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Chapter 1 Objectives This chapter introduces the field of statistics by linking statistical thinking to the understanding and management of variability. Upon completion of this chapter you should understand: The difference between samples and populations. The difference between categorical and numerical variables. The difference between discrete numerical and continuous numerical variables. The difference between various sampling approaches. Read the entire chapter. Note: Software installation and how to configure your EXCEL is discussed on page 574. Also there is an EXCEL overview at the end of chapter one. October 24, 2005 Chapter 2 Objectives This chapter discusses the importance of tables and charts for everyday business decision - making and for improving processes. You will learn to create and understand a variety of charts that can be used to summarize data obtained from continuous or discrete variables. Upon completion of this chapter you should be able to: Given a numerical data set, be able to prepare by hand a stem-leaf display, frequency distribution, relative frequency distribution, cumulative percentage distribution, histogram, polygon, or a cumulative percentage polygon. And if appropriate, be able to create by hand a time series plot. Given a categorical data set, create by hand a summary table, bar chart, Pareto diagram, and pie chart. Given a data set with two categorical variables, be able to prepare by hand a contingency table and a side by side chart. Given two numerical variables, be able to create by hand a scatter diagram. Use EXCEL to do the above. Read all pages in the chapter. October 24, 2005 Chapter 3 Objectives This chapter describes the characteristics and properties of a variety of measures of central tendency, variability, and skewness. It also illustrates the use of the box-and-whisker plot as a graphical representation that can used to assess skewness and identify outliers. Upon completion of this chapter you should understand: Measures of central tendency including the mean, median, and mode; be able to calculate these measures by hand. Measures of variation including the range, inter-quartile range, and standard deviation; be able to calculate these measures by hand. The concepts behind the box-and-whisker plot; be able to create the box-and-whisker plot by hand. Be able to use the box-and-whisker plot to chose between the measures in 1 and 2 above based on skewness and outliers. Also be able to compare the characteristics of two or more groups using the box-and-whisker plot. Additional measures of central tendency and variation include the coefficient of variation, z scores, and variance; be able to calculate these by hand. Also be able to calculate the population mean and population standard deviation. Use EXCEL to do the above. (No need to calculate the geometric mean or Chebyshev Rule) Read all pages in the chapter. October 24, 2005 Chapter 4 Objectives This chapter helps you to understand the basic concepts of probability and probability distributions. Upon completion of this chapter you should be able to: Given a simple word problem, be able to use the rules for finding various probabilities and establishing independence. (No need to do 4.3 Bayes Theorem or 4.4 Counting Rules) Read pages 122 to 159. October 24, 2005 Chapter 5 and 6 Objectives Omit Chapter 5. Chapter 6 helps you to understand the basic concepts of the normal distribution. Upon completion of chapter 6 you should be able to: Given a word problem, be able to find probabilities using the normal curve table. Use EXCEL to assess whether a distribution is normal. Read all pages in chapter 6. October 24, 2005 Chapter 7 Objectives This chapter explains sampling distributions and their measures. Upon completion of this chapter, you should be able to: Be able to calculate the mean, standard error, and variance of the sampling distribution for a mean or proportion. Given a word problem, be able to find probabilities for the sampling distributions using the normal table. Be able to contrast and identify the four types of sampling methods presented in 7.4 Be able to contrast and identify the four types of survey errors presented in 7.5 Be able to take a simple random sample. Read all pages in chapter 7. October 24, 2005 Chapter 8 Objectives This chapter explains interval estimates of the population means and proportions using confidence intervals. Upon completion of this chapter, you should be able to: Interpret the meaning of a confidence interval estimate. Set up confidence interval estimates of the mean both when sigma is known and unknown. Set up confidence interval estimates the proportion. Determine the necessary sample size for a given level of error when estimating means and proportions. Read all pages in chapter 8. October 24, 2005 Chapter 14 Objectives This chapter explains the underlying theory of quality control charts and the circumstances in which they should be used. Upon completion of this chapter you should to be able to: Understand Deming's 14 points. Understand how and why control charts are used. Be able to decide if a process is out of control. Given appropriate data, be able to create the p, range, and mean charts; also understand the differences between them. Use EXCEL to do the above. Read all pages in this chapter except section 14.5. October 24, 2005 Chapters 9 to 11 Objectives To develop an understanding of the hypothesis testing approach so that conclusions can be reached on important questions like whether two or more groups differ in their means or proportions. Upon completion of this chapter, you should be able to: Formulate the null and alternative hypotheses. Distinguish between the risks of Type I and Type II errors. Understand and be able to test one and two tail hypotheses. Be able to use the one sample Z and t tests to determine if the mean or proportion of a population is as hypothesized. Be able to calculate the pvalue for Z tests. Use the single factor Analysis of Variance to examine differences in the means of two or more groups. Also be able to use the Tukey-Kramer procedure. No need to know Levene's test. Use the chi-square test to determine whether differences exist in the proportions in two or more groups and if necessary use the Marasculio procedure. Use EXCEL to do these tests. Read all of chapter 9 and chapter 11 sections 1 and 2 plus pages 346 to 360. October 24, 2005 Chapters 12 to 13 Objectives These chapters explain the forecasting models used for predicting one variable from one or more other variables, what the assumptions of these models are, and how these assumptions may be evaluated. Upon completion of this chapter you should be able to: Interpret the regression coefficients obtained by using the least square method in EXCEL. No need to calculate the regression coefficients by hand. Use regression to estimate both causal and time series models including the use of dummy variables shown in 13.5. Interpret the coefficients of determination, correlation, r squared, and r squared adjusted. No need to know the t test on correlation in section 12.7 Interpret the standard error of the estimate. Use residual analysis to determine whether the appropriate model has been fit to a set of data. Evaluate the validity of regression assumptions including testing using the Durbin Watson statistic (and VIF - not in the book). Test regression hypotheses about the slope and about overall regression model fit. Be able to make forecasts; be able to place confidence intervals on the forecasts using EXCEL (not by hand). Use EXCEL to do all the above. Read all of 12 and 13 except 12.7 and 13.6 October 24, 2005