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DBM
Quantitative Techniques in Management
Semester - 1
Session - 1
Text
Quantitative Techniques
C.R. Kothari
Arun Sharma
References
London N.P., Linear Programming, Tata McGraw-Hill
Gupta S.P.& Gupta M.P. 1995, Business Statistics, 10th Ed. Sultan Chand &
Sons
Kapoor V.K. 1997, Operations Research, 5th Ed. Sultan Chand & Sons
Sharma J.K. 1997, Operations Research: Theory & Application, Mac Millan
India Ltd.
Gupta S.P., Statistical Techniques, Sultan Chand & Sons
Grobner D.F. & Shannon P.W., Essential of Business Statistics: A Decision
Making Approach, MacMillan College Publishing Co.
Fleming M.C. & Joseph G.N. 1996, Statistics for management, 2nd Ed. Prentice
Hall of India
Allen R.G.D. 1997, Mathematics Analysis for Economics, AITBS Publishers &
Distributors
INTRODUCTION TO
STATISTICS
Statistics and planning: Statistics in indispensable into planning in the modern age which is termed as the
age of planning. Almost all over the world the govt. are re-storing to planning for economic development.
2.
Statistics and economics: Statistical data and techniques of statistical analysis have to immensely useful
involving economical problem. Such as wages, price, time series analysis, demand analysis.
3.
Statistics and business: Statistics is an irresponsible tool of production control. Business executive are
relying more and more on statistical techniques for studying the much and desire of the valued customers.
4.
Statistics and industry: In industry statistics is widely used inequality control. In production engineering to
find out whether the product is confirming to the specifications or not. Statistical tools, such as inspection
plan, control chart etc.
DESCRIPTION OF DATA
Analysis
of Data
Organization
of Data
Presentation
of Data
EXAMPLE:
A)
Collection of Data
1. Previous Information
Search for relevant information from books,
newspapers, magazines, world wide web, etc.
2. Questionnaire
Set a questionnaire and distribute to each member
of the target group to obtain the relevant information.
A)
Collection of Data
3. Observation
Obtain the required information through direct
observation, measurement or counting.
4. Experiment
Obtain the required information by doing real
experiments.
5. Interview
Through household surveys, street surveys or
telephone interviews to obtain the required data.
EXAMPLE:
(a) Questionnaire
(b) Interview
(c) Observation
B)
Classification of Data
1. Discrete Data
Discrete data can only take up certain values and
these values are usually obtained by counting, and
so are often positive integers.
E.g. the number of rotten apples in a box.
Note : Discrete data may NOT be numbers. Some examples are
peoples religions and favourite singers.
These data are called nominal data.
B)
Classification of Data
2. Continuous Data
Continuous data can take up any value within a
reasonable interval and these values are usually
obtained from measurements.
E.g. the weights of the apples in a box.
EXAMPLE:
EXAMPLE:
Discrete data
(b) bag.
The time that a group of students spent
on their individual presentation.
Continuous data
Continuous data
Discrete data
Tally
Number of
students
11
//
12
15
13
17
14
//// /
EXAMPLE:
EXAMPLE:
11
13
17
10
22
18
11
10
14
20
16
10
Tally
Number of
students
03
//// ////
47
13
8 11
//// //// /
11
12 15
//
16 19
///
20 23
//
Pie Charts
Broken-line Graphs
Stem-and-leaf Diagrams
Scatter Diagrams
Pie Charts
1. Understanding Pie Charts
i. A pie chart is appropriate to present the various
statistical items as percentages of the whole.
E.g.
A)
Pie Charts
1. Understanding Pie Chart
ii. Each item can be indicated as a percentage of the
whole set of data or as the angle of the sector.
E.g.
Monthly expenditure
of a family
Monthly expenditure
of a family
A)
Pie Charts
2. Drawing a Pie Chart
i.
x = 360 90 225
= 45
Favourite singers of
120 teenagers
Favourite singers of
120 teenagers
EXAMPLE:
(a) 40 + 35 + 5 + x = 100
x = 100 40 35 5
= 20
Total:
140
100%
360o
(c) ii.
B)
Broken-line Graphs
1. Understanding Broken-line Graphs
i. A broken-line graph is used to show the change
in the data over a period of time and their overall
tendency.
E.g.
Year
B)
Broken-line Graphs
2. Drawing a Broken-line Graph
i. List on the horizontal axis, the time of happenings
of the statistical item in order of magnitude.
ii. List the frequencies of the item on the vertical
axis.
iii. All necessary scales, items, values and units
should be shown clearly on the two axes.
iv. Use or x to indicate points that represent the
frequency of the corresponding statistical item.
v. Join adjacent points by line segments.
vi. Give a title to the broken-line graph.
EXAMPLE:
160
160
Number
Numberof
ofVisitors
Visitorsto
tothe
thePark
Parkin
inaa
Particular
ParticularDay
Day
140
140
Numberof
ofVisitors
Visitors
Number
120
120
100
100
80
80
60
60
40
40
20
20
00
12:00
12:00
14:00
14:00
16:00
16:00 18:00
18:00
Time
of
Day
Time of Day
20:00
20:00
22:00
22:00
160
160
Number
Numberof
ofVisitors
Visitorsto
tothe
thePark
Parkin
inaa
Particular
ParticularDay
Day
Numberof
ofVisitors
Visitors
Number
140
140
120
120
100
100
80
80
60
60
40
40
20
20
00
12:00
12:00
14:00
14:00
16:00
16:00 18:00
18:00
Time
of
Day
Time of Day
20:00
20:00
22:00
22:00
EXAMPLE:
Month
EXAMPLE:
Month
C)
Stem-and-leaf Diagrams
1. Understanding Stem-and-leaf Diagrams
i. A stem-and-leaf diagram is used to present the
data in a graphical way and record the values of
all the original data.
E.g.
8
0
0
1
9
2 3 3 4 6 7 7 8 9
0 1 2 2 2 5 6 8
3 5 7
C)
Stem-and-leaf Diagrams
1. Understanding Stem-and-leaf Diagrams
ii. If we want to compare two groups of related data,
we can use back-to-back stem-and-leaf
E.g.
diagram.
C)
Stem-and-leaf Diagrams
2. Drawing a Stem-and-leaf Diagram
i. Check the range of the collected data and choose
the place values for the stems and the leaves.
ii. Arrange the numbers in the stem from top to
bottom in an ascending order of magnitude.
iii. List each datum to the right of its corresponding
stem.
iv. Arrange the data in the leaves in ascending order.
5
2
0
0
0
1
5
5
0
0
0
3
8
5
2 2 3 4 7
0 5 5 8 8
2 2 4 5
5
EXAMPLE:
EXAMPLE:
10 25 45 85 90 90 95
00 30 50 50 81
15 60 60
20 22
30 90
82
EXAMPLE:
Group A
103 119
100
Group B
93 102
86
113
117
85
98
115
112
102
100
114
120
126
121
127
118
114
120
115
112
121
88
90
101
123
106
107
(a)
3
7 6 2 2 1 0 0
8 5 4 4 3 2
3 0
8
9
10
11
12
Group A
Leaf (Units digits)
1
0
3
2
0
5 6 8
8
5 7 9
1 1 6 7
(b) From the diagram in (a), there are more students in group A
whose IQ are 120 or above.
Group A has more gifted students.
Scatter Diagrams
1. Understanding Scatter Diagrams
i. A scatter diagram is appropriate to show whether
two variables have close relationship with each other.
E.g.
D)
Income ($)
Example
D)
Scatter Diagrams
1. Understanding Scatter Diagrams
ii. In general, the two variables x and y may relate in
different ways.
values of x increase,
values of y increase
values of x increase,
values of y decrease
D)
Scatter Diagrams
2. Drawing a Scatter Diagram
i.
EXAMPLE:
The heights of fathers and their sons are shown in the scatter
diagram.
Sons' height
height (cm)
(cm)
Sons'
195
195
Heights
Heights of
of fathers
fathers and
and their
their sons
sons
190
190
185
185
180
180
175
175
170
170
165
165
160
160
155
155
140
140
150
150
160
160
170
170
180
180
Fathers'
Fathers'height
height (cm)
(cm)
190
190
200
200
EXAMPLE:
Student
Time spent on studying
(min)
No. of mistakes
EXAMPLE:
Number of mistakes
E)
EXAMPLE:
EXAMPLE:
Number of students
Year
EXAMPLE:
Mark
EXAMPLE:
Leaf (1 sq.ft.)
15 24
30 25 70 89
40 48 90
28
EXAMPLE:
Number of citizens
Expensive
217
Moderate
285
Cheap
16
EXAMPLE:
EXAMPLE:
Telecommunications Company
EXAMPLE:
1
that of HK United.
5
EXAMPLE:
Year
EXAMPLE:
(a) Suppose each small square in the figure has a side of 1 unit:
Area of triangle B = 1 16 30 sq. units
2
= 240 sq. units
Area of triangle A = 1 8 15 sq. units
2
= 60 sq. units
The required multiple = 240 4
60
Thus, the area of B is 4 times that of A.
EXAMPLE:
Profit ($ million)
Profit ($ million)
Fig. A
Year
Year
Fig. B
EXAMPLE:
They are much easier on the eye, being more visually attractive.
They are easier on the brain, in that they are less difficult to
comprehend at a glance.
Disadvantages: