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215 chapter 2

215 chapter 2 - bow77477_ch01.qxd 11:06 PM Page 2 CHAPTER 1...

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Chapter Outline 1.1 Populations and Samples 1.2 Sampling a Population of Existing Units 1.3 Sampling a Process 1.4 Ratio, Interval, Ordinal, and Nominative Scales of Measurement (Optional) 1.5 An Introduction to Survey Sampling (Optional) An Introduction to Business Statistics CHAPTER 1 bow77477_ch01.qxd 07/21/2005 11:06 PM Page 2

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he subject of statistics involves the study of how to collect, summarize, and interpret data. Data are numerical facts and figures from which conclusions can be drawn. Such conclusions are important to the decision-making processes of many professions and organizations. For example, government officials use conclusions drawn from the latest data on unemployment and inflation to make policy decisions. Financial planners use recent trends in stock market prices to make investment decisions. Businesses decide which products to develop and market by using data that reveal consumer preferences. Production supervisors use manufacturing data to evaluate, control, and improve product quality. Politicians rely on data from public opinion polls to formulate legislation and to devise campaign strategies. Physicians and hospitals use data on the effectiveness of drugs and surgical procedures to provide patients with the best possible treatment. In this chapter we begin to see how we collect and analyze data. As we proceed through the chapter, we introduce several case studies. These case studies (and others to be introduced later) are revisited throughout later chapters as we learn the statistical methods needed to analyze the cases. Briefly, we will begin to study four cases: 1.1 Populations and Samples Statistical methods are very useful for learning about populations, which can be defined in various ways. We begin with the following definition: A population is a set of existing units (usually people, objects, or events). Examples of populations include (1) all of last year’s graduates of Dartmouth College’s Master of Business Administration program, (2) all consumers who bought a cellular phone last year, (3) all accounts receivable invoices accumulated last year by The Procter & Gamble Company, (4) all Lincoln Town Cars that were produced last year, and (5) all fires reported last month to the Tulsa, Oklahoma, fire department. We usually focus on studying one or more characteristics of the population units. Any characteristic of a population unit is called a variable. For instance, if we study the starting salaries of last year’s graduates of the Dartmouth College MBA program, the variable of interest is starting salary. If we study the gasoline mileages ob- tained in city driving by last year’s Lincoln Town Car, the variable of interest is gasoline mileage in city driving. We carry out a measurement to assign a value of a variable to each population unit. For example, we might measure the starting salary of an MBA graduate to the nearest dollar. Or we might measure the gasoline mileage obtained by a car in city driving to the nearest one-tenth of a
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215 chapter 2 - bow77477_ch01.qxd 11:06 PM Page 2 CHAPTER 1...

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