Introduction to Statistics

A decision of opening up retail sector for FDI cant be taken in a hurry

Retailing Sector
Total retail business in India is over Rs 12, 00,000 crore, a third of our GDP After agriculture, it is the largest employer with over 22 million people engaged in it Throw out the self-employed 51 per cent of our total workforce Unorganized Sector 98% Unorganized sector makes up for 92% of our entire workforce Between 2005 and 2010, against the official claim of creating more than 50 million jobs, actually only two million jobs were created

Retailing Sector
Industry would need additional manpower of 15 to 30 million in 10 years, if reforms do happen The industry currently employs 35 million people Requirement of an estimated 25 to 30 million additional people by 2020 In about 10 years, we would provide direct and indirect employment opportunities to approximately 20,000 people in the stores itself

What is Statistics?
Science of gathering, analyzing, interpreting, and presenting data Branch of mathematics Course of study Facts and figures A death Measurement taken on a sample Type of distribution being used to analyze data

Population Versus Sample

Population the whole- a collection of persons, objects, or items of interest
A defined category A group of people A set of objects

Census gathering data from the entire population Sample a portion of the whole
a subset of the population

Population

Population and Census Data

Identifier RD1 RD2 RD3 RD4 RD5 BL1 BL2 GR1 GR2 GY1 GY2 GY3 Color Red Red Red Red Red Blue Blue Green Green Gray Gray Gray MPG 12 10 13 10 13 27 24 35 35 15 18 17

Sample and Sample Data

Identifier Color MPG

RD2

Red

10

RD5

Red

13

GR1

Green

35

GY2

Gray

18

Descriptive vs. Inferential Statistics

Descriptive Statistics using data gathered on a group to describe or reach conclusions about that same group only
Inferential Statistics using sample data to reach conclusions about the population from which the sample was taken

Descriptive Statistics Collect Organize Summarize Display Analyze

Inferential Statistics Predict and forecast values of population parameters Test hypotheses about values of population parameters Make decisions

Descriptive statistics in manufacturing batteries to make better decisions

total number of worker hours per plant per week - help management understand labor costs, work allocation, productivity, etc. company sales volume of batteries in a year - help management decide if the product is profitable, how much to advertise in coming year, compare to costs to determine profitability. total amount of sulfuric acid purchased per month for use in battery production. - can be used by management to study wasted inventory, scrap, etc.

Inferential Statistics in manufacturing batteries to make decisions

take a sample of batteries and test them to determine the average shelf life - use the sample average to reach conclusions about all batteries of this type. Management can then make labeling and advertising claims. They can compare these figures to the shelf- life of competing batteries. Take a sample of battery consumers and determine how many batteries they purchase per year. Infer to the entire population - management can use this information to estimate market potential and penetration Interview a random sample of production workers to determine attitude towards company management - management can use this survey results to ascertain employee morale and to direct efforts towards creating a more positive working environment which, hopefully, results in greater productivity.

Descriptive statistics in recorded music industry

total sales of compact discs this week, number of artists under contract to a company at a given time. total dollars spent on advertising last month to promote an album. number of units produced in a day. number of retail outlets selling the company's products.

Inferential statistics in recorded music industry

measure the amount spent per month on recorded music for a few consumers then use that figure to infer the amount for the population. determination of market share for rap music by randomly selecting a sample of 500 purchasers of recorded music. Determination of top ten single records by sampling the number of requests at a few radio stations. Estimation of the average length of a single recording by taking a sample of records and measuring them.

Parameter vs. Statistic

Parameter descriptive measure of the population
Usually represented by Greek letters

Statistic descriptive measure of a sample

Usually represented by Roman letters

Symbols for Population Parameters

denotes population parameter

denotes population variance

denotes population standard deviation

Symbols for Sample Statistics

x denotes sample mean

denotes sample variance

S denotes sample standard deviation

Process of Inferential Statistics

Calculate x
Population

to estimate

Sample x (statistic)

(parameter )

Select a random sample

Variables
Categorical Data
Qualitative or Nominal Variables

Numerical Data
Discrete or Continuous Variables

Example 1
Name of Internet provider Amount of time spent surfing Internet No. of online purchases made in a month No. of emails received in a week

Example 2
Number of telephones per household Length (in minutes) of longest long-distance call made per month Whether there is a telephone line connected to a computer modem Whether there is a fax machine in the household

Example 3
Amount of time spent shopping in the bookstore Number of textbooks purchased Academic qualification Gender

Levels of Data Measurement

Nominal Lowest level of measurement Ordinal Scale
Interval Ratio Highest level of measurement

Nominal Level Data

Numbers are used to classify or categorize
Example: Employment Classification
1 for Educator 2 for Construction Worker 3 for Manufacturing Worker
1 for African-American 2 for Anglo-American 3 for Hispanic-American

Example: Ethnicity

More Examples: Gender Religion Geographical location Place of Birth Telephone numbers Employee ID numbers

Ordinal Level Data

Numbers are used to indicate rank or order Relative magnitude of numbers is meaningful Differences between numbers are not comparable Example: Ranking productivity of employees Example: Taste test ranking of three brands of soft drink Example: Position within an organization 1 for President 2 for Vice President 3 for Plant Manager 4 for Department Supervisor 5 for Employee More Examples:

Computer Tutorial Mutual Funds Top Companies

Example of Ordinal Measurement

1 6 2 4 3 5

f i n i s h

Ordinal Data
Faculty and staff should receive preferential treatment for parking space.
Strongly Agree Agree Neutral Disagree Strongly Disagree

Interval Level Data

Distances between consecutive integers are equal
Relative magnitude of numbers is meaningful Differences between numbers are comparable Location of origin, zero, is arbitrary Vertical intercept of unit of measure transform function is not zero

Example: Fahrenheit Temperature

More Examples:

Percentage Change in employment Percentage Return on a stock Dollar Change in Stock Price y = b + ax

Ratio Level Data

Highest level of measurement
Relative magnitude of numbers is meaningful Differences between numbers are comparable Location of origin, zero, is absolute (natural) Examples: Height, Weight, and Volume Example: Monetary Variables, such as Profit and Loss, Revenues, and Expenses Example: Financial ratios, such as P/E Ratio, Inventory Turnover, and Quick Ratio. More Examples: Number of trucks sold, Complaints per 1,000 customers, Number of employees y = ax

Usage Potential of Various Levels of Data

Ratio Interval Ordinal Nominal

Data Level, Operations, and Statistical Methods

Data Level Nominal Ordinal Interval Meaningful Operations Classifying and Counting All of the above plus Ranking All of the above plus Addition, Subtraction, Multiplication, and Division All of the above

Statistical Methods
Nonparametric Nonparametric Parametric

Ratio

Parametric