More than 100 years ago H. G. Wells, an English author and historian, suggested that one day quantitative reasoning will be as necessary for effective citizenship as the ability to read. He made no mention of business because the Industrial Revolution was just beginning. Mr. Wells could not have been more correct. While “business experience,” some “thoughtful guesswork,” and “intuition” are key attributes of successful managers, today’s business problems tend to be too complex for this type of decision making alone.

Businesses face similar situations. The Kellogg Company must ensure that the mean amount of Raisin Bran in the 25.5-gram box meets label specifications. To do so, it sets a “target” weight somewhat higher than the amount specified on the label. Each box is then weighed after it is filled. The weighing machine reports a distribution of the content weights for each hour as well as the number “kicked-out” for being under the label specification during the hour. The Quality Inspection Department also randomly selects samples from the production line and checks the quality of the product and the weight of the box. If the mean product weight differs significantly from the target weight or the percent of kick-outs is too large, the process is adjusted.

Alan Greenspan, former chairman of the Federal Reserve Board, knows and understands the importance of statistical tools and techniques to provide accurate and timely information to make public statements that have the power to move global stock markets and influence political thinking. Dr. Greenspan, speaking before a National Skills Summit, stated: “Workers must be equipped not simply with technical know-how, but also with the ability to create, analyze, and transform information and to interact effectively with others. That is, separate the facts from opinions, and then organize these facts in an appropriate manner and analyze the information.”

As a student of business or economics, you will need basic knowledge and skills to organize, analyze, and transform data and to present the information. In this text, we will show you basic statistical techniques and methods that will develop your ability to make good personal and business decisions.