DSC 7001: Statistical & Quantitative

Methods

Kim Menezes
Email: [email protected]
Learning Outcomes
Subject Specific: Knowledge, Understanding and Skills:
» Understand the applications of basics of statistics used in a
business
» Analyze data with the help of statistical tools and techniques.
» Prepare statistical reports, charts and spreadsheets.
» Prepare analysis of business problem using statistics and
interpret them.
» Use Excel to analyze the data
Coverage
» Unit 1: Introduction to Statistics and Data
Presentation
» Unit 2: Descriptive Statistics and Index Numbers
» Unit 3: Theory of Probability
» Unit 4: Inferential Statistics
» Unit 5: Forecasting
Assessment structure
Component of
Internal (40) End Term
Evaluation
Case Analysis / Quiz/
Simulations/ Modelling
Theory +
Class Test* Attendance etc) / Computer Based
Practical
Exercise/Reviews of
Research Article.)**
Weightage (%)
60 (45 +
/ Course 15 5 20
15)
Outcomes
CO 1 X X X
CO 2 X X X
CO 3 X X
CO4 X X X

*Two Class tests to be conducted **Minimum 2 assessment methods to be adopted

References

Core text:
Anderson, Sweeney, Williams (2011) Statistics for
Business and Economics, 11/e, Cengage
Learning.

Reference book:
Ken Black (2008) Business Statistics, 4/e, Wiley.
Statistics & Data
Statistics – the science of collecting, organizing,
analyzing, interpreting, and presenting data for the
purpose of gaining insight and making better
decisions.
Applications abound in all business disciplines.

Data are the “raw material” of statistics

Data are facts and figures that are collected,
summarized, analyzed and interpreted
Dataset – Laggards on DALAL Street
Data is from Business Today, June 26, ’11
Source: BT Research

Company Latest Closing Issue Grade Date of listing

Price Price Assigned
JSW Energy 68.7 100 **** Jan 4, ’10
Gammon Infrastructure 17.25 167 **** Apr 3, ’08
Reliance Power 110 450 **** Feb 11, ’08
OnMobile Global 107.1 440 **** Feb 19, ’08
Edelweiss Capital 32.9 825 **** Dec 12, ’07
Nu Tek India 5.48 192 *** Aug 27, ’08
DEN Networks 107.05 195 *** Nov 24, ’09
Indiabulls Power 20.2 45 *** Oct 30, ’09
NHPC 24.25 36 *** Sep 1, ’09
Shriram EPC 132.8 300 *** Feb 20, ‘08
Elements, Variables and Observations
Elements : Entities on which data are collected

Variable: A characteristic of interest for the element

Observation: The set of measurements or data collected for a

particular element

Dataset Size = Number of elements x Number of Variables

Scales of Measurement
Scales of measurement include:
– Nominal
– Ordinal
– Interval
– Ratio

The scale determines the amount of information contained in

the data
The scale indicates the data summarization and statistical
analyses that are most appropriate for the data
Scales of Measurement: Nominal Scale

• Data are labels or names used to describe the attribute of the

element
• A non-numeric label or numeric code may be used

Example:
Students of a University are classified by their area of
specialization using non-numeric label Marketing, Economics,
Finance, Human Resources and Operations.
Alternatively a numeric code could be used 1-Marketing,
2-Economics, 3-Finance, 4-Human Resources, 5-Operations
Scales of Measurement: Ordinal Scale

• The data have the properties of nominal data and the order or
rank of the data is meaningful
• A nonnumeric label or numeric code may be used.

Example:
Education level of employees are classified by their degree
courses they have completed. High School, Bachelor’s
degree, Master’s and Doctorate
Alternatively a numeric code could be used 1-High School, 2-
Bachelor, 3-Master’s and 4-Doctorate
Scales of Measurement: Interval Scale

• The data have the properties of ordinal data, and the interval
between observations is expressed in terms of a fixed unit of
measure. There is no natural zero.
• Interval data are always numeric.

Example:
Daily temperature recorded in Celcius is interval data. The
difference between 24C and 25C is the same magnitude as
the difference between 40C and 41C.
Note that 0C is arbitrary, so that it does not make sense to say
that 20C is twice as hot as 10C.
Scales of Measurement: Ratio Scale
• The data have all the properties of interval data and the ratio
of two values is meaningful.
• This scale must contain a zero value that indicates that
nothing exists for the variable at the zero point.

Example:
Distance, height, weight, and time use the ratio scale.
It is now meaningful to say that 10 m is twice as long as 5 m.
This ratio hold true regardless of which scale the object is
being measured in (e.g. meters or yards). This is because
there is a natural zero.
Qualitative and Quantitative Data
» Qualitative Data (Categorical Data)
 Labels or names used to identify an attribute of each
element
 Nominal or Ordinal scale of measurement

» Quantitative Data (How many or How much)

 Quantitative data are always numeric
 Ordinary arithmetic operations are meaningful for
quantitative data.
 Ratio or Interval Scale of Measurement
Ch1-Exercise 11 (ASW)
State whether each of the following variables is
qualitative or quantitative
(a) Annual Sales
(b) Soft-drink size (small, medium, large)
(c) Empolyee classification (GS1 through GS18)
(d) Earnings per share
(e) Method of payment (cash, check, credit card)
Statistical Inference
• Population – the set of all elements of interest in a study
• Sample – a subset of the population
• Descriptive Statistics – Summaries of data in tables, graphs
and numerical measures
• Statistical Inference - the process of using data obtained from
a sample to make estimates and test hypotheses about the
characteristics of a population
• Census – Collecting data for the entire population
• Sample Survey – Collecting data for a sample
Ch1-Exercise 8 (ASW)
A Wall Street Journal/NBC News poll asked 2013 adults, “How
satisfied are you with the state of the U.S. economy today?
(Wall Street Journal, December 12, 1997). Response
categories are Dissatisfied, Satisfied, and Not Sure
(a) What is the sample size for this survey
(b) Are the data qualitative or quantitative?
(c) Would you use average or percentages to summarize this
data
(d) Of the respondents, 28% said they were dissatisfied with the
state of the U.S. economy. How many individuals provided
this response?
Data
• Cross-sectional data are collected at the same or
approximately the same point in time.
Example: Details on the number of building permits issued in
the metros in the year 2009

• Time series data are collected over several time periods.

Example: Details on the number of building permits issued in
Gurgaon from the years 2000-2010
Data Sources

» Existing Sources
– Data available within a company – employment data
– Business Databases – Sensex data
– Government Publications – National Account Statistics ,
Wholesale Price Index, Reserve Bank of India bulletins
– Internet
Data Sources
» Statistical Studies
• In experimental studies the variables of interest are first identified.
Then one or more factors are controlled so that data can be obtained
about how the factors influence the variables.
For example a pharmaceutical firm is testing a new diabetes drug. The
variable of interest is the diabetes level. The dosage of the drug will be
controlled to study it’s effect on the diabetes level.

 In observational (nonexperimental) studies no attempt is made to

control or influence the variables of interest.
For example a survey is conducted by restaurants where customers
are asked to rate on a scale of 1-5 (1=excellent, 2=good, 3=satisfactory
and 4=unsatisfactory )the food, ambience, promptness of service and
cleanliness
H.W.
» Read Chapter 1
» Problems – Please solve problems at end of Chapter
1