Yangon University of Economics

Managerial Statistics

Dr. Hlaing Hlaing Moe

Professor/ Head
Department of Applied Statistics
Yangon University of Economics
Statistical Analysis for Effective Decision Making
Introduction to Decision Making

 Everyday we make decisions

 Some decisions are small and easy to make and some bigger decisions need
more time and thought

 Decision making is a process of gathering information to help understand

our choices
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 Data and Information

Data is set of qualitative or quantitative values. Data can be a number, symbol,

character, word, codes, graphs, etc.

Information is the results of processing. Information is processed, organised and

structured data. It provides context for data and enables decision making.
 Data Analysis & Statistical Analysis
The process that involves cleaning, transforming, and data modelling to discover
hidden patterns for decision-making is called data analysis.

Statistic analysis is the science and art of collecting, exploring, analyzing, and
presenting a large volume of data to reveal hidden patterns.
 Statistical analysis for decision making is useful for leaders, managers and professionals
who make crucial decisions for their respective organizations that affect many people.

 Various Statistical Data Analysis tools can be used for effective decision making, to
perform skilled statistical data analysis, summarization and interpretation of datasets by use
of analytical software, to utilize appropriate methods of optimization on data for the
analysis of decision outcomes in business and public environments.
 Role of statisticians

 To guide the design of an experiment or survey prior to data collection

 To analyze data using proper statistical procedures and techniques

 To present and interpret the results to researchers and other decision makers
 Who use Statistics?

School Students and Teachers (both primary and secondary)

Tertiary Students (including university and vocational education students and
teachers/lecturers)
Opinion Leaders (including journalists)
Decision Makers (including politicians, political advisors and government employees)
General Community (including small business/community groups) etc.

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Introduction To Statistics
 Why Study Statistics?
 What Is Meant by Statistics?
 Types of Statistics
Descriptive Statistics
Inferential Statistics
 Types of Variables
 Levels of Measurement
Nominal-Level Data
Ordinal-Level Data
Interval-Level Data
Ratio-Level Data
 Why Study Statistics?
 Data are everywhere

 Statistical techniques are used to make many decisions that affect our lives

 No matter what your career, you will make professional decisions that involve data. An
understanding of statistical methods will help you make these decisions effectively.
 Applications of Statistical Concepts in the Business World

Finance – correlation and regression, index numbers, time series analysis

Marketing – hypothesis testing, chi-square tests, nonparametric statistics

Personel – hypothesis testing, chi-square tests, nonparametric tests

Operating management – hypothesis testing, estimation, analysis of variance, time series

analysis
 Statistics

The science of collecting, organizing, presenting, analyzing, and interpreting data to assist in
making more effective decisions

Statistical analysis – used to manipulate summarize, and investigate data, so that useful
decision-making information results.
 Types of Statistics
Descriptive statistics – Methods of organizing, summarizing, and presenting data in an
informative way

Inferential statistics – The methods used to determine something about a population on the
basis of a sample
◦ Population –The entire set of individuals or objects of interest or the measurements
obtained from all individuals or objects of interest
◦ Sample – A portion, or part, of the population of interest
 Descriptive Statistics

Collect data
◦ e.g., Survey

Present data
◦ e.g., Tables and graphs

Summarize data
X i
◦ e.g., Sample mean = n
 Inferential Statistics
Estimation
◦ e.g., Estimate the population mean weight using the
sample mean weight
Hypothesis testing
◦ e.g., Test the claim that the population mean weight is
70 kg

Inference is the process of drawing conclusions or making decisions about a

population based on sample results
 Why Sample?

Less time consuming than a census

Less costly to administer than a census

It is possible to obtain statistical results of a sufficiently high precision based on samples.
 Sampling Techniques

Samples

Non-Probability Probability Samples

Samples

Simple Systematic
Judgement Random

Convenience Cluster
Stratified
 Statistical Data

The collection of data that are relevant to the problem being studied is commonly the most
difficult, expensive, and time-consuming part of the entire research project.
Statistical data are usually obtained by counting or measuring items.
Primary data are collected specifically for the analysis desired
Secondary data have already been compiled and are available for statistical analysis
A variable is an item of interest that can take on many different numerical values.
A constant has a fixed numerical value.
 Data

Statistical data are usually obtained by counting or measuring items. Most data can be put into
the following categories:
Qualitative - data are measurements that each fail into one of several categories. (hair color,
ethnic groups and other attributes of the population)
Quantitative - data are observations that are measured on a numerical scale (distance traveled
to college, number of children in a family, etc.)
 Qualitative data

 Qualitative data are generally described by words or letters. They are not as widely used as

quantitative data because many numerical techniques do not apply to the qualitative data. For

example, it does not make sense to find an average hair color or blood type.
 Quantitative data

Quantitative data are always numbers and are the result of counting or measuring attributes of a
population.
Quantitative data can be separated into two subgroups:
Discrete (if it is the result of counting (the number of students of a given ethnic group in a class,
the number of books on a shelf, ...)
Continuous (if it is the result of measuring (distance traveled, weight of luggage, …)
Types of Variables

Variables

Qualitative Quantitative

Gender, marital
Discrete Continuous
status

Children in family, Amount of income

Strokes on a golf tax paid, weight of a
hole student
 Numerical Scale of Measurement

Nominal – consist of categories in each of which the number of respective observations is

recorded. The categories are in no logical order and have no particular relationship. The
categories are said to be mutually exclusive since an individual, object, or measurement can be
included in only one of them.
Ordinal – contain more information. Consists of distinct categories in which order is implied.
Values in one category are larger or smaller than values in other categories (e.g. rating-excelent,
good, fair, poor)
 Numerical Scale of Measurement

Interval - numerical data where the distances between numbers have meaning, but the zero has
no real meaning. With interval data it is not meaningful to say than one measurement is twice
another, and might not still be true if the units were changed. Example: Temperature measured in
Centigrade, a cup of coffee at 80°c isn't twice as hot a one at 40°c. IQ score
Ratio – numerical data where the distances between data and the zero point have real meaning.
With such data it is meaningful to say that one value is twice as much as another, and this would
still be true if the units were changed. Examples: Heights, Weights, Salaries, Ages. If someone is
twice as heavy as someone else in pounds, this will still be true in kilograms
 Data Type v. Statistics Used
Data Type Statistics Used
Nominal Frequency, percentages, modes
Ordinal Frequency, percentages, modes, median, percentile, ranking

Interval Frequency, percentages, modes, median, range, percentile, ranking,

average, variance, SD, t-tests, ANOVAs, Pearson R, regression

Ratio Frequency, percentages, modes, median, range, percentile, ranking

average, variance, SD, t-tests, ratios, ANOVAs, Pearson R,
regression
 Methods of presentation of data

Numerical presentation

Graphical presentation
 Data Presentation

Graphical

Histograms

Bar charts

Pie charts

Error bars

More….
 Data Presentation

Tabular

◦ Frequency tables

◦ Percentages
 Summary statistics

Measures of location

1- Measures of central tendency

2- Measures of non central locations

(Quartiles, Percentiles )

Measures of dispersion
 Misuse of Statistics
Use of unreliable data
Biased samples
Overgeneralization
Misunderstanding of estimated error
False causality
Suspect samples
Misleading graph
Over/under estimate etc.
Errors in Presenting Data

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 ‘Chart Junk’
Bad Presentation Good Presentation
Minimum Wage Minimum Wage
1960: $1.00 $
4
1970: $1.60
2
1980: $3.10
0
1990: $3.80 1960 1970 1980 1990

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 Compressing Vertical Axis

Bad Presentation Good Presentation

Quarterly Sales Quarterly Sales
$ $
200 50

100 25

0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

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 No Zero Point on Vertical Axis
Bad Presentation Good Presentation
Monthly Sales Monthly Sales
$ $
45 60
42 40
39 20
36 0
J M M J S N J M M J S N

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Worst graphic in the world?
Thank You!