TextbookChapter1 - Lin01765_ch01_001-019.qxd 10/7/08 7:51...

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GOALS When you have completed this chapter, you will be able to: 1 Organize data into a fre- quency distribution. 2 Portray a frequency distribu- tion in a histogram, frequency polygon, and cumulative fre- quency polygon. 3 Present data using such graphical techniques as line charts, bar charts, and pie charts. FPO 1 this chapter you will be 1 Understand why we study statistics. 2 Explain what is meant by descriptive statistics and inferential statistics. 3 Distinguish between a qualitative variable and a quantitative variable. 4 Describe how a discrete variable is different from a continuous variable. 5 Distinguish among the nominal, ordinal, interval, and ratio levels of measurement. What Is Statistics? A poll solicits a large number of college undergraduates for information on the following variables: the name of their cell phone provider, the number of minutes used last month, and their satisfaction with the service. What is the data scale for each of these three variables? (See Exercise 10, Goal 5)
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2 Chapter 1 Introduction More than 100 years ago H. G. Wells, an English author and historian, suggested that one day quantitative reasoning will be as necessary for effective citizenship as the ability to read. He made no mention of business because the Industrial Revo- lution was just beginning. Mr. Wells could not have been more correct. While “busi- ness experience,” some “thoughtful guesswork,” and “intuition” are key attributes of successful managers, today’s business problems tend to be too complex for this type of decision making alone. One of the tools used to make decisions is statistics. Statistics is used not only by businesspeople; we all also apply statistical concepts in our lives. For example, to start the day you turn on the shower and let it run for a few moments. Then you put your hand in the shower to sample the temperature and decide to add more hot water or more cold water, or that the temperature is just right and to enter the shower. As a second example, suppose you are at Costco wholesale and wish to buy a frozen pizza. One of the pizza makers has a stand, and they offer a small wedge of their pizza. After sampling the pizza, you decide whether to purchase the pizza or not. In both the shower and pizza examples, you make a decision and select a course of action based on a sample. Businesses face similar situations. The Kellogg Company must ensure that the mean amount of Raisin Bran in the 25.5-gram box meets label specifications. To do so, it sets a “target” weight somewhat higher than the amount specified on the label. Each box is then weighed after it is filled. The weighing machine reports a distribu- tion of the content weights for each hour as well as the number “kicked-out” for being under the label specification during the hour. The Quality Inspection Depart- ment also randomly selects samples from the production line and checks the qual- ity of the product and the weight of the contents of the box. If the mean product
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TextbookChapter1 - Lin01765_ch01_001-019.qxd 10/7/08 7:51...

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