Q.1 is the main Dq and needs to write the explanations of terms and Process Q2 and Q3 are the replies for the discussions?Mathwk1.docxBOOKBusinessStatisticsForContempora

Dedication

For Carolyn, Caycee, Wendi, Antoine II, and Antoine III

Business Statistics

For Contemporary Decision-Making

Tenth Edition

KEN BLACK University of Houston—Clear Lake

VICE PRESIDENT AND DIRECTOR Michael McDonald

ASSOCIATE EDITOR Alden Farrar

ASSOCIATE INSTRUCTIONAL DESIGNER Lindsey Myers

EDITORIAL ASSISTANT Cecilia Morales

SENIOR CONTENT MANAGER Dorothy Sinclair

SENIOR PRODUCTION EDITOR Rachel Conrad

MARKETING MANAGER Jenny Geiler

SENIOR DESIGNER Wendy Lai

COVER DESIGNER Caycee Black

PRODUCTION MANAGEMENT SERVICES Lumina Datamatics, Inc.

COVER IMAGE Tobias Carlsson/Unsplash

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ePUB ISBN-13: 978-1-119-59135-1

Library of Congress Cataloging-in-Publication Data

Names: Black, Ken (Kenneth Urban), author.

Title: Business statistics: for contemporary decision making / Ken Black.

Description: Tenth Edition. | Hoboken: Wiley, 2019. | Revised edition of the author’s Business statistics, 2016.

Identifiers: LCCN 2019035351 (print) | LCCN 2019035352 (ebook) | ISBN 9781119607458 (paperback) | ISBN 9781119650584 (adobe pdf) | ISBN 9781119591351 (epub)

Subjects: LCSH: Commercial statistics.

Classification: LCC HF1017 .B572 2019 (print) | LCC HF1017 (ebook) | DDC 519.5—dc23

LC record available at https://lccn.loc.gov/2019035351

LC ebook record available at https://lccn.loc.gov/2019035352

Preface

The tenth edition of Business Statistics for Contemporary Decision-Making continues the tradition of presenting and explaining the concepts and principles of business statistics through the use of clear, complete, student-friendly pedagogy within the context and framework of business analytics. The author and Wiley have vast ancillary resources available through WileyPLUS with which to complement the text in helping instructors effectively deliver this subject matter and in assisting students in their learning. With WileyPLUS instructors have far greater latitude in developing and delivering their course than ever before.

In the tenth edition, all the features of the ninth edition have been updated and changed as needed to reflect today’s business world. To meet the challenges, opportunities, and potentialities presented to business decision makers through the advent of big data, a new field of business methodology and quantitative investigation, business analytics, has arisen. Realizing the potential of this new approach, we have infused the tenth edition with the language of business analytics along with its definitions, approaches, and explanations to better assist the student in understanding business analytics and the role that business statistics plays in it. With this in mind, there have been a number of important changes and additions to the tenth edition.

The title of Chapter 1 has been changed to “Introduction to Statistics and Business Analytics” and a new section has been added, “Introduction to Business Analytics.” Included in this is a subsection on big data and its four dimensions, a subsection on defining business analytics, a subsection on the categories of business analytics, a subsection on data mining, and a subsection on data visualization.

One of the key areas of business analytics is data visualization, which is a quick and often simple way to obtain an overview of data with the potential for communicating to a broader audience. With that in mind, the title of Chapter 2 has been changed to “Visualizing the Data with Charts and Graphs.” Because business analytics sometimes uses historical data with measures taken over time to predict what might happen in the future, there is a new section in Chapter 2 entitled “Visualizing Time-Series Data.”

The other major changes in the text related to business analytics involve databases. Because much of business analytics stems from big data, more emphasis has been placed in the tenth edition on analyzing databases with a broader selection of larger databases.

In particular, a new feature has been created for the tenth edition called Big Data Case, which is housed at the end of each chapter. The Big Data Case focuses on one large database throughout the text. This database, entitled the AHA database, contains data on 12 variables for over 2000 U.S. hospitals drawn from the American Hospital Association’s (AHA) compilation of information from of 6000 U.S. hospitals in a recent year. In this feature, the student is asked to perform several tasks related to the material from the chapter of study using variables, samples, and data from this large database. As students progress through the text they will become more familiar with this database and will obtain a better understanding of the hospitals under study.

In the spirit of business analytics and big data, in the tenth edition, the number of databases

has been expanded from 9 to 20. In addition, there is a greater variety of databases, some of which are much bigger than databases associated with previous editions of the text. To reflect this effort, the feature Analyzing the Databases has been renamed Exploring the Databases with Business Analytics. Not only does this feature include a broader and deeper selection of databases, but the analysis requested of students is focused more on business analytics, big data, and data visualization.

This edition is designed and written for a two-semester introductory undergraduate business statistics course or an MBA-level introductory course. In addition, with 19 chapters, the tenth edition lends itself nicely to adaptation for a one-semester introductory business statistics course. The text is written with the assumption that the student has a college algebra mathematical background. No calculus is used in the presentation of material in the text.

An underlying philosophical approach to the text is that every statistical tool presented in the book has some business application. While the text contains statistical rigor, it is written so that the student can readily see that the proper application of statistics in the business world goes hand-in-hand with good decision-making. In this edition, statistics are presented as a means for converting data into useful information that can be used to assist the business decision maker in making more thoughtful, information-based decisions. Thus, the text presents business statistics as “value-added” tools in the process of converting data into useful information.

Changes for the Tenth Edition

Chapters

In this edition, the chapter organization is unchanged. As the chapter organization of the text allows for both one- and two-semester coverage, the first 12 chapters include the typical chapters covered in a one-semester course; and the last 7 chapters offer extended coverage, allowing students to explore such topics as multiple regression, logistic regression, forecasting, analysis of categorical data, nonparametric statistics, statistical quality control, and decision analysis. The titles of two of the chapters have changed to highlight the new emphasis on business analytics. In particular, the Chapter 1 title has changed from “Introduction to Statistics” to “Introduction to Statistics and Business Analytics.” The Chapter 2 title has changed from “Charts and Graphs” to “Visualizing the Data with Charts and Graphs.”

Topical Changes

In the tenth edition, some section and topical changes were made to reflect contemporary usage and the additional inclusion of business analytics. Specifically, a new section has been added to Chapter 1 entitled “Introduction to Business Analytics” that addresses such topics as big data, business analytics, data mining, and data visualization. Chapter 2 has a new section entitled “Visualizing Time-Series Data.” In Chapter 3, a section entitled “Descriptive Statistics on the Computer” has been replaced by “Business Analytics Using Descriptive Statistics.” Presented in this section are data on U.S. Production of Finished Motor Gasoline from 1997 to 2018 and how it is analyzed using output containing the results of techniques presented in Chapter 3.

In addition, also in Chapter 3, a section entitled “Measures of Central Tendency and

Variability: Grouped Data” has been deleted. In the past, this particular section focused on methodologies for the hand calculation of statistics on grouped data that few statisticians, researchers, and analysts still do. However, the concepts of grouped data and the construction of frequency distributions are still presented in Chapter 2. In Chapter 18, “Statistical Quality Control,” three of the more current quality topics—Value Stream Mapping, Kaizen Event, and Quality and Business Analytics—have replaced two of the older quality topics—Failure Mode and Effects Analysis (FMEA) and Quality Circles and Six Sigma Teams.

Decision Dilemma and the Decision Dilemma Solved

Each chapter of the tenth edition begins with a Decision Dilemma. Decision Dilemmas are real business vignettes that set the tone for each chapter by presenting a business dilemma and asking a number of managerial or statistical questions, the solutions to which require the use of techniques presented in the chapter. At the end of each chapter, a Decision Dilemma Solved feature discusses and answers the managerial and statistical questions posed in the Decision Dilemma using techniques from the chapter, thus bringing closure to the chapter. In the tenth edition, all decision dilemmas have been revised and updated. Solutions given in the Decision Dilemma Solved features have been revised for new data and for new versions of computer output.

As examples, here is an overview of two Decision Dilemmas located in Chapters 6 and 7 of the tenth edition. Chapter 6, which introduces the student to continuous distributions including the normal curve, opens with a Decision Dilemma titled “CSX Corporation” This Decision Dilemma introduces the student to the CSX Corporation, which is a leading rail transportation company in the United States. Based in Jacksonville, Florida, the CSX Transportation network has 21,000 miles of track across the eastern half of the United States and two Canadian provinces. Analysis of this vignette focuses on average rail freight line-haul speed, terminal dwell time, and freight train arrival time. Students have to analyze data about these variables using probability distributions presented in Chapter 6.

Chapter 7, “Sampling and Sampling Distributions,” contains the Decision Dilemma, “Toro,” which discusses the Toro Company’s 100 years of providing business solutions for the outdoor environment including turf, snow, and ground-engaging equipment along with irrigation and outdoor lighting solutions. The associated managerial, statistical, and analytical questions tackle issues related to consumer and household spending on landscape services both in terms of dollars spent and population percentages.

Thinking Critically About Statistics in Business Today

Every chapter in the tenth edition contains at least one or two Thinking Critically About Statistics in Business Today features that give real-life examples of how the statistics presented in the chapter apply in the business world today. Each of these contains thought- provoking questions called Things to Ponder in which the objective is to effect critical thinking on behalf of the student and generate discussion involving critical thinking in the classroom. This approach to learning is in sync with various accreditation organizations and their current emphasis on developing critical thinking in our students. Some of these include “Recycling Statistics,” “Warehousing,” “Canadian Grocery Shopping Statistics,” “Beverage Consumption: America vs. Europe,” “Are Facial Characteristics Correlated with CEO Traits?” “Assessing Property Values Using Multiple Regression,” “Can Scrap Metal Prices Forecast the

Economy?” “City Images of Cruise Destinations in the Taiwan Strait,” and “Does an Iranian Auto Parts Manufacturer’s Orientation Impact Innovation?” As an example, from “Beverage Consumption: America vs. Europe,” Americans drink nearly five times as much soda as do Europeans and almost twice as much beer. On the other hand, Europeans drink more than twice as much tea (hot or cold), more than three times as much wine, and over four times as much tap water as Americans. Statistics show that the average American consumes forty- eight 12 oz. containers of carbonated soda per month compared to only 10 for Europeans. Europeans consume an average of sixteen 4 oz. containers of wine per month compared to an average of only five for Americans. One of the Things to Ponder questions is, “Can you think of some reasons why Americans consume more carbonated soda pop and beer than Europeans, but less wine, hot or iced tea, or tap water? Do you think that these outcomes may change in time?”

Chapter Cases

Every chapter in this text contains a unique business case. These business cases are more than just long problems; and in the discussion that follows the business scenario, several issues and questions are posed that can be addressed using techniques presented in the chapter. Following are a few examples of these cases. The Southwest Airlines case in Chapter 2 discusses the company’s rise from incorporation in 1967 to an operation with more than 3600 flights a day, serving 94 destinations across the United States and six other countries. In Chapter 6, the reader is introduced to USAA, the United Services Automobile Association, which was founded in 1922 by 25 army officers who came together in San Antonio and decided to insure each other’s automobiles. Offering banking, investment, and insurance to people and families that serve, or served, in the U.S. military, USAA currently has 10.7 million members, 42.6 million products, and 26,300 employees, and it is ranked 57th in net worth ($25 billion) in Fortune 500 companies. Chapter 7 contains a case on the 3M Company. Born as a small-scale mining company in 1902 and best known for its adhesive products, 3M is a global innovation company with over 100,000 patents, $31 billion in sales, and 90,000 employees. Five Guys, a hamburger restaurant chain whose philosophy is to serve fresh, hand-cooked burgers with “all the toppings you could stuff between fresh-baked buns” along with fresh-cut fries cooked in peanut oil, is the case in Chapter 10. A family operation which opened its first restaurant in Arlington, Virginia in 1987 on $70,000 has grown to 1163 U.S. restaurants with U.S. systemwide sales of $1.21 billion and units now existing in other countries. Chapter 12 contains a case on Caterpillar, Inc. Caterpillar, headquartered in Peoria, Illinois, is an American corporation with a worldwide dealer network that sells machinery, engines, financial products, and insurance. Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives.

While all cases in the tenth edition have been updated and edited for today’s market, one new case has been added in the tenth edition, the Standard Motor Products company in Chapter 18.

Standard Motor Products, Inc. (SMP), headquartered in Long Island City, New York, manufactures and distributes replacement parts in the automotive aftermarket industry. Among its products sold under various brand names and private labels are fuel injectors, ignition wires, coils, switches, relays, sensors, distributor caps and rotors, and many other engine components.

SMP, founded in 1919 as a partnership specializing in ignition and electrical parts, was listed on the New York Stock Exchange (NYSE) in 1977. As of 2018, SMP had an annual sales revenue of $1.09 billion. The Standard Motor Products Corporation has utilized a number of quality efforts to improve its manufacturing processes. As an example, the Independence, Kansas, facility completed a Kaizen improvement event in its World Valve PCV manufacturing cell utilizing such Lean techniques as value stream mapping, the 7 Wastes, Level Loading, and material and information flows. Overall, the improvements made increased cell output from 3000 units per day to 3600 units per day. As a result, this additional volume was absorbed without increasing hours run.

Problems

There are 958 practice problems in the text. About 35 of these problems have been updated to include the latest data and information available. Twelve of the problems have been replaced with new problems.

Included in virtually every section of every chapter of the text is a demonstration problem that is an extra example containing both a problem and its solution and is used as an additional pedagogical tool to supplement explanations and examples in the chapters. Virtually all example and demonstration problems in the tenth edition are business oriented and contain the most current data available.

As with the previous edition, problems are located at the end of most sections in the chapters. A significant number of additional problems are provided at the end of each chapter in the Supplementary Problems. The Supplementary Problems are “scrambled”—problems using the various techniques in the chapter are mixed—so that students can test themselves on their ability to discriminate and differentiate ideas and concepts.

Databases

Available with the tenth edition are 20 databases that provide additional opportunities for students to apply the analytics presented in this text. These 20 databases represent a wide variety of business areas, such as agribusiness, banking, consumer spending, energy, the environment, finance, healthcare, international labor, manufacturing, market research, retailing, stocks, and others. Altogether, these databases contain 128 variables and 71,498 observations. The data are gathered from such reliable sources as the U.S. government’s Bureau of Labor, U.S. Department of Agriculture, U.S. Environmental Protection Agency, American Hospital Association, Energy Information Administration, Moody’s Handbook of Common Stocks, American Marketing Association, EMSI, Inc., and the U.S. Census Bureau. Fourteen of the databases are used with in-text activities. Eight of the 20 databases contain time-series data. The databases are

12-Year Gasoline

Agribusiness Time-Series

AMA Top 50 (market research firms)

American Hospital Association (AHA)

Consumer Food

EMSI United Kingdom Job Change

Energy

EPA Data Average Annual Emissions

Fifty Largest Banks in the World

Financial Database

Furniture and Household Furnishings Stores

Inc.5000 2014

International Labor

Manufacturing

Multi-Family Metrics

Personal Savings Rate

Student Survey

Top 100 Retailers in the U.S.

U.S. and International Stock Market

World’s Largest Companies

Video Tutorials by Ken Black

An exciting feature of the tenth edition package that can impact the effectiveness of student learning in business statistics and significantly enhance the presentation of course material is the series of videotape tutorials by Ken Black. With the advent of online business statistics courses, increasingly large class sizes, and the number of commuter students who have very limited access to educational resources on business statistics, it is often difficult for students to get the learning assistance they need to bridge the gap between theory and application on their own. There are now 21 videotaped tutorial sessions on key difficult topics in business statistics delivered by Ken Black and available for all adopters on WileyPLUS. In addition, these tutorials can easily be uploaded for classroom usage to augment lectures and enrich classroom presentations. Because there is at least one video for each of the first 12 chapters, the instructor has the option to include at least one video in the template of each chapter’s plan for most, if not all, of the course. While the video tutorials vary in length, a typical video is about 10 minutes in length. The 21 video tutorials are:

Chapter 1: Levels of Data Measurement1.

Chapter 2: Stem-and-Leaf Plot2.

Chapter 3: Computing Variance and Standard Deviation3.

Chapter 3: Understanding and Using the Empirical Rule4.

Chapter 4: Constructing and Solving Probability Tables5.

Chapter 4: Solving Probability Word Problems6.

Chapter 5: Solving Binomial Distribution Problems, Part I7.

Chapter 5: Solving Binomial Distribution Problems, Part II8.

Chapter 6: Solving Problems Using the Normal Curve9.

Chapter 7: Solving for Probabilities of Sample Means Using the z Statistic10.

Chapter 8: Confidence Intervals11.

Chapter 8: Determining Which Inferential Technique to Use: Confidence Intervals12.

Chapter 9: Hypothesis Testing Using the z Statistic13.

Chapter 9: Establishing Hypotheses14.

Chapter 9: Understanding p-Values15.

Chapter 9: Type I and Type II errors16.

Chapter 9: Two-Tailed Tests17.

Chapter 10: Hypothesis Tests of the Difference in Means of Two Independent Populations Using the t Statistic

18.

Chapter 11: Computing and Interpreting a One-Way ANOVA19.

Chapter 12: Testing the Regression Model I—Predicted Values, Residuals, and Sum of Squares of Error

20.

Chapter 12: Testing the Regression Model II—Standard Error of the Estimate and r221.

Features and Benefits

Each chapter of the tenth edition contains sections called Learning Objectives, Decision Dilemma, Demonstration Problems, Section Problems, Thinking Critically About Statistics in Business Today, Decision Dilemma Solved, Chapter Summary, Key Terms, Formulas, Ethical Considerations, Supplementary Problems, Exploring the Databases with Business Analytics, Chapter Case, and Big Data Case.

Learning Objectives. Each chapter begins with a statement of the chapter’s main learning objectives. This statement gives the reader a list of key topics that will be discussed and the goals to be achieved from studying the chapter.

Decision Dilemma. At the beginning of each chapter, a short case describes a real company or business situation in which managerial and statistical questions are raised. In most Decision Dilemmas, actual data are given and the student is asked to consider how the data can be analyzed to answer the questions.

Demonstration Problems. Virtually every section of every chapter in the tenth edition contains demonstration problems. A demonstration problem contains both an example problem and its solution and is used as an additional pedagogical tool to supplement explanations and examples.

Section Problems. There are approximately 950 problems in the text. Problems for practice are found at the end of almost every section of the text. Most problems utilize real data gathered from a plethora of sources. Included here are a few brief excerpts from some of the real-life problems in the text: “The Wall Street Journal reported that 40% of all workers say they would change jobs for ‘slightly higher pay.’ In addition, 88% of companies say that there is a shortage of qualified job candidates.” “In a study by Peter D. Hart Research Associates for the Nasdaq Stock Market, it was determined that 20% of all stock investors are retired people. In addition, 40% of all U.S. adults have invested in

mutual funds.” “A survey conducted for the Northwestern National Life Insurance Company revealed that 70% of American workers say job stress caused frequent health problems.” “According to Padgett Business Services, 20% of all small-business owners say the most important advice for starting a business is to prepare for long hours and hard work.” “According to Nielsen Media Research, approximately 86% of all U.S. households have High-definition television (HDTV). In addition, 49% of all U.S. households own Digital Video Recorders (DVR).”

Thinking Critically About Statistics in Business Today. Every chapter in the tenth edition contains at least one Thinking Critically About Statistics in Business Today feature. These focus boxes contain an interesting application of how techniques of that particular chapter are used in the business world today and ask probing questions of the student. They are usually based on real companies, surveys, or published research.

Decision Dilemma Solved. Situated at the end of the chapter, the Decision Dilemma Solved feature addresses the m

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