Statistical

Fundamentals

Prepared By:
Kath Lea Busalanan
Glorietta Montanez
Statistical Thinking
 A decision-making skill demonstrated by the ability to draw to
conclusions based on data.
Based on three concepts:
 All work occurs in a system of interconnected processes.
 All processes have variation (the amount of which tends to be
underestimated).
 Understanding and reducing variation are important keys to success.
 Guides people to make decisions based on data, which needs to be
done in business.

Why Do Statistics Sometimes Fail in the Workplace?

• Many times statistical tools do not create the desired result, because
many firms fail to implement quality control in a substantive way.
• They prefer form over substance.

Population sampling Techniques

Population sampling is the process of taking a subset of subjects that is
representative of the entire population. The sample must have sufficient size to
warrant statistical analysis.

TYPES OF SAMPLING
A. Non-Probability Sampling
-In this type of population sampling, members of the population do not
have equal chance of being selected.
B. Probability Sampling (Random)
-In probability sampling, every individual in the population have equal
chance of being selected as a subject for the research.

TYPES OF non-probability sample

1. Quota Sampling
2. convenience Sampling
3. Purposive Sampling

TYPES OF probability sample

 Simple Random Sampling
 Systematic Random Sampling
 Stratified Random Sampling
 Multistage Sampling
 Multiphase Sampling
 Cluster Sampling

Steps in Recruiting the Appropriate Research Sample

1. First, the researcher must clearly define the target population. In research,
population is a precise group of people or objects that possesses the
characteristic that is questioned in a study. To be able to clearly define the target
population, the researcher must identify all the specific qualities that are common
to all the people or objects in focus.
2. Define the accessible population considering the researcher's time, budget and
workforce.
3. Allocate the available money, time and workforce for recruitment.
 Research Triad

NORMAL CURVE
A normal curve is a bell-shaped curve which shows the probability distribution of
a continuous random variable. Moreover, the normal curve represents a normal
distribution. The total area under the normal curve logically represents the sum of
all probabilities for a random variable. Hence, the area under the normal curve is
one. Also, the standard normal curve represents a normal curve with mean 0 and
standard deviation 1. Thus, the parameters involved in a normal distribution is
mean ( μ ) and standard deviation ( σ ).
Characteristics of Normal Curve
• The values of mean, median and mode are same
• It represents a unimodal distribution as it has only one peak.
• It shows a symmetric distribution as 50% of the data set lies on the left
side of the mean and 50% of the data set lies on the right side of the mean.
• Empirical rule: 68% of the data fall within μ ±σ, 95% of the data fall within
μ ± 2 σ and 99.7% of the data fall within μ ± 3 σ

THE NORMAL CURVE

Run chart
• A run chart is a line graph of data plotted over time. By collecting and
charting data over time, you can find trends or patterns in the process.
• It is used to determine whether or not the central tendency of a process is
changing. It does not require tedious calculations or special software to
produce.

FOUR STATES OF RUN CHART

 Ideal
 Threshold
 Brink of chaos
 State of chaos

How to Create a Run Chart

There are seven steps to creating a run chart.
1. Decide on the measure to be analyzed (assuming there is a reliable
measurement system in place).
2. Gather the data – have a minimum of 10 data points.
3. Draw a graph with a vertical line and a horizontal line.
4. On the vertical line, or the y-axis, draw the scale relative to the variable you
are measuring.
5. On the horizontal line, or the x-axis, draw the time or sequence scale.
6. Calculate the mean/median (whichever the data set indicates to be
appropriate) and draw a horizontal line at that value – going across the
graph.
7. Plot the data in the sequence, or the time order, in which the data was
collected.
WHAT DOES RUN CHART LOOK LIKE?

Figure 1: Run Chart – Trends Example

Figure 2: Run Chart – Shifts Example

 WHAT DOES RUN CHART LOOK LIKE?

Figure 3: Run Chart – Alternating Example

Control Chart
• Control Chart is a graphical representation of the collected information
• It pertains to the measured or otherwise judged quality characteristics of
the items or samples

What do these charts do?

• It detects variations in the processing and warns if there is any departure from
the specified tolerance limits.
• It is primarily a diagnostic technique
• It depicts whether there is any change in characteristics of items since the start
of the production run.
PURPOSES AND ADVANTAGES OF CONTROL CHARTS
• It indicates whether a process is in control or out of control
• It determines processes variability and detects unusual variations taking
place in a process
• It ensures product quality level
• It warns in time and if the process is rectified in time scrap percentage can
be reduced
• It provides information about the selection of process and setting of
tolerance limits
• It builds up the reputation of the organization through customer’s
satisfaction

TYPES OF CONTROL CHART

A. Variable Chart
-plots continuous measurement process data, such as length or pressure, in
a time-ordered sequence.
Subgroups: 1. X-bar Chart
2. R-bar Chart
B. Attribute Chart
- plots count data, such as the number of defects or defective units.
EXAMPLE OF CONTROL CHART
X-Bar and R-Chart - How They Are Different
• X-Bar Chart
-Indicates how the average or mean changes over time. It Is utilized to
monitor the process mean when calculating subgroups at regular intervals from a
process.
• R-Chart
-Indicates how the range of the subgroups changes over time. This is
utilized to monitor process variability, like the range, when measuring subgroups
less than ten at regular intervals in a process.