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Mba 2

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5 views28 pages

Mba 2

Uploaded by

risalatali471
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Mathematical and Statistical Applications for

Business
MGT-509

M. Ahmad Naeem.

Department of
Management
Sciences
Statistical Interference
To make/drawn conclusion from the analysis of
data/sample for a population

O Estimation
Estimation is a process in which we obtain the values of
unknown population parameters with the help of sample
data. In other words, it is a data analysis framework that
combines effect sizes and confidence interval to plan an
experiment, analyze data, and interpret the results.
Point of Estimation
Interval Estimation

O Test of Hypothesis
Point Estimation
O Let x̅ be the sample mean and μ be the population mean then,

Point of estimation = x̅ = μ

O In Interval estimation, the point estimation is extended with margin


of error. Interval estimation (or set estimation) is a kind of statistical
inference in which we search for an interval of values that contains
the true parameter with high probability. Such an interval is called a
confidence interval. A confidence interval, in statistics, refers to the
probability that a population parameter will fall between a set of
values for a certain proportion of times. Analysts often use
confidence intervals that contain either 95% or 99% of expected
observations. Thus, if a point estimate is generated from a
statistical model of 10.00 with a 95% confidence interval of 9.50 to
10.50, it means one is 95% confident that the true value falls within
that range.

x̅ = 87 , 87 ± 3
O Let Xi be the characteristic of interest of a
product/process from a normal distribution
with mean μ, and S.D
When is known,

= Point estimation
=Z value from table
= Probability from 0-1
When is unknown and n is less than 30
,x̅
(1 – ) is the confidence interval when sigma is
known
KEY TAKEAWAYS

O A confidence interval displays the probability


that a parameter will fall between a pair of
values around the mean.
O Confidence intervals measure the degree of
uncertainty or certainty in a sampling method.
O They are also used in hypothesis testing and
regression analysis.
O Statisticians often use p-values in conjunction
with confidence intervals to gauge statistical
significance.
O They are most often constructed using
confidence levels of 95% or 99%.
Example
O Let a sample of 200 employees has a
mean work experience of 12 years with
a known population variance of 9 years.
What is the expected average work
experience of all employees?
What is the interval estimation for work
experience of all employees?
With = 0.05.
With 95% of confidence interval.
Example
O From a class of 500 student , a
sample of 15 students was taken ,
wit their any score of 20 marks with
S.D of 5 marks.
Find the score of 500 students? Also
construct 90% confidence interval for
any score of entire class.
Testing of Hypothesis
O A hypothesis is a claim conjecture or a statement. The testing of
hypothesis is a statistical technique to test or verity the hypothesis
scientifically. It is comprise on 6 steps which are as follows.
Step 1
Stating the hypothesis
Ho: ≥ 0
Ha: < 0

Ho: ≤ 0
Ha: > 0

Ho: ≠ 0
Ha: = 0

Null hypothesis always held a equality sign.


Step 2
Level of Significance
α is given
=0.01 ,α=0.05 ,α=0.10
If not than take 0.05
value will be less for sensitive cases *

Step 3
Test Statistic
For is known and n is greater than equal to 30
Than,

If is unknown and n is less than 30


Step 4
Define Critical Region

Case 1

Case 2

Both are on tail test


Case 3

The above case are two tail test


Regions

Case 3 Case 2
Step 5
Calculation
Calculate from step 3.
Calculate from table of Z.

Step 6
Results & Conclusion
From Step 4 find out the results
Case 1

Case 2

Case 3
Example
O An organization claims that the
average salary of its employees is
R.s 20,000/month with the variance
of R.s 400/month. To test their claim,
a sample of 100 employees was
taken with the mean salary of R.s
20,500/month. Was the claim true at
5% of level of significance.
Example
O Test Claim that Average life time of a
product is 122 days. Assume that
distribution of population is Normal.
Following is the data
x̅ = 120 days
= 10
n= 36
Example
O A textile manufacture company has
a lead time of 20 days with a S.D = 3
days. If the lead time normally
distribution with the known signal of
3 days. Develop hypothesis for the
delivery of raw material , if the early
and late arrival both are not good.
Draw till critical region
Two Sample Mean
Independent Case
O There are four cases while testing independent sample
or population of two sample mean.

Case 1
1. 2 are known & equal
2. Both the population are normal
3. Population/sample are independent to each other

is known as pooled variance.


Case 2
1. 2 are known but unequal
2. Both the population are normal
3. Population/sample are independent to each other

Case 3
4. 2 are unknown & unequal
5. Both the population are normal
6. Population/sample are independent to each other

with degree of freedom

Where
Case 4
1. 2 are unknown but equal.
2. Both the population are normal.
3. Population/sample are independent to
each other.

with degree of freedom

d.f n1 + n2 – 2 and n is less than equal


to 30
Example
O On the average, Islamabad has more
unemployment rate than Lahore. The
federal govt. is agreed to manage this issue
but only one city from the aforementioned
city can get this plan. Islamabad can have
that if its unemployment rate is 10 time
greater than Lahore. To investigate this
issue, a sample of 200 residence was taken
from each city with sample mean of
Islamabad is 60 and Lahore is 55 and their
variance is 10 & 15 respectively.
Example
O Two Manufacturing process are being
compared for their average no of
defective products, if first
manufacture claims that his process
is better than the competitor on the
basis of average defective piece .
Write an appropriate hypothesis for
them
Example
O A bank manager claims that his
customer are happier than his
competitor banks on the basis of
complaints receive. Write an
appropriate hypothesis for this.
Two Sample Mean
Dependent Case
Step 1
Stating the hypothesis

Null Hypothesis = Ho
Alternate Hypothesis = Ha

Ho: ≥ 0
Ha: <0

Ho: ≤0
Ha: >0

Ho: ≠ 0
Ha: = 0

Null hypothesis always held a equality sign.


Step 2
Level of Significance
α is given
=0.01 ,α=0.05 ,α=0.10
If not than take 0.05

Step 3
Test Statistic
If is unknown and n is less than 30

Where = ;=
Step 4
Define Critical Region
Case 1

Case 2

Both are on tail test


Case 3

The above case are two tail test


Step 5
Calculation
Calculate from step 3.
Calculate from table of Z.

Step 6
Results & Conclusion
From Step 4 find out the results
Case 1

Case 2

Both are on tail test


Case 3
Example
O A test is conducted to asses the students
competency in Maths, at the beginning of
a semester , after evaluation the results, it
was decided by the authorities that a
foundation courses should be offer to
enhance their Maths skills. An eight week
course was designed and delivered after
which another test was taken, To test the
effectiveness of foundation course from
the class, 10 students were taken and
their scores were noted Such As:
Student ID X1 X2
1 60 70
2 32 65
3 69 67
4 70 80
5 40 46
6 30 50
7 70 60
8 60 80
9 65 75
10 70 60
Example
O Following is the data of the bank
employees was taken before and
after of the workshop and their claim
is workshop was very effective. Test
the hypothesis:
N=15
= = 20 minutes
S= 350 minutes
α=0.05

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