Business Statistics

Facilitator: Dr. Abhijeet Lele

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Linear Regression

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ANOVA (Analysis of Variance)
• An ANOVA test is a way to find out if survey or experiment results are
significant.

• It is used to analyze the differences among group sample means

drawn independently from a normally distributed population
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Example
• Following randomly selected data shows effect of employee
engagement exercise on positive change in engagement score of
employees at three different locations Mumbai, Pune, Hyderabad.
Mumbai Pune Hyderabad

2 3 4
4 5 6
6 7 8

• Find if there is a significant difference between average effect of

employee engagement output at Mumbai, Pune, Hyderabad.
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t-Test

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Exercise
A batch of batteries with an average of
60v. If 9 batteries are selected at random,
and were found to have average of 62v
and standard deviation of 9v, do you
think there is defect in batteries?

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Exercise
It is known that mean Brinell hardness
of ductile iron pieces is 170. An engineer
measured the Brinell hardness of 25 pieces of
ductile iron and believes that brinell hardness
is more than 170. If mean hardness of 25
pieces is 172.52 with standard deviation of
10.31, then test engineer’s hypothesis.
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Chi-Square Test
The Chi Square statistic is commonly used for testing relationships
between categorical variables. 

The null hypothesis of the Chi-Square test is that no relationship exists on

the categorical variables in the population; they are independent.

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Chi-Square Test

O = Original value
E = Expected Value

E= (Row Total * Column Total)/N

Degree of freedom= (no of rows-1)*(no of columns-1)

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Exercise
In an antimalarial campaign in India, Quinine was administered to 500 persons
out of a total population of 2000. The no. of fever cases is shown below.

Is there a significant relationship between administration of drug and

treatment of malaria?

Administration of Fever No Fever

Drug/Treatment of malaria

Quinine 20 480

No Quinine 100 1400

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Probability
Example

What is the probability of getting a 2

or 5 when a single dice is rolled?
Example

What is the probability of getting a 2

and 5 when pair of dice is rolled
together?
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Example

Find the probability of selecting a

black card or a 6 from a deck of 52
cards.
Example

Say, a fair coin is tossed twice. What

is the probability of getting two
consecutive tails
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Conditional Probability
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Example
In an organization, the percentage of
employees who are men and poor
performers are 2.25%. What is the
probability of an employee being a poor
performer given that employee is a man?

Note: Assume, there are only two categories

of Gender: Male and Female in Organization.
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Bayes’ Theorem
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Example
Assume that the word ‘jackpot’ occurs in 8% of the spam
messages in my account. Also, let’s assume ‘jackpot’ occurs
in 10% of e-mails. If 30% of the received e-mails are
considered as spam, what is the probability of a message
being spam when it is known to contain word “jackpot”?
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 Thank You !

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