Business Statistics, 3rd Edition
Robert A. Donnelly, J R .
Table of Contents
Preface | xiii
Acknowledgments | xx
Dear Students | xxiv
Index of Applications xxv
1 An Introduction to Business Statistics | 1
1.1 Business Statistics and Their Uses 2
1.2 Data 4
1.3 Branches of Statistics 12
FOCUS ON ANALYTICS 14
1.4 Ethics and Statistics—It’s a Dangerous World of Data Out There 15
Summary/Key Terms 17 • Problems 18 • Solutions to…YOUR TURN 21
2 Displaying Descriptive Statistics | 22
2.1 The Role Technology Plays in Statistics 24
2.2 Displaying Quantitative Data 26
2.3 Displaying Qualitative Data 43
2.4 Contingency Tables 55
2.5 Stem and Leaf Display 60
2.6 Scatter Plots 62
FOCUS ON ANALYTICS: The Real Estate Market 66
Summary/Key Terms 68 • Problems 69 • Solutions to…YOUR TURN 76
3 Calculating Descriptive Statistics | 78
3.1 Measures of Central Tendency 79
3.2 Measures of Variability 93
3.3 Using the Mean and Standard Deviation Together 103
3.4 Working with Grouped Data 113
3.5 Measures of Relative Position 117
3.6 Measures of Association Between Two Variables 128
FOCUS ON ANALYTICS: Fitness Trackers 133
Summary 135 • Key Terms 136 • Formulas 137 • Problems 139 •
Solutions to…YOUR TURN 144
4 Introduction to Probabilities | 148
4.1 An Introduction to Probabilities 149
4.2 Probability Rules for More Than One Event 157
4.3 Counting Principles 180
FOCUS ON ANALYTICS: Stock Investment 186
Summary/Key Terms 187 • Formulas 188 •
Problems 190 • Solutions to…
YOUR TURN 194
5 Discrete Probability Distributions | 198
5.1 Introduction to Discrete Probability
Distributions 200
5.2 Binomial Distributions 212
5.3 Poisson Distributions 222
5.4 The Hypergeometric Distribution 230
FOCUS ON ANALYTICS: Decision Making
under Risk 234
Summary/Key Terms 236 • Formulas 237 •
Problems 238 • Solutions to…
YOUR TURN 244
6 Continuous Probability Distributions | 248
6.1 Continuous Random Variables 249
6.2 Normal Probability Distributions 251
6.3 Exponential Probability
Distributions 269
6.4 Uniform Probability Distributions 273
FOCUS ON ANALYTICS: Six Sigma 277
Summary/Key Terms 280 • Formulas 281 •
Problems 282 • Solutions to…
YOUR TURN 288
7 Sampling and Sampling Distributions | 290
7.1 Why Sample? 291
7.2 Types of Sampling 292
7.3 Sampling and Nonsampling Errors 299
7.4 The Central Limit Theorem 303
7.5 The Sampling Distribution of the
Proportion 318
FOCUS ON ANALYTICS: Measuring Television
Viewership 322
Summary 325 • Key Terms /Formulas 326 •
Problems 327 • Solutions to…
YOUR TURN 332
8 Confidence Intervals | 335
8.1 Point Estimates 336
8.2 Calculating Confidence Intervals for the
Mean When the Standard Deviation 1s2
of a Population is Known 337
8.3 Calculating Confidence Intervals for the
Mean When the Standard Deviation 1s2
of a Population is Unknown 349
8.4 Calculating Confidence Intervals for
Proportions 355
8.5 Determining the Sample Size 359
8.6 Calculating Confidence Intervals for
Finite Populations 364
FOCUS ON ANALYTICS: Confidence Intervals
and Surveys 366
Summary/Key Terms 368 • Formulas 369 •
Problems 371 • Solutions to…
YOUR TURN 376
9 Hypothesis Testing for a
Single Population | 380
9.1 An Introduction to Hypothesis Testing 381
9.2 Hypothesis Testing for the Population
Mean When s is Known 388
9.3 Hypothesis Testing for the Population
Mean When s is Unknown 400
9.4 Hypothesis Testing for the Proportion of
a Population 407
9.5 Type II Errors 411
FOCUS ON ANALYTICS: FDA’s New Drug
Approval Decision 417
Summary/Key Terms 420 • Formulas 421 •
Problems 422 • Solutions to…
YOUR TURN 427
10 Hypothesis Tests Comparing
Two Populations | 431
10.1 Comparing Two Means with Known
Standard Deviations 433
- Independent Samples
- Known Population Standard Deviations (s) and (s)
10.2 Comparing Two Population Means with 442
- Independent Samples
- Unknown Population Standard Deviations (s) and (s)
10.3 Hypothesis Testing with Dependent
Samples 460
10.4 Comparing Two Population Proportions
with Independent Samples 470
FOCUS ON ANALYTICS: Clinical Trial Design
and Placebo Response 477
Summary/Key Terms 478 • Formulas 479 •
Problems 482 • Solutions to…
YOUR TURN 488
11 Analysis of Variance (ANOVA)
Procedures | 494
11.1 One-Way ANOVA: Examining the Effect
a Single Factor Has on the Means of
Populations 496
11.2 Randomized Block ANOVA: Examining
the Effects of a Single Factor by
Blocking a Second Factor 515
11.3 Two-Way ANOVA: Examining the
Effects Two Factors Have on the Means
of Populations 532
FOCUS ON ANALYTICS: Production Process
Characterization 545
Summary 549 • Key Terms 550 • Formulas
551 • Problems 553 • Solutions to…
YOUR TURN 559
12 Chi-Square Tests | 565
12.1 Comparing Two or More Population
Proportions 567
12.2 Determining If Observed Frequencies
Follow a Known Probability
Distribution 574
12.3 Testing the Independence of
Two Variables 594
FOCUS ON ANALYTICS: Gender Bias in
Decision Making 598
Summary/Key Terms 600 • Formulas /
Problems 601 • Solutions to…
YOUR TURN 608
13 Hypothesis Tests for the
Population Variance | 614
13.1 Testing the Variance of a Single
Population 615
13.2 Comparing the Variances of Two
Populations 623
FOCUS ON ANALYTICS: Shortening Waiting
Times in Line 630
Summary/Formulas 632 • Problems 633 •
Solutions to…YOUR TURN 637
14 Correlation and Simple
Linear Regression | 640
14.1 Dependent and Independent
Variables 642
14.2 Correlation Analysis 642
14.3 Simple Linear Regression
Analysis 649
14.4 Using a Regression to Make a
Prediction 664
14.5 Testing the Significance of
the Slope of the Regression
Formula 669
14.6 Assumptions for Regression
Analysis 674
14.7 A Simple Regression Example
with a Negative Correlation 677
FOCUS ON ANALYTICS: The Law of
Supply and Demand 685
14.8 Some Final (but Very Important)
Thoughts 687
Summary 688 • Key Terms /Formulas 689 •
Problems 691 • Solutions to…
YOUR TURN 695
15 Multiple Regression and
Model Building | 700
15.1 Developing the Multiple Regression
Model 701
15.2 Explaining the Variation of the
Dependent Variable 709
15.3 Inferences about the Independent
Variables 718
15.4 Using Qualitative Independent
Variables 723
15.5 Model Building 730
FOCUS ON ANALYTICS: Predicting Oil and
Gas Prices 747
Summary 750 • Key Terms /Formulas 751 •
Problems 752 • Solutions to…
YOUR TURN 756
16 Forecasting | 761
16.1 Introduction to Forecasting 762
16.2 Smoothing Forecasting Methods 764
16.3 Forecasting with Regression Analysis 780
16.4 Forecasting with Seasonality 793
FOCUS ON ANALYTICS: Economic
Forecasting 806
Summary 809 • Key Terms 810 • Formulas/
Problems 811 • Solutions to…
YOUR TURN 815
17 Decision Analysis (online) | 17-1
17.1 Introduction to Decision Analysis 17-2
17.2 Constructing a Decision Table 17-3
17.3 Decision Making Under Uncertainty 17-6
17.4 Decision Making Under Risk 17-12
17.5 Decision Making Using Decision
Trees 17-16
17.6 Using Bayes’ Theorem to Calculate
Posterior Probabilities 17-27
Summary/Key Terms 17-32 • Formulas
17-33 • Problems 17-34 • Solutions to…
YOUR TURN 17-38
18 Nonparametric Statistics (online) | 18-1
18.1 Introduction to Nonparametric
Statistics 18-2
18.2 The Sign Test 18-4
18.3 The Wilcoxon Rank-Sum Test for Two
Independent Samples 18-14
18.4 The Wilcoxon Signed-Rank Test for Two
Dependent Samples 18-22
18.5 The Kruskal–Wallis One-Way
ANOVA 18-27
18.6 The Spearman Rank-Order Correlation
Coefficient 18-31
Summary 18-37 • Key Terms /Formulas 18-38 •
Problems 18-39 • Solutions to…
YOUR TURN 18-45
Appendix C: Tables for Chapter 18 18–49
Appendix A | 821
1 Binomial Probabilities 821
2 Poisson Probabilities 832
3 Cumulative Probabilities for the
Standard Normal Distribuition 837
4 Cumulative Probabilities for the
Standard Normal Distribution 838
5 Student’s t-distribution 839
6 F–distribution 842
7 Critical Values of the Studentized
Range, Q 852
8 Chi–Square Distribution 855
9 Critical Values for the Durbin-Watson
Statistic 856
Appendix B | 859
Answers to Selected Even-Numbered
Problems 859
Photo Credits | 934
Index | 935