An Essential Guide to Business Statistics

Preface ix

About the Author xi

Chapter 1 Introduction 1

Collection 1

Analysis 2

Interpretation 2

Presentation 2

Terminology 2

Using Excel 3

Chapter 2 Data Collection 13

Introduction 13

Terminology 14

Primary and Secondary Data 15

Sampling Methods 15

Data Collection Techniques 23

Understanding Bias 28

Hints and Tips 28

Practice Exercises 29

Solutions to Practice Exercises 35

Chapter 3 Data Distributions 43

Introduction 43

Frequency Distributions 44

Relative Frequency 47

Cumulative Frequency 48

Cumulative Relative Frequency 49

Grouped Frequency Distributions 50

Numerical Class Characteristics 54

Which Distribution? 57

Hints and Tips 58

Practice Exercises 59

Solutions to Practice Exercises 71

Chapter 4 Graphical Representation 85

Introduction 85

Bar Charts 86

Pie Charts 88

Stem and Leaf Diagrams 90

Histograms 93

Time Series Plots 95

Scatter Diagrams 97

Hints and Tips 98

Using Excel 100

Practice Exercises 104

Solutions to Practice Exercises 116

Chapter 5 Measures of Central Tendency 125

Introduction 125

The Mode 126

The Mean 127

The Median 131

Advantages and Disadvantages 134

Which Measure? 135

Hints and Tips 136

Using Excel 137

Practice Exercises 143

Solutions to Practice Exercises 156

Chapter 6 Measures of Dispersion 163

Introduction 163

Range 164

Quartiles and the Interquartile Range 165

Five-Number Summary 167

Box Plots 168

Variance and Standard Deviation 172

Coefficient of Variation 178

Hints and Tips 180

Using Excel 181

Practice Exercises 184

Solutions to Practice Exercises 196

Chapter 7 Correlation 203

Introduction 203

Scatter Diagrams 204

Correlation Coefficient 205

Rank Correlation Coefficient 211

Cause and Effect 212

Hints and Tips 213

Using Excel 213

Practice Exercises 215

Solutions to Practice Exercises 228

Chapter 8 Simple Linear Regression 245

Introduction 245

Independent and Dependent Variables 246

Linear Equations 246

Simple Linear Regression Model 248

Finding the Line of Best Fit 249

Making Predictions 252

Interpolation and Extrapolation 253

Interpretation 253

Hints and Tips 254

Using Excel 256

Practice Exercises 257

Solutions to Practice Exercises 267

Chapter 9 Probability 279

Introduction 280

Terminology 280

Approaches to Probability 281

Basic Properties 284

Probability Model 285

Venn Diagrams 286

Mutually Exclusive Events 287

Independent Events 287

Complement Rule 288

Intersection and Union 289

Addition Rule 290

Conditional Probability 292

Multiplication Rule 293

Hints and Tips 294

Practice Exercises 296

Solutions to Practice Exercises 303

Chapter 10 Introducing Statistical Inference 309

Introduction 309

Random Variables 310

Discrete and Continuous Random Variables 310

Probability Distributions 311

Normal Distribution 313

The Standard Normal Distribution 315

Population Parameters and Sample Statistics 321

Point and Interval Estimates 323

Hints and Tips 326

Practice Exercises 327

Solutions to Practice Exercises 333

Appendix: The Standard Normal Distribution 341

Glossary 345

Index 351