# Statistics and Application to Business Decisions

## Introduction

First, let define and distinguish the terms Population, and Sample

– If the data consist of all possible observations of a certain phenomenon, we call it Population

– If the data contains only a part of these observations, we call it Sample

Often, we need to represent a set of data in terms of a single (or a few) number

These are what we usually call Descriptive Statistics

Which kind of number we choose depends on the particular characteristics we

want to describe

- We start considering those measures which describe the center or middle of a set of

data, the measures of Central Location

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## Median

Sometimes, samples contain very small or very large values that substantially affect

the Mean, and its ability in describing properly the data

- These values are usually called outliers
**Example**: Five light bulbs burned for 867,849,840,852,822 hours. The mean is 4230/5 = 846. If

we record incorrectly the second value, that is 489 instead of 849, the mean would be 3870/5=774

To avoid the problems related with the presence of outliers, we can use another

measure of central location: the Median - The Median of a set of data is the value of the middle item when the data are

ordered (in an increasing or decreasing order)**Example**: Eleven large corporations reported that in 2013 they made cash donations to

9,16,11,19,11,10,13,12,6,9,12 colleges

! Arranging in an increasing order: 6 9 9 10 11 11 12 12 13 16 19

) The Median is 11

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