UM22BC145A - DATA AND DECISIONS FOR MANAGERS(4-0-4-4-4)

COURSE OBJECTIVES:
The objective of the course is
 To develop the student’s ability to deal with numerical and quantitative issues in business
and to enable the use of statistical, graphical and algebraic techniques wherever relevant.
 To have a proper understanding of Statistical applications in Economics and Management.
 To learn non-parametric tests such as the Chi-Square test for Independence
 To understand both the meaning and applicability of a dummy variable and the
assumptions which underlines a regression model?
 To provide students with hands-on experience to use statistical tools in order to make
scientific decisions even in an uncertain business environment
COURSE OUTCOMES:
 At the end of the course students should be able to
 Identify statistical tools needed to solve various business problems.
 Compute measures of location and dispersion.
 Interpret the results of Bivariate and Multivariate Regression and Correlation Analysis, for
forecasting and also perform ANOVA and F-test.
 Develop the skill to perform a multiple regression using computer software.
 Apply probability rules and concepts relating to discrete and continuous random variables
to answer questions within a business context
Perquisite:
Tools: WBL- Case Studies

Course Content
Unit I: Introduction to Statistics
Basic concepts: Meaning, Definition, Features, Importance and limitations of statistics. Meaning
and difference between primary and secondary data, data collection methods. Classification
and tabulation of data (problems).Diagrammatic and graphical representation Introduction –
 Significance – Difference between diagrams and graphs – Types of diagrams (Multiple Bar
diagrams & Percentage bar diagrams) and graphs (Histograms, Frequency polygons, Ogives). 11
Hours
Unit II: Measure of Univariate Data
Measures of Central tendency and Dispersion: Introduction – Types of averages – Arithmetic
mean (Simple and weighted) – Median – Mode-Range – Quartile deviation – Mean deviation –
Range- Standard deviation – coefficient of variation. Measures of Skewness: Meaning of
Skewness – Symmetrical & Skewed Distributions- Measures of Skewness – Absolute and
Relative Measures of Skewness – Karl Pearson’s Coefficient of Skewness. 11 Hours
Unit III: Measure of Bi-variate data
Correlation: Meaning – Types – Karl Pearson’s coefficient of correlation – Spearman’s Rank
correlation (with or without Ties) -Properties of Correlation coefficient- Regression – Meaning –
Definition – Regression equations of X on Y and Y on X 11 Hours
Unit IV: Time Series and Index Numbers
Time Series: Forecasting methods and forecasting control parameters Index Numbers: Meaning
and components. Classification – Construction of index numbers – methods of constructing
index numbers – simple aggregative method – weighted aggregative method – Fisher's ideal
method including time & factor reversibility tests – Consumer price index numbers. 11 Hours
Unit V: Testing of Hypothesis
Introduction to testing of Hypothesis: Estimation – Sampling distribution of statistics and
standard errors – Point and interval estimate – Confidence interval – Statistical Hypotheses –
Procedure for testing hypothesis – Setting of Hypothesis -Null and alternative hypotheses, Type
I and Type II errors – critical region – Level of significance- One-Tailed and Two-Tailed – (Large &
Small sample test)- Test for Single mean, Proportion, Difference of means, Chi-Square: Test for
single variance and Goodness of fit 12 Hours
Text Book:
 S. P. Gupta & M. P. Gupta, Business Statistics, Sultan Chand and Sons, 17 Edition, 2013, ISBN-
9788180549458
 Statistic for Business and Economics – JIT S Chandan , Vikas publication
 Statistics for Management using MS Excel, Ash Narayan Sah, by WILEY, ISBN: 978-93-8987-47-7,
2020
Reference Books:
 Alexander Holmes, Barbara Illowsky & Susan Dean, Introductory Business Statistics,
Openstax (Open source), 2020
 Richard I Levin,Rubin D. S, Statistics for Management, Pearson Education India, 2014, ISBN-
9789332581180
 Unit I: Introduction to Statistics
Contents
Basic concepts:
 Meaning &Definition
 Features
 Importance and limitations of statistics.
 Meaning and difference between primary and secondary data
 data collection methods
 Classification and tabulation of data (problems)
 Diagrammatic and graphical representation
 Introduction – Significance – Difference between diagrams and graphs
 Types of diagrams (Multiple Bar diagrams & Percentage bar diagrams)
 Graphs (Histograms, Frequency polygons, Ogives).
Introduction
The meaning of statistics word is varying to the different person. In day to day human
life, the knowledge of this subject is use in different ways. We have used statistics for personal
purpose as well as professional purpose. In personal life, we have used statistics for general
calculation of household budget. Generally, there are two type of information i.e., quantitative
and qualitative information. Thus, this subject is used by the people to take appropriate
decision about the problems/ budget on the basis of the both types of information’s. Statistics
is the part of mathematical science which pertains to the collection, classification, tabulation,
analysis, interpretation and presentation of data. Some of the eminent researchers consider
Statistics to be a separate mathematical science rather than a branch of mathematics. On the
other hand, many scientific investigations make use of data, Statistics is concerned with the use
of data in the background of uncertainty and judgment making in the face of uncertainty.
Meaning of statistics
The word of statistics has been derived from the ‘status’, which is Latin word OR ‘Statista’ which
is Italian word. In the18th century, Prof. G. F. Achenwall has been used it first time. These
words were used for political state of the region during early period. The Italian word ‘Statista’
was used to maintain the records of census or data related to wealth of a state/ nation.
Successively, the meaning and usage of statistics extended and there onwards its nature also
changed.
For a common man, ‘Statistics’ means numerical information expressed in quantitative which
may relate to objects, subjects, activities, information, phenomena, or regions of space. The
word statistics can be defined in two broad different ways, because it is used to convey
different meanings in singular and plural sense.

Singular sense Plural sense

Singular Sense In this sense, ‘Statistics’ refers In plural sense, ‘Statistics’ means a set of
to what is called statistical methods, which numerical information known as statistical
deals with the collection, classification, data, i.e., information on population features,
tabulation, analysis and interpretations of climatic variable, enrolment of students in a
statistical data. So, it is described as a branch class, and so on. According to Webster’s
of science which deals with numerical facts “Statistics are the classified facts representing
and makes decision as well. Every statistical the conditions of the people in a State
process should pass through these stages. specifically those facts which can be stated in
number or in tables of number or classified
arrangement”.

Definition of statistics
The definition of statistics has been given by the different statistician in different ways. Some
important definitions of statistics are given below;
A. L. Bowley defined that “Statistics may be called the science of counting”. He also said
that “Statistics may rightly be called the science of average”.
According to Boddington “Statistics is the science of estimates and probabilities”.
 According to Selligman “Statistics is the science which deals with the methods of
collecting, classifying, tabulation, comparing and interpreting numerical data collected to throw
some light on any sphere of enquiry”.
Croxton and Cowden defined that “statistics as the collection, tabulation, presentation,
analysis and interpretation of numerical data”.

FEATURES

1.Collection of Data:

To begin with, proper attention should be paid to collect the data as they constitute the
foundation of statistical analysis.

Organization of Data:

After the collection of data, the first step in organizing the data is editing. This is done in
order to rectify omissions, inconsistencies etc. After the edit of data, classification is done
to arrange the data according to some common characteristics.

Presentation of Data:

The data collected should be presented through graphs, tables etc. so that the
classification of data may easily be understandable.

Analysis of Data

It is necessary to analyze the data further in order to arrive at some definite results. The
characteristic properties of the problem are revealed only when quantities like measures
of central tendency, measures of dispersion, correlation etc. are calculated. These single
figures tell us about the situation.

Interpretation of Data:
This is the last-stage in the process and, therefore, is perhaps the most-difficult part,
requiring a high degree of skill and experience. The results of the third stage are in the
form of numbers and need to be transformed into statements. These interpretations are,
to some extent, probable but could never be taken as absolutely certain.

IMPORTANCE AND LIMITATIONS OF STATISTICS.

There is the wide importance of Statistics in several areas/ subject. Statistical applications have
a wide

Policy Planning: To finalize a government or individual policy, it requires some relevant data
from previous documents or expected environment that the policy can be effectively utilised
with maximum favorable benefits/ results.

Behavioral and Social Sciences: In social sciences specially in Economics, the both types of
information i.e., quantitative and qualitative are used to analysis and draw policy
recommendations. Moreover, statistics helps the academician/ researchers to alter the
information in a comprehensive way to analysis and predict the patterns of behavior or trends.

Pure and Mathematical science: The tools of statistical are also used to have precise measures
in pure and mathematical sciences and to see differences on different occasions in various
conditions.

Education Sector: The statistical tools or instruments are also used in the area of education.
Statistics used to create patterns and trends of variables on the basis of past and present
conditions and hence showing the direction of development in education sector. Further, these
trends help to crates the policies and planning of the education.

Management and Commerce: Statistics is very useful tool in management and commerce. It
organization the various aspects of work and well being of the employees. It is also a very useful
instrument for account, which is the branch of commerce. Moreover, it also keeps an eye on
the progress trend of the organization.

Industries and Service: Statistics is a basic tool to analysis the progress of industry as well as
service sector and it also helps to make further strategies for the development of these sectors.

Problem Solving Technique: Statistics is providing the problem solving tool between two or
more variables. To find out the best applicable solution to a problem situation, we can use
statistical technique and it is possible because of statistics.

Theoretical Researches: On the basis of statistical analysis, we can establish the significance
relationship of those facts for a particular paradigm or phenomena, which theories evolve the
facts obtained from the field scope and uses.

LIMITATIONS OF STATISTICS

Although, statistics has a very extensive application in everyday life of human as well as in
social, physical, pure and mathematical sciences but it has certain limitations also. These

The first serious limitation of Statistics is that, it deals with aggregate of facts and not with
single observation. Therefore, the methods of statistics do not give any recognition to an
individual person/ object/ event.

The next limitation of statistics is that it deals mostly with numerical data. So, statistics is more
applicable to those phenomenon which can be measured quantitatively not qualatively.
However, qualitative phenomenon can be applied indirectly through the some statistical
techniques.

The third important limitation of statistics is that, its conclusions are true only on the average
or aggregates. Therefore, statistical inferences may not be considered as exact like conclusions
based on Mathematical laws or Mathematical sciences. Physical, pure and mathematical
sciences but it has certain limitations also.

Meaning of primary and secondary data

Primary Data: Data that has been generated by the researcher himself/herself, surveys,
interviews, experiments, specially designed for understanding and solving the research problem
at hand.

Secondary Data: Using existing data generated by large government Institutions, healthcare
facilities etc. as part of organizational record keeping. The data is then extracted from more
varied data files.

Difference between primary and secondary data

BASIS FOR
PRIMARY DATA SECONDARY DATA
COMPARISON

Meaning Primary data refers to the first hand Secondary data means data
data gathered by the researcher collected by someone else earlier.
himself.

Data Real time data Past data

Process Very involved Quick and easy

Source Surveys, observations, experiments, Government publications, websites,

questionnaire, personal interview, books, journal articles, internal
etc. records etc.

Cost Expensive Economical

effectiveness

Collection time Long Short

Specific Always specific to the researcher's May or may not be specific to the
needs. researcher's need.

Available in Crude form Refined form

 BASIS FOR
PRIMARY DATA SECONDARY DATA
COMPARISON

Accuracy and More Relatively less

Reliability

Data collection methods

Introduction

Data collection is an important facet of economics as it helps make informed decisions in a

systematic manner. Data is an invaluable tool to make measured decisions that saves both
time and resources. In order to collect data, economists and statisticians, among others,
partake some pertinent methods that help them acquire information related to their
concerned subjects.

Data Collection: Definition

Data collection is a process of measuring and gathering information on desired variables in a

fashion so that questions related to the data can be found and used in research of various
types. Data collection is a common feature of study in various disciplines, such as marketing,
statistics, economics, sciences, etc. The methods of collecting data may vary according to
subjects, but the ultimate aim of the study and honesty in data collection are of the same
importance in all matters of study.

Types of Data Collection

Depending on the nature of data collection, it can be divided into two major types, namely:

 Primary data collection method

 Secondary data collection method.
Primary Data Collection method
Primary data is collected by researchers on their own and for the first time in a study. There
are various ways of collecting primary data, some of which are the following:
 Interview: Interviews are the most used primary data collection method. In interviews a
questionnaire is used to collect data or the researcher may ask questions directly to the
interviewee. The idea is to seek information on concerning topics from the answers of
the respondent. Questionnaires used can be sent via email or details can be asked over
telephonic interviews.
  Delphi Technique: In this method, the researcher asks for information from the panel of
experts. The researcher may choose in-person research or questionnaires may be sent
via email. At the end of the Delphi technique, all data is collected according to the need
of the research.
 Projective techniques: Projective techniques are used in research that is private or
confidential in a manner where the researcher thinks that respondents won’t reveal
information if direct questions are asked. There are many types of projective techniques,
such as Thematic appreciation tests (TAT), role-playing, cartoon completion, word
association, and sentence completion.
 Focus Group Interview: Here a few people gather to discuss the problem at hand. The
number of participants is usually between six to twelve in such interviews. Every
participant expresses his own insights and a collective unanimous decision is reached.
 Questionnaire Method: Here a questionnaire is used for collecting data from a diverse
group population. A set of questions is used for the concerned research and respondents
answer queries related to the questionnaire directly or indirectly. This method can either
be open-ended or closed-ended.
Secondary Data Collection method
Secondary data means data that are not collected by the researcher on his own and for the
first time. In fact, secondary data is already available and needs to be collected from various
sources.
Some of the sources of data that can be used for secondary data collection include:

 Newspapers
 Magazines
 Journals
 Public records
 Business documents
 Historical and statistical documents, etc.
Apart from the sources of published data mentioned above, unpublished data acquired from
letters, diaries, and unpublished biographies can be used for secondary data collection.

Primary Data Collection: Quantitative Data Collection

Quantitative primary data collection methods may be of various types, some of which are the
following:
Probability Sampling
Here some form of random selection is carried out in the target population. Then probability
statements are made on the random sample data obtained from the population. The
advantage of random p[probability sampling is that researchers may collect data from
representatives instead of all populations and the data is mostly unbiased in form.
Interviews
Interviews are also a good way to collect primary data. Interviews can be of three types -
telephonic, face-to-face, and computer-assisted. The aim of interviews is to get unbiased
personal data about respondents in a quick and efficient manner.
Surveys
Questionnaire surveys can also be a great way to collect primary data. The questionnaire can
be sent via email or it can be web-based. The major aim of surveys is to get quick data in a
verifiable form. It is also a very easy way to get primary data from a population.
Observations
Observations are also a very straightforward way to collect quantitative data. In observations, a
group of population tinder given demographic area is observed to get answers related to the
primary research. Usually, observations are carried out to find the who, what and why of
research questions.

Methods to Collect Qualitative Data

As mentioned above, there are numerous techniques to collect qualitative data some of which
overlap with the methods of collecting quantitative data.For example, interviews can be held
to collect both quantitative and qualitative data. The same is true for observations.
The four most used techniques to collect qualitative data are surveys, group discussions,
observations, and interviews. Other techniques such as the Delphi technique and projective
techniques can also be used.
Qualitative data are often textual and used for research and analysis. Therefore, the margin of
error in qualitative data must be maintained in order to get a truthful picture of the research
outcomes. Quantitative data on the other hand needs to be accurate because they determine
the result of the research directly.

Sources of Secondary Data

Secondary data may be collected from various sources. Some of these may be internal or
collected from internal resources of the companies while some other are external or that
belongs to external sources.
The most common sources of secondary data are the following:

 Books
 Published resources
 Unpublished resources
 Journals
 Letters
 Newspapers
 Websites
  Blogs
 Diaries
 Government records
 Online libraries
 Podcasts, etc.

Classification and tabulation of data

Classification and Tabulation

The data collected for the purpose of a statistical inquiry sometimes consists of a few
fairly simple figures, which can be easily understood without any special treatment. But
more often there is an overwhelming mass of raw data without any structure. Thus,
unwieldy, unorganized and shapeless mass of collected is not capable of being rapidly or easily
associated or interpreted. Unorganized data are not fit for further analysis and interpretation.

In order to make the data simple and easily understandable the first task is not
condense and simplify them in such a way that irrelevant data are removed and their
significant features are stand out prominently. The procedure adopted for this purpose is
known as method of classification and tabulation.

Classification helps proper tabulation. “Classified and arranged facts speak themselves;
unarranged, unorganized they are dead as mutton”. -Prof. J.R. Hicks

Meaning of Classification

Classification is a process of arranging things or data in groups or classes

according to their resemblances and affinities and gives expressions to the unity of
attributes that may subset among a diversity of individuals.

Definition of Classification

Classification is the process of arranging data into sequences and groups according to
their common characteristics or separating them into different but related parts. –Secrist
 The process of grouping large number of individual facts and observations on the basis of
similarity among the items is called classification. -Stockton & Clark Characteristics of
classification

a) Classification performs homogeneous grouping of data

b) It brings out points of similarity and dissimilarities.

c) The classification may be either real or imaginary

d) Classification is flexible to accommodate adjustments

Objectives / purposes of classifications

I)To simplify and condense the large data

ii) To present the facts to easily in understandable form

iii) To allow comparisons

iv) To help to draw valid inferences

v) To relate the variables among the data

vi) To help further analysis

vii) To eliminate unwanted data

viii) To prepare tabulation Guiding principles (rules) of classifications

Following are the general guiding principles for good classifications

a) Exhaustive: Classification should be exhaustive. Each and every item in data must belong to
one of class. Introduction of residual class (i.e. either, miscellaneous etc.) should be avoided.

b) Mutually exclusive: Each item should be placed at only one class

c) Suitability: The classification should confirm to object of inquiry.

d) Stability: Only one principle must be maintained throughout the classification and
analysis.

e) Homogeneity: The items included in each class must be homogeneous.

f) Flexibility: A good classification should be flexible enough to accommodate new

situation or changed situations.

Modes / Types of Classification

Modes / Types of classification refers to the class categories into which the data could be
sorted out and tabulated. These categories depend on the nature of data and purpose for
which data is being sought.

Important types of classification

a) Geographical (i.e. on the basis of area or region wise)

b) Chronological (On the basis of Temporal / Historical, i.e. with respect to time)

c) Qualitative (on the basis of character / attributes)

d)Numerical, quantitative (on the basis of magnitude)

a)Geographical Classification

In geographical classification, the classification is based on the geographical regions.

Ex: Sales of the company (In Million Rupees) (region –wise)

Region Sales

North 285

South 300

East 185

West 235
b )Chronological Classification

If the statistical data are classified according to the time of its occurrence, the type of
classification is called chronological classification.

Sales reported by a departmental store

Month Sales(Rs.) in lakhs

January 22
February 26

April 30
March 32
May 25
June 27

c) Qualitative Classification

In qualitative classifications, the data are classified according to the presence or

absence of attributes in given units. Thus, the classification is based on some quality
characteristics / attributes.

Ex: Sex, Literacy, Education, Class grade etc.

Further, it may be classified as

a) Simple classification

b) Manifold classification

a)Simple classification: If the classification is done into only two classes then
classification is known as simple classification.

Ex:

a) Population in to Male / Female

b) Population into Educated / Uneducated

b) Manifold classification: In this classification, the classification is based on more than one
attribute at a time.

Ex:

d)Quantitative Classification: In Quantitative classification, the classification is based on

quantitative measurements of some characteristics, such as age, marks, income,
production, sales etc. The quantitative phenomenon under study is known as variable
and hence this classification is also called as classification by variable.

Ex: For a 50 marks test, Marks obtained by students as classified as follows

Marks No. of students

0 –10 5

10 –20 7

20 –30 10

30 –40 25

40 –50 3

Total Students = 50

In this classification marks obtained by students is variable and number of

students in each class represents the frequency.

Tabulation Meaning and Definition of Tabulation

Tabulation may be defined, as systematic arrangement of data is column and

rows. It is designed to simplify presentation of data for the purpose of analysis and
statistical inferences.

Major Objectives of Tabulation

1. To simplify the complex data

2. To facilitate comparison

3. To economies the space

4. To draw valid inference / conclusions

5. To help for further analysis

Differences between Classification and Tabulation

1.First data are classified and presented in tables; classification is the basis for tabulation.

2. Tabulation is a mechanical function of classification because is tabulation classified data are

placed in row and columns.

3. Classification is a process of statistical analysis while tabulation is a process of presenting

data is suitable structure.

Classification of tables

Classification is done based on

1. Coverage (Simple and complex table)

2.Objective / purpose (General purpose / Reference table / Special table or summary

table)

3. Nature of inquiry (primary and derived table).

Ex:

a) Simple table: Data are classified based on only one characteristic

Distribution of marks

Class Marks No. of students

30 –40 20

40 –50 20
 50 –60 10

Total 50

b) Two-way table: Classification is based on two characteristics

Class Marks No. of students

Boys Girls Total
30 – 40 10 10 20
40 – 50 15 5 20
50 – 60 3 7 10
Total 28 22 50

Frequency Distribution
Frequency distribution is a table used to organize the data. The left column (called classes or
groups) includes numerical intervals on a variable under study. The right column contains the
list of frequencies, or number of occurrences of each class/group. Intervals are normally of
equal size covering the sample observations
range. It is simply a table in which the gathered data are grouped into classes and the number
of occurrences, which fall in each class, is recorded.

Definition
A frequency distribution is a statistical table which shows the set of all distinct values of the
variable arranged in order of magnitude, either individually or in groups with their
corresponding frequencies. - Croxton and Cowden
A frequency distribution can be classified as
a) Series of individual observation
b) Discrete frequency distribution
c) Continuous frequency distribution
a) Series of individual observation
Series of individual observation is a series where the items are listed one after the each
observation. For statistical calculations, these observation could be arrange is either ascending
or descending order. This is called as array.
Ex:
Roll No Marks obtained in
statistics paper
1 83
2 80
3 75
4 92
5 65

The above data list is a raw data. The presentation of data in above form doesn’t reveals any
information. If the data is arranged in ascending / descending in the order of their magnitude,
which gives better presentation then, it is called arraying of data.
Discrete (ungrouped) Frequency Distribution
If the data series are presented in such away that indicating its exact measurement of units,
then it is called as discrete frequency distribution. Discrete
variable is one where the variants differ from each other by definite amounts.
Ex:

Assume that a survey has been made to know number of post-graduates in 10 families at
random; the resulted raw data could be as follows.
0, 1, 3, 1, 0, 2, 2, 2, 2, 4
This data can be classified into an ungrouped frequency distribution. The number of post-
graduates becomes variable (x) for which we can list the frequency of occurrence (f) in a tabular
from as follows;
Number of post Frequency (f)
graduates (x)

0 2

1 2
 2 4

3 1

4 1

The above example shows a discrete frequency distribution, where the variable has discrete
numerical values.

Continuous frequency distribution (grouped frequency distribution)

Continuous data series is one where the measurements are only approximations and are
expressed in class intervals within certain limits. In continuous frequency distribution the class
interval theoretically continuous from the starting of the frequency distribution tills the end
without break.
According to Boddington „the variable which can take very intermediate value between the
smallest and largest value in the distribution is a continuous frequency distribution.
Ex: Marks obtained by 20 students in students‟ exam for 50 marks are as given below – convert
the data into continuous frequency distribution form.
18 23 28 29 44 28 48 33 32 43
24 29 32 39 49 42 27 33 28 29
By grouping the marks into class interval of 10 following frequency distribution tables can be
formed.
Marks No. of students

0-5 0

5 – 10 0

10 – 15 0

15 – 20 1
 20 – 25 2

25 – 30 7

30 – 35 4

35 – 40 1

40 – 45 3

45 – 50 2

Diagrammatic and graphical representation Introduction – Significance – Difference between

diagrams and graphs – Types of diagrams (Multiple Bar diagrams & Percentage bar diagrams)
and graphs (Histograms, Frequency polygons, Ogives).