STANDARD LECTURE NOTES

FOR
STATISTICS FOR DIPLOMA IN

SOCIAL WORK &COMMUNITY

DEVELOPMENTMODULE II

QUANTITATIVE TECHNIQUES

1
Course Outline

1. Introduction to Quantitative Techniques

2. Fundamentals of Mathematics and Statistics.
3. Data Collection
4. Measures Of Central Tendency
5. Measures Of Variation /Depression
6. Correlation Analysis
7. Regression Analysis
8. Index Number
9. Time Series Analysis
10. Probability
11. Sampling
12. Test of Hypothesis
13. Linear Programming

QUANTITATIVE TECHNIQUES

2
 GENERAL OBJECTIVES

At the end of this course unit, the trainee should be able to;-
❖ broaden his/her knowledge in mathematical application;
❖ understand and appreciate the role of quantitative methods in
decision making;
❖ collect and organize statistical data for management;
❖ analyze quantitative data for management decision making;
❖ Apply quantitative methods in solving business problems.

Introduction
Def; quantitative techniques are those techniques which provides the
decision maker with a systematic and powerful means of analysis and help,
based on quantitative data in exploring policies for achieving pre-
determined goals Involves the use of numbers, symbols and other
mathematical expressions.
They are essentially helpful in supplementing to judgment and intuition.
These techniques evaluate planning factors of alternatives as and when
they arise rather than prescribe courses of action. They are particularly
relevant to problems of complex business enterprises.
Classification of Q.T

a) Statistical Techniques
Are those techniques which are used in conducting the statistical inquiry
concerning a certain phenomenon? They include statistical methods
beginning from the collection of data till the task of interpretation of the
data collected.

b) Programming Techniques
Are the model building techniques used by decision maker?

Quantitative techniques

Statistical techniques programming techniques

Statistical techniques Programming techniques

Methods of collecting data Linear programming
Classification and tabulation of Decision theory
collected data Theory of games
Probability theory and sampling Simulation
Correlation and regression analysis a) monte carlo technique
Index numbers b) system simulation
Time series analysis queuing (waiting line) theory

3
Interpretation and extrapolation inventory planning
Survey techniques and methodology network analysis/ PERT
Ratio analysis integrated production model
Statistical quality control others;
Analysis of variance non-linear programming
Statistical inference and the theory of replacement
interpretation quadratic programming
Theory of attributes. Parametric programming etc.

QT and Business management

Production Management
• Selecting building site fro a plant, scheduling and controlling its
development and designing its layout
• Locating within the plant and controlling movement required
materials and finished goods inventories.
• Scheduling and sequencing production by adequate preventive
maintenance with optimum number of operatives by proper
allocation of machines
• Calculating optimum product mix.
Personnel Management
• Optimum manpower planning
• No of persons to be maintained on permanent or full time roll
• The no. of persons to be kept in work pool intended fro meeting the
absenteeism.
• Optimum manner of sequencing and routing of personnel to a variety
of jobs
• Studying personnel recruiting procedures, accidents rates and labor
turnover
Market Management
• Where distribution and warehousing should be located the size ,
quantity to be stocked and choice of customers.
• Optimum allocation of sales budget to direct selling of promotional
expenses.
• Choice of different media of advertising and bidding strategies.
• Financial management
• Finding long range capital requirement as well as how to generate
theses requirements
• Determining optimum replacement policies
• Working out a profit plan for the firm
• Developing capital investment plans
• Estimating credit and investment risks.
Limitation of Q.T s
1. the inherent limitation concerning mathematical expressions

4
 2. high costs involved in the use of QTs
3. They do not take into consideration the intangible factors i.e. non-
measurable human factors.
4. Quantitative techniques are just the tools of analysis and not the
complete decision making process.

Role of QT in business and industry

1. they provide a tool for scientific analysis
these techniques provides executives with a more precise description of the
cause and effect relationship and risks underlying the business operations in
measurable terms and this eliminates the conventional
intuitive and subjective basis on which management used to formulate their
decisions.
2. they provide solution for various business problems
Are used in the field of production, procurement, marketing, finance and
other allied fields. Problems like how best can managers and executive4s
allocate available resources to various products so that in a given time the
profits are maximized or costs are minimized. Is it possible for an
enterprise to arrange the time and quantity of orders of its stocks such that
the overall profit with given resources is maximized?
3. they enable proper development of resources
E.g. programmed evaluation and review techniques (PERT) enables us to
determine earliest and the latest time fro each of he events and activities
and thereby helps in the identification of the critical path
All these helps in deployment of resources from one activity to another to
enable the project completion on time.
4. They help in minimizing waiting and servicing time.
The queuing theory helps management in minimizing the total waiting of
servicing costs. It also analyses the feasibility of adding facilities and
thereby helping to take correct and profitable decision.
5. They enable management to decide when to buy and how much to
buy.
The main objective of inventory planning is to achieve balance between the
costs of holding stock and benefits of holding stock. Helps in determining
when to buy and how much to buy.
6. They assist in choosing an optimum strategy.
In a competitive situation game theory helps to determine optimum
strategy which maximizes profits or minimizes loses but adopting optimum
strategy.
7. they render great help in optimum resource allocation
8. they facilitate the process of decision making
9. Through various QTs management can know the reactions of the
integrated business systems.

CHAPTER ONE

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 FUNDAMENTALS OF MATHEMATICS AND STATISTICS

Specific Objectives
At the end of this topic, the trainee should be able to:
❖ Form and solve algebraic equations.
❖ Apply the various techniques of counting to solving management
decision problems;
❖ Applying set theory to business decision problems;
❖ Derive and apply the binomial theorem to business problems;
❖ Evaluate mathematical series.

ALGEBRAIC EQUATIONS

Algebra
Algebra is a branch of mathematics in which, instead of using numbers,
we use letters to represent numbers.

We all know that 2+3=5.

Suppose, though, that we substitute letters for the first two numbers, so
that:

2=a

3=b

We can then write:

a+b=5
All that has happened is that we have replaced the numbers with
letters. However, a number is a specific quantity – e.g., 5 is more than
4, but less than 6 – whereas a letter can be used to represent any
number. Thus in the above expression, ‘a’ could be 4 and ‘b’ could be 1.
We only know that they are 2 and 3 respectively because we defined
them as such before.

The main consequence of this is that algebra uses general expression

and gives general results, whereas arithmetic (using numbers) uses
definite numbers and gives definite results. Arithmetic is specific
whereas algebra is general.

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Equations
An equation is an expression with an equal sign (=)
Equations are classified into two main groups’ linear equations and non
linear equations. Examples of linear equations are
x + 13 = 15
7x + 6 = 0

Non linear equations in the variable x are equations in which x appears in

the second or higher degrees. They include quadratic and cubic equations
amongst others. For example
5x2 + 3x + 7 = 0 (quadratic equation)
2x3 + 4x2 + 3x + 8 = 0 (cubic equation)
The solution of equations or the values of the variables for which the
equations hold is called the roots of the equation or the solution set.

Solution of linear equations.

Supposing M, N, and P are expressions that may or may not involve

variables, then the following constitute some rules which will be useful in
the solution of linear equations
Rule 1: Additional rule
If M = N then M + P = N + P
Rule 2: Subtraction rule
If M = N, Then M – P = N – P
Rule 3: multiplication rule
If M = N and P ≠ O then M x P = N x P
Rule 4: Division rule
If P x M = N and P ≠ O
And N/P = Q Q being a raterial number then
M = N/P

Example
i. Solve 3x + 4 = - 8
y
ii. Solve =-4
3
Solutions
i. 3x + 4 = –8
3x + 4 – 4 = – 8 – 4 (by subtraction rule)
7
 3x = – 12 (simplifying)
3x 12
=−
3 3 (by division rule)

x=–4 (simplifying)
y
ii. 3 = −4  3
3
y = –12 (simplifying)

Solutions of inequalities
The solutions sets of inequalities frequently contain many elements. In a
number of cases they contain infinite elements.

Example
Solve and graph the following inequalities
x – 2 > 2; x  w (where x is a subset of w)

Solution
x – 2 > 2 so x – 2 + 2 > 2 + 2
Thus, x>4
The solution set is infinite, being all the elements in w greater than 4

0 1 2 3 4 5 6 7 8 9 10 11

Example
Solve and graph
3x – 7 < - 13;
Solution

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3x - 7 < -13

 3x - 7 + 7 < -13 + 7

 3x < -6

3x -6
<
3 3

x < -2

….. R Line

-4 -3 -2 -1 0 2 3 4

Rules for solving linear inequalities

Suppose M, M1, N, N1 and P are expressions that may or may not involve
variables, then the corresponding rules for solving inequalities will be:
Rule 1: Addition rule
If M > N and M1> N1
Then M + P > N + P and

M1 + P >N1+ P
Rule 2: Subtraction Rule
If M < N and M1 ≥N1
Then M – P < N – P and
M1 – P ≥N1– P
Rule 3: Multiplication rule
If M ≥N and M1 > N1 and P≠ 0
Then MP ≥NP; M1P > N1P
M (-P) ≤ N (-P) and M1 (-P) < N1(-P)
Rule 4: Division
If M > N and M1< N1 and P≠ 0
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 Then M/P > N/P: M1/P < N1/P
M/ (-P) < N/ (-P): and M1/ (-P) > N1/ (-P)
Rule 5: Inversion Rule
If M/P ≤ N/Q where P, Q ≠ 0
M1/P > N1/Q
Then P/M ≥ Q/N and P/M1 < Q/N1
Note: The rules for solving equations are the same as those for solving
equations with one exception; when both sides of an equation is multiplied
or divided by a negative number, the inequality symbol must be reversed
(see rule 3 & Rule 4 above).

Example
Solve and graph the following:
i. 7 – 2x > - 11 ;
ii. –5x + 4 ≤ 2x – 10 ;
iii. –3 ≤ 2x + 1 < 7 ;
Solutions
i. 7 - 2x > -11

-2x > -18 (subtraction rule)

-2x -18
< (bydivision rule)
-2 -2

x<9

line Q
-3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11

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 ii. -5x + 4  2x - 10

-7x + 4  -10 (by subtraction rule)

-7x  -14 (by subtraction rule)

x2 (by division rule)

Q
line -4 -3 -2 -1 0 1 2 3 4 5

iii. -3  2x + 1 < 7

-4  2x < 6 (by substraction rule)

-2  x < 3 ( by division rule)

Q
line -4 -3 -2 -1 0 1 2 3 4 5

Linear inequalities in two variables: relations

An expression of the form
Y ≥ 2x – 1
Is technically called a relation. It corresponds to a function, but different
from it in that, corresponding to each value of the independent variable x,
there is more than one value of the dependent variable y
Relations can be successfully presented graphically and are of major
importance in linear programming.

Solutions of linear simultaneous equations.

Two or more equations will form a system of linear simultaneous equations

if such equations be linear in the same two or more variables.

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For instance, the following systems of the two equations is simultaneous in
the two variables x and y.
2x + 6y = 23
4x + 7y = 10
The solution of a system of linear simultaneous equations is a set of values
of the variables which simultaneously satisfy all the equations of the
system.

Solution techniques
a) The graphical technique
The graphical technique of solving a system of linear equations consists of
drawing the graphs of the equations of the system on the same rectangular
coordinate system. The coordinates of the point of intersection of the
equations of the system would then be the solution.

Example
10

9
.
8
.
7
.
6
.
5
. (2,4)
4
.
3
.
2 x + 2y = 10
.
2x + y = 8
1

-1 1 2 3 4 5 6 7 8 9 10 11 12 13

The above figure illustrates:

Solution by graphical method of two equations
2x + y = 8
x + 2y = 10
The system has a unique solution (2, 4) represented by the point of
intersection of the two equations.

b) The elimination technique

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This method requires that each variable be eliminated in turn by making
the absolute value of its coefficients equal in the equations of the system
and then adding or subtracting the equations. Making the absolute values of
the coefficients equal necessitates the multiplication of each equation by
an appropriate numerical factor.
Consider the system of two equations (i) and (ii) below
2x – 3y = 8 …….. ........................... (i).
3x + 4y = -5 …….. .......................... (ii).
Step 1
Multiply (i) by 3
6x – 9y = 24 …… .................................... (iii).
Multiply (ii) By 2
6x + 8y = - 10 …… .................................. (iv).
Subtract (iii) from (iv).
17y = -34 ……........................................ (v).
 y = -2

Step 2
Multiply (i) by 4
8x – 12y = 32 ……. ................................. (vi)
Multiply (ii) by 3
9x + 12y = -15 ….. ................................. (vii)
Add (vi) to (vii)
17x = 17 ……......................................... (viii)
 x=1
Thus x = 1, y = -2 i.e. {1,-2}

c) The substitution technique

To illustrate this technique, consider the system of two equations (i) and
(ii) reproduced below
... 2x – 3y = 8 …….. (i).
... 3x + 4y = -5 …… (ii).
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The solution of this system can be obtained by
a) Solving one of the equations for one variable in terms of the other
variable;
b) Substituting this value into the other equation(s) thereby obtaining
an equation with one unknown only
c) Solving this equation for its single variable finally
d) Substituting this value into any one of the two original equations so
as to obtain the value of the second variable

Step 1
Solve equation (i) for variable x in terms of y
2x – 3y = 8
x= 4 + 3/2 y (iii)
Step 2
Substitute this value of x into equation (ii). And obtain an equation in y only
3x + 4y = -5
3 (4 + 3/2 y) + 4y = -5
8 ½ y = - 17 ……. (iv)
Step 3
Solve the equation (iv). For y
8½y = -17
y = -2
Step 4
Substitute this value of y into equation (i) or (iii) and obtain the value of x
2x – 3y = 8
2x – 3(-2) = 8
x=1

Example
Solve the following by substitution method
2x + y = 8
3x – 2y = -2
Solution
Solve the first equation for y

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 y = 8 – 2x
Substitute this value of y into the second equation and solve for x
3x – 2y = -2
3x – 2 (8-2x) = -2
x=2
Substitute this value of x into either the first or the second original
equation and solve for y
2x + y = 8
(2) (2) + y = 8
y=4

TECHNIQUES OF COUNTING

Permutations
This is an order arrangement of items in which the order must be strictly
observed

Example

Let x, y and z be any three items. Arrange these in all possible

permutations

1st 2nd 3rd

X Y Z
X Z Y
Y X Z Six different permutations
Y Z X
Z Y X
Z X Y

NB: The above 6 permutations are the maximum one can ever obtain in a
situation where there are only 3 items but if the number of items exceeds 3
then determining the no. of permutations by outlining as done above may
be cumbersome. Therefore we use a special formula to determine such
permutations. The formula is given below

The number of permutations of ‘r’ items taken from a sample of ‘n’ items
n!
may be provided as nPr = where;! = factorial
(n - r )!
e.g.

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 3P 3!
i. 3 =
(3 − 3)!
3 21
= note; 0! = 1
0!
6
= =6
1

5P 5!
ii. 3 =
(5 - 3)!
5 4  3 21
=
1 2
= 60

7P 7!
iii. 5 =
(7 - 5)!
765 4  3 2 1
=
21
5040
=
2
= 2520
Example
There are 6 contestants for the post of chairman secretary and treasurer.
These positions can be filled by any of the 6. Find the possible no. of ways
in which the 3 positions may be filled.
Solution
Chairman Secretary Treasurer
6 5 4
Therefore the no of ways of filing the three positions is 6 x 5 x 4 = 120
6P 6!
3 =
(6 - 3)!
65 4  3 2 1
=
3 21
720
=
6
= 120

Combinations

A combination is a group of times in which order is not important.

For a combination to hold at any given time it must comprise of the same
items but if a new item is added to the group or removed from the group
then we have a new combination

Example

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3 items x, y and z will have 6 different permutations but only one
combination.
The following formula is usually used to determine the no. of combinations
in a given situation.
n!
n
Cr =
r !( n − r )!
Example
8!
i. 8
C7 =
7!( 8 − 7 )!
8! 8  7!
= =
7!1! 1 7!
=8

6!
ii. C4 =
6

4!( 6 − 4 )!

6! 6  5  4!
= =
4!2! 4! 2 1

= 15

8!
iii. C3 =
8

3!5!
8  7  6  5!
=
3  2 1 5!
= 56

Application

Example
There is a committee to be selected comprising of 5 people from a group of
5 men and 6 women. If the selection is randomly done. Find the possibility
of having the following possibilities (combinations)
i. Three men and two women
ii. At least one man and at least one woman must be in the
committee
iii. One particular man and one particular woman must not be in the
committee (one man four women)

Solution
i. The committee size = 5 people
The group size = 5m + 6w

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 ∴ assuming no restrictions the committee can be selected in 11C5
The committee has to consist of 3m & 2w
∴ these may be selected as follows.
5C × 6C
3 2
P(committee 3m and 2w)
5
C  6C2
= 311 note that this formula can be fed directly to
C5
your scientific calculator and attain a solution.

5! 6!

= 3!2! 4!2!
11!
5!6!

5  4  3  2 1 6  5  4! 5  4  3  2 1 6!
=  
3  2 1 2 1 2 1 4! 1110  9  8  7  6!
27
=
77

ii. P(at least one man and at least one woman must be in the
committee)
The no. of possible combinations of selecting the committee without
any woman = 5C5
The probability of having a committee of five men only
5
C 1
= 11 5 =
C5 462
The probability of having a committee of five women only

6!
6
C 5!1!
= 11 5 =
C5 11!
5!6!

6  5! 5!6!
= 
5!1! 1110  9  8  7  6!

1
=
77
∴ P (at least one man and at least one woman)
= 1 – {P (no man) + P (no woman)}
1 1 
=1–  + 
 77 462 

18
 =1–
(6 + 1)
462
7
=1–
462
455
=
465
iii. P(one particular man and one particular woman must not be in
the committee would be determined as follows
The group size = 5m + 6w
Committee size = 5 people

Actual groups size from which to

Select the committee = 4m + 5w
Committee = 1m + 4w

The committee may be selected in 9C5

The one man may be selected in 4C1 ways
The four women may be selected in 5C4 ways
∴ P (committee of 4w1man).
C4  4C1
5
= 9
C5

5! 4!

= 4!1! 1!3!
9!
4!5!

5  4! 4  3! 4!5!
=  
1!4! 1 3! 9  8  7  6  5!
10
=
63

SETS THEORY
Introduction
Sets and set theory
A set is a collection of distinct objects. We may consider all the ocean in
the world to be a set with the objects being whales, sea plants, sharks,
octopus etc, similarly all the fresh water lakes in Africa can form a set.
Supposing A to be a set
A = {4, 6, 8, 13}

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The objects in the set, that is, the integers 4, 6, 8 and 13 are referred to as
the members or elements of the set. The elements of a set can be listed in
any order. For example,
A = {4, 6, 8, 13} = {8, 4, 13, 6}
Sets are always precisely defined. Each element occurs once and only once
in a set.
The notion  is used to indicate membership of a set. ∉ represents non
membership. However, in order to represent the fact that one set is a
subject of another set, we use the notion  . A set “S” is a subject of
another set “T” if every element in “S” is a member of “T”
Example
If A = {4, 6, 8, 13} then
i) 4  {4, 6, 8, 13} or 4  A; 16 ∉ A
ii) {4, 8}  A; {5, 7}  A; A  A
Methods of set representation
Capital letters are normally used to represent sets. However, there are two
different methods for representing members of a set:
i. The descriptive method and
ii. The enumerative method
The descriptive method involves the description of members of the set in
such a way that one can determine the elements of the set without
difficulty.
The enumerative method requires that one writes out all the members of
the set within the curly brackets.
For example, the set of numbers 0, 1, 2, 3, 4, 5, 6 and 7 can be
represented ass follows
P = {0, 1, 2, 3, 4, 5, 6, 7} , enumerative method
P = {X/x = 0, 1, 2…7} descriptive method
Or
P = {x/0 ≤ x ≤7} where x is an integer.

Types of sets
a) Finite and infinite sets
A set can be classified as a finite or infinite set, depending upon the
number of elements it has. A finite set has a finite number of elements
whereas an infinite set has an infinite number of elements.

20
For example, set P below has ten elements and is therefore a finite set. Set
S, on the other hand, is an infinite set since it has an infinite number of
elements.

P = {2, 4, 6…20}
S = {1, 3, 5…}
b) Universal set
The term refers to the set that contains all the elements that an analyst
wishes to study.
The notation U or ξ is generally used to denote universal sets
c) The null set or empty set
This is a set which contains no elements. It is normally designated by a
Greek letter Ø, or { }.
The sets Ø and {Ø} are not the same thing since the former has no elements
in it, while the later has one element in it, namely zero
d) Equal or equivalent sets
Two sets C and D are said to be equal if every member of set C belongs to D
and every member of set D also belongs to C
e) Complement of a set
The complement of set A is written as A΄. This set contains all those
elements of universal set which are not in A
f) Intersection and union
B  C Denotes the intersection of B and C. it is the set containing all those
elements, which belong to both B and C
If B = {5, 8, 11, 20, 25} and C = {1, 3, 5, 7, 9, 11, 13}
Then B  C = {5, 11}
B  C = {1, 3, 5, 7, 8, 9, 11, 13, 20 25}

Set Operations and Laws

A simple way of representing sets and relations between sets is by means of
the Venn diagram. Venn diagram consists of a rectangle that represents the
universal set. Subjects of the universal set are represented by circles drawn
within the rectangle, or the universe.
Suppose that the universal set is designated by U and the sets A, B and C
are subject of U.The Venn diagram below can be used to illustrate the sets
as follows

21
 U
B
A
C

Venn diagram below representing the intersection of set A and B or A  B =

C is illustrated as follows

Intersection of sets

A C B

Example:
You are given the universal set
T = {1, 2, 3, 4, 5, 6, 7, 8}
And the following subjects of the universal set:
A = {3, 4, 5, 6,}
B = {1, 3, 4, 7, 8}
Determine the intersection of A and B
Solution
The intersection of A and B is the subject of T, containing elements that
belong to both A and B

A  B = {3, 4, 5, 6,}  {1, 3, 4, 7, and 8}

= {3, 4}

22
 Or

T
U
5 3 1
A 6 4 7 B
8

Example
Consider the following universal set T and its subjects C, D and E
T = {0, 2, 4, 6, 8, 10, 12}
C = {4, 8,}
D = {10, 2, 0}
E = {0}
Find
i) DE
ii) CDE

Solution
ii) D  E = {10, 2, 0}  {0} = {0}

E
D

D  E = Shaded area
ii) C  D  E = {4, 8}  {10, 2, 0}  {0} = { } = Ø

23
 T

D
C

4; 8 E 0
2; 10

Mutually exclusive or disjointed sets

Two sets are said to be disjointed or mutually exclusive if they have no

elements in common. Sets P and R below are disjointed

P R

Disjointed sets are represented by a null set in this case

PR = Ø

The union of sets

Venn diagram representing the union of sets A and B or A  B = Shaded area
is illustrated below;-

AA
 B = Shaded area B
Example
Consider the universal set T and its subsets A, B and C below:
T = {a, b, c, d e, f}
A = {a, d}
B = {b, c, f}
C = {a, c, e, f}
24
Find
i) A B
ii) AC
iii) B C
iv) A B C

Solution
i) A  B = {a, d}  {b, c, f} = {a, b, c, d, f}
ii) A  C = {a, d}  {a, c, e, f} = {a, c, d, e, f}
iii) B  C = {b, c, f}  {a, c, e, f} = {a, b, c, e, f}
iv) A  B  C = {a, d}  {b, c, f }  {a, c, e, f} = {a, b, c, d, e, f} =
T

Complement of a set
Venn diagram representing the complement of a set say A represented by A1
is illustrated below.

A1

A1= shaded area

Example
For the universal set T = {1, 2, 3, 4, 5} and its subset A ={2, 3} and B ={5, }

Find
ii) A1
iii) (A1)1
iv) (B1)1

Solution
i) A1 ={2, 3}1 = {1, 4, 5}
ii) (A1)1 =({2, 3}1)1 = {1, 4, 5}1={2, 3} = A

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 iii) (B1)1=({5}1)1 = {1, 2, 3, 4}1={5} = B

Laws of Set Algebra

From the following Venn diagram where T is the universal set and A its
subset, we can deduce a number of laws.

i) AØ = A
ii) AT = T
iii) AA = A
iv) A  A= A
v) A  T= A
vi) A  A1 = T
vii) A  A1=Ø
viii) (A1)1 = A

Applications

Example 1
Of the 20 girls in a form, 16 play hockey 12 play tennis and 4 play
basketball. Every girl plays at least one game and two plays all the three.
How many play two and only two games.
Solution
N (ξ) = 20

n (T) = 12
n (H) = 16

y 12 – y –z – 2
16 – x – y – 2
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