AE103-MS - Management Science (A.Y.

2020-2021)

QUANTITATIVE MATHEMATICS
MODULE 1
THE BASICS (INTRODUCTION)

I. VARIABLES
- A variable is an attribute that describes a person, place, thing, or idea.
- The value of the variable can “vary” from one entity to another.

1. QUALITATIVE OR CATEGORICAL VARIABLES

- takes on values that are names or labels.

2. QUANTITATIVE VARIABLES
- variables that are numeric.
- represent a measurable quantity.
a. CONTINUOUS VARIABLES
- can take any value between its minimum and maximum value.
b. DISCRETE VARIABLES
- can have some, but not all between its minimum and maximum.
- can only have an integer value.

II. POPULATIONS AND SAMPLES

• POPULATION
- includes all of the elements from a set of data.
- attributes are called parameters.
• SAMPLE
- consists one or more observations drawn from the population.
- attributes are called statistics.

III. SAMPLING METHOD

- A procedure for selecting sample elements from a population.

• SIMPLE RANDOM SAMPLING

- refers to a sampling methods that has the following properties:
o The population consists of N objects.
o The sample consists of n objects.
o All possible samples of n objects are equally likely to occur.

1. SAMPLING WITH REPLACEMENT

- a population element can be selected more than one time.
2. SAMPLING WITHOUT REPLACEMENT
- a population element can be selected only one time.

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IV. CENTRAL TENDENCY: MEAN AND MEDIAN

• MEDIAN
- to find the median, we arrange the observations in order from smallest to largest
value. If there is an odd number of observations, the median is the middle value. If there
is an even number of observations, the median is the average of the two middle values.

• MEAN
- computed by adding all the observations and dividing by the number of observations.

Population Mean Sample Mean

𝚺𝑿 ∑𝒙
𝝁= ̅=
𝒙
𝑵 𝒏

where where
𝝁 is the population mean ̅ is the sample mean
𝒙
𝚺𝑿 is the sum of all the 𝚺𝒙 is the sum of all the
population observations sample observations
𝑵 is the number of 𝒏 is the number of
population observations sample observations

V. VARIABILITY
- Spread in a data set.
- Common measures of variability.

1. RANGE
- the difference between the largest and smallest values in a set of values.

2. INTERQUARTILE RANGE (IQR)

- A measure of variability based on dividing a data set into quartiles.
- Quartile divide ordered data into four equal parts.
- Values that divide each part are called the first, second, and third quartiles.
- They are denoted by 𝑄1 , 𝑄2 , and 𝑄3 .
* 𝑄1 is the “middle” value in the first half of the rank-ordered data set.
* 𝑄2 is the median value in the set.
* 𝑄3 is the “middle” value in the second half of the rank-ordered data set.
To find IQR :
a. Arrange data set in a numerical order.
b. Find 𝑄2 , 𝑄1 , and𝑄3 .
c. Compute for IQR.
𝑰𝑸𝑹 = 𝑸𝟑 − 𝑸𝟏

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3. VARIANCE
- average squared deviation from the mean.

Population Variance Sample Variance

∑(𝑿𝒊 −𝝁)𝟐 ∑(𝒙𝒊 −𝒙̅)𝟐

𝝈𝟐 = 𝒔𝟐 =
𝑵 𝒏−𝟏

where where
𝟐
𝝈 is the population variance 𝒔𝟐 is the sample variance
𝑿𝒊 is the ith element from the 𝒙𝒊 is the ith element from the
population sample
𝝁 is the population mean ̅ is the sample mean
𝒙
𝑵 is the number of elements 𝒏 is the number of elements
in the population in the sample

4. STANDARD DEVIATION
- the square root of the variance.

Population Standard Deviation Sample Standard Deviation

∑(𝑿𝒊 −𝝁)𝟐 ∑(𝒙𝒊 −𝒙̅)𝟐

𝝈=√ 𝒔=√
𝑵 𝒏−𝟏

where where
𝝈 is the population standard 𝒔 is the sample standard
deviation deviation
𝑿𝒊 is the ith element from the 𝒙𝒊 is the ith element from the
population sample
𝝁 is the population mean ̅ is the sample mean
𝒙
𝑵 is the number of elements 𝒏 is the number of elements
in the population in the sample

VI. MEASURES OF POSITION

- Position of a value, relative to other values in a set of data.
- Common measures of variability.

1. PERCENTILES
- divide a set of data into 100 equal parts.
- there are 99 percentile values: 𝑃1 , 𝑃2 , 𝑃3 , . . . , 𝑃99
- 𝑃𝑖 is a value, such that 𝒊 percent of observations in a data set fall at or below it.
- 𝑃50 would be the median.

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2. QUARTILES
- divide ordered data into four equal parts.
- values that divide each part are called the first, second, and third quartiles.
- they are denoted by 𝑄1 , 𝑄2 , and 𝑄3 .
- 𝑄1 corresponds to 𝑃25 .
- 𝑄2 corresponds to 𝑃50 (the median).
- 𝑄3 corresponds to 𝑃75 .

3. STANDARD SCORES (Z-SCORES)

- indicates how many standard deviations an element is from the mean.

(𝑿 − 𝝁)
𝒛=
𝝈
where
𝒛 is the z-score
𝑿 is the value of the element
𝝁 is the mean of the population
𝝈 is the standard deviation

* How to interpret z-scores:

1. A z-score less than 0 represents an element less than the mean.
2. A z-score greater than 0 represents an element greater than the mean.
3. A z-score equal to 0 represents an element equal to the mean.

Prepared by:

Mr. Ivo Amodia

Information System Department
National College of Business and Arts - Fairview

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