistics?
• Interpretation Of Business And Economic Data
• Data
• Information
• Knowledge
• Methods Of Analysis:
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What Is Statistics?
“Statistics is the science concerned with developing and studying
methods for collecting, analyzing, interpreting and presenting
empirical data.”
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What is statistics?
Descriptive statistics deals with methods of organizing, summarizing,
and presenting data in a convenient and informative way.
Inferential statistics is a way of making inferences about populations
based on samples
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Key Statistical Concepts
A population is the group of all items of interest to a statistics
practitioner.
A sample is a set of data drawn from the studied population.
Statistical inference is the process of making an estimate, prediction, or
decision about a population based on sample data.
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Data, Information And Knowledge
Data
Facts and statistics collected together for reference or analysis.
A collection of text, numbers and symbols with no meaning
Example
3, 6, 9, 12
Cat, dog, gerbil, rabbit, cockatoo
161.2, 175.3, 166.4, 164.7, 169.3
These are meaningless sets of data
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Sources of Data
Existing Sources
Data Available from Internal Company Records
Sources of Data
Existing Sources
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Data Available from Selected Government Agencies
Sources of Data
Observational Study
An observational study we simply observe what is happening in a particular
situation, record data on one or more variables of interest, and conduct a statistical
analysis of the resulting data.
Experiment
An experiment is that an experiment is conducted under controlled conditions
The data obtained from a well-designed experiment can often provide more
information as compared to the data obtained from existing sources or by
conducting an observational study 11
Data, Information And Knowledge
Information
Information is the result of processing data, usually by computer.
Data consists of raw facts and figures.
When that data is processed into sets according to context, it provides information.
Data + Meaning = Information
Example
3, 6, 9 and 12 are the first four answers in the 3 x table
cat, dog, gerbil, rabbit, cockatoo is a list of household pets
161.2, 175.3, 166.4, 164.7, 169.3 are the heights of 15-year-old students. 12
Data, Information And Knowledge
Knowledge
Knowledge is produced as a result of understanding information that has been given to
us, and using that information to gain knowledge of how to solve problems.
Knowledge can therefore be:
Acquiring and remembering a set of facts, or
The use of information to solve problems.
Information + Application or Use = Knowledge
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Data, Information And Knowledge
Example
4, 8, 12 and 16 are the first four answers in the 4 x table (because the 3 x table
starts at three and goes up in threes the 4 x table must start at four and go up in
fours)
The tallest student is 175.3cm.
A lion is not a household pet as it is not in the list and it lives in the wild.
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Data Analysis – “The Concept”
Approach to de-synthesizing data, informational, and/or factual
elements to answer research questions
Method of putting together facts and figures to solve research problem
Systematic process of utilizing data to address research questions
Breaking down research issues through utilizing controlled data and
factual information 15
Categories of Data Analysis
1. Narrative (Eg. Laws, arts)
2. Descriptive (Eg. Social sciences)
3. Statistical/mathematical (pure/applied sciences)
4. Audio-optical (Eg. Telecommunication)
5. Others
Most research analyses, arguably, adopt the first three.
The second and third are, arguably, most popular in pure, applied, and social sciences 16
Statistical Methods
Something to do with “statistics”
Statistics: “meaningful” quantities about a sample of objects, things, persons, events,
phenomena, etc.
Widely used in social sciences.
Simple to complex issues. E.G.
Correlation
Anova
Manova
Regression
Econometric modelling
Two main categories:
Descriptive statistics
Inferential statistics 17
Descriptive Statistics
Use sample information to explain/make abstraction of population “phenomena”.
Common “phenomena”:
• Association (Eg. Σ1,2.3 = 0.75)
• tendency (left-skew, right-skew)
• Causal relationship (Eg. If X, then, Y)
• Trend, pattern, dispersion, range
Used in non-parametric analysis (Eg. Chi-square, t-test, 2-way anova)
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Examples Of “Abstraction” Of Phenomena
350,000
No. of houses
300,000
200000
250,000
150000 200,000 1991
150,000 2000
100000
100,000
50000 50,000
0
0
1 2 3 4 5 6 7 8
Loa n t o pr ope r t y se c t or ( RM 32635.8 38100.6 42468.1 47684.7 48408.2 61433.6 77255.7 97810.1
million)
De ma nd f or shop shouse s ( unit s) 71719 73892 85843 95916 101107 117857 134864 86323
S upply of shop house s ( unit s) 85534 85821 90366 101508 111952 125334 143530 154179
Year (1990 - 1997)
District
Tre nds in prope rty loan, s hop hous e dem and & s upply
200
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Price (RM/sq. f t of built a rea)
Proportion (%)
12 180
10
160
8
6 140
4
120
2
0 100
80
0 20 40 60 80 100 120
Age Category (Years Old) 19
Demand (% sales success)
Exploratory Data Analysis
What is EDA?
The analysis of datasets based on various numerical methods and graphical tools.
Exploring data for patterns, trends, underlying structure, deviations from the trend,
anomalies and strange structures.
It facilitates discovering unexpected as well as conforming the expected.
Another definition: an approach/philosophy for data analysis that employs a variety of
techniques (mostly graphical).
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Aim of the EDA
Maximize insight into a dataset
Uncover underlying structure
Extract important variables
Detect outliers and anomalies
Test underlying assumptions
Develop valid models
Determine optimal factor settings (Xs) 21
Aim of The EDA
• The goal of EDA is to open-mindedly explore data.
• Tukey: EDA is detective work… unless detective finds the clues, judge or jury has
nothing to consider.
• Here, judge or jury is a confirmatory data analysis
• Tukey: confirmatory data analysis goes further, assessing the strengths of the
evidence.
• With EDA, we can examine data and try to understand the meaning of variables.
What are the abbreviations stand for.
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Exploratory Vs Confirmatory Data Analysis
EDA CDA
• No hypothesis at first • Start with hypothesis
• Generate hypothesis • Test the null hypothesis
• Uses graphical methods (mostly) • Uses statistical models
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Steps of EDA
• Generate good research questions
• Data restructuring: you may need to make new variables from the existing ones.
• Instead of using two variables, obtaining rates or percentages of them
• Creating dummy variables for categorical variables
• Based on the research questions, use appropriate graphical tools and obtain descriptive statistics. Try to
understand the data structure, relationships, anomalies, unexpected behaviors.
• Try to identify confounding variables, interaction relations and multicollinearity, if any.
• Handle missing observations
• Decide on the need of transformation (on response and/or explanatory variables).
• Decide on the hypothesis based on your research questions
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After EDA
Confirmatory data analysis: verify the hypothesis by statistical
analysis
Get conclusions and present your results nicely.
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Classification of EDA*
Exploratory data analysis is generally cross-classified in two ways.
First, each method is either non-graphical or graphical.
Second, each method is either univariate or multivariate (usually just bivariate).
Non-graphical methods generally involve calculation of summary statistics, while graphical
methods obviously summarize the data in a diagrammatic or pictorial way.
Univariate methods look at one variable (data column) at a time, while multivariate methods look
at two or more variables at a time to explore relationships. Usually our multivariate EDA will be
bivariate (looking at exactly two variables), but occasionally it will involve three or more
variables.
It is almost always a good idea to perform univariate EDA on each of the components of a
multivariate EDA before performing the multivariate EDA.
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*Seltman, H.J. (2015). Experimental Design and Analysis. http://www.stat.cmu.edu/~hseltman/309/Book/Book.pdf
1. Presentation of quantitative data
One hundred people were shown two statistical data group, one from 1999 and
another from 2010.
The people were asked to rate both group in terms of happiness using an
ordinal scale ranging from very happy with a score of 1, to very unhappy with a
rating of 5. The results are show below in Table.
Display the above data in an appropriate format that will allow a comparison to
be made between the views on the two groups. 27
Y- Max University ( YMU )
Table : Happiness ratings of the 1999 and 2010 statistical data group
Rating Rating score 1999 group Number of people 2010 group Number of people
4 43
Very happy 1
15 31
Happy 2
Balanced 3 21 14
Unhappy 4 42 9
Very unhappy 5 18 3
THANK YOU
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