Business Statistics
The Where, Why, and How of Data Collection
1) Statistics is a discipline that involves tools and techniques used to describe data and draw conclusions.
Answer: TRUE
2) In this course, the term business statistics refers to the set of tools and techniques that are used to
convert information into meaningful data.
Answer: FALSE
3) Descriptive statistics allow a decision maker to reach a conclusion about a population
subset from the population.
Answer: FALSE
based on a
4) An accountant has recently prepared a report for a client that contains a variety of graphs and charts.
In doing so, she has used descriptive statistical methods.
Answer: TRUE
5) Descriptive statistical tools include graphs, charts, and numerical measures.
Answer: TRUE
6) A histogram is an example of a numerical measure.
Answer: FALSE
7) Companies frequently use charts and graphs in their regular communications with stockholders and
investors; this shows the use of descriptive statistics.
Answer: TRUE
8) A manufacturing manager has developed a table that shows the average production volume each day
for the past three weeks. The average production level is an example of a numerical measure.
Answer:
TRUE
9) An accountant who recently examined 200 accounts from a company's total of 4,000 accounts in an
effort to estimate the percentage of all accounts that have incorrect journal entries is using descriptive
statistical analysis to reach the conclusion.
Answer: FALSE
10) The editor of a local newspaper is interested in determining the percentage of subscribers who read
the paper's editorials. The statistical technique that he would use is called estimation.
Answer: TRUE
11) Hypothesis testing and estimation are two statistical tools that are used to draw inferences about a
large data set based on a subset of the data.
Answer: TRUE
Keywords:
inferential statistics
12) Another term for the arithmetic average is the mean.
Answer: TRUE
, mean
13) Statistical inference would be used as the primary statistical tool by a quality control manager who
wishes to estimate the average weight of her company's products.
Answer: TRUE
Keywords:
inferential statistics
14) A light bulb manufacturer wants to advertise the average life of its light bulbs so it tests a subset of
light bulbs. This is an example of inferential statistics.
Answer: TRUE
Keywords:
inferential statistics
15) A sales manager has five salespeople. The following are the number of units sold by the five
salespeople during the past week: {5, 13, 6, 2, 4}. Based on the data, the mean number of units sold was 6
units.
Answer: TRUE
, mean
16) Some of the most common methods of collecting data include experiments, telephone surveys, mail
questionnaires, direct observations, and personal interviews.
Answer: TRUE
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
17) An experiment is a process that generates data as its outcome.
Answer: TRUE
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
18) Experimental design is a plan for performing an experiment where the effects of one or more factors
on the variable of interest are measured.
Answer: TRUE
Keywords: data collection, experiments
Section: 1-2 Procedures for Collecting Data
19) Typically, it is possible to include a larger number of questions in a phone survey than in a mail
survey since it takes less time to complete the survey over the phone.
Answer: FALSE
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
20) An Internet-based or emailed survey is not an alternative method of data collection.
Answer: FALSE
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
21) An open-end question requires respondents to choose from a short list of choices
Answer: FALSE
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
22) A short survey with closed-end questions is likely to have a better response rate than a long survey
with open-ended questions.
Answer: TRUE
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
23) The Cranston Company recently met with a group of its customers to ask questions about the service
and products provided by the company. The data collected in this process would be an example of data
collected through direct observation.
Answer: FALSE
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
24) The Georgia Company, a pharmaceutical company, recently conducted a study in which 20 people
were given a new drug and 20 other people were given a placebo. The objective was to determine
whether there was a difference in pain relief between those using the new drug versus those using the
placebo. The data collection used here is an example of an experiment.
Answer: TRUE
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
25) When comparing experiments, surveys, and direct observation as methods of data collection, the
method that would typically be the least expensive is surveys.
Answer: TRUE
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
26) Assuming that you are planning to collect data using an experiment, it will be very important to
establish an appropriate survey design.
Answer: FALSE
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
27) Mail questionnaires typically generate poor response rates.
Answer: TRUE
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
28) In an unstructured interview the questions are scripted.
Answer:
FALSE
Keywords: data collection, interviews
Section: 1-2 Procedures for Collecting Data
29) One way to improve the response rate for a survey is to administer the surveys directly to the
respondents.
Answer: TRUE
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
30) On a survey, the questions pertaining to the background of the respondent (age, gender, etc.) are
referred to as demographic questions.
Answer: TRUE
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
31) When an interviewer asks a specified series of questions in the course of a personal interview, he/she
is conducting an unstructured interview.
Answer: FALSE
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
32) A company that is interested in determining which of three prices to charge for its products has test
marketed the product in three cities, each time using a different price for the product. The number of
products sold in the first week is recorded. In this case, the data are considered to have been collected
using an experiment.
Answer: TRUE
Keywords: data collection, survey
Section: 1-2 Procedures for Collecting Data
33) Data collected using open-end
closed-end questions.
Answer: FALSE
questions is generally easier to analyze than data collected from
Keywords: data collection, survey
Section: 1-2 Procedures for Collecting Data
34) One of the advantages of data check sheets is that as the data are being recorded, they are also being
displayed in a useful format.
Answer: TRUE
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
35) The primary purpose of performing a pre-test when developing a telephone or mail survey is to make
sure that the respondents can understand the questions and are able to provide meaningful responses.
Answer: TRUE
Keywords: data collection, protest
Section: 1-2 Procedures for Collecting Data
36) Close-end questions provide the greatest opportunity to obtain ideas and thoughts on the part of
those surveyed but the resulting data are more difficult to analyze.
Answer: FALSE
Keywords: data collection, survey
Section: 1-2 Procedures for Collecting Data
37) Questions on a written survey dealing with the characteristics of the respondent (age, income, etc.) are
referred to as categorical questions.
Answer: FALSE
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
38) Open-end questions are typically included in a survey when the objective is to provide the maximum
opportunity for the respondent to express his or her opinion.
Answer: TRUE
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
39) The method of data collection called direct observation is always associated with gathering data from
people.
Answer: FALSE
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
40) Data gathered from a structured interview is generally easier to analyze than data collected from an
unstructured interview.
Answer: TRUE
Keywords: data collection, structured interview
Section: 1-2 Procedures for Collecting Data
41) When a survey is done you can always assume that non-respondents would have answered the same
way as those who did respond.
Answer: FALSE
Keywords: data collection, nonresponse bias
Section: 1-2 Procedures for Collecting Data
42) When a company scans the bar codes on its products in an effort to count the number of products that
remain in inventory, the company is collecting data through experimentation.
Answer: FALSE
Keywords:
data collection, UPC
Section:
1-2 Procedures for Collecting Data
43) Data collected on the Internet can generally be considered accurate since the data must go through a
screening process before they can be placed on the Internet.
Answer: FALSE
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
44) It is possible for an interviewer to interject bias into the data collection project by the way he or she
asks the questions.
Answer: TRUE
Keywords: data collection, bias
Section: 1-2 Procedures for Collecting Data
45) When people fail to respond to a survey, the data collection process may suffer from nonresponse
bias.
Answer: TRUE
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
46) Selection bias occurs when the respondent decides which of the questions on the survey to answer.
Answer: FALSE
Keywords: data collection, bias
Section: 1-2 Procedures for Collecting Data
47) Recently, an analyst in a company's marketing department surveyed customers regarding how often
they buy a particular product. One customer indicated that she purchased the product 17 times in the last
six months, but the analyst recorded the response as 71 times. This is an example of observer bias.
Answer: FALSE
Keywords: data collection, bias
Section: 1-2 Procedures for Collecting Data
48) When the United States conducts a census that counts all people in the country, this is an example of
using a sample.
Answer: FALSE
Keywords: population, sample
Section: 1-3 Populations, Samples and Sampling Techniques
49) When the marketing manager for a large company surveys a portion of the total customers of his
company, he is using a sample from the population.
Answer:
TRUE
Keywords: sample, population
Section: 1-3 Populations, Samples and Sampling Techniques
50) A census is an enumeration of the entire sample of items selected from the population of interest.
Answer: FALSE
Keywords: sample
Section: 1-3 Populations, Samples and Sampling Techniques
51) A sample is selected from a population in cases where selecting data from the entire population is
either very difficult or very expensive.
Answer: TRUE
Keywords: sample
Section: 1-3 Populations, Samples and Sampling Techniques
52) A parameter is the boundary on the population of interest.
Answer: FALSE
Keywords: parameter, population
Section: 1-3 Populations, Samples and Sampling Techniques
53) Population parameters are descriptive numerical measures, such as an average, that describe the
entire population.
Answer: TRUE
Keywords: parameter
Section: 1-3 Populations, Samples and Sampling Techniques
54) Statistics are measures computed from the entire population of data.
Answer: FALSE
Keywords: statistics
Section: 1-3 Populations, Samples and Sampling Techniques
55) When the production manager selects a sample of items that have been produced on her production
line and computes the proportion of those items that are defective, the proportion is referred to as a
statistic.
Answer: TRUE
Keywords: statistics, proportion
Section: 1-3 Populations, Samples and Sampling Techniques
56) The First National Bank mailed out a survey to all 3,456 savings account customers. A total of 568
surveys were returned. Values computed from the returned surveys would constitute parameters since
all 568 customers were surveyed.
Answer: FALSE
Keywords: parameter, statistic
Section: 1-3 Populations, Samples and Sampling Techniques
57) If an analyst computes statistics from a sample, the sample is by definition a statistical sample.
Answer: FALSE
Keywords: sample, statistic
Section: 1-3 Populations, Samples and Sampling Techniques
58) When a group of university students takes a poll of their fellow students on whether they support a
proposed fee increase, the sampling method they would use when students walking near the library are
surveyed would be called a random sample.
Answer: FALSE
Keywords: random sample
Section: 1-3 Populations, Samples and Sampling Techniques
59) A pharmaceutical company conducts a study where 50 patients are given a drug. They find that 10
percent of patients experience nausea as a side effect. This 10 percent is an example of a parameter.
Answer: FALSE
Keywords: parameter, statistic
Section: 1-3 Populations, Samples and Sampling Techniques
60) It is possible for a nonstatistical sample to yield statistics that have values closer to the corresponding
parameter than will a statistical sample.
Answer: TRUE
Keywords: nonstatistical sample
Section: 1-3 Populations, Samples and Sampling Techniques
61) One of the most common statistical sampling techniques is convenience sampling.
Answer: FALSE
Keywords: convenience sample
Section: 1-3 Populations, Samples and Sampling Techniques
62) Possibly the most frequently used nonstatistical sampling procedure is the simple random sample.
Answer: FALSE
Keywords: simple random sample
Section: 1-3 Populations, Samples and Sampling Techniques
63) A common underpinning of all statistical sampling techniques is the concept of random selection.
Answer: TRUE
Keywords: random sample
Section: 1-3 Populations, Samples and Sampling Techniques
64) Simple random sampling involves selecting members of the population in such as way that all
members are equally likely to be chosen.
Answer: TRUE
Keywords: sampling techniques
Section: 1-3 Populations, Samples and Sampling Techniques
65) When stratified random sampling is employed, the population is divided into homogeneous
subgroups called strata.
Answer: TRUE
Keywords: stratified random sample
Section: 1-3 Populations, Samples and Sampling Techniques
66) In election years, the polls that are conducted by such companies as Gallup and Harris typically
employ stratified random sampling to reduce the number of people that will need to be surveyed.
Answer: TRUE
Keywords: stratified random sample
Section: 1-3 Populations, Samples and Sampling Techniques
67) If a state agency wishes to conduct on-site surveys of small businesses throughout the state, cluster
sampling could potentially be used to reduce the geographical area over which the surveys would need
to be conducted.
Answer: TRUE
Keywords: cluster sample
Section: 1-3 Populations, Samples and Sampling Techniques
68) Stratified random sampling is the same thing as simple random sampling.
Answer: FALSE
Keywords: sampling techniques
Section: 1-3 Populations, Samples and Sampling Techniques
69) When a small sample is used, a stratified random sample is more likely to provide the desired
information than a simple random sample.
Answer: TRUE
Keywords: sampling techniques
Section: 1-3 Populations, Samples and Sampling Techniques
70) Suppose a professor collects survey data by passing out surveys in his/her classes, where the
population of interest is defined as all students enrolled at that university. This is an example of
nonstatistical sampling technique.
Answer: TRUE
Keywords: sampling techniques
Section: 1-3 Populations, Samples and Sampling Techniques
71) One of the reasons that managers prefer statistical sampling to nonstatistical sampling is that
statistical sampling is generally easier to perform and less expensive.
Answer: FALSE
Keywords: statistical sample
Section: 1-3 Populations, Samples and Sampling Techniques
72) A market research firm that surveys customers in a shopping mall by asking various people to
respond to a short survey about a new product is performing convenience sampling.
Answer: TRUE
Keywords: convenience sample
Section: 1-3 Populations, Samples and Sampling Techniques
73) If a population is very large, it may be better to select a sample from the population than to try to
obtain a census in an effort to reduce measurement error.
Answer: TRUE
Keywords: measurement error, data collection
Section: 1-3 Populations, Samples and Sampling Techniques
74) The sales data for a company measured weekly for the past year would be considered cross-sectional
data since the sales values are computed from the entire company.
Answer: FALSE
Keywords: data type, cross-sectional
Section: 1-4 Data Types and Data Measurement Levels
75) When students are asked to list their age and the percentage of their college expenses that they pay
for themselves, the type of data being collected is quantitative.
Answer: TRUE
Keywords: data type, quantitative
Section: 1-4 Data Types and Data Measurement Levels
76) It is possible for the same survey questionnaire to yield both quantitative and qualitative data.
Answer: TRUE
Keywords: data type, quantitative, qualitative
Section: 1-4 Data Types and Data Measurement Levels
77) Sales data measured each week for the past twenty weeks are examples of time-series data.
Answer: TRUE
Keywords: data type, time series
Section: 1-4 Data Types and Data Measurement Levels
78) Recording vehicle type as sedan, minivan, pick-up truck, etc. is an example of qualitative data.
Answer: TRUE
Keywords: data type
Section: 1-4 Data Types and Data Measurement Levels
79) When customers return a product to a store and the store asks the customer to indicate the reason that
the merchandise was returned, the resulting data are quantitative since multiple people will be providing
the data.
Answer: FALSE
Keywords: data type, qualitative
Section: 1-4 Data Types and Data Measurement Levels
80) Nominal data is the highest level of data.
Answer: FALSE
Keywords: measurement levels
Section: 1-4 Data Types and Data Measurement Levels
81) At the end of the school term, students are asked to rate the course and instructor by indicating on a
scale of 1-5 how well they liked the course. The data generated from this question are examples of ordinal
data.
Answer: TRUE
Keywords: data type, ordinal
Section: 1-4 Data Types and Data Measurement Levels
82) On a survey, amount of education is recorded as some high school, high school graduate, some
college, college graduate, etc. This is an example of ordinal data.
Answer: TRUE
Keywords: measurement levels
Section: 1-4 Data Types and Data Measurement Levels
83) A variable, i.e., the length of time it takes for an employee to complete an assembly procedure at an
automotive plant, is a ratio level variable.
Answer: TRUE
Keywords: levels of measurement, ratio
Section: 1-4 Data Types and Data Measurement Levels
84) A variable that has all the properties of an interval variable, but also has a true zero, is a ratio level
variable.
Answer: TRUE
Keywords: levels of measurement, ratio
Section: 1-4 Data Types and Data Measurement Levels
85) Cross-sectional data is a set of data values observed at successive points in time.
Answer: FALSE
Keywords: data type, time series
Section: 1-4 Data Types and Data Measurement Levels
86) Data collected on marital status (married, divorced, single, other) would be an ordinal level variable.
Answer: FALSE
Keywords: data type, ordinal
Section: 1-4 Data Types and Data Measurement Levels
87) Recently, a bank manager pulled a sample of customer accounts and recorded data for two variables,
checking account balance and total number of transactions during the previous 30 days. The data
collected would be considered time-series data.
Answer: FALSE
Keywords: data type, time series
Section: 1-4 Data Types and Data Measurement Levels
88) Flavors of ice cream (chocolate, vanilla, strawberry, etc.) are an example of nominal data.
Answer: TRUE
Keywords: measurement levels
Section: 1-4 Data Types and Data Measurement Levels
89) A major fast-food chain has installed a device that measures the temperature of the hamburgers on
the grill. These data are stored in a computer file. If you were to analyze these data, you would be
working with ordinal level data.
Answer: TRUE
Keywords: levels of measurement, ordinal
Section: 1-4 Data Types and Data Measurement Levels
90) The difference between interval data and ratio data is that interval data has a natural zero.
Answer: FALSE
Keywords: measurement levels
Section: 1-4 Data Types and Data Measurement Levels
91) If you have an ordinal variable, it is possible to precisely measure the magnitude of the difference
between the possible values of the variable.
Answer: FALSE
Keywords: levels of measurement, ordinal
Section: 1-4 Data Types and Data Measurement Levels
92) A cell phone service provider has 14,000 customers. Recently, the sales department selected a random
sample of 400 customer accounts and recorded the number of minutes of long distance time used during
the previous billing period. The data for this variable is considered to be nominal since the values are
based on sample data.
Answer: FALSE
Keywords: levels of measurement, nominal
Section: 1-4 Data Types and Data Measurement Levels
93) A cell phone service provider has 14,000 customers. Recently, the sales department selected a random
sample of 400 customer accounts and recorded the number of minutes of long distance time used during
the previous billing period. The company analyst used Excel to sort these values in order from high to
low. She then assigned the highest value a rank of 1, the next highest value a rank of 2, and so forth.
These ranks would be considered to be ordinal data.
Answer: TRUE
Keywords: levels of measurement, ordinal
Section: 1-4 Data Types and Data Measurement Levels
94) A survey conducted by a local real estate agency asked respondents to indicate whether they
preferred natural gas, electric, or oil furnaces for heating their home. The data collected for this variable
would be of ordinal level.
Answer: FALSE
Keywords: levels of measurement, ordinal
Section: 1-4 Data Types and Data Measurement Levels
95) A small engine repair shop tracks the number of customers who call each day. This variable is a
time-series variable and also ratio level.
Answer: TRUE
Keywords: levels of measurement, time series, ratio
Section: 1-4 Data Types and Data Measurement Levels
96) The use of charts and graphs is an example of:
A) descriptive statistics.
B) inferential statistics.
C) estimation.
D) hypothesis testing.
Answer: A
97) When an administrator at a local hospital prepares a series of charts and graphs pertaining to the
patients that have stayed at the hospital during the past month, she is using which general category of
statistical analysis?
A) Quantitative statistics
B) Inferential statistics
C) Descriptive statistics
D) Random sampling
Answer: C
98) Which of the following is an example of graphs used to describe data?
A) Histograms
B) Bar charts
C) Both A and B are correct.
D) None of the above.
Answer: C
, graphs
99) When a marketing manager surveys a few of the customers for the purpose of drawing a conclusion
about the entire list of customers, she is applying:
A) inferential statistics.
B) descriptive statistics.
C) quantitative models.
D) numerical measures.
Answer: A
Keywords:
inferential statistics
100) When the park ranger at Yellowstone National Park reports the average length of time that visitors
spend in the park, he is using:
A) graphical tools.
B) numerical measures.
C) statistical charts.
D) histograms or bar charts.
Answer: B
101) Recently, a major tire manufacturer stated in its advertising that its tires with a new tire tread design
will last more than 50,000 miles on average. A consumer agency collected a subset of these tires and
tested them in very controlled conditions. Based on this test, the agency concluded that the manufacturer
was justified in making this claim. The process described is an example of:
A) descriptive statistics.
B) hypothesis testing.
C) statistical inference.
D) Both B and C are correct.
Answer: D
, inferential statistics, hypothesis testing
102) A consumer products company is considering introducing a new product nationally. To help make
the decision, it first conducts a test market by selling the product for a few months in one city. This is an
example of:
A) descriptive statistics.
B) charts and graphs.
C) estimation.
D) hypothesis testing.
Answer: C
Keywords:
inferential statistics
103) The Biltmore Hotel manager is getting ready to make a presentation that she hopes will justify
adding additional staff. As part of the presentation, she has constructed charts and graphs. The general
type of statistical analysis she is using is:
A) hypothesis testing.
B) estimation.
C) inferential statistics.
D) descriptive statistics.
Answer: D
, graphs
104) Estimation and hypothesis testing are categories of:
A) inferential statistics.
B) descriptive statistics.
C) numerical measurement.
D) statistical charts.
Answer: A
Keywords:
inferential statistics
105) A political poll that is used to indicate the percentage of voters who will vote for a particular
candidate makes use of which of the following?
A) Hypothesis testing
B) Numerical analysis
C) Estimation
D) Both B and C
Answer: D
Keywords:
inferential statistics
106) The company that makes a new weight loss pill claims that people who use this pill according to
instructions will lose an average of 20 pounds during a four-month period. They say the claim is based on
a study of 300 people. Which of the following statistical methods was most likely used to arrive at the
company's conclusion?
A) Estimation
B) Hypothesis testing
C) Histograms
D) Bar charts
Answer: B
Keywords:
inferential statistics
107) When the California Highway Patrol states that a study of drivers on a rural highway shows that the
average speed is between 62.5 mph and 64.5 mph, they are most likely basing this statement on:
A) descriptive statistics.
B) estimation.
C) hypothesis testing.
D) graphical analysis.
Answer: B
Keywords:
inferential statistics
108) The summaries of data, which may be in forms of tabular, graphical, or numerical, are referred to as:
A) inferential statistics.
B) descriptive statistics.
C) statistical inference.
D) report generation.
Answer: B
109) Based on a survey of 400 students in a university in which 20 percent indicated that they were
business majors. The university student newspaper reported that "20 percent of all the students at the
university are business majors." This report is an example of:
A) a sample.
B) a population.
C) statistical inference.
D) descriptive statistics.
Answer: C
Keywords:
inferential statistics
110) A company is interested in determining which of several advertising layouts is most effective at
generating additional sales. The data collection tool that would most likely be used in this situation is:
A) telephone survey.
B) mail questionnaire.
C) experiment.
D) observation.
Answer: C
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
111) A company conducted a survey of its employees to determine their level of satisfaction with various
company policies. The data collected from this survey are:
A) primary data.
B) secondary data.
C) experimental data.
D) census data.
Answer: A
Keywords: data collection, primary data
Section: 1-2 Procedures for Collecting Data
112) The Dalton Company has recently made a decision to build a new plant in Denver. In making this
decision it used data supplied by the U.S. Census Bureau. For the Dalton Company, these data are
examples of:
A) primary data.
B) secondary data.
C) reliable data.
D) experimental data.
Answer: B
Keywords: data collection, secondary data
Section: 1-2 Procedures for Collecting Data
113) An Internet service provider wants to determine its level of customer satisfaction. The best data
collection method to obtain the results most quickly is:
A) experiment.
B) telephone survey.
C) mailed survey.
D) personal interview.
Answer: B
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
114) A tire manufacturing company is interested in obtaining data on stopping distances for each of the
three main tread types made by the company. The data collection method that would be most likely used
in this case would be:
A) telephone survey.
B) written questionnaire.
C) demographic surveying.
D) experiments.
Answer: D
Keywords: data collection, experimental
Section: 1-2 Procedures for Collecting Data
115) Which of the following data collection methods is most likely to generate the largest nonresponse?
A) Mail surveys
B) Direct observation
C) Telephone surveys
D) Personal interviews
Answer: A
Keywords: data collection, mail surveys
Section: 1-2 Procedures for Collecting Data
116) In developing and conducting a survey, what is the purpose of the pre-test phase?
A) To make sure that the cost of developing the survey instrument is not too great
B) To generate initial data for analysis
C) To catch any problems with the questionnaire before it is fully administered
D) To make sure that the respondents like the issues being addressed by the survey
Answer: C
Keywords: data collection, survey pre-test
Section: 1-2 Procedures for Collecting Data
117) For which data collection method is it most important to have a polished-looking survey form?
A) Telephone survey
B) Written questionnaire
C) Experimental design
D) Personal interview
Answer: B
Keywords: data collection, questionnaire
Section: 1-2 Procedures for Collecting Data
118) Which of the following types of questions provide the respondent with the greatest choice in
responding to a question?
A) Open-end questions
B) Close-end questions
C) Multiple choice questions
D) True/false questions
Answer: A
Keywords: data collection, open-ended
Section: 1-2 Procedures for Collecting Data
119) A consumer products company wants to interview customers regarding a new product. If it wishes
to adhere to a predetermined pattern of questions in the interview, which of the following would likely
be used?
A) Structured interview
B) Open-end questioning
C) Unstructured interview
D) Written questionnaire
Answer: A
Keywords: data collection, structured interview
Section: 1-2 Procedures for Collecting Data
120) In conducting a personal interview, what problem can result if the interviewer is allowed to
arbitrarily decide who should be interviewed?
A) Nonresponses
B) Missing data
C) Bias
D) Poor response rate
Answer: C
Keywords: data collection, bias
Section: 1-2 Procedures for Collecting Data
121) One of the major challenges for developing a good written questionnaire or telephone survey
instrument is that:
A) nonresponses are too high.
B) there will always be missed data.
C) bias cannot be controlled.
D) wording can influence responses.
Answer: D
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
122) When an accounting auditor randomly selects 20 accounts from all the accounts to check for
accuracy, she has selected:
A) a personal observation.
B) a sample from the population.
C) a census.
D) a convenience sample.
Answer: B
Keywords: data collection, sample
Section: 1-3 Populations, Samples and Sampling Techniques
123) An Internet service provider has the capability of tracking the time that each of its customers spends
connected to the Internet during a month. These data would constitute:
A) a simple random sample.
B) a convenience sample.
C) a cluster sample.
D) a population.
Answer: D
Keywords: data collection, population
Section: 1-3 Populations, Samples and Sampling Techniques
124) A professor hands out survey forms during her classes, where the population is all students
attending the college. This is an example of:
A) a convenience sample.
B) a simple random sample.
C) a stratified sample.
D) a cluster sample.
Answer: A
Keywords: convenience sampling
Section: 1-3 Populations, Samples and Sampling Techniques
125) Another term used for statistical sampling is:
A) probability sampling.
B) convenience sampling.
C) ratio sampling.
D) numerical sampling.
Answer: A
Keywords: probability sample
Section: 1-3 Populations, Samples and Sampling Techniques
126) A grocery store is interested in determining whether its customers are satisfied with the quality of
service provided. To collect the necessary data, interviewers have been hired to stand near the store's
exits and to survey customers who have the time and interest to be surveyed. This type of sampling is
called:
A) systematic random sampling.
B) ratio sampling.
C) convenience sampling.
D) stratified sampling.
Answer: C
Keywords: convenience sampling
Section: 1-3 Populations, Samples and Sampling Techniques
127) The Polson Pole and Fence Company recently did a quality check on the length of fence posts. To do
this, each of the 400 posts in inventory was numbered. Numbers from 1 to 400 were placed in a bowl.
Twenty numbers were selected from the bowl without looking. These 20 poles were the ones selected for
the study. This type of sampling is called:
A) cluster sampling.
B) simple random sampling.
C) nonstatistical.
D) convenience sampling.
Answer: B
Keywords: simple random samples
Section: 1-3 Populations, Samples and Sampling Techniques
128) In order to determine a parameter (such as a mean) of a population you would need to conduct a:
A) population.
B) random sample.
C) census.
D) statistic.
Answer: C
Keywords: population, parameter
Section: 1-3 Populations, Samples and Sampling Techniques
129) If a systematic random sample is to be selected of size 100 from a population with 5,000 items, the
first item selected from the ordered population will be:
A) randomly selected between 1 and 100.
B) randomly selected between 1 and 50.
C) any randomly selected value between 1 and 5,000.
D) item 50.
Answer: B
Keywords: systematic sample
Section: 1-3 Populations, Samples and Sampling Techniques
130) If a stratified random sample is to be conducted, which of the following is true?
A) The population will be broken down into subgroups called strata.
B) Each subgroup should contain items that are homogeneous with respect to the characteristic of
interest.
C) If effective, the total required sample size should be less than that which would be needed if a simple
random sample were selected.
D) All of the above.
Answer: D
Keywords: stratified sample
Section: 1-3 Populations, Samples and Sampling Techniques
131) A food warehouse manager plans to conduct a check on damaged packages. The warehouse covers a
large area and products are spread out over the entire building. Assuming that no products are more
likely to have damaged packages than any other, what statistical sampling method would be used to
reduce the time and effort required to do the study?
A) Convenience sampling
B) Stratified random sampling
C) Cluster random sampling
D) Systematic random sampling
Answer: C
Keywords: cluster sample
Section: 1-3 Populations, Samples and Sampling Techniques
132) Some stores and restaurants have "tell us what you think" cards available for customers. Assuming
that angry customers are more likely to take the time to fill these out, this is an example of:
A) simple random sampling.
B) stratified sampling.
C) cluster sampling.
D) nonstatistical sampling.
Answer: D
Keywords: sampling methods
Section: 1-3 Populations, Samples and Sampling Techniques
133) The mayor of a large U.S. city is interested in addressing complaints from many property owners
regarding recent property assessments. Many people feel that they are being overtaxed and that their
assessments are too high. To study this issue, the mayor plans to hire consultants to randomly select
homes in the city and have these homes independently assessed for value. However, she is concerned
that the cost of sampling will be very high since the city is spread out over a wide geographical area. To
potentially reduce the cost of sampling, which of the following statistical sampling techniques should be
applied?
A) Cluster sampling
B) Ratio sampling
C) Simple random sampling
D) Stratified random sampling
Answer: A
Keywords: sampling methods
Section: 1-3 Populations, Samples and Sampling Techniques
134) The human resources department at a major high tech company plans to conduct an employee
satisfaction study by sampling 100 employees from the 3,000 total employees. They plan to use systematic
random sampling since the employee file is in alphabetic order. The first employee selected in the study
should be:
A) the 30th employee.
B) employee 1 to 30 randomly selected.
C) employee 1 to 100 randomly selected.
D) the first employee.
Answer: B
Keywords: systematic random sample
Section: 1-3 Populations, Samples and Sampling Techniques
135) A value computed from a population is called:
A) a statistic.
B) a real number.
C) a parameter.
D) a point estimate.
Answer: C
Keywords: statistic
Section: 1-3 Populations, Samples and Sampling Techniques
136) Which of the following statements is true?
A) Random samples are easier to select than nonstatistical samples.
B) Nonstatistical samples can provide useful data.
C) Stratified random sampling involves breaking the population down into geographic subgroups.
D) Systematic sampling is an example of nonstatistical sampling.
Answer: B
Keywords: nonstatistical sampling
Section: 1-3 Populations, Samples and Sampling Techniques
137) In Excel, what procedure is used to select random numbers?
A) The random numbers function
B) Click on the Data tab, then click on Data Analysis, then click on Sampling
C) Click on the Data tab, then click on Data Analysis, then click on Random Number Generation
D) Random numbers are not available in Excel.
Answer: C
Keywords: Excel, random number generation
Section: 1-3 Populations, Samples and Sampling Techniques
138) A sampling plan that requires a person to interview 100 people as they exit a department store
would most likely be:
A) a simple random sample.
B) a convenience sample.
C) a systematic random sample.
D) a stratified sample.
Answer: B
Keywords: convenience samples
Section: 1-3 Populations, Samples and Sampling Techniques
139) Which one of the following is NOT statistical sampling?
A) Simple random sample
B) Stratified random sampling
C) Cluster sampling
D) Convenience sampling
Answer: D
Keywords: statistical and nonstatistical sampling
Section: 1-3 Populations, Samples and Sampling Techniques
140) When a survey uses the responses strongly disagree, disagree, neutral, agree, strongly agree, this is
an example of:
A) nominal data.
B) ordinal data.
C) interval data.
D) ratio data.
Answer: B
Keywords: measurement levels
Section: 1-4 Data Types and Data Measurement Levels
141) General Electric Corporation tracks employee turnover annually. It currently has a data set that
contains turnover for the past 20 years. What type of data does it have?
A) Time-series data
B) Cross-sectional data
C) Nominal data
D) Ordinal data
Answer: A
Keywords: data types, time series
Section: 1-4 Data Types and Data Measurement Levels
142) The human resources department at a major high tech company recently conducted an employee
satisfaction survey of 100 of its 3,000 employees. Data were collected on such variables as age, gender,
marital status, current salary, level of overall satisfaction on a scale from 1 to 5, number of years with the
company, and job title. Which of the following best describes the overall data set that was generated from
the study?
A) Cross-sectional data
B) Time-series data
C) Nominal data
D) Quantitative data
Answer: A
Keywords: data types, cross-sectional
Section: 1-4 Data Types and Data Measurement Levels
143) The human resources department at a major high tech company recently conducted an employee
satisfaction survey of 100 of its 3,000 employees. Data were collected on such variables as age, gender,
marital status, current salary, level of overall satisfaction on a scale from 1 to 5, number of years with the
company, and job title. Considering the age variable where employees were asked to list their age at their
last birthday, which of the following best describes the level of data measurement for that variable?
A) Interval level
B) Nominal level
C) Ratio level
D) Cross-sectional data
Answer: C
Keywords: data measurement levels, ratio
Section: 1-4 Data Types and Data Measurement Levels
144) The high temperature is recorded each day for a period of 1 year. This is an example of:
A) nominal data.
B) ordinal data.
C) time-series data.
D) cross-sectional data.
Answer: C
Keywords: data type, time series
Section: 1-4 Data Types and Data Measurement Levels
145) The human resources department at a major high tech company recently conducted an employee
satisfaction survey of 100 of its 3000 employees. Data were collected on such variables as age, gender,
marital status, current salary, level of overall satisfaction on a scale from 1 to 5, number of years with the
company, and job title. Which of the variables listed are considered to be ratio level data?
A) Age and years with the company
B) Gender and marital status
C) Job title
D) None of the variables is ratio level.
Answer: A
Keywords: data measurement levels, ratio
Section: 1-4 Data Types and Data Measurement Levels
146) The human resources department at a major high tech company recently conducted an employee
satisfaction survey of 100 of its 3,000 employees. Data were collected on such variables as age, gender,
marital status, current salary, level of overall satisfaction on a scale from 1 to 5, number of years with the
company, and job title. Which of the variables would be classified as nominal level data?
A) Age and years with the company
B) Overall satisfaction
C) Gender, marital status, and job title
D) Age and gender
Answer: C
Keywords: data measurement levels, nominal
Section: 1-4 Data Types and Data Measurement Levels
147) The human resources department at a major high tech company recently conducted an employee
satisfaction survey of 100 of its 3,000 employees. Data were collected on such variables as age, gender,
marital status, current salary, level of overall satisfaction on a scale from 1 to 5, number of years with the
company, and job title. Which of the variables would be considered to be qualitative data?
A) Gender, marital status, job satisfaction, and job title
B) Age
C) Years with the company
D) All variables listed are qualitative.
Answer: A
Keywords: data types, qualitative data
Section: 1-4 Data Types and Data Measurement Levels
148) Weekly stock closing prices for IBM would be classified as which of the following?
A) Cross-sectional data
B) Time-series data
C) Nominal data
D) Ordinal data
Answer: B
Keywords: data types, time series
Section: 1-4 Data Types and Data Measurement Levels
149) A college data base includes the number of people who are enrolled in each class the college offers.
This is an example of:
A) nominal data.
B) ordinal data.
C) interval data.
D) ratio data.
Answer: D
Keywords: measurement levels
Section: 1-4 Data Types and Data Measurement Levels
150) When data are organized into levels, the highest data level is:
A) interval level data.
B) nominal level data.
C) ordinal level data.
D) ratio level data.
Answer: D
Keywords: data measurement levels, ratio
Section: 1-4 Data Types and Data Measurement Levels
151) Data collected at a fixed point in time are:
A) time-series data.
B) approximate time-series data.
C) cross-sectional data.
D) panel data.
Answer: C
Keywords: time-series data, cross-sectional data
Section: 1-4 Data Types and Data Measurement Levels
152) What is meant by the term statistical inference?
Answer: A statistical inference is a conclusion reached about a population value (parameter) based
upon an analysis of data in a statistical sample from the population. The idea is that we can study the
sample data and then draw a conclusion (inference) about what the entire population looks like with
respect to the measure of interest. There are two main categories of statistical inference: estimation and
hypothesis testing.
Keywords:
inferential statistics
153) Discuss the differences and similarities between statistical estimation and statistical hypothesis
testing.
Answer: Both estimation and hypothesis testing fall under the main category of statistical procedures
called inferential statistics. In both cases, we are attempting to better understand the population of
interest by examining the data in a sample from the population. With estimation, we begin with a goal of
estimating a population value such as a population mean. We don't have a preconception about what that
value is. Instead, we look at a corresponding value for the sample (i.e., sample mean) and use that as our
"best" guide to what the population value is. With hypothesis testing, we begin with a claim or idea
(hypothesis) about what the population value is and then we use the corresponding sample value to
either support or refute the claim or idea.
Keywords:
inferential statistics
154) Explain what an experimental design is.
Answer: When an experiment is conducted with an experimental design the factors that may affect the
variable of interest are controlled so their effect can be observed. Each factor has several predefined levels
and the combinations of the various factor levels are tested.
Keywords: data collection, experimental design
Section: 1-2 Procedures for Collecting Data
155) Discuss the steps involved in developing and carrying out a written survey.
Answer: While there are several possible approaches to developing and conducting a written survey,
there are several steps that most approaches would include. These are:
Define the issue — You need a clear understanding of what it is that you wish to learn from the survey.
Define the population of interest — You must determine who the people are that are to be surveyed. You
need to be specific about this since those surveyed will hopefully represent the views of the entire
population.
Design the survey instrument — You need to develop the questions that will get at the answers to your
research questions. A written survey must be a reasonable length and the questions need to be
well-written and clear. You need to be careful not to interject bias in the way the question is written. The
survey design should be clear and easy for the respondents to use.
Pre-test — You should always pre-test the survey with a small subgroup from the population. Use their
feedback to make constructive improvements in the survey and to make sure that you have included the
right questions given your original objective.
Determine the sample size and sampling method — Whenever possible you want to survey a large
number of people, but your sampling budget will limit you. It will be necessary to determine how many
are needed for statistical validity and for meeting objectives. You also need to specify how the sample is
to be selected from the population—statistical or nonstatistical—and specifically what sampling method
to use.
Select the sample and administer the survey — The survey can be administered in several ways—through
the mail, on the Internet, or in person.
Keywords: data collection, survey
Section: 1-2 Procedures for Collecting Data
156) What are the advantages and disadvantages of open-end questions in either a written survey or a
personal interview?
Answer: Open-end questions allow the respondent to provide a broad range of input and not be
restricted to a defined set of response options. This is an advantage since it is possible to tap into the true
feelings of the respondent and to obtain responses that might not have been anticipated when the survey
was developed. The disadvantage is that analysis of the responses to open-end questions is difficult.
The analyst must somehow code the potentially broad range of responses into categories. This takes time
and often requires interpretation that might interject bias into the analysis.
Keywords: data collection, survey, interview
Section: 1-2 Procedures for Collecting Data
157) Discuss the two major types of descriptive statistics.
Answer: Descriptive statistics includes methods for summarizing a data set. The two major types of
descriptive statistics are (1) charts and graphs, and (2) summary numerical measures. Charts and graphs
include "picture" type tools such as histograms, bar charts and pie charts that visually summarize a data
set. Numerical summary measures are numbers such as the average that describe a characteristic of the
data set.
158) Is there ever a reason why we might prefer to work with a sample rather than with an entire
population? Discuss.
Answer: A sample is a subset of a population and might not be a perfect representation of the
population. As a result, it is possible that when our objective is to know characteristics of the population,
the values we get from the sample might be misleading. Thus, in the general case, we would prefer to
have access to all the data in the population. However, there are reasons why we might be better off with
a sample in some instances. For example, if the population is very large, the time and cost of collecting
data from the entire population might make the project unfeasible. In addition, when a great number of
measurements are required for a large population, measurement and/or coding errors could be
introduced that would give us incorrect information about the population. In addition, if the
measurement process requires that we destroy, or otherwise modify, the population values, it would not
make sense to deal with the entire population. In these cases, a sample might well be preferable to a
census of the population.
Keywords: sample, population
Section: 1-3 Populations, Samples and Sampling Techniques
159) What is the underlying common element of all statistical sampling techniques?
Answer: The basis for all statistical sampling techniques is that the items selected in the sample are
chosen at random from the population. This provides the potential to perform an objective analysis of the
data and reach objective conclusions about the population based on the sample.
Keywords: random sampling
Section: 1-3 Populations, Samples and Sampling Techniques
160) Explain the difference between stratified random sampling and cluster random sampling.
Answer: Both techniques are considered statistical sampling techniques since the elements to be
included in the sample are randomly selected. Likewise, both techniques have as their objective reducing
the cost of sampling as compared to a simple random sample. However, the two techniques are
fundamentally different. With stratified random sampling, the population is divided into homogeneous
subgroups (strata) with the intent of having the elements in a particular subgroup be as much alike as
possible, thereby making it possible to know about all items in the subgroup by examining only a few of
the subgroup items. Thus, the overall sample size, which is the sum of the samples from each stratum,
could be smaller than the sample size needed if the sampling was done using a simple random sampling
approach. Cluster sampling is used when the population values are spread out over a relatively wide
geographical area and data collection would be costly due to movement among the population values.
With cluster sampling, the population is divided into groups called clusters that are usually defined by
geographical boundaries. Each cluster is intended to be as heterogeneous as the population as a whole.
Then a random selection of clusters is selected and the sampled items are all selected from only those
clusters. This potentially reduces the travel costs.
Keywords: sampling methods, stratified, cluster
Section: 1-3 Populations, Samples and Sampling Techniques
161) Open the data file provided with the text called AirlinePassengers. Indicate the level of data
measurement for each variable in the data set.
Answer: Airline
- nominal
Day of Week
- ordinal
Time of Day
- nominal
Male/Female
- nominal
Business/Pleasure
- nominal
Length of Trip- ordinal
Hours to Destination
- ratio
Children < 10 years
- nominal
Pieces of Luggage
- ratio
Pieces Carried On
- ratio
Times Flown
- ratio
Keywords: data measurement levels
Section: 1-4 Data Types and Data Measurement Levels
162) Open the data file provided with the text called Computer Use. Indicate the level of data
measurement for each variable in the data set.
Answer: Major
- nominal
Comp. Use
- ordinal
Comp. Hours
- ratio
Labs
- ordinal
Benefit
- nominal
Higher Tuition
- nominal
Enrollment Decision
- nominal
Price to Pay
- ratio
Keywords: data measurement levels
Section: 1-4 Data Types and Data Measurement Levels
163) Of the following techniques for collecting data, which one is generally considered the least costly to
implement: experiments, telephone surveys, mail questionnaires, direct observation, personal interview?
Answer: In most instances, the mail questionnaire is the least costly method for data collection. Even
though response rates are notoriously low, the cost of sending surveys in the mail is very low on a per
item basis. However, there are many instances where mail surveys can't be used to collect the required
data. For instance, if we are interested in the impact of greater drying heat in the press when plywood is
manufactured, we can't very well send a survey to a piece of plywood asking for information about its
strength and quality! An experiment would be required. In other instances, we need to use observation to
get accurate data since people might be tempted to reply with the desired response rather than the truth.
For instance, a question like, "Do you wear your seatbelt when driving in your car?" might not provide
accurate data in a written survey. Observation might provide better data on driver behavior.
Keywords: data collection
Section: 1-2 Procedures for Collecting Data
164) What are the major categories of statistical tools that will be covered in this course?
Answer: Business statistics can be divided into two main categories: descriptive statistics and inferential
statistics. Probability is a link between the two and is a major part of the statistical inference section.
Keywords:
descriptive, inferential statistics
165) In a survey, what is meant by demographic questions and why might we want to include
demographic questions in survey?
Answer: Demographic questions are questions that pertain to the respondent such as age, gender,
education level, etc. The purpose of demographic questions is to be able to group responses to the central
survey questions by category of the demographic questions. For instance, we might group responses to a
question about product satisfaction by male/female to see whether males and females have different
views about the product.
Keywords: data collection, demographics
Section: 1-2 Procedures for Collecting Data
166) As a member of the student council at your university, you have been assigned the task of
conducting a phone survey of undergraduate students to determine satisfaction with the campus food
service. Explain how you would go about selecting a simple random sample.
Answer: We need to obtain a frame (list) of the population that might be available through the
registrar's office. We would assign each student a number from 1 through the number of students.
Assuming that this list contains a contact phone number for each student, we could select a simple
random sample by using Excel (or a random numbers table) to select the desired sample size. We would
probably select extra students since some would be unreachable or not use campus food service. We
should establish a call-back procedure to reduce sampling bias.
Keywords: simple, random, sample, bias
Section: 1-3 Populations, Samples and Sampling Techniques
167) Explain the difference between a stratified random sample and cluster random sample.
Answer: First, both sampling techniques are examples of statistical sampling procedures. However,
they are very different in purpose. In stratified random sampling, the population is broken down into
homogeneous groups called strata. The idea is that the elements in each strata are as much alike as
possible so that the required sample size from each strata is reduced. Then the total sample size selected
from all strata will hopefully be less than the required sample size that would be needed if stratification
were not used. In cluster sampling, the population is divided into geographical subgroups. The hope is
that each subgroup is a mirror image of the population as a whole. Then a few of the clusters are
randomly selected and all sampling of individual items is taken from only the selected clusters. The
objective is to reduce the cost of sampling by reducing the physical area that must be covered in the
sample.
Keywords: stratified, random, cluster, sample
Section: 1-3 Populations, Samples and Sampling Techniques
The Where, Why, and How of Data Collection
Section 1.1
1.1 This application is primarily descriptive in nature. The owner wishes to develop a presentation.
She will most likely use charts, graphs, tables and numerical measures to describe her data.
1.2 The graph is a bar chart. A bar chart displays values associated with categories. In this case the
categories are the departments at the food store. The values are the total monthly sales (in dollars) in
each department. A bar chart also typically has gaps between the bars. A histogram has no gaps and
the horizontal axis represents the possible values for a numerical variable.
1.3 A bar chart is used whenever you want to display data that has already been categorized while a
histogram is used to display data over a range of values for the factor under consideration. Another
fundamental difference is that there typically are gaps between the bars on a bar chart but there are no
gaps between the bars of a histogram.
1.4 Businesses often make claims about their products that can be tested using hypothesis testing.
For example, it is not enough for a pharmaceutical company to claim that its new drug is effective in
treating a disease. In order for the drug to be approved by the Food and Drug Administration the
company must present sufficient evidence that the drug first does no harm and that it also provides an
effective treatment against the disease. The claims that the drug does no harm and is an effective
treatment can be tested using hypothesis testing.
1.5 Hypothesis testing uses statistical techniques to validate a claim.
With hypothesis
testing, sample data is used to make an inference about the larger population from which the
sample was drawn. Student-provided examples will differ depending on their experiences.
1.6 Statistical inference procedures are useful in situations where a decision maker needs to reach an
estimate about a population based on a subset of data taken from the population. For example, a
decision maker might want to know the starting annual salary of all attorneys in the United States. If it
is not feasible or possible to look at the salary data for all attorneys, the decision maker could look at a
subset of attorneys and use statistical inference to reach a conclusion about the population of all
attorneys.
1.7 Hypothesis testing is used whenever one is interested in testing claims that concern a
population. Using information taken from samples, hypothesis testing evaluates the claim and
makes a conclusion about the population from which the sample was taken. Estimation is used
when we are interested in knowing something about all the data, but the population is too large,
or the data set is too big for us to work with all the data. In estimation, no claim is being made
or tested.
1.8 The major advantage of a graph is it allows a more complete representation of information
in the data. Not only can a decision maker visualize the center of the data but also how spread
out the data is. An average, for instance, nicely represents the center of a data set, but contains
no information of how spread out the data is.
1.9 By its nature, a single measure is just one value and therefore is simpler than a table. It allows an
easy method of comparison between two or more data sets, something that is more difficult if the data
sets are represented in tabular form. In addition, although not mentioned in this chapter, additional
statistical techniques, such as hypothesis testing and estimation, involve calculations based on a single
measure from a subset of population data.
1.10 The company could use statistical inference to determine if its parts last longer. Because it is
not possible to examine every part that could be produced the company could examine a randomly
chosen subset of its parts and compare the average life of the subset to the average life of a randomly
chosen subset of the competitor’s parts. By using statistical inference procedures the company could
reach a conclusion about whether its parts last longer or not.
1.11 Student answers will vary depending on the periodical selected and the periodical's issue date,
but should all address the three parts of the question.
1.12 The appropriate chart in this case is a histogram where the horizontal axis contains the number of
missed days and the area of the bars represent the number of employees who missed each number of
days.
Histogram: Missed Days for Illness or Injury
180
160
140
Number of Employees
120
100
80
60
40
20
0
0-2 days
3-5 days
6-8 days
8-10 days
Days Missed
Note, there are no gaps between the bars.
1.13 Because it would be too costly, too time consuming, or practically impossible to contact every
subscriber to ascertain the desired information, the decision makers at Fortune might decide to use
statistical inference, particularly estimation, to answer its questions. By looking at a subset of the data
and using the procedures of estimation it would be possible for the decision makers to arrive at values
for average age and average income that are within tolerable limits of the actual values..
1.14 Student answers will vary depending on the business periodical or newspaper selected and
the article referenced. Some representative examples might include estimates of the number of
CEO's who will vote for a particular candidate, estimates of the percentage increase in wages for
factory workers, estimates of the average dollar advertising expenditures for pharmaceutical
companies in a specific year, and the expected increase in R&D expenditures for the coming
quarter.
1.15. Student answers will vary. However, the examples should illustrate how statistics has been
used and should clearly indicate the type of statistical analysis employed.
1.16
a. A commonly used measure of the center of the data is the mean or average. The executive
could calculate the average age of the people in the market area and use the average as the
center value.
b. To determine a value for the percentage of people in the market area that are senior citizens,
the executives would rely on estimation--a set of statistical techniques that allow one to know
something about a data set by using a subset of the data whenever the data set is too large to
work with all the data.
c. The executives might want to test the hypothesis that the percentage of senior citizens in the
market area is greater than the percentage of senior citizens nationwide. The executives could
also test the hypothesis that the percentage of senior citizens is greater than or less than a
specific value, say 27%.
Section 1.2
1.17 As discussed in this section, the pet store would most likely use a written survey or a
telephone survey to collect the customer satisfaction data.
1.18 A leading question is one that is designed to elicit a specific response, or one that might influence
the respondent’s answer by its wording. The question is posed so that the respondent believes the
researcher has a specific answer in mind when the question is asked, or worded in such a way that the
respondent feels obliged to provide an answer consistent with the question. For example, a question
such as “Do you agree with the experts who recommend that more tax dollars be given to clean up
dangerous and unhealthy pollution?” could cause respondents to provide the answer that they think will
be consistent with the “experts” with whom they do not want to disagree. Leading question should be
avoided in surveys because they may introduce bias.
1.19 An experiment is any process that generates data as its outcome. The plan for performing the
experiment in which the variable of interest is defined is referred to as an experimental design. In the
experimental design one or more factors are identified to be changed so that the impact on the variable
of interest can be observed or measured.
1.20 In a survey, poorly worded and leading questions can produce different results. Major
organizations usually do a good job of conducting surveys. However, sometimes even seemingly
subtle differences in wording can lead to different outcomes. Here the noticeable difference in
the three surveys is that one mentions tax payers and the other two the government or
government agencies. While this may seem a minor difference, it could be significant enough
to cause the difference in response.
1.21. There will likely by a high rate of nonresponse bias since many people who work days will not be
home during the 9-11 AM time slot. Also, the data collectors need to be careful where they get the
phone number list as some people do not have listed phones in phone books and others have no phone
or only a cell phone. This may result in selection bias.
1.22
a. Observation would be the most likely method. Observers could be located at various bike
routes and observe the number of riders with and without helmets. This would likely be better
than asking people if they wear a helmet since the popular response might be to say yes even
when they don’t always do so.
b. A telephone survey to gas stations in the state. This could be a cost effective way of getting
data from across the state. The respondent would have the information and be able to
provide the correct price.
c. A written survey of passengers. This could be given out on the plane before the plane lands
and passengers could drop the surveys in a box as they de-plane. This method would likely
garner higher response rates compared to sending the survey to passengers’ mailing address
and asking them to return the completed survey by mail.
1.23 The two types of validity mentioned in the section are internal validity and external
validity. For this problem external validity is easiest to address. It simply means the sampling
method chosen will be sufficient to insure the results based on the sample will be able to be
generalized to the population of all students. Internal validity would involve making sure the
data gathering method, for instance a questionnaire, accurately determines the respondent’s
attitude toward the registration process.
1.24 This data could have been collected through observation or experiment. Employees of
the USDA could provide periodic reports of fire ant activity in their region. Likewise, scientists
studying the spread of fire ants may have conducted experiments that indicate the rate of spread
under certain conditions.
1.25 There are many potential sources of bias associated with data collection. If data is to be
collected using personal interviews it will be important that the interviewer be trained so that
interviewer bias, arising from the way survey questions are asked, is not injected into the survey. If the
survey is conducted using either a mail survey or a telephone survey then it is important to be aware of
nonresponse bias from those who do not respond to the mailing or refuse to answer your calls. You
must also be careful when selecting your survey subjects so that selection bias is not a problem. In
order to have useful, reliable data that is representative of the true student opinions regarding campus
food service, it is necessary that the data collection process be conducted in a manner that reduces or
eliminates the potential for these and other sources of potential bias.
1.26 For retailers technology that scans the product UPC code at checkout makes the collection of
data fast and accurate. Retailers that use such technology can automatically update their inventory
records and develop an extensive collection of customer buying habits. By applying advanced
statistical techniques to the data the retailer can identify relationships among purchases that might
otherwise go unnoticed. Such information could enable retailers to target their advertising or even
rearrange the placement of products in the store to increase sales. Manufacturing firms use bar code
scanning to collect information concerning product availability and product quality. Credit card
purchases are automatically tracked by the retailer and the bankcard company. In this way the credit
card company is able to track your purchases and even alert you to potential fraud if purchases on your
card appear to be unusual. Finally, some companies are using radio frequency identification (RFID) to
track products through their supply chain, so that product delays and inventory problems can be
minimized.
1.27 One advantage of this form of data gathering is the same as for mail questionnaires.
That is low cost. Additional factors being speed of delivery and, with current software, with
closed- ended questions, instant updating of data analysis. Disadvantages are also similar, in
particular low response and potential confusion about questions. An additional factor might be
the ability of competitors to “hack” into the database and analysis program.
1.28. Student answers will vary. Look for clarity of questions and to see that the issue questions are
designed to gather useful data. Look for appropriate demographic questions.
1.29 Students should select some form of personal observation as the data-gathering technique.
In addition, there should be a discussion of a sampling procedure with an effort made to ensure
the sample randomly selected both days of the week unless daily observations are made, and
randomly selected times of the day since 24 hour observation would likely be impossible. A
complete answer would also address efforts to reduce the potential bias of having an observer
standing in an obvious manner by the displays.
1.30 Student answers will vary. However, the issue questions should be designed to gather the
desired data regarding customers’ preferences for the use of the space. Demographic questions
should provide data so that the responses can be broken down appropriately so that United Fitness
Center managers can determine which subset of customers have what opinion about this issue.
Regarding questionnaire layout, look at neatness and answer location space. Make sure questions are
properly worded, used reasonable vocabulary, and are not leading questions.
1.31 The results of the survey are based on telephone interviews with 1,025 national adults, aged 18
and older. Students may also answer that the survey could have been conducted using personal
interviews. Because telephone interviews were used to collect the survey data nonresponse biases
associated with sampled adults who are not at home when phoned, or adults who refuse to participate
in the survey. There is also the problem that some adults do not have a phone. If personal interviews
are used to collect the data then it is important to guard against nonresponse bias from those sampled
adults who refuse to be interviewed. There is also the problem of selection bias. In phone interviews
we may miss the people who work evenings and nights. If personal interviews are used we must be
careful to select a representative sample of the adult population, not just those who appear willing or
interested in participating.
Section 1.3
1.32.
a. Because the population is spread over a large geographical area, a cluster random sample could
be selected to reduce travel costs.
b. A stratified random sample would probably be used to keep sample size as small as possible.
c. Most likely a convenience sample would be used since doing a statistical sample would be too
difficult.
1.33 To determine the range of employee numbers for the first employee selected in a systematic
random sample use the following:
Part range =
Population Size 18, 000

 180
Sample Size
100
Thus, the first person selected will come from employees 1-180. Once that person is randomly
selected, the second person will be the one numbered 100 higher than the first, and so on.
1.34 Whenever a descriptive numerical measure such as an average is calculated from the entire
population it is a parameter. The corresponding measure calculated from a subset of the population,
that is to say a sample, is a statistic.
1.35 Statistical sampling techniques consist of those sampling methods that select samples based on
chance. Nonstatistical sampling techniques consist of those methods of selecting samples using
convenience, judgment, or other nonchance processes. In convenience sampling, samples are chosen
because they are easy or convenient to sample. There is no attempt to randomize the selection of the
selected items. In convenience sampling not every item in the population has a random chance of
being selected. Rather, items are sampled based on their convenience alone. Thus, convenience
sampling is not a statistical sampling method.
1.36 From a numbered list of all customers who own a certificate of deposit the bank would need to
randomly determine a starting point between 1 and k, where k would be equal to 25000/1000 = 25.
This could be done using a random number table or by having a statistical package or a spreadsheet
generate a random number between 1 and 25. Once this value is determined the bank would select
that numbered customer as the first sampled customer and then select every 25th customer after that
until 100 customers are sampled.
1.37 A census is an enumeration of the entire set of measurements taken from the population as
a whole. While in some cases, the items of interest are obtained from people such as through a
survey, in many instances the items of interest come from a product or other inanimate object.
For example, a study could be conducted to determine the defect rate for items made on a
production line. The census would consist of all items produced on the line in a defined period
of time.
1.38 Values computed from a sample are always considered statistics. In order for a value,
such as an average, to be considered a parameter it must be computed from all items in the
population.
1.39 In stratified random sampling, the population is divided into homogeneous groups called
strata. The idea is to make all items in a stratum as much alike as possible with respect to the
variable of interest thereby reducing the number of items that will need to be sampled from each
stratum. In cluster sampling, the idea is to break the population into heterogeneous groups
called clusters (usually on a geographical basis) such that each cluster looks as much like the
original population as possible. Then clusters are randomly selected and from the cluster,
individual items are selected using a statistical sampling method.
1.40 Using Excel, choose the Data tab, select Data Analysis from the Analysis Group , then Random
Number Generation – shown as follows:
The next step is to complete the random number generation dialog as follows:
The resulting random numbers generated are:
Note, the students’ answers may differ since Excel generates different streams of random
numbers each time it is used. Also, if the application requires integer numbers, the Decrease
Decimal option can be used.
1.41 If these percentages were based on all students attending college in those years they would
would be parameters, if the percentages were based on a sample they would be statistics.
1.42 This is a statistic. A poll would be a sample of eligible voters rather than all eligible voters.
1.43 Solution
a.
Stratified random sampling
b.
Simple random sampling or possibly cluster random sampling
c.
Systematic random sampling
d.
Stratified random sampling
1.44 This is a statistical sample. Every employee has an equal chance of being selected using this
method. In fact, this is an example of a simple random sample because every possible sample of size
50 has an equal chance of being selected.
1.45
a. Student answers will vary
b. Cluster sampling could be used to ensure that you get all types of cereal. Make each
cluster the area where certain cereals are located (i.e., isle, row, shelf, etc.)
c. Cluster sampling would give you a better idea of the inventory of all types of cereal. Simple
random sampling could possibly end up with only looking at 2 or 3 cereal types.
1.46 Students should choose the Data tab, select Data Analysis from the Analysis group –
Random Number Generation process. Students’ answers will differ since Excel generates
different streams of random numbers each time it is used, but 40 random numbers should be
generated from a uniform distribution with values ranging from 1 to 578. Since the application
requires integer numbers, the Decrease Decimal option should be used.
1.47
a. The population should be all users of cross-country ski lots and trailheads in Colorado.
b. Several sampling techniques could be selected. Be sure that some method of ensuring
randomness is discussed. In addition, some students might give greater weight to frequent
users of the lots. In which case the population would really be user days rather than individual
users.
c. Students using Excel should choose the Data tab, select Data Analysis from the Analysis
group – Random Number Generation process. Students’ answers may differ since Excel
generates different streams of random numbers each time it is used. Since the
application requires integer numbers, the Decrease Decimal option should be used.
1.48
a. Since there are 4,000 patient files we could give each file a unique identification number
consisting of 4 digits. The first file would be given the identification number “0001”. The last
file would be given the identification number of “4000”. By assigning each patient a number
and randomly selecting the 100 numbers allows each possible sample of 100 an equal chance of
being selected.
b. Either use a random number table (randomly select the starting row and column), or use a
computer program, such as Microsoft Excel or Minitab, which has a random number generator.
c. Since each patient is assigned a 4-digit identification number, we would need a 4-digit random
number for each random number selected.
d. Answers will vary.
Section 1.4
1.49.
a. Time-series
b. Cross-sectional
c.
Time-series
d. Cross-sectional
1.50 Qualitative data are categories or numerical values that represent categories. Quantitative data
is data that is purely numerical.
1.51
a. Ordinal – categories with defined order
b. Nominal – categories with no defined order
c.
Ratio
d.
Nominal – categories with no defined order
1.52 Nominal data involves placing observations in separate categories according to some measurable
characteristic. Ordinal data also involves placing observations into separate categories, but the
categories can be rank-ordered.
1.53 Since the circles involve a ranking from best to worst, this would be ordinal data.
1.54
a. The data are cross-sectional. The data are collected from 2,300 customers at approximately
the same point in time
b. This is a ratio level, quantitative variable.
The data represent a measurement of time.
c. Ordinal with a numerical value representing customers rating of level of service
1.55
a. Nominal Data
b. Ratio Data
c. Nominal Data
d.
e.
f.
g.
Ratio Data
Ratio Data
Nominal Data
Ratio Data
1.56
a.
b.
c.
d.
e.
Cross-sectional
Time-series
Cross-sectional
Cross-sectional
Time-Series
1.57
Brand - Nominal
Model – Nominal
Sports Car – Nominal
SUV – Nominal
Wagon – Nominal
Minivan – Nominal
Pickup – Nominal
All-Wheel Drive – Nominal
Rear-Wheel Drive – Nominal
Suggested Retail Price – Ratio
Dealer Cost – Ratio
Engine Size – Ratio
Cylinders – Ratio
Horsepower – Ratio
City MPG – Ratio
Highway MPG – Ratio
Weight – Ratio
Wheel base – Ratio
Length - Ratio
Width - Ratio
1.58.
a. The data are cross-sectional since they represent data across a sample of customers
where the data reflect the demographics of the customers at basically one point in time.
b. The following variables are quantitative:
Past Due Amount
Current Amount Due
The following variables are qualitative:
Account number
Caller gender
Account Holder gender
Was this a billing question?
Even though these variables have numeric values, because the numbers represent a discrete
category, they are considered qualitative.
c. The following variables are ratio level measures:
Past Due Amount
Current Amount Due
The following variables are nominal measures:
Account number
Caller gender
Account Holder gender
Was this a billing question?
End of Chapter
1.59 Answers will vary with the student. But a good discussion should include the following factors:
Sampling techniques and possible problems selecting a representative sample.
Determining how to develop questions to measure approval.
Structuring questions to avoid bias.
The measurement scale associated with the questions.
The fact these polls tend to develop time-series data.
1.60 Nominal data or ordinal data.
1.61 Interval or ratio data.
1.62 Ratings are typical uses of ordinal scale data. And since ratings are based on personal opinion,
even though people are using the same scale, a direct comparison between the two ratings is not
possible. This is a common problem when people are asked to rate an object using an ordinal scale.
1.63 Answers will vary with the student. But a good discussion should include the following factors:
Sampling techniques and possible problems selecting a representative sample.
Determining how to measure confidence.
Structuring questions to avoid bias.
The measurement scale associated with the questions.
The fact this poll is specifically intended to develop time-series data.
1.64 Answers will vary with the student.
1.65 Answers will vary with the student.
1.66
a. No because a random sample means that every item in the population has an equal
chance of being selected. Individuals who do not have or use email do not have an
equal chance of being included in this survey. Also, volunteer emails would not be
random.
b. In this survey the biggest drawback is that only individuals with strong feelings one way
or the other are apt to respond to this survey. This could lead to a great deal of bias in
the results of the survey. Another big problem with a survey is nonresponse bais.
Again because they are requesting viewers to write in there will be a great deal of
nonresponse to this survey.
1.67
a. They would probably want to sample the salsa jars as they come off the assembly line at
the plant for a specified time period. They would want to use a random sample. One
method would be to take a systematic random sample. They could then calculate the
percentage of the sample that had an unacceptable thickness.
b. The product is going to be ruined after testing it. You would not want to ruin the entire
product that comes off the assembly line.
1.68
a. Student answers will vary but one method would be personal observation at grocery
stores or another method would be to simply look at their sales. Are buyers of the
energy drinks purchasing bottles or cans?
b. If using personal observation just have people at grocery stores observe people over a
specified period of time and note which are selecting cans and which are selecting bottles
and look at the percentages of each.
c. You would be looking at ratio data because you could have a true 0 if, for example, no one
purchased bottles.
d. Depends on the way the data are collected. Sales data would be quantitative.