511 - Quantitative Methods

IILM Lodhi Road - Trimester I – 2021-22

Course description in brief: This course introduces the fundamental concepts, methods, techniques and
frameworks for analyzing one or more random variables. The intent is to infer its expected behavior and use the
same in reaching objective decisions in an uncertain environment. The course emphasizes analytical methods,
techniques and concepts that are broadly applicable to business problems.

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1. General Course Information

1.1 Course Details

Course: Quantitative Methods
Code 511
Term: Trimester I
Level: Postgraduate
Credits : 3
Contact: Up to 2 classroom sessions of 1 hour 15 minutes each per week and tutorials
Prerequisites: 5007 Excel for Business and its Application, 5005 Mathematical Foundation for
Decision Making
1.2 Course Faculty
Module Leader: Raju Majumdar, [email protected], 9811229459
Module Tutor: Dr. Manisha Joshi, [email protected],
1.3 Class and tutorial details:
Classes for this course shall be scheduled twice a week. Tutorial sessions shall also be conducted for
this course in due time.

2. Learning Outcomes
2.1 Course Learning Outcome
By the end of this course, you/students should be able to:
1. The ability to structure, describe and visualize data.
2. The ability to understand the nature of a variable and its distribution
3. The ability to infer/draw conclusion from data through structured analysis.

2.2 Course learning outcomes, program learning outcomes and assessments:

Course learning outcomes Program learning outcomes Assessments
The ability to structure, L2 - An ability to acquire,
describe and visualize data. analyze and understand data Assignments (Problem set)
and information for
managerial decisions.
The ability to understand the L2 - An ability to acquire, Project Work (Group
nature of a variable and its analyze and understand data assignment) and End-term
and information for
distribution managerial decisions. Examination

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The ability to infer/draw L3 - Critical thinking and Project Work (Group
conclusion from data through informed judgment leading to assignment) and End-term
structured analysis. problem solving, decision- Examination
making and negotiating skills

2.3 Relationship of this course with other courses conducted in the

Same term: Learning from this course will find direct use in Microeconomics, and indirectly in Design
Thinking and Creativity for Business, Marketing and in OB and Change (to the extent data is used to
describe a situation and in impact assessment).
Other terms: Tools and techniques learnt in this course will be extensively used in core papers of Term
II (Macroeconomics, Corporate Finance, Operations Management, Competitive Strategy and Human
Resource Management) and will be the basic requirement for all electives and core papers of Trimester
III. Additionally for electives in the domain of finance, operations and analytics and market research,
learning from this paper will remain indispensible.

3. Learning Resources
3.1 Required resources
Test Book: Statistics for Management, Levin et al, Pearson Education, 7e
Reference book:
Ken Black, Wiley, Fourth Edition, Business Statistics for Contemporary Decision Making (Soft copy
of this book is available on the internet)
Statistical Methods, Rudolf J. Freund, William J. Wilson, Donna L. Mohr, Elsevier, 2003, London
(Soft copy of this book is available on the internet)

3.2 Recommended resources

Reading is considered to be an essential part of the course, and students are expected to access and
critically analyze the relevant literature. Apart from becoming familiar with the contents of the main
text, students are also strongly urged to refer to academic journals/periodicals in the area of Statistics
and Data Science.

3.3 Online resources

 Statistics with R Specialization, available on https://www.coursera.org/specializations/statistics
 Data Science: R Basics, available https://www.edx.org/course/data-science-r-basics-harvardx-
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 ph125- 1x-0
 Probability and Statistics, available on https://online.stanford.edu/course/probability-and-
statistics- self-paced

4. Learning and Teaching Activities:

 Approach to Learning and Teaching in the Course: This course emphasizes on both the
acquisition and application of knowledge. It is believed that learning occurs most effectively
when theory is taught in conjunction with application. This is reflected in the way we go about
in this course by combining conceptual knowledge about their application in management
(decision making). Timely feedback from you will help us in making learning more outcome
centric and interesting. We encourage you to actively take responsibility for your own learning
and to critically evaluate the concepts presented.
 Learning Activities and Teaching Strategies: The lecture is designed to convey theoretical and
practical knowledge about quantitative techniques used in managerial decision making. The
lecture will be presented online and recorded each week. If you cannot attend the online lecture
you should make sure to listen to the lecture recording prior to the next class or your tutorial for
that week. The tutorials involves problem solving and discussions to enable transfer of skills to
the world of work.

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4.1 Module overview:
Session Topics Pre-class references to go through Learning activities in session

1 Introduction to a. Understanding Data, Information, Knowledge and Their Inter-Relationships, Liew Discussion:
data, information A, Journal of Knowledge Management Practice, Vol. 8, No. 2, June 2007 1. Data, information and
and knowledge http://www.tlainc.com/articl134.htm knowledge in different situations
b. The Data – Information – Knowledge Cycle 2. Characteristics of good data: Your
https://www.dataversity.net/the-data-information-knowledge-cycle/ Data, inputs
Information, Knowledge, and Wisdom https://otec.uoregon.edu/data- 3. Are all data being of same
wisdom.htm types? Let’s discuss (Types of
c. Video: Data-Information-Knowledge in 3 minutes or less (2:51) data/data measurement level)
https://www.youtube.com/watch?v=sIjSY05JE9Q 4. Organize: summary table,
Data Information and Knowledge (2:14 min) contingency table
Faculty Video 1 https://www.youtube.com/watch?v=QsP5WGv0aQc
2 From data to What are Variables? Discussion: variables: their role in
Variable https://www.abs.gov.au/websitedbs/a3121120.nsf/home/statistical+language+- decision making
+what+are+variables Visualize-one variable: bar chart, pie
Video: Discrete and Continuous Random Variable chart, dounut chart, pareto chart
https://www.khanacademy.org/math/statistics-probability/random-variables- stats-
library/random-variables-discrete/v/discrete-and-continuous-random- Exercise: Understanding types of
variables variables from daily life
Charts for One Variable
Faculty Video 2 https://help.syncfusion.com/predictive-analytics/charts-for-one-variable

3 Measures of central Mean Median and Mode for discrete data sets Discussion: Mean, Weighted
tendency https://www.khanacademy.org/math/ap-statistics/summarizing-quantitative- data- mean, Geometric mean, Median,
ap/measuring-center-quantitative/v/statistics-intro-mean-median-and- mode Mode and their interpretation.
Weighted mean
https://www.khanacademy.org/computing/pixar/environment-modeling- Exercise: Calculation of mean, median
2/mathematics-of-parabolas2-ver2/v/weighted-average-two-points and mode using in MS Excel.
Geometric mean
https://www.youtube.com/watch?v=xt07TExQNVg

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4-5 Measures of Dispersion https://www.khanacademy.org/math/ap-statistics/summarizing- Discussion: Range, Standard
dispersion quantitative-data-ap/measuring-spread-quantitative/e/calculating-the- deviation, Mean deviation form
interquartile-range--iqr- mean, mean absolute deviation
Measures of spread: range, variance & standard deviation from mean, Mean square deviation
https://www.khanacademy.org/math/probability/data-distributions- (variance), Coefficient of variation,
a1/summarizing-spread-distributions/v/range-variance-and-standard-deviation- as- skewness, kurtosis
measures-of-dispersion
Coefficient of variation, skewness, kurtosis Exercise: Computation of range,
https://www.khanacademy.org/math/ap-statistics/density-curves-normal- variance, standard deviation, and
distribution-ap/density-curves/v/median-mean-and-skew-from-density-curves Coefficient of variation, skewness,
Faculty Video 3 kurtosis in MS Excel
6 Understanding Video: Intro to theoretical probability Discussion: Understanding
probabilities 1. https://www.khanacademy.org/math/probability/probability- collectively exhaustive and mutually
geometry/probability-basics/v/basic-probability exhaustive events and Problem
Faculty Video 2. https://www.khanacademy.org/math/statistics-probability solving
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7-8 Random variable Video: Discussion: Discussion on Random
Variance and standard deviation of a discrete random variable (6.26) Variable, understanding risk and
https://www.khanacademy.org/math/ap-statistics/random-variables-ap/discrete- random- uncertainty
variables/v/variance-and-standard-deviation-of-a-discrete-random- variable Exercise: Problem solving on
Mean, Variance and Standard Deviation computation of measures of central
https://www.mathsisfun.com/data/random-variables-mean-variance.html tendency for random
Faculty Video 5 variables, computing probabilities of
events (with replacement and without
replacement)
9-10 Probability and Valid discrete probability distribution examples(4:00) Discussion: Role of expected value in
Expected Value https://www.khanacademy.org/math/ap-statistics/random-variables-ap/discrete- random- decision making, understanding
variables/v/valid-discrete-probability-distribution-examples Poisson and Binomial Probabilities.
Binomial distribution(11:50) Exercise:
https://www.khanacademy.org/math/statistics-probability/random-variables-stats- Calculating Expected value and using
library/binomial-random-variables/v/binomial-distribution them in managerial decision making, MS
Poisson process 1(11:00) Excel workout.
https://www.khanacademy.org/math/statistics-probability/random-variables-stats-
library/poisson-distribution/v/poisson-process-1
Poisson process 2 (12:00)
Faculty Video 6 https://www.khanacademy.org/math/statistics-probability/random-variables-stats- Assignment 1 (5 marks)
library/poisson-distribution/v/poisson-process-2

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11-12 Continuous •Deep definition of the normal distribution (23:00) Discussion: Understanding the
distributions I & https://www.khanacademy.org/math/statistics-probability/modeling- need for variable transformation,
II distributions-of-data/more-on-normal-distributions/v/introduction-to-the- normal- Probability Density Function,
distribution Uniform distribution, Normal
•Qualitative sense of normal distributions (11:00) distribution and the standard normal
https://www.khanacademy.org/math/statistics-probability/modeling- distribution, Exponential
distributions-of-data/normal-distributions-library/v/ck12-org-normal- distribution
distribution-problems-qualitative-sense-of-normal-distributions
•Standard normal distribution and the empirical rule (8:15) Exercise: Problem solving on normal and
https://www.khanacademy.org/math/statistics-probability/modeling- distributions-of- standard normal variable in the
data/normal-distributions-library/v/ck12-org-exercise-standard- normal-distribution-and- managerial context; how and why this
the-empirical-rule distribution is to be applied and results
Normal Distribution, https://www.mathsisfun.com/data/standard-normal- interpreted
Faculty Video 7 distribution.html
13-14 Sampling and Relevant Videos for the Session: Discussion: need and rationale
Sampling •Introduction to sampling distributions (7:17) https://www.khanacademy.org/math/ap- for sampling and the
Distributions statistics/sampling-distribution-ap/what-is-sampling-distribution/v/introduction-to- importance of the standard
sampling-distributions normal distribution; Center
•Sampling distribution of the sample mean (10:51) Limit Theorem, Sampling
https://www.khanacademy.org/math/statistics-probability/sampling- Distributions of the Mean
distributions-library/sample-means/v/sampling-distribution-of-the-sample- mean
•Central limit theorem (9:48) https://www.khanacademy.org/math/statistics- Exercise: problem solving on
probability/sampling- distributions-library/sample-means/v/central-limit- standard error and its
theorem interpretation
Faculty Video 8
15-16 Estimation Good estimator properties summary (2:12) Discussion: Students t distribution, Chi-
https://www.youtube.com/watch?v=uh4zUdKvxPA Introduction to square distribution, F distribution its
the t Distribution (8.54) attributes, shape and rationale for use
https://www.youtube.com/watch?v=Uv6nGIgZMVw Introduction to t
statistics (4:26) Exercise: Problem solving using z and t
https://www.khanacademy.org/math/ap-statistics/estimating-confidence- distributions, comparison of results
ap/one-sample-t-interval-mean/v/introduction-to-t-statistics
Z-statistics vs. T-statistics (6.39) https://www.khanacademy.org/math/statistics-
probability/significance-tests-
one-sample/more-significance-testing-videos/v/z-statistics-vs-t-statistics
Chi-square distribution introduction
Faculty Video 9 https://www.khanacademy.org/math/statistics-probability/inference-categorical-data- Assignment II (5 marks)
chi-square-tests/chi-square-goodness-of-fit-tests/v/chi-square-distribution-introduction

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17-19 Testing of •Introduction to Type I and Type II errors (5:09) Discussion: rationale of hypothesis testing
Hypothesis https://www.khanacademy.org/math/ap-statistics/tests-significance-ap/error- and the process, p-value, critical value
probabilities-power/v/introduction-to-type-i-and-type-ii-errors
•Examples identifying Type I and Type II errors (5:43) Exercise: testing hypothesis in the context
https://www.khanacademy.org/math/ap-statistics/tests-significance-ap/error- of business decision making; analyzing
probabilities-power/v/examples-identifying-type-i-and-type-ii-errors objectivity in decision making
•Introduction to power in significance tests (9:44)
Faculty Video 10 https://www.khanacademy.org/math/ap-statistics/tests-significance-ap/error-
probabilities-power/v/introduction-to-power-in-significance-tests

20 ANOVA: •ANOVA 1: Calculating SST (total sum of squares)(7:38) Discussion: Why we need to analyze
Analysis of Variance https://www.khanacademy.org/math/statistics-probability/analysis-of-variance- anova- variances and how to use ANOVA in
library/analysis-of-variance-anova/v/anova-1-calculating-sst-total-sum- of-squares decision making
•ANOVA 2: Calculating SSW and SSB (total sum of squares within and between)
(13:19) Exercise: Problem solving on and
https://www.khanacademy.org/math/statistics-probability/analysis-of-variance- anova- interpretation of ANOVA results
library/analysis-of-variance-anova/v/anova-2-calculating-ssw-and-ssb- total-sum-
of-squares-within-and-between-avi
•ANOVA 3: Hypothesis test with F-statistic (10:13)
https://www.khanacademy.org/math/statistics-probability/analysis-of-variance-
Faculty Video 11 anova-library/analysis-of-variance-anova/v/anova-3-hypothesis-test-with-f- statistic
21 Correlation Exploring Bivariate numerical data Discussion: How is correlation
Analysis https://www.khanacademy.org/math/ap-statistics/bivariate-data-ap#correlation- analysis to be used in decision making,
coefficient-r how good is the tool
Calculating correlation coefficient r (12:21) Exercise: Calculation of correlation
https://www.khanacademy.org/math/ap-statistics/bivariate-data-ap/correlation- coefficients and understanding statistical
coefficient-r/v/calculating-correlation-coefficient-r significance
Faculty Correlation coefficient intuition (7:20)
Video 12 https://www.khanacademy.org/math/ap-statistics/bivariate-data-ap/correlation- Mini projects in Groups (5
coefficient-r/v/correlation-coefficient-intuition-examples Marks)
22-24 Regression Analysis A Refresher on Regression Analysis by Amy Gallo, for the complete article Discussion: the rational of model
refer to: https://hbr.org/2015/11/a-refresher-on-regression-analysis Regression building, simple and multiple
Analysis: Step by Step Articles, Videos, Simple Definitions independent variables model, linearity
https://www.statisticshowto.com/probability-and-statistics/regression-analysis/ and non-linearity
Regression line example
https://www.khanacademy.org/math/statistics-probability/describing- Exercise: Let’s build a model basis the data
Faculty Video 13 relationships-quantitative-data/more-on-regression/v/regression-line-example given and interpret the results
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4.2 Session Plan:
QT Session 1: Introduction to data, information and knowledge

Description of the session: How old are you today? How much time it took for you to reach the
market in your locality? What was your score in 10th standard? How much did you score in each
subject of graduation? And which class/division were you awarded? What do you think is
happening to prices?
Say for instance you know that Pulses of a certain variety is selling at Rs 116/kg. And you have
read in the paper today that the consumer price index stood at 148.60. Do they communicate the
same information to you? Have you heard the word wholesale price index and consumer price
indices?
We come across data in our daily life, and we keep using them in our conversations with others
in order to prove a point; either to support a point or to refute someone else’s point of view. And
when you hear your batch mate won the debate competition because she presented a lot of data
in her speech, unlike the contestant, you infer Oh! She must be knowledgeable. But how do we
distinguish between Data, Information and Knowledge? Are they related? Are they the same?
In these two sessions we will discuss how the three are different and how we move from one to
the other. We will discuss alternative sources of data like Primary and Secondary data,
arrangement of data and presentation of date and we will look at alternative ways of describing
data using summary measures.

Learning outcome: After completion of the session, you will be able to

•Define and distinguish data, information and knowledge clearly.
•Show how data can become information through context and meaning and how information
becomes knowledge when human experience is applied.
•Understand the alternative sources of data.
•How to represent data in alternative forms

Required readings: Chapter 2, pp 13-72, Statistics for Management, Levin et al, Pearson
Education, 7e.
Desired readings: Chapter 1, pp. 1-61, Statistical Methods, Rudolf J. Freund, William J. Wilson,
Donna L. Mohr, Elsevier, 2003, London.

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Self-Study: Please go through these readings before the class
•Understanding Data, Information, Knowledge And Their Inter-Relationships Liew A, Journal of
Knowledge Management Practice, Vol. 8, No. 2, June 2007 http://www.tlainc.com/articl134.htm
•The Data – Information – Knowledge Cycle https://www.dataversity.net/the-data-information-
knowledge-cycle/
•Data, Information, Knowledge, and Wisdom https://otec.uoregon.edu/data-wisdom.htm

Video: Please go through these videos before the class

•Data-Information-Knowledge in 3 minutes or less (2:51)
https://www.youtube.com/watch?v=sIjSY05JE9Q
•Data Information and Knowledge (2:14 min)
https://www.youtube.com/watch?v=QsP5WGv0aQc

Class Activity: Are all data of the same type? Let’s have a poll.
•Data Types in Statistics
https://towardsdatascience.com/data-types-in-statistics-347e152e8bee

Home Assignment: Question Set will be shared after the class.

Session 2: From data to variable

Description of the session: Data comes in different forms, some are qualitative and some
quantitative; some comes in units of INR, some in meters and some in kilograms/grams, some
comes in the form of ‘yes’ and ‘no’ and some comes in the form of rankings, like we say most
preferred and least preferred. And if that was not enough, we have something called discrete data
and continuous data. And there is a strong possibility that they all may be present in the same
place at the same time. Remember the last time you filled in a questionnaire for some friend or a
company representative who came to your door steps? Of the feedback form that you fill up
when it was time to de-board a train after a long journey? Yes, so you also would have given
away qualitative and quantitative data in answering the questionnaire. So let us discuss further.
Did the questionnaire ask you about your gender, Age or place of domicile? And your answer
would have been female, 21, Durg. From the person who administered the questionnaire, what

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are these? These are variables. So what is a variable? How do we present these diverse categories
of data in a form that conveys useful meaning to the recipient?
Here again also note that some variables can take any value, and some can take only a selected
number of values in a range. For instance the number of children in the family/siblings you have.
This can’t take a value of 2.5, it can be 2 or 3. Temperature on the other hand can be 98.4 degree
F! So variables can take continuous value or discrete value.
Take another example. When you walk towards a forest what do you see? A continuous line on
the horizon, but when you reach the forest they are all separate! Another example is the skyline
of a city. It appears continuous but they are actually not.

Learning outcome: After completion of the session, you will be able to

•Understand the different forms in which data can appear
•Appreciate the differences between continuous and discrete data
•Understand the challenges faced in handling variables of different form.

Excel sheet to work with: Different types of data.

Here the excel sheet will be provided to you. After a 20 minute discussion we will figure out the
types of variables that are present in the data set.

Required readings: Chapter 2, pp 14-72, Statistics for Management, Levin et al, Pearson
Education, 7e. Desired readings: Chapter 1, pp. 7-9, Ken, B. Business Statistics for
Contemporary Decision Making, 6e, John Wiley & Sons, Inc.
Chapter 1, pp. 1-61, Statistical Methods, Rudolf J. Freund, William J. Wilson, Donna L. Mohr,
Elsevier, 2003, London.

Self-Study: Please go through these readings/video before the class

•What are Variables?
https://www.abs.gov.au/websitedbs/a3121120.nsf/home/statistical+language+-
+what+are+variables
•Video: Discrete and Continuous Random Variable
https://www.khanacademy.org/math/statistics-probability/random-variables-stats-
library/random- variables-discrete/v/discrete-and-continuous-random-variables

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Home assignment:
Create a set of questions on a topic of your choice and see if you can include all the types of
variables we studied in the class.

Session 3: Measures of Central Tendency

Description of the session: Now that we have gathered data on a number of variables how do I
explain the data set? Let’s take an example, your class of PGDM 2021-23. How do I describe
your class performance to a visiting faculty if I need to do so? Or how do I explain the
performance of the class in this paper at the end of the course? What do I call this group in
general terms? How do I compare if I am able to do better as an instructor or I am not doing well
enough on a year-on-year basis? What do I need to make the comparison possible and evaluate?
Do you remember the questions you asked when you were spoken to about our students’
placement performance? Yes. You are right there. You asked on an average what is the package,
what is the maximum and minimum and how many of your seniors were placed. Exactly so you
were looking at summary measures or the measures of central tendency (average) and deviation
(maximum and minimum) in order to form a perception about performance.
Let us call the last batch a sample of students. So new word, sample, naturally the question is
then what is the population?! So here in this module we talk about measures of central tendency.
There are a couple of them and each of them have their own merits and demerits, each of them
have a context where they may be applied and much more. We plan to learn all these in this
module. Yes a sample of students
Sampling is a tool used in business as a mean of gathering useful information about a population.
With the help of this information collected from the samples conclusions are drawn about the
population. In this session you will learn how to describe a sample. Various measures of central
tendencies, mean, median and mode will be discussed in the class.
Learning outcome: After completion of the session, you will be able to
•Describe a sample in terms of its summary measure
•Appreciate the merits and demerits of each of the measures
•Compare sample on the basis of measures of central tendencies

Required reading: Chapter 3, pp. 73-152, Statistics for Management, Levin et al, Pearson
Education, 7e.

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Desired reading: Chapter 3, pp. 46-91, Ken, B. Business Statistics for Contemporary Decision
Making, 6e, John Wiley & Sons, Inc.
Chapter 1, pp. 1-61, Statistical Methods, Rudolf J. Freund, William J. Wilson, Donna L. Mohr,
Elsevier, 2003, London.
Video: Please go through the videos before the commencement of the class
•Mean Median and Mode for Discrete data sets https://www.khanacademy.org/math/ap-
statistics/summarizing-quantitative-data-ap/measuring-center-quantitative/v/statistics-intro-
mean-median-and-mode (Topics covered: Mean, median, & mode, Mean, median, & mode
example, Median in a histogram, Practice: Calculating the mean, Practice: Calculating the
median, Practice: Calculating mean and median from data displays)
•Weighted mean https://www.khanacademy.org/computing/pixar/environment-modeling-
2/mathematics-of-parabolas2-ver2/v/weighted-average-two-points
•Geometric mean https://www.youtube.com/watch?v=xt07TExQNVg
Additional references: Measures of Central Tendency,
https://statistics.laerd.com/statistical-guides/measures-central-tendency-mean-mode-median.php
Home assignment problem set: A problem set will be shared with you at the end of the class as a
home assignment.
Class activity: Assessing student performance in this module using hypothetical scores.

Session 4-5: Measures of Dispersion

Description of the session: While measures of central tendency are used to estimate "normal"
values of a dataset, measures of dispersion are important for describing the spread of the data, or
its variation around a central value. Two distinct samples may have the same mean or median,
but completely different levels of variability, or vice versa. A proper description of a set of data
should include both of these characteristics. There are various methods that can be used to
measure the dispersion of a dataset, each with its own set of advantages and disadvantages.
In this session you will learn how to describe dispersion in a dataset. Various measures of
dispersions Range, Standard deviation, Mean deviation form mean, mean absolute deviation
from mean, etc. will be discussed in the class.
Learning outcome: After completion of the session, you will be able to
•Describe a sample in terms of its summary measure
•Appreciate the merits and demerits of each of the measures
•Compare sample on the basis of measures of dispersions

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Required reading: Chapter 3, pp. 73-152, Statistics for Management, Levin et al, Pearson
Education, 7e.
Desired reading: Chapter 3, pp. 46-91, Ken, B. Business Statistics for Contemporary Decision
Making, 6e, John Wiley & Sons, Inc.
Chapter 1, pp. 1-61, Statistical Methods, Rudolf J. Freund, William J. Wilson, Donna L. Mohr,
Elsevier, 2003, London.

Video: Please go through the videos before the commencement of the class

•Dispersion:https://www.khanacademy.org/math/ap-statistics/summarizing-quantitative-data-
ap/measuring-spread-quantitative/e/calculating-the-interquartile-range--iqr- (Topics Covered:
Inter-quartile range (IQR), Practice: Inter-quartile range (IQR), Sample variance, Sample
standard deviation and bias, Practice: Sample standard deviation, Visually assessing standard
deviation, Practice: Visually assessing standard deviation, Mean and standard deviation versus
median and IQR)
•Review and intuition why we divide by n-1 for the unbiased sample variance,
https://www.khanacademy.org/math/ap-statistics/summarizing-quantitative-data-ap/more-
standard-deviation/v/review-and-intuition-why-we-divide-by-n-1-for-the-unbiased-sample-
variance
•Optional Video: Creating a box plot (odd number of data points),
https://www.khanacademy.org/math/ap-statistics/summarizing-quantitative-data-ap/stats-box-
whisker-plots/v/box-and-whisker-plot-exercise-example
Class activity: Assessing student performance in this module using hypothetical scores.

Session 6: Understanding probabilities

Description of the session: What does the word probability or likelihood or chance mean to you?
What is the probability that you will get 90% in statistics or, a CGPA of 6 on a scale of 6? Will
India win the next cricket 20-20 world cup? What is the chance that if you toss a fair coins it will
land up on heads? If you toss it twice, what is the chance that you will get two heads, or two
tails? What is the chance it will rain today? What is the chance that it will rain given it is cloudy?
Take another example; before the football match starts between Liverpool and Crystal Palace in
the British Premier League, you think that the probability of Crystal Palace wining is as much as
20%. By half time Liverpool is already up by 2 goals. Would you revise your probability?

14
Here in this session, we will introduce ourselves to probability. Many events can't be predicted
with total certainty. The best we can say is how likely they are to happen, using the idea of
probability. For example what will turn up if you toss a coin? What will you throw in the next
roll of a dice? Probability does not tell us exactly what will happen, it is just a guide; yes
indicative. Have a look at this link:
Probability, https://www.mathsisfun.com/data/probability.html
You will come across several new terms like, randomness, events, experiments, sample space
and outcome. And if you remember the Vein Diagrams from your foundation courses you may
find it all the more fun to solve problems and intuitively respond to some of our queries.
Also, we will try and see if what happened in the past may influence the future. We will look at
possibilities of two events happening together or in quick succession, and relatedness and un-
relatedness.
Learning outcome: After completion of the session, you will be able to
•Familiarize yourself with terminologies that are frequently used in probability theory
•Classify events/occurrences as marginal, joint or conditional
•Calculate the probability of their occurrence
•Revise prior estimates of probability with new information.

Required readings: Chapter 4, pp. 154-208, , Statistics for Management, Levin et al, Pearson
Education, 7e. Desired readings: Chapter 4, pp. 92-135, Ken, B. Business Statistics for
Contemporary Decision Making, 6e, John Wiley & Sons, Inc.
Chapter 2, pp. 62-116, Statistical Methods, Rudolf J. Freund, William J. Wilson, Donna L. Mohr,
Elsevier, 2003, London.
Video: Please go through the videos before the commencement of the class Video: Intro to
theoretical probability
https://www.khanacademy.org/math/probability/probability-geometry/probability-basics/v/basic-
probability (You will find a lot of topics covered in this link, please keep exploring the list)
https://www.khanacademy.org/math/statistics-probability
Class activity: We will solve a few problems in the class and we also have a take home problem
set for you to solve. We can start the next class discussing the challenges you faced while solving
problems. Here is some food for your thoughts: How does relative frequency and probability
relate to each other?

15
Problem set: Much like the previous class we will share a problem set with you that will help you
further clarify concepts.

Session 7-8: Random Variable

So, this is what we have so far:
•A Random Variable is a set of possible values from a random experiment. A Random Variable
is a variable whose possible values are numerical outcomes of a random experiment.
•The set of possible values is called the Sample Space.
•A Random Variable is given a capital letter, such as X or Z.
•Random Variables can be discrete or continuous.

Much like session 2, for random variables as well we can compute their mean, Variance and
standard deviation of a discrete random variable:
https://www.khanacademy.org/math/ap-statistics/random-variables-ap/discrete-random-
variables/v/variance- and-standard-deviation-of-a-discrete-random-variable

The mean computed here has a special name. Before I tell you, you can try and you can be right
as well because you have computed this without knowing how you are doing, so many times till
date. For instance, in your 10th standard, after the Board’s got over, what did you do? You
evaluated each paper the way it went and for each paper you had an expected score and then you
compute an expected percentage on the whole and then you wait for your results. What you also
do is you look back at how your expectations and reality differed! In some of your cases you
were near the mark and somewhere you were far. So there is a deviation or variability and once
you standardize the deviation you are there with variance and standard deviation!
How can we use expected value in decision making? Why should a manager learn this? Before
we go there have a look at this link.
Random Variables: Mean, Variance and Standard Deviation
https://www.mathsisfun.com/data/random-variables-mean-variance.html

Here is an example we referred to earlier:

Let us look at the case of a fruit and vegetable wholesaler who sells strawberries. This product
has a very limited useful life. If not sold on the day of delivery, it is worthless. One case of
strawberries costs $20, and the wholesaler receives $50 for it. The wholesaler cannot specify the

16
number of cases customers will call for on any one day, but her analysis of past records has
produced the information

Daily Sales Number of Days Sold Probability of Each Number Being Sold
10 15 0.15
11 20 0.20
12 40 0.40
13 25 0.25
100 1.00
Can you help him decide how many units he must stock?
Have you not come across a situation like this? And you also made a decision! So let us do it.

Required reading: Chapter 5, pp. 209-224, Statistics for Management, Levin et al, Pearson
Education, 7e.

Take home assignment: Problem 5-15 and 5-16 pp 224

Session 9-10: Distribution: Discrete random variable

Description of the session: The session name may be intimidating, but what we are saying is
plain and simple. Like we studied earlier, variables may be discrete or continuous. This session
focuses on the former and what we are trying to do is to explore how the distribution of a
discrete random variable will look like.
So, if a random variable is a discrete variable, its probability distribution is called a discrete
probability distribution. An example will make this clear. Suppose you flip a coin two times.
This simple statistical experiment can have four possible outcomes: HH, HT, TH, and TT. Now,
let the random variable X represent the number of Heads that result from this experiment. The
random variable X can only take on the values 0, 1, or 2, so it is a discrete random variable.
The probability distribution for this statistical experiment appears below.
Number of heads Probability
0 0.25
1 0.50
2 0.25

17
The above table represents a discrete probability distribution because it relates each value of a
discrete random variable with its probability of occurrence. You can try drawing this and once
you have done so, Bingo! That’s the distribution.
Here is an additional reference. Valid discrete probability distribution examples
https://www.khanacademy.org/math/ap-statistics/random-variables-ap/discrete-random-
variables/v/valid- discrete-probability-distribution-examples (4:00)

Here in these two sessions we look at two different discrete distributions: the Binomial and the
Poison distribution. We shall discuss each of them and understand the situation where each of
them is applicable and measures of their central tendency. The formulas will be by heart by the
time we finish the session and we will spend more time understanding how managers use these
distributions in decision making.

Learning outcome: After completion of the session, you will be able to compute
•The probability of occurrence or otherwise of independent event with two possible outcomes.
•The probability of occurrence of events that occur repeatedly and irregularly.

Required readings: Chapter 5, pp. 225-274, Statistics for Management, Levin et al, Pearson
Education, 7e.

Desired readings: Chapter 5, pp. 143-153, Business Statistics for Contemporary Decision
Making, Ken Black (KB), John Wiley & Sons, Inc
Chapter 2, pp. 62-116, Statistical Methods, Rudolf J. Freund, William J. Wilson, Donna L. Mohr,
Elsevier, 2003, London

Probability Distributions: Discrete vs. Continuous https://stattrek.com/probability-

distributions/discretecontinuous.aspx#:~:text=If%20a%20random%20variable%20is,called%20a
%20discrete%20probability%20distribution.&text=The%20random%20variable%20X%20can,th
is%20statistical%20experiment%20appears%20below

Videos:
•Binomial distribution

18
https://www.khanacademy.org/math/statistics-probability/random-variables-stats-
library/binomial- random-variables/v/binomial-distribution (11:50)
•Poisson process 1
https://www.khanacademy.org/math/statistics-probability/random-variables-stats-
library/poisson- distribution/v/poisson-process-1 (11:00)
•Poisson process 2
https://www.khanacademy.org/math/statistics-probability/random-variables-stats-
library/poisson- distribution/v/poisson-process-2 (12:00)

Problem set: We will share a reference number of problems we would suggest you to complete
for these tow distributions.

Further readings:
Binomial Probability Distribution, https://stattrek.com/probability-distributions/binomial.aspx
Poisson Distribution, https://stattrek.com/probability-distributions/poisson.aspx

Session 11 & 12: Continuous distributions

The normal distribution occupies a very prominent place in statistics (that is one reason why we
spend so much time on this distribution here in the course). Can you think of why? Or, ever
wondered why it is called a normal curve? Yes, the name says it all about this distribution. A
large number of variables follow this pattern; i.e., they may be labeled as ‘normal. Just think,
have you seen too many dwarfs in your life all the time or too many people with height above 8
feet or 9 feet? Possibly not. Most of them would be around the range of 5 ft to 6 ft. More
examples may include blood pressure or family size or IQ test scores. And if you want examples
from your daily life, look at the time you take to commute to the nearest marketing centre in your
locality. In most cases you take the expected time and in exceptional situations either you reach
very early or you reach amazingly late, may be because of traffic or any other factor.
All these variables we discussed so far share one common feature; a tendency to have more
observations around a few values and too few extreme observations. So we say this is what is
normal!
The Normal Distribution.
Visually, the graph of the normal distribution is symmetrical and it depends on two factors - the
mean and the standard deviation. The mean of the distribution determines the location of the

19
center of the graph, and the standard deviation determines the height and width of the graph. All
normal distributions look like a symmetric, bell-shaped curve. When the standard deviation is
small, the curve is tall and narrow; and when the standard deviation is big, the curve is short and
wide.
The properties of this normally distributed random variable and hence its distribution is
applicable to a great many situations, as we have discussed. In statistics we call this distribution
bell shaped; the Gaussian distribution. The distribution that we will use extensively here in this
paper and you will use in your decision making process is a standardized normal distribution;
one with a mean =0 and a standard deviation = 1.
Please watch these videos before the class:
•Deep definition of the normal distribution (23:00)
https://www.khanacademy.org/math/statistics-probability/modeling-distributions-of-data/more-
on- normal-distributions/v/introduction-to-the-normal-distribution
•Qualitative sense of normal distributions (11:00)
https://www.khanacademy.org/math/statistics-probability/modeling-distributions-of-data/normal-
distributions-library/v/ck12-org-normal-distribution-problems-qualitative-sense-of-normal-
distributions
•Standard normal distribution and the empirical rule (8:15)
https://www.khanacademy.org/math/statistics-probability/modeling-distributions-of-data/normal-
distributions-library/v/ck12-org-exercise-standard-normal-distribution-and-the-empirical-rule

Learning Outcome: After completion of the session, you will be able to

•Apply and use the normal distribution to compute probabilities
•Apply the properties of the normal curve and draw inferences

Required readings: Chapter 5, pp.246-273, Statistics for Management, Levin et al, Pearson
Education, 7e
Desired readings: Chapter 6, pp. 184-194, Business Statistics For Contemporary Decision
Making, Ken Black(KB), John Wiley & Sons, Inc
Chapter 2, pp. 62-116, Statistical Methods, Rudolf J. Freund, William J. Wilson, Donna L. Mohr,
Elsevier, 2003, London
You will get to see a lot of examples here Normal Distribution,
https://www.mathsisfun.com/data/standard- normal-distribution.html

20
Problem set: We will share a reference number of problems we would suggest you to complete
for these tow distributions.

Session 13&14: Sampling and Sampling Distribution:

Description of the session: As an intern your immediate superior wants you to analyze consumer
perception about the popular antiseptic liquid Dettol; in your area there has been a recent decline
in sales. How will you go about finding the same? Let’s have another example, this one more
attractive. You have been assigned the task of a quality supervisor in Dairy Milk a brand owned
by Cadbury (Cadbury, formerly Cadbury's and Cadbury Schweppes, is a British multinational
confectionery company wholly owned by Mondelez International (originally Kraft Foods) since
2010). How would you ensure that you are able to do your role effectively? (Yes you may be
tempted to have a bite from all of them, but then what will you sell?!). I am sure closer home you
would have done some similar exercise or you would have seen someone in your family do it.
What we are trying to indicate is that often it is not possible to analyze the entire basket to figure
out if there is a challenge and in all such cases we examine a small part of the basket to reach a
conclusion about the whole. From now on we shall call the small part a ‘sample’ and the whole
as ‘population’. So these two sessions is devoted to sampling and sampling distribution.

Let us go step by step. Why do we need to do sampling? Why not study the population
concerned? How do we do sampling? What are the properties of a good sample? How do we put
things together when we have innumerable samples from the same population? Is the sample we
plan to work with adequate? Will it tell me enough about the population?
We shall discuss all these and understand different ways of sampling (for instance cluster
sampling, stratified sampling, and many more different types) and the contexts where they may
be used.
You can read more at:

Learning outcome: After completion of the session, you will be able to

•Appreciate the need for sampling
•Decide on the type of sampling you must carry out in order to fulfill your objective
•Develop an understanding of the process and its limitations
•The usefulness of the central limit theorem in market research

21
Required readings: Chapter 6, pp.277-326, Statistics for Management, Levin et al, Pearson
Education, 7e Desired readings: Chapter 7, pp. 217-346, Business Statistics For Contemporary
Decision Making, Ken Black(KB), John Wiley & Sons, Inc
Chapter 2, pp. 62-116, Statistical Methods, Rudolf J. Freund, William J. Wilson, Donna L. Mohr,
Elsevier, 2003, London

Relevant Videos for the Session:

•Introduction to sampling distributions (7:17)
https://www.khanacademy.org/math/ap-statistics/sampling-distribution-ap/what-is-sampling-
distribution/v/introduction-to-sampling-distributions
•Sampling distribution of the sample mean (10:51)
https://www.khanacademy.org/math/statistics-probability/sampling-distributions-library/sample-
means/v/sampling-distribution-of-the-sample-mean
•Central limit theorem (9:48)
https://www.khanacademy.org/math/statistics-probability/sampling-distributions-library/sample-
means/v/central-limit-theorem
Problem set: 6-27 to 6-39 pp. 310-312, Levin et al.

Session 15 & 16: Estimation

Description of the session: In statistics, estimation refers to the process by which one makes
inferences about a population, based on information obtained from a sample. Please understand
this line carefully. Estimation comes in only in the context of sample studies not for population.
When we talk of estimation we refer to either Point Estimate or Interval Estimate. Statisticians
use sample statistics to estimate population parameters. For example, sample means are used to
estimate population means; sample proportions, to estimate population proportions.
An estimate of a population parameter may be expressed in two ways: Point estimate. A point
estimate of a population parameter is a single value of a statistic. For example, the sample mean
x is a point estimate of the population mean μ. Similarly, the sample proportion p is a point
estimate of the population proportion P. Or interval estimate. An interval estimate is defined by
two numbers, between which a population parameter is said to lie. For example, a < x < b is an
interval estimate of the population mean μ. It indicates that the population mean is greater than a
but less than b.

22
Three important attributes of statistics as estimators are covered here: unbiasedness, consistency,
and relative efficiency. For more please refer to
Good estimator properties summary https://www.youtube.com/watch?v=uh4zUdKvxPA

In this session we shall also get introduced to the t-distribution. The T distribution, also known as
the Student's t-distribution, is a type of probability distribution that is similar to the normal
distribution with its bell shape but has heavier tails. T distributions have a greater chance for
extreme values than normal distributions, hence the fatter tails. Watch this video for more
details:
Introduction to the t Distribution (8.54) https://www.youtube.com/watch?v=Uv6nGIgZMVw

Learning outcome: After completion of the session, you will be able to

•Understand the properties of a good estimator
•Develop estimates
•Calculate the accuracy of an estimate
•Decide on the sample size to reach a desired level of accuracy.
Required readings: Chapter 7, pp. 327-377, Statistics for Management, Levin et al, Pearson
Education, 7e Desired readings: Chapter 8, pp 250-286 Business Statistics for Contemporary
Decision Making Ken Black (KB), John Wiley & Sons, Inc

Video:
Introduction to t statistics (4:26)
https://www.khanacademy.org/math/ap-statistics/estimating-confidence-ap/one-sample-t-
interval- mean/v/introduction-to-t-statistics
Z-statistics vs. T-statistics (6.39)
https://www.khanacademy.org/math/statistics-probability/significance-tests-one-sample/more-
significance- testing-videos/v/z-statistics-vs-t-statistics

Problem set: Two problem sets will be shared with you; one concerning the normal distribution
and the other on Student’s T distribution.

Practice problems: 7-12, 7-13, 7-15, 7-18, pp 340, Levin et al.

23
Session 17, 18 & 19: Tests of Hypothesis
Description of the session: Hypothesis testing is a statistical method that is used in making
statistical decisions using experimental data. Hypothesis Testing is basically an assumption that
we make about the population parameter. This assumption may or may not be true. Hypothesis
testing refers to the formal procedures used by statisticians to accept or reject statistical
hypotheses.
You may argue that the best way to determine whether a statistical hypothesis is true would be to
examine the entire population. Since that is often impractical, researchers typically examine a
random sample from the population. If sample data are not consistent with the statistical
hypothesis, the hypothesis is rejected.

Take an example: An automobile manufacturer claims that a particular model gets 28 miles to
the gallon. One really can’t test all the models to figure out the same. So, the Environmental
Protection Agency, using a sample of 49 automobiles of this model, observes the sample mean to
be 26.8 miles per gallon. What is your conclusion from this?

Hypothesis Tests
Statisticians follow a formal process to determine whether to reject a null hypothesis, based on
sample data. This process, called hypothesis testing, consists of four steps.

•State the hypotheses. This involves stating the null and alternative hypotheses. The hypotheses
are stated in such a way that they are mutually exclusive. That is, if one is true, the other must be
false.
•Formulate an analysis plan. The analysis plan describes how to use sample data to evaluate the
null hypothesis. The evaluation often focuses around a single test statistic.
•Analyze sample data. Find the value of the test statistic (mean score, proportion, t statistic, z-
score, etc.) described in the analysis plan.
•Interpret results. Apply the decision rule described in the analysis plan. If the value of the test
statistic is unlikely, based on the null hypothesis, reject the null hypothesis.

Here in this session, we get formally introduced to testing of hypothesis. But do keep thinking of
the errors that we may commit even in case when we are following the desired steps. We shall
also get introduced to:

24
•One-tailed test: When the given statistical hypothesis is one value like H0: μ1 = μ2, it is called
the one-tailed test.
•Two-tailed test: When the given statistics hypothesis assumes a less than or greater than value,
it is called the two-tailed test.

Learning outcome: After completion of the session, you will be able to:
•Set up a problem in a structured manner
•Prove or disprove assumptions about the representativeness of the sample
•Understand the challenges in drawing inferences concerning the population

Required readings: Chapter 8 and 9, pp. 379-477, Statistics for Management, Levin et al,
Pearson Education, 7e
Desired readings: Chapter 9 & 10, pp 288-398, Business Statistics for Contemporary Decision-
Making Ken Black (KB), John Wiley & Sons, Inc
Chapter 3, pp. 117-158, Statistical Methods, Rudolf J. Freund, William J. Wilson, Donna L.
Mohr, Elsevier, 2003, London

Please note that for this chapter exercises given in Exercise 8.3 (p 414), Exercise 8.4 (p 422) and
chapter concept test (p 446) should be completed as assignments.

In session 16 we shall discuss Decision Errors

Two types of errors can result from a hypothesis test.
•Type I error. A Type I error occurs when the researcher rejects a null hypothesis when it is true.
The probability of committing a Type I error is called the significance level. This probability is
also called alpha, and is often denoted by α.
•Type II error. A Type II error occurs when the researcher fails to reject a null hypothesis that is
false. The probability of committing a Type II error is called Beta, and is often denoted by β. The
probability of not committing a Type II error is called the Power of the test.

Videos: Watch them before the class.

•Introduction to Type I and Type II errors (5:09)
https://www.khanacademy.org/math/ap-statistics/tests-significance-ap/error-probabilities-
power/v/introduction-to-type-i-and-type-ii-errors

25
•Examples identifying Type I and Type II errors (5:43) https://www.khanacademy.org/math/ap-
statistics/tests-significance-ap/error-probabilities-power/v/examples-identifying-type-i-and-type-
ii-errors

•Introduction to power in significance tests (9:44)

https://www.khanacademy.org/math/ap-statistics/tests-significance-ap/error-probabilities-
power/v/introduction-to-power-in-significance-tests

Required readings: Chapter 8 and 9, pp. 379-477, Statistics for Management, Levin et al, Pearson
Education, 7e
Desired readings: Chapter 9 & 10, pp 288-398, Business Statistics for Contemporary Decision
Making Ken Black (KB), John Wiley & Sons, Inc
In session 17 we shall practice problems that will use all our learning from the previous two
sessions. Problem sets:
•8-3, 8-4, 8-13 through to 8-25, pp 392-393, Levin et al.
•8-26 through to 8-33, pp 400-401, Levin et al.
•8-44 through to 8 41, pp 410-411, Levin et al.

Session 20: ANOVA: Analysis of Variance

Description of the session: The training director of a company is trying to evaluate three different
methods of training new employees. The first method assigns each to an experienced employee
for individual help in the factory. The second method puts all new employees in a training room
separate from the factory, and the third method uses training films and programmed learning
materials. The training director chooses 16 new employees assigned at random to the three
training methods and records their daily production after they complete the programs:
Method 1 15 18 19 22 11
Method 2 22 27 18 21 17
Method 3 18 24 19 16 22 15
The director wonders whether there are differences in effectiveness among the methods. Using
techniques learned in the session, we can help answer that question.

26
Let’s take another example. Many times, managers need to know whether the differences they
observe among several sample proportions are significant or only due to chance. Suppose the
campaign manager for a presidential candidate studies three geographically different regions and
finds that 35, 42, and 51 percent, respectively, of the voters surveyed in the three regions
recognize the candidate’s name. If this difference is significant, the manager may conclude that
location will affect the way the candidate should act. But if the difference is not significant (that
is, if the manager concludes that the difference is solely due to chance), then he may decide that
the place chosen to make a particular policy-making speech will have no effect on its reception.
To run the campaign successfully, then, the manager needs to determine whether location and
name recognition are dependent or independent.
The tests we have learnt earlier will be of no use here; you must have noted that there are
multiple populations involved and hence we need more sophisticated tools for analysis.
We are primarily looking at two different text statistics here; the Chi-square (is a statistical test
that can be used to determine whether observed frequencies are significantly different from
expected frequencies) and the F-Statistic (is designed to test if two population variances are
equal to one another. It does that by comparing the ratio of two variances/groups). For the latter
test the following three videos will be extremely useful.

•ANOVA 1: Calculating SST (total sum of squares)(7:38)

https://www.khanacademy.org/math/statistics-probability/analysis-of-variance-anova-
library/analysis-of-variance-anova/v/anova-1-calculating-sst-total-sum-of-squares

•ANOVA 2: Calculating SSW and SSB (total sum of squares within and between)(13:19)
https://www.khanacademy.org/math/statistics-probability/analysis-of-variance-anova-
library/analysis-of-variance-anova/v/anova-2-calculating-ssw-and-ssb-total-sum-of-squares-
within- and-between-avi

•ANOVA 3: Hypothesis test with F-statistic (10:13)

https://www.khanacademy.org/math/statistics-probability/analysis-of-variance-anova-
library/analysis-of-variance-anova/v/anova-3-hypothesis-test-with-f-statistic

Learning outcome: After completion of these two sessions, you will be able to:
•To recognize situations requiring the comparison of more than two means or proportions

27
•To introduce the chi-square and F distributions and learn how to use them in statistical
inferences

Required readings: Chapter 11, pp. 531-608, Statistics for Management, Levin et al, Pearson
Education, 7e Desired readings: Chapter 1, pp 402-463, Business Statistics for Contemporary
Decision Making Ken Black (KB), John Wiley & Sons, Inc
Chapter 6, pp. 219-286, Statistical Methods, Rudolf J. Freund, William J. Wilson, Donna L.
Mohr, Elsevier, 2003, London
Problem sets: We will be sharing a problem set with you for these two sessions.

Session 21. Correlation Analysis

Description of the session: Correlation is used to test relationships between quantitative variables
or categorical variables. In other words, it’s a measure of how things are related. The study of
how variables are correlated is called correlation analysis. Some examples of data that have a
high correlation:
•Your caloric intake and your weight
•Your eye color and your relatives’ eye colors
•The amount of time your study and your GPA
•The CGPA you score and your placement package (in monetary terms) Some examples of data
that have a low correlation (or none at all):
•A dog’s name and the type of dog biscuit they prefer.
•The cost of a car wash and how long it takes to buy a soda inside the station. “Correlation Does
Not Imply Cause” - But What Does That Actually Mean?
It seems pretty self-explanatory, but it's not always easy to understand exactly what this phrase
means until you examine it carefully. First of all, it is important to understand what a correlation
is and what a causation is. A correlation is a mutual relationship or a connection between two
variables. Causation is the relationship between cause and effect. So, when a cause results in an
effect, that's a causation. In other words, correlation between two events or variables simply
indicates that a relationship exists, whereas causation is more specific and says that one event
actually causes the other.
When we say that correlation does not imply cause, we mean that just because you can see a
connection or a mutual relationship between two variables, it doesn't necessarily mean that one
causes the other. Of course, it might be the case that one event or variable causes the other, but

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we can't know that by looking at the correlation alone. More research would be necessary before
that conclusion could be reached.
The Correlation Coefficient
A correlation coefficient is a way to put a value to the relationship. Correlation coefficients have
a value of between -1 and 1. A “0” means there is no relationship between the variables at all,
while -1 or 1 means that there is a perfect negative or positive correlation (negative or positive
correlation here refers to the type of graph the relationship will produce)
Before we go further, explore this topic using the link below Exploring bivariate numerical data
https://www.khanacademy.org/math/ap-statistics/bivariate-data-ap#correlation-coefficient-r
•Constructing a scatter plot
•Example of direction in scatter plots
•Positive and negative associations in scatter plots
•Bivariate relationship linearity, strength and direction
•Describing scatter plots (form, direction, strength, outliers)

Learning outcome: After completion of the session, you will be able to

•Calculate coefficient of correlation
•Understand how and where to use correlation as a part of our analysis.

Videos:
Calculating correlation coefficient r (12:21)
https://www.khanacademy.org/math/ap-statistics/bivariate-data-ap/correlation-coefficient-
r/v/calculating- correlation-coefficient-r
Correlation coefficient intuition (7:20)
https://www.khanacademy.org/math/ap-statistics/bivariate-data-ap/correlation-coefficient-
r/v/correlation- coefficient-intuition-examples

Required readings: Chapter 12, pp. 643-663, Statistics for Management, Levin et al, Pearson
Education, 7e Desired readings: Chapter 12, pp. 466-489, Business Statistics for Contemporary
Decision Making Ken Black (KB), John Wiley & Sons, Inc
Chapter 7, pp. 287-332, Statistical Methods, Rudolf J. Freund, William J. Wilson, Donna L.
Mohr, Elsevier, 2003, London

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We will work with the World Bank data base on India and figure out correlation values for
alternative variables involved. We shall then discuss when correlation becomes a problem in the
context of modeling and how to deal with them.

Session 22-24: Linear Regression: simple and multiple linear Regressions

Suppose you’re a sales manager trying to predict next month’s numbers. You know that dozens,
perhaps even hundreds of factors from the weather to a competitor’s promotion to the rumor of a
new and improved model can impact the number. Perhaps people in your organization even have
a theory about what will have the biggest effect on sales. “Trust me. The more rain we have, the
more we sell.” “Six weeks after the competitor’s promotion, sales jump.”
Regression analysis is a way of mathematically sorting out which of those variables does indeed
have an impact. It answers the questions: Which factors matter most? Which can we ignore?
How do those factors interact with each other? And, perhaps most importantly, how certain are
we about all of these factors?
In regression analysis, those factors are called variables. You have your dependent variable —
the main factor that you’re trying to understand or predict. In Redman’s example above, the
dependent variable is monthly sales. And then you have your independent variables — the
factors you suspect have an impact on your dependent variable.
(Excerpt from: A Refresher on Regression Analysis by Amy Gallo, for the complete article refer
to: https://hbr.org/2015/11/a-refresher-on-regression-analysis)
The word regression actually means a return to a former or less developed state. In statistics we
define it as a measure of the relation between the mean value of one variable (e.g. output) and
corresponding values of other variables.
Description of the session: here we get into model building. We define variables as independent
and dependent, and hypothesize their relationship and explore their statistical validity. For
instance our hypothesis may be that advertisement increases sales. So with this in mind we start
gathering data on the two variables and then build a model to see if this relationship/causation is
correct of incorrect. Yes, regression means causation, the variable advertisement expenses is the
regressor and sales is termed the regressand.

Learning outcome: After completion of the session, you will be able to

•Use regression analysis to estimate the relationship between two or more variables
•Use the estimated relationship to predict the value of the dependent variable

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•Use regression as a tool for business decision
•Understand the limitations of regression analysis
Required readings: Chapter 12 & 13, pp. 664-745, Statistics for Management, Levin et al,
Pearson Education, 7e
Desired readings: Chapter 12 and 13, pp. 498-543, Business Statistics for Contemporary
Decision Making Ken Black (KB), John Wiley & Sons, Inc
Chapter 8, pp. 333-416, Statistical Methods, Rudolf J. Freund, William J. Wilson, Donna L.
Mohr, Elsevier, 2003, London
We will work with the World Bank data base on India to hypothesize relations and use the excel
tools to derive the line of best fit. We shall spend time on interpreting each component of the
excel sheet to understand its relevance and use.

5. Assessments:
5.1 Assessment summary
Assessment Item Due date Weighting Related learning outcome
(marks/%)
1. There will be a total of 30th Aug/ 10 marks/ The ability to structure, describe
two assignments (problem
20th Sept 33% and visualize data.
sets)
2. Mini project 15th Oct 5 marks/ 16% The ability to understand the nature
of a variable and its distribution
3. In the end term you shall Last week 15 marks/ The ability to understand the nature
be asked to solve three of Oct 50% of a variable and its distribution
application based questions
The ability to infer/draw
each carrying 5 marks
conclusion from data through
structured analysis.

5.2 Assessment related details

 If a student is absent on the scheduled date of (internal) assessments, she/he shall be
given one more option to reappear in the same, provided the faculty is convinced that the

31
 reason for absence is genuine. Inability to attend the reappear assessment will result in
the student being awarded zero.
 Group assessments shall not be repeated. In case a student is absent on the day of
presentation of the same, the student will be awarded zero for this component of
assessment. The faculty in such cases shall conduct a separate viva for the concerned
student and grade her/him accordingly.
 End term assessments are compulsory. Absence in end term assessments will be marked
as ‘absent’ and the result will be marked as ‘incomplete’. This is irrespective of the
student’s score in internal assessments.
5.3 Assessment details
Assignments: This paper will have two assignments and they will not assess wrote learning. They shall
require you to solve problems and state the correct answer. In some cases, there will be a brief
description of a situation along with data and you will be asked a set of questions based on that. Each
question will assess your skill development from the course.
Mini project: Group project can help you develop a host of skills that are increasingly important in the
professional world. Here, each student group (a group may have 3-5 students) will do a mini project on
data analysis. The group will consider a data problem (preferably realistic) for the project and will solve
it using statistical methods/techniques. From this, students can learn the application of statistical
methods/techniques on data problems. Also, learning from the project will be helpful for their
dissertation.
End-term Examination: An open book end-term examination will be conducted at the end of the course.
The end term exam will be case based. You will be allowed to use your laptop and notes/textbook. The
end term submission scores will be marked:
5: The answer is to the point, complete and without errors. It demonstrates excellent
understanding of concepts and is the best answer possible.

4: The answer contains minor errors that are unlikely to undermine the main conclusion. It
demonstrates understanding of concepts, but the answer is not presented well.

3: The answer contains errors that are likely to undermine the main conclusion, but the

32
candidate has shown initiative to identify possible solutions/explanations to the issues raised
and has demonstrated understanding of concepts required.

2: The answer contains major errors that are likely to undermine the main conclusion, but the
candidate has shown initiative to identify possible solutions/ explanations to the issues raised.
Also the answer/submission does not reflect adequate understanding of the underlying concepts
required for answering the question

1: Your answer suggests complete lack of understanding of the concepts involved.

5.4 Details of submissions/presentations

Assignment (problem set) will have to be solved using pen and paper, scanned and uploaded at a
specified location by the due date.
The mini project will have to be submitted using a word document (for explanation purpose) and
an excel sheet (for sharing workings)
The end term examination again will have to be answered using pen and paper, scanned and
uploaded at a specified location by the due date.
5.5 Assessment Feedback
Feedback on student performance from formative and summative assessment tasks will be
provided to students in a timely manner. Assessment tasks completed within the teaching period
of a course, other than a final assessment, will be assessed and students provided with feedback,
with or without a provisional result, within 10 working days of submission, under normal
circumstances. Feedback on continuous assessment tasks, if any, will be provided prior to the
midpoint of the course.
Note: Appeal of grade – students who wish to appeal their end term marks should initially
discuss their concerns with their tutor. If they are still dissatisfied they should then make contact
with the Controller of Examination within 10 business days from the date of notification of the
result. Such a written request must contain details of the grounds on which the objection is based.
Requests must include a summary of the reasons the student believes his or her assessment work

33
deserves a higher mark. These reasons must be directly related to the academic quality of the
work.
5.6 Quality Assurance
IILM is actively monitoring student learning and quality of the student experience in all its
programs. A random selection of completed assessment tasks may be used for quality assurance,
such as to determine the extent to which program learning goals are being achieved. The
information is required for accreditation purposes, and aggregated findings will be used to
inform changes aimed at improving the quality of Business School programs.
6. Maps:
6.1 Assessment Map

Module Name: A1 A2 A3 A4 A5

Quantitative Methods Y Y Y

A1- Individual assignment/quiz A2- Group assignment

A3- Open book examinations A4- Closed book examinations A5- Presentations

6.2 Teaching Map

Module Name: T1 T2 T3 T4 T5 T6

Quantitative Methods Y Y

T1: Lectures T2: Seminars/Tutorials T3: Projects

T4: Case Discussion T5: Guest Lectures/Industrial Visit T6: Workshop Sessions

6.3 Curriculum Map

Module Name: Program learning outcomes

Quantitative Methods L1 L2 L3 L4 L5 L5 L7

Taught Y Y

Assessed Y Y

Covered Y Y Y

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Program Learning Outcomes:

L1 - An understanding of organizations and management techniques to allow investigation into

business and management issues.
L2 - An ability to acquire, analyze and understand data and information for managerial decisions.
L3 - Critical thinking and informed judgment leading to problem solving, decision-making and
negotiating skills
L4 - Cognitive flexibility which enables adaptability to uncertainty in a rapidly changing
business environment
L5 - An understanding of disruptive and technological change and the ability to seek innovative
and entrepreneurial solutions.
L6 - Emotional intelligence and people’s skills in communicating, working in teams and with
people.
L7 - Being cognizant of the impact of individual and corporate actions on society, recognizing responsible
and inclusive business practices and sensitivity to the social, economic and environmental responsibilities
of business.

7. Student feedback
The Institute places high priority on approaches to learning and teaching that enhances the
students’ experience. Feedback is sought from students in a variety of ways including on-going
engagement with faculty, the use of online questionnaires and interaction with the
Dean/appropriate authority. This course is regularly revised and updated to reflect student
feedback.

8. Plagiarism
Please refer to the student handbook, page 30, for details.

35
9. Module Readings Grid

Essential Title/Chapter Topic Discussed No of Isolated/

Reading Pages* Shared
1. Chapter 2, pp 14-72, Statistics for Data Information and Knowledge 58 pages Isolated
Management, Levin et al, Pearson
Education, 7e
2 Chapter 3, pp. 73-152, Ibid Measures of Central Tendency and Dispersion 79 pages Isolated
in Frequency Distributions
3. Chapter 4, pp. 154-208, Ibid Understanding Probability 54 pages Isolated
4. Chapter 5, pp. 209-224, Ibid Random Variable and discrete distributions 16 pages Isolated
5. Chapter 6, pp.277-326, Ibid Sampling and sampling distribution 50 pages Isolated
6. Chapter 7, pp. 327-377, Ibid Estimation 51 pages Isolated
7. Chapter 8 and 9, pp. 379-477, Ibid Testing of Hypothesis 98 pages Isolated
8. Chapter 11, pp. 531-608, Ibid Chi-Square and ANOVA 79 pages Isolated
9. Chapter 12, pp. 643-663 Correlation Analysis 18 pages Isolated
10. Chapter 12 & 13, pp. 664-745 Regression Analysis 60 pages Isolated

Videos
1. Data-Information-Knowledge in 3 minutes or less 2:51 2:51 min
https://www.youtube.com/watch?v=sIjSY05JE9Q
2. Data Information and Knowledge (2:14 min) 2:14 min
https://www.youtube.com/watch?v=QsP5WGv0aQc
3. Discrete and Continuous Random Variable 11:56 min
https://www.khanacademy.org/math/statistics-probability/random-variables-stats-
library/random-variables-discrete/v/discrete-and-continuous-random-variables
4. Intro to theoretical probability 8:18 min
https://www.khanacademy.org/math/probability/probability-geometry/probability-
basics/v/basic-probability
5. Binomial distribution 11:50 min
https://www.khanacademy.org/math/statistics-probability/random-variables-stats-
library/binomial-random-variables/v/binomial-distribution
6. Poisson process 1 11:00 min
https://www.khanacademy.org/math/statistics-probability/random-variables-stats-
library/poisson-distribution/v/poisson-process-1
7. Poisson process 2 12:00 min
https://www.khanacademy.org/math/statistics-probability/random-variables-stats-
library/poisson-distribution/v/poisson-process-2
8. Deep definition of the normal distribution 23:00 min
https://www.khanacademy.org/math/statistics-probability/modeling-distributions-of-
data/more-on-normal-distributions/v/introduction-to-the-normal-distribution

36
9. Qualitative sense of normal distributions 11:00 min
https://www.khanacademy.org/math/statistics-probability/modeling-distributions-of-
data/normal-distributions-library/v/ck12-org-normal-distribution-problems-
qualitative-sense-of-normal-distributions
10. Standard normal distribution and the empirical rule 8:15 min
https://www.khanacademy.org/math/statistics-probability/modeling-distributions-of-
data/normal-distributions-library/v/ck12-org-exercise-standard-normal-distribution-
and-the-empirical-rule
11. Introduction to sampling distributions 7:17 min
https://www.khanacademy.org/math/ap-statistics/sampling-distribution-ap/what-is-
sampling-distribution/v/introduction-to-sampling-distributions
12. Sampling distribution of the sample mean 10:51 min
https://www.khanacademy.org/math/statistics-probability/sampling-distributions-
library/sample-means/v/sampling-distribution-of-the-sample-mean
13. Central limit theorem 9:48 min
https://www.khanacademy.org/math/statistics-probability/sampling-distributions-
library/sample-means/v/central-limit-theorem
14. Good estimator properties summary 2:46 min
https://www.youtube.com/watch?v=uh4zUdKvxPA
15. Introduction to the t Distribution 8:54 min
https://www.youtube.com/watch?v=Uv6nGIgZMVw
16. Introduction to t statistics 4:26 min
https://www.khanacademy.org/math/ap-statistics/estimating-confidence-ap/one-
sample-t-interval-mean/v/introduction-to-t-statistics
17. Z-statistics vs. T-statistics 6:39 min
https://www.khanacademy.org/math/statistics-probability/significance-tests-one-
sample/more-significance-testing-videos/v/z-statistics-vs-t-statistics
18. Introduction to Type I and Type II errors 5:09 min
https://www.khanacademy.org/math/ap-statistics/tests-significance-ap/error-
probabilities-power/v/introduction-to-type-i-and-type-ii-errors
19. Examples identifying Type I and Type II errors 5:43 min
https://www.khanacademy.org/math/ap-statistics/tests-significance-ap/error-
probabilities-power/v/examples-identifying-type-i-and-type-ii-errors
20. Introduction to power in significance tests 9:44 min
https://www.khanacademy.org/math/ap-statistics/tests-significance-ap/error-
probabilities-power/v/introduction-to-power-in-significance-tests
21. ANOVA 1: Calculating SST (total sum of squares) 7:38 min
https://www.khanacademy.org/math/statistics-probability/analysis-of-variance-
anova-library/analysis-of-variance-anova/v/anova-1-calculating-sst-total-sum-of-
squares

37
 22. ANOVA 2: Calculating SSW and SSB (total sum of squares within and between) 13:19 min
https://www.khanacademy.org/math/statistics-probability/analysis-of-variance-
anova-library/analysis-of-variance-anova/v/anova-2-calculating-ssw-and-ssb-total-
sum-of-squares-within-and-between-avi
23. ANOVA 3: Hypothesis test with F-statistic 10:13 min
https://www.khanacademy.org/math/statistics-probability/analysis-of-variance-
anova-library/analysis-of-variance-anova/v/anova-3-hypothesis-test-with-f-statistic
24. Calculating correlation coefficient r 12:21 min
https://www.khanacademy.org/math/ap-statistics/bivariate-data-ap/correlation-
coefficient-r/v/calculating-correlation-coefficient-r
25. Correlation coefficient intuition 7:20 min
https://www.khanacademy.org/math/ap-statistics/bivariate-data-ap/correlation-
coefficient-r/v/correlation-coefficient-intuition-examples
*Inclusive of illustrative examples and problem sets

10. Student Responsibilities and Conduct

Students are expected to be familiar with and adhere to Institute's policies in relation to class
attendance and general conduct and behaviour, including maintaining a safe, respectful
environment; and to understand their obligations in relation to workload, assessment and keeping
informed.
Workload: It is expected that you will spend at least ten to twelve hours per week studying for a
course. This time should be made up of reading, research, working on exercises and problems,
online activities and attending classes. In periods where you need to complete assignments or
prepare for examinations, the workload may be greater. We strongly encourage you to connect
with your MS Teams Portal in the first week of semester.
Attendance: Your regular and punctual attendance at lectures and seminars or in online learning
activities is expected in this course. The Institute reserves the right to refuse final assessment to
those students who fails to attend the required minimum number of classes where attendance and
participation is required as part of the learning process (e.g., tutorials, flipped classroom sessions,
seminars, labs, etc.).
General Conduct and Behaviour: You are expected to conduct yourself with consideration and
respect for the needs of your fellow students and teaching staff. Conduct which unduly disrupts

38
or interferes with a class, such as ringing or talking on mobile phones, is not acceptable and
students may be asked to leave the class.
Health and Safety: IILM requires each person to work safely and responsibly, in order to avoid
personal injury and to protect the safety of others.
Keeping Informed: You should take note of all announcements made in lectures, tutorials or on
the course web site. From time to time, the Institute will send important announcements to your
university e-mail address without providing you with a paper copy. You will be deemed to have
received this information. It is also your responsibility to keep the Institute informed of all
changes to your contact details.

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