Business Statistics

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This photo shows a large open news room with enough space to seat about 200 employees.
We encounter statistics in our daily lives more often than we probably realize and from many different sources, like the news. (credit: David Sim)

Chapter objectives

By the end of this chapter, the student should be able to:

  • Recognize and differentiate between key terms.
  • Apply various types of sampling methods to data collection.
  • Create and interpret frequency tables.

You are probably asking yourself the question, "When and where will I use statistics?" If you read any newspaper, watch television, or use the Internet, you will see statistical information. There are statistics about crime, sports, education, politics, and real estate. Typically, when you read a newspaper article or watch a television news program, you are given sample information. With this information, you may make a decision about the correctness of a statement, claim, or "fact." Statistical methods can help you make the "best educated guess."

Since you will undoubtedly be given statistical information at some point in your life, you need to know some techniques for analyzing the information thoughtfully. Think about buying a house or managing a budget. Think about your chosen profession. The fields of economics, business, psychology, education, biology, law, computer science, police science, and early childhood development require at least one course in statistics.

Included in this chapter are the basic ideas and words of probability and statistics. You will soon understand that statistics and probability work together. You will also learn how data are gathered and what "good" data can be distinguished from "bad."


This course will introduce you to business statistics, or the application of statistics in the workplace. Statistics is a course in the methods for gathering, analyzing, and interpreting data. If you have taken a statistics course in the past, you may find some of the topics in this course familiar. You can apply statistics to any number of fields from anthropology to hedge fund management because many of us best interpret data when it is presented in an organized fashion (as it is with statistics). You can analyze data in any number of forms. Summary statistics, for example, provide an overview of a data set, such as the average score on an exam. However, the average does not always tell the entire story; for example, if the average score is 80, it may be because half of the students received 100s and the other half received 60s. This would present a much different story than if everyone in the class had received an 80, which demonstrates consistency. Statistics provides more than simple averages. In this course, you will learn how to apply statistical tools to analyze data, draw conclusions, and make predictions of the future. The course will begin with data distributions, followed by probability analysis, sampling, hypothesis testing, inferential statistics, and, finally, regression. This course is mathematically intensive, and much of what you learn here will deal with things you encounter every day. This course also makes use of spreadsheets, an important tool for working with and making sense of numerical data.
Quiz PDF eBook: 
Business Statistics
Download Business Statistics Quiz PDF eBook
187 Pages
2014
English US
Educational Materials



Sample Questions from the Business Statistics Quiz

Question: A major coffee company decides to offer its customers a cup of coffee brewed from an extravagant process in half of its large-city retail locations. The special cup of coffee costs $3.50 more than the basic cup of coffee the company offers. Which of the following is NOT an example of how the coffee company could use business statistics to understand the value of introducing the new, and very expensive, cup of coffee to its customers?

Choices:

So the company can compare the effect of revenues for a store from the new expensive brew versus stores where the brew is not offered

So the company can measure if the amount of regular (cheaper) cups of coffee is purchased less in favor of the more expensive cup

So the company can gauge whether the new coffee improves the ambience of the in-store seating area

So the company can gauge whether on average customers who order the more expensive cup also tend to order more or less food along with their coffee

Question: A local restaurant keeps statistics on the average number of meals ordered for each table in the restaurant during dinner hours. In the last hour, four tables ordered and were served 2, 4, 6, and 8 meals, respectively. Calculate the standard deviation of the number of meals ordered in the last hour. Round your answer to the nearest tenth.

Choices:

2.6

6.7

2.2

5.0

Question: Based on the histogram, what is the range of the data?

Choices:

10

30

60

70

Question: A national shoe company noticed that sales of its new running shoe are below what was expected for the month of December. To better understand the trends in the sales data collected for each day in December, which option below would NOT be a useful way to present the data to company executives?

Choices:

Compile the sales data in a spreadsheet, and construct a table with each day's sales from highest to lowest displaying which days were the strongest days for sales.

Compile the sales data in a spreadsheet, and construct a histogram showing the frequency of sales over the weeks of the December shopping season.

Compile the sales data in a spreadsheet, and construct a table with each day's sales from this December and the previous December to compare the difference.

Compile the sales data in a spreadsheet, and construct a table listing the reasons you think sales were lower than expected.

Question: A small firm awards points to its employees for working overtime and subtracts points for unapproved absences from work (the points are then used in annual performance reports). A group of five employees has points of 1, -2, -3, 4, and 5, respectively. To get a sense of the average size of the total points awarded to the group of employees, calculate the root mean square of those five numbers. Round your answer to the nearest tenth.

Choices:

1

3.2

11.2

45.0

Question: In a study conducted by the National Collegiate Athletic Association, a number of variables were gathered on the characteristics of student athletes across the United States. In the study, specific information on each student athlete is collected. Which information best describes an ordinal variable?

Choices:

If a student athlete is a humanities major, business major, or a science major

If a student athlete is a freshman, sophomore, junior, or senior with respect to athletic eligibility

If a student athlete is or has been ranked nationally in his or her respective sport

If the student athlete is on full scholarship

Question: Complete the following sentence. In a histogram, the area of the bin is:

Choices:

proportional to the interquartile range of the data.

proportional to the height of the scaled y-axis.

proportional to the total number of observations in the histogram.

proportional to the relative frequency of the observations in the bin.

Question: A high school math teacher offers an after-school tutoring session open to all students. To measure student demand for the session, she keeps track of the total number of students attending each week. In the last five weeks, the total attendance was 6, 3, 0, 4, and 2, respectively. Calculate the variance of attendance in the last five weeks. Round your answer to the nearest tenth.

Choices:

5.0

2.2

4.0

2.5

Question: In a random sample of cell phone users, a leading marketing company compiled a count of total minutes per month, per user, over a three month period. With the data organized in a spreadsheet, which of the following is the best way to identify the mode number of minutes among the sample of users?

Choices:

Sort the data in a single column from highest to lowest, and identify the value that appears most often.

Sort the data in a single column from highest to lowest, and find the average value by using the spreadsheet's averaging function.

Sort the data in two columns, subtract the difference between each row and column, and then add the total by using the spreadsheet's summary function.

Sort the data in three columns, and add the three month totals for each user by using the spreadsheet's summary function.

Question: A Fortune 500 company asked its customers to take a voluntary survey each time a customer made an online purchase. The company gathered over 5,000 responses, which included both quantitative and qualitative information. Which of the following best demonstrates the difference between a quantitative variable and qualitative variable?

Choices:

Part 1 of the survey asked the customer for information on his or her total years of schooling, and Part 2 asks for his or her current level of income in dollars.

Part 1 of the survey asked the customer for information on whether he or she completed college, and Part 2 asked for whether he or she had lost a job in the last five years.

Part 1 of the survey asked the customer for information on his or her total years of schooling, and Part 2 asked if he or she own a car.

Part 1 of the survey asked the customer for information on his or her total years of schooling, and Part 2 asked how many members are in his or her household.

Question: In a study conducted by the National Collegiate Athletic Association, a number of variables were gathered on the characteristics of student athletes across the United States. In the report publicizing the major findings, certain variables for each student athlete are grouped together. Which grouping below provides the best example of quantitative information?

Choices:

The grade point average, the total credit hours in the most recent semester, and the number of classes missed as a result of athletics in the most recent semester for each student athlete

The height, weight, and ethnicity of each student athlete

The chosen major of the student athlete, whether the student had missed class as a result of athletics in the most recent semester, and whether the student had sought help from the instructor outside of regular class time in the most recent semester

The sport of each student athlete, the number of practice hours per week for each athlete, and number of days the athlete spent traveling during the most recent semester

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Source:  David T. Bourgeois, PhD; Bharatendra K. Rai, PhD. Business Statistics. The Saylor Academy 2014, http://www.saylor.org/courses/bus204/
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