CH. 1 The Where, Why, and How of Data Collection
Data mining: the application of statistical techniques and algorithms to the analysis of
large data sets
Business Intelligence: the application of tools and technologies for gathering, storing,
retrieving, and analyzing data that businesses collect and use.
1.1 What is Business Statistics?
Business Statistics: a collection of procedures and techniques that are used to
convert data into meaningful information in a business environment.
Descriptive Statistics: procedures and techniques designed to describe data.
Charts and Graphs
Histograms
Bar charts
Numerical Measures:
arithmetic mean or average: the sum of all values divided by the
number of values
Ex. When the park ranger at Yellowstone National Park reports
the average length of time that visitors spend in the park
Inferential Statistics: tools and techniques that help decision makers to draw
inferences from a set of data
Statistical Inference Procedures: Procedures that allow a decision maker
to reach a conclusion about a set of data based on a subset of that data.
Estimation
e.g. Estimate the population mean weight using the sample
mean weight
estimates are formed by looking closely at a subset of the
larger data set
Hypothesis testing
e.g. Use sample evidence to test the claim that the
population mean weight is 120 pounds
1.2 Procedures for Collecting Data
Data Collection Methods:
Experiments: a process that produces a single outcome whose result
cannot be predicted with certainty
Experimental Design: a plan for performing an experiment in
which the variable of interest is defined. One or more factors are
identified to be manipulated, changed, or observed so that the
impact (or influence) on the variable of interest can be measured
or observed.
Advantages:
Provide controls
Preplanned objectives
Disadvantages:
Costly

Timeconsuming
Requires planning
Telephone Surveys:
must be short → 13 min.
Generally, closedend questions: questions that require the
respondent to select from a short list of defined choices.
should have a short statement at the beginning explaining the
purpose of the survey and reassuring the respondent that his or
her responses will remain confidential
Last part of the survey, demographic questions: questions relating
to the respondents’ characteristics, backgrounds, and attributes
Gender
Income Level
Education Level
Prime time for voter survey: 79PM
Advantages:
Timely
Relatively inexpensive
Disadvantages:
Poor reputation
Limited scope and length
Written Questionaire and Surveys
most frequently used method to collect opinions and factual data
from people
generally least expensive
similar to telephone surveys
must look professional
Scanning for a large number of surveys
can contain both closed and openended questions
Openended questions: questions that allow respondents