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Hypothesis testing, Z test, t test, chi square test and f test

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POPULATION:

Population or universe refers to the aggregate of

statistical information on a particular character of all the

members covered by an investigator/ enquiry.

POPULATION SIZE:

Refers to the total numbers of members in a certain

group. Population may be finite of infinite.

SAMPLING:

Refers to the selection of a sample from the population

with a view to ascertain the characteristics of the whole.

SAMPLE:

A sample is that part of the universe which we select for

the purpose of investigation.

CENSUS:

When each and every unit of the population is

investigated for the characteristics under study. 2

Economic Method:

This method is much more economical than complete census because

only a fraction of population is studied.

Save time as well as labour:

There is saving of time & labour not only in conducting the sample

enquiry but also in processing, editing & analyzing the data.

Testing of Accuracy:

The accuracy of the sampling investigation can be tested by comparing

the result of two or more samples.

Detailed & Intensive Enquiry:

The number of units under study is kept limited & this makes it possible

to study them in detail & intensively.

Reliability:

If sample are taken in proper size & on proper grounds, the results of

sampling will be almost the same which might have been obtained by

3

census method.

Misleading Results:

If a sample survey is not properly planned & carefully

executed, the results obtained may be unreliable &

misleading.

Need of Specialised Knowledge:

An efficient sampling requires the services of qualified,

skilled & experienced personnel.

Heterogeneous Units:

If the units of population are too heterogeneous, the

sampling techniques cant give fair results.

Impossibility of Sampling:

Sometimes the universe may be so small that it may be

impossible to draw a representative sample from it.

4

TERMS RELATED TO HYPOTHESIS TESTING:

Hypothesis:

Hypothesis is an assumption about a population

parameter.

Null Hypothesis:

Null Hypothesis is the assumption which we

wish to test and whose validity is tested for

possible rejection on the basis of sample

information.

It is denoted by Ho

Alternate Hypothesis:

Any hypothesis which is complementary to the

null hypothesis is called alternate hypothesis.

It is denoted by H1

5

Hypothesis Testing:

Hypothesis testing is a process of making a

decision on whether to accept or reject an

assumption about the population parameter on the

basis of sample information at a given level of

significance.

Level of significance:

Level of significance is the maximum probability of

rejecting the null hypothesis when it is true.

It is usually expressed as % and is denoted by

For example: 5% LOS implies that there are about

5 chance out of 100 of rejecting the null hypothesis

when it is true OR we are about 95% confident

that we will make a correct decision.

6

Critical Region / Rejection Region:

A region in the sample space in which if the computed

value of the test statistic lies, we reject the null

hypothesis, is called critical or rejection region.

Critical Value:

Critical value is that value of statistics which separates

the critical region from the acceptance region. It lies

at the boundary of the region of acceptance &

rejection.

Acceptance Region

One Tailed Test:

It is also known as one sided test. It is a test in

which rejection region is located in one side or in one

tail of the distribution of testing statistic.

On the basis of side or tail it maybe left tail or right

tail test.

For Eg: Testing a population with mean 50.

Acceptance Acceptance

Region Region

H0 : = 50 H0 : = 50

H1 : < 50 H1 : > 50 8

Two Tail Test:

It is also known as two sided test. It is a test in which

rejection region is located in both the tails of probability

curve of the sampling distribution.

For Eg: For testing a population mean 50

H0 : = 50

H1 : 50

Acceptance Region

9

Type I Error:

A type I error occurs when one rejects the null hypothesis

when it is true.

The probability of committing Type I error is denoted by

that is level of significance

Type II Error:

A type II error occurs when one accepts the null hypothesis

when it is false.

The probability of committing Type II error is denoted by .

True

Situation

H0 is True H0 is False

10

Parameter:

Parameter is a statistical measure based on each & every

item of the population.

Parameter shows the characteristics of the population.

Statistic:

Statistic is a statistical measure based on items / observation

of a sample. Since the values of statistic varies from sample

to sample, it has sampling error and sampling fluctuations.

Notations Used for Parameter & Statistic:

1 Size N n

2 Mean X

3 Standard Deviation S

11

The following are the steps involved in test of

significance.

STEP 1: Setting up of a null hypothesis:

This step involves setting of null and alternate

hypothesis. For eg: To test the population mean

50, null hypothesis & alternate hypothesis may

be formulated as:

Type of Test

(H0) (H1)

. (i) Right Tail H0 : = 50 H1 : > 50

. (ii) Left Tail H0 : = 50 H1 : < 50

12

STEP 2: Specify the test statistics to be used:

Test

S.No. Conditions

Statistics

1 Z - Test

large sample size i.e. n > 30

2 t - Test

small sample size i.e. n 30

For testing the discrepancy between

3 X2 - Test observed frequency and expected

frequency

For comparing several means at the

4 F Test

same time.

13

STEP 3: Compute the value of test statistic:

Compute value of test statistic (z,t, X2, f) used in testing.

STEP 4: Specifying level of significance:

In general, 5% and 1% level of significance is taken.

STEP 5: Finding critical value:

Find the critical value of the test statistic used at the

selected level of significance from the table of

respective sampling distribution (z, t,X2, f) .

STEP 6: Interpretation:

Specify the decision as follows:

If the critical value (table value) is greater than

computed value then we accept null hypothesis (Ho).

computed value then we reject null hypothesis (Ho).

14

15

Test of Significance of Large Sample

A sample is regarded as large only if its size

exceeds 30.

Step 1: Setting up Ho & H1 as follows:

Ho = & H1 (Two Tail Test)

Ho = & H1 > (Right Tail Test)

Ho = & H1 < (Left Tail Test)

Step 2: Appropriate test statistic to be used is Z

test , when the sample size exceeds 30 or

population SD is known.

Step 3: Calculate Standard Error of mean as follows

SE = (if population SD is Known)

n

X

n 16

Step 4: Calculate value of Z as follows:

-x

Z=

SE x

Where

is Sample Mean

x

is Population Mean

Step 5 : Look for critical value of z at a given level

of significance (5% or 1%) from the normal

distribution table for two tail or one tail test.

1% 2.58 2.33

5% 1.96 1.64

17

STEP 6: Interpretation:

Specify the decision as follows:

If the critical value (table value) is

greater than computed value then we

accept null hypothesis (Ho).

less than computed value then we

reject null hypothesis (Ho).

18

Illustration 1

A company manufacturing automobile tyres, finds that

tyre life is normally distributed with a mean of 40,000

km and standard deviation of 3,000 km. It is believed

that a change in the production process will result in a

better product and the company has developed a new

tyre. A sample of 100 new tyres has been selected. The

company has found that the mean life of these new

tyre is 40,900 km. Can it be concluded that the new

tyre is significantly better than the old one, using the

significance level of 0.01? 19

Illustration 2

An insurance agent has claimed that the

average age of policyholders who insure

through him is less than the average for all

other agents, which is 35 years. A random

sample of 40 policy holders who have

insured through him gave an average of 32

years with a standard error of 2 years.

whether the insurance agents claim is

justifiable. 20

3. Philips company claims that the length of life of its

electric bulb is 2000 hours with the SD of 30 hours. A

random sample of 25 showed an average life of 1940

hours with a standard deviation of 25 hours. At 5% LOS,

can we conclude that the sample has come from

population with mean of 2000 hours.

4. A random sample of 900 members is found to have a

mean of 3.4 cm. Could it be reasonably regarded as a

simple sample from a large population whose mean is

3.25 cm and standard deviation 2.4 cm.

5. From a normally distributed infinite number of iron bars

with mean and standard deviation as 4m and 0.6m

respectively, a sample of 100 bars is taken. If the sample

mean is 4.2m, can the sample be called a truly random

sample? 21

Practical steps involved in two tailed test for difference

between the means of two samples:

Step1: Setting up the hypothesis as follows:

H0 : There is no significant difference between the

means of two samples i.e. 1 = 2

H1 : There is significant difference between the means of

two samples i.e. 1 2

Step2: Appropriate test should be Z when sample size

exceeds 30

Step3: Calculation of Standard Error:

Standard Error

Case

(SE)

same population with standard deviation = (n + )

2 1

1

1

n2

1 2 2 2

b) If samples of size n1 & n2 are drawn from

two different population with standard = n1 + n2

=

deviation 1 &2 (i) 1 & 2 are known

S1 2 S2 2

( (ii) 1 &2 are unknown

n1 + n2 22

Step 4: Calculation of value of Z

X1 - X2

Z=

SE

Step 5 : Look for critical value of z at a given level

of significance (5% or 1%) from the normal

distribution table for two tail.

LOS 1% 5%

Two Tail Test 2.58 1.96

STEP 6: Interpretation:

Specify the decision as follows:

If the critical value (table value) is greater than

computed value then we accept null hypothesis (Ho).

value then we reject null hypothesis (Ho).

23

Illustrations

6. The mean yield of wheat from a district A was 210kg with

SD 10kg per acre from a sample of 100 plots. In another

district B, the mean yield was 220 kg with SD 12kg from a

sample of 150 plots. Assuming that the SD of the yield in

entire state was 11kg. Test whether there is any significant

difference between the mean yield of crops in the two

districts.

7. A random sample of 200 villages was taken for Allahabad

district and the average population per village was found

to be 485 with SD of 50. Another random sample of 200

villages from the same district gave an average population

of 510 per village with SD of 40. Is the difference

between averages of two sample statistically significant?

24

25

Test of Significance of Small Sample

A sample is regarded as small if sample size is less than or equals to 30.

Step 1: Setting up Ho & H1 as follows:

Ho = & H1 (Two Tail Test)

Ho = & H1 > (Right Tail Test)

Ho = & H1 < (Left Tail Test)

Step 2: Appropriate test statistic to be used is t test , when the

sample size is less than 30 and population SD is unknown.

Step 3: Calculate Standard Error of mean as follows

x2

SE =

X

;x=X-

n-1

=

n S2

n-1 ;S Sample SD

26

Step 4: Calculation of value of t as follow:

-x

t=

SE/ n

Step 5: Calculation degree of freedom:

= n -1

Step 6 : Look for critical value of t at a given level

of significance (5% or 1%) and calculated

degree of freedom

STEP 7: Interpretation:

Specify the decision as follows:

If the critical value (table value) is greater than

computed value then we accept null hypothesis

(Ho).

If the critical value (table value) is less than

computed value then we reject null hypothesis

(Ho).

27

Q1) A soap manufacturing company was distributing a particular

type of brand through a large number of retail shops. Before a

heavy advertising campaign, the mean sales per week per shop

was 140 dozens. After the campaign, a sample of 26 shops was

taken & the mean sales was found to 147 dozens with SD 16.

Can you consider advertisement effective? (2001 2002)

Q2) Six boys are selected at random from a school and their marks in

mathematics found to be 63,63,64,66,60 and 68 out of 100. In the

light of these marks discuss the general observation that the mean

marks in mathematics in the school were 66.

colony has a mean 63.5 cm & variance 6.25 cm. Test at 5% LOS,

the hypothesis that the children of the given colony are on average

less than 65 cm in all. ( The value of t for 9 dof at 5% LOS is 2.262)

28

29

Hpothesis Test Concerning The Difference Between

Two Population Mean

Step1: Setting up the hypothesis as follows:

H0 : There is no significant difference between the

means of two samples i.e. 1 = 2

H1 : There is significant difference between the

means of two samples i.e. 1 2

Step 2: Appropriate test statistic to be used is t

test , when the sample size is less than 30 or

population SD is unknown.

Step 3: Calculate Standard Error as follows:

x12 + x22

SE = n1 + n2 - 2

n1 S12 + n2 S22

=

n1 + n2 - 2 30

Step 4: Calculation of value of t as follow:

X1 X2

t= 1 1

SE +

n1 n2

Step 5: Calculation degree of freedom:

= n1 + n2 - 2

Step 6 : Look for critical value of t at a given level

of significance (5% or 1%)

Step 7: Interpretation:

Specify the decision as follows:

If the critical value (table value) is greater than

computed value then we accept null hypothesis

(Ho).

If the critical value (table value) is less than

computed value then we reject null hypothesis

(Ho).

31

ILLUSTRATIONS

Q1) Two groups of students appeared in a test

examination and the marks obtained by them were as

follows:

Ist Group 18 20 36 50 49 36 34 49 41

IInd Group 29 28 26 35 30 44 46 - -

marks secured by the above two groups.

Q2) Two salesmen A & B are employed by a company.

Recently, it conducted a sample survey yielding the

following data:

Salesman A Salesman B

No. of sales 20 22

Avg weekly sales (Rs in lakh) 30 25

Standard Deviation (Rs lakh) 10 7

sales of the two salesmen? 32

33

34

Chi Square Test

Chi square test is a measurement which tells about

the magnitude of difference between actual of

observed frequencies (fo) and corresponding

theoretical frequencies (fe).

Mathematically, it is expressed as:

X = [ ]

2 (fo fe)2

fe

Properties:

It is a non - parametric test.

It is continuous probability distribution.

It is not symmetrical. It is skewed to the right.

It has only one parameter i.e. degree of freedom.

Its variance is 2 times d.o.f. (Variance = 2 d.o.f.)

Condition for application of X2-test:

Random Samples

Independent Observations

Atleast 50 Observations.

Test of Independence:

Chi square test is used to examine the association

or independence between two sets of attributes.

For Eg: To test whether there is any association

b/w the level of intelligence of fathers & sons or

both are independent.

Test of goodness of fit:

Chi square test is also used to determine whether

actual or observed frequencies correspond to any

specified theoretical frequency distribution such

as Binomial. Poisson & Normal Distribution.

Test of homogeneity

In this test it is determined whether two or more

independent random samples have been drawn

from the same population or not.

Steps Involved In Testing Independence of Attributes:

Step 1 : Set up the hypothesis as follows:

H0 : No association exists between the attributes.

H1 : An association exists between the attributes.

Step 2 : Calculate expected frequencies (fe):

Ri X Cj

(fe)ij = n

Where R is an ith row totat

C is a jth column total

n is sample size

Step 3 : Calculate value of Chi Square (X2):

X = [ ]

2 (fo fe)2

fe

38

fo fe fo - fe (fo - fe)2 (fo - fe)2/ fe

Total X2 =

Step 4: Calculation degree of freedom:

v = (r -1) (c -1)

Step 5 : Look for critical value of X2 at a given level

of significance (5% or 1%)

STEP 6: Interpretation:

Specify the decision as follows:

If the critical value (table value) is greater than

computed value then we accept null hypothesis

(Ho).

If the critical value (table value) is less than

computed value then we reject null hypothesis

(Ho). 39

Steps Involved In Testing

Goodness Of Fit:

Step 1 : Set up the hypothesis as follows:

H0 : fo = fe

H1 : fo fe

Step 2 : Calculate expected frequencies (fe):

Calculate expected frequencies using appropriate

theoretical distribution such as:

Binomial: Expected Frequency=NP(r) = N Cr p q

n r n-r

-m x

Poisson: Expected Frequency= NP(x) = N e m

x!

Sum of Frequencies

Normal : Expected Frequency=

No. of Observation

40

Step 3 : Calculate value of Chi Square (X2):

X 2

= [

(fo fe)2

fe ]

fo fe fo - fe (fo - fe)2 (fo - fe)2/ fe

Total X2 =

Step 4: Calculation degree of freedom:

v = n-1

Step 5 :Look for critical value of X2 at a given level of

significance (5% or 1%).

STEP 6: Interpretation: Specify the decision as follows:

If the critical value (table value) is greater than

computed value then we accept null hypothesis (Ho).

If the critical value (table value) is less than computed

value then we reject null hypothesis (Ho).

41

Q1) 100 students of management institute obtained

the following grades in the statistics paper.

Grade A B C D E Total

Frequency 15 17 30 22 16 100

distribution of grade is uniform.

Q2) A survey of 320 families with 5 children each

revealed the following distribution:

No. of boys 5 4 3 2 1 0

No. of girls 0 1 2 3 4 5

No. of families 18 56 110 88 40 8

0.05 & 0.01 LOS respectively. Test the hypothesis

that male & female births are equally probable. 42

Question 3

The employees in 4 different firms are

distributed in three skill categories shown in

the following table. Test the hypothesis that

there is no relationship between the firm and

the type of labour. Let the level of significance

be 5%.

Firm

A B C D

Type of labour

Skilled 24 24 23 49

Semi Skilled 32 60 37 51

Manual 24 56 40 80

43

Question 4

Five coins were tossed 3200 times and the

number of heads appearing each time is

noted as shown below:

No. of heads 0 1 2 3 4 5

Frequency 80 570 1100 900 500 50

that all the coins are unbiased.

44

Question 5

The following table shows the number of

road accidents in a city, that occurred

during various days of a week:

Days Sun Mon Tue Wed Thu Fri Sat

No. of accidents 14 16 8 12 11 9 14

accidents are normally distributed over

different days of the week.

45

Question 6

By using Chi square test, find out

whether there is any association

between income level and type of

schooling:

Public Govt.

Income

School School

46

47

48

The Analysis of

F - Test

Variance or F Testis a technique

develop by R A Fisher to test for the significance of the

difference among more than two sample means and to

make inferences about whether such samples are

drawn from the population having the same mean.

F test is based on the ratio rather than the difference

between variance.

F test is obtained by taking ration of unbiased

estimates of population variances as follows:

n1S12

var12 (n1 1)

f= var22 = n2S22

(n2 1)

n1 sample size of first population.

n2 sample size of second population.

S1 Standard deviation of first population.

S2 Standard deviation of second population. 49

Assumptions:

Samples are randomly drawn from the

population

distributed population.

drawn have same means & variances.

50

CLASSIFICATION MODEL:

(a) One Way Model

(b) Two Way Model

Salesman

One Factor

Salesman

EXPERIMENT

Sales

Two Factors

Season

51

Practical Steps Involved In Preparation Of ANOVA

Table For One Factor Analysis Of Varince

STEP 1:

We set null hypothesis and alternate hypothesis as:

Ho : 1 = 2 = 3 = 4 .. = n

H1 : Atleast two means are not equal

STEP 2:

Calculate the sum of observations of each sample i.e.

X1, X2, X3,, Xn.

Now square the observations and obtain their total

for each sample i.e. X12, X22, X32, . Xn2.

STEP 3:

Calculate Correction Factor (T2/N) as follows:

T2 (Sum of all observation of all samples)2

N = Total no. of observation of all the samples

52

T2 = (X1 + X2 + X3 + + Xn)2

N N

STEP 4:

Calculate Sum of Square between samples(SSB) as

follows:

SSB = (Sum of Observation of sample)12+ .. C.F.

(No. of items in column)

+ ..... +

(X1)2 (X2)2 (X3)2 (Xn)2 T2

SSB = n1 + n2 + n3 nn -

N

STEP 5:

Calculate Total Sum of Square (SST) as follows:

53

STEP 6:

Calculate Sum of Square within sample (SSW) as

follows:

SSW = SST SSB

STEP 7:

Preparation of ANOVA Table:

Sources Of Sum Of d.o.f Mean Variance

Variation Squares Squares Ratio

Between SSB c -1

Samples

MSB = SSB

c-1

F = MSB

Within SSW N-c MSW = SSW

MSW

Samples N-c

Total SST N1

54

Step 8:

Calculate critical value at given level of

significance.

Step 9:

Interpretation:

Compare the computed value of F with the table

value of F for the given level of significance and

interpret the same as follows:

Case (a) :

If Critical Value > Calculated Value; Accept null

hypothesis

Case (b) :

If Critical Value < Calculated Value; Reject null

hypothesis 55

56

57

Practical Steps Involved In Preparation Of

ANOVA Table For Two Way Model

STEP 1:

We set null hypothesis and alternate hypothesis as:

Ho : 1 = 2 = 3 = 4 .. = n

H1 : Atleast two means are not equal

STEP 2:

Calculate the sum of observations of each row and

each column.

Now square the observations and obtain their total

for each sample.

STEP 3:

Calculate Correction Factor (T2/N) as follows:

T2 (Sum of all observation of all samples)2

N = Total no. of observation of all the samples

58

T2 = (X1 + X2 + X3 + + Xn)2

N N

STEP 4:

Calculate Sum of Square between columns (SSC) as:

(Sum of Square of total of each columns)12+ .. C.F.

SSC=

(No. of items in column)

+ ..... +

(X1)2 (X2)2 (X3)2 (Xn)2 T2

SSC = n1 + n2 + n3 nn - N

STEP 5:

Calculate Sum of Square between rows (SSR) as:

SSR= (Sum of Square of total of each row)12 + .. C.F.

(No. of items in row)

+ ..... +

(Y1)2 (Y2)2 (Y3)2 (Yn)2 T2

SSR = r1 + r2 + r3 rn - N

59

STEP 6:

Calculate Total Sum of Square (SST) as

follows:

SST = Sum of square of all observation C.F.

STEP 7:

Calculate Total Sum of Square for the Residual

Error (SSE) as:

60

STEP 8:

Preparation of ANOVA Table:

Sources

Sum of Degree of Variance Critical

of Mean Squares

Squares Freedom Ratio Value

Variation

MSC

Between

Columns

SSC c-1 MSC = SSC

c-1 F1= MSE F1

Between MSR

Rows

SSR r-1 MSR = SSR

r-1

F 2= MSE F2

Residual

SSE (c-1)(r-1) MSE =

SSE

Error (r-1)(c-1)

Total SST rc -1

61

Step 9:

Interpretation:

Compare the computed value of F with the table

value of F for the given level of significance and

interpret the same as follows:

Case (a) :

hypothesis

Case (b) :

hypothesis

62

Illustration

A tea company appoints four salesman A, B, C

& D and observes their sales performance in

three seasons of the year viz Summer,

Monsoon & Winter. The figures of sales in lakh

of Rs, are given in the following table. Carry

out an analysis of variance and interpret.

Salesman

A B C D

Season

Summer 56 56 41 55

Monsoon 46 48 49 49

Winter 48 49 51 52

Total 150 153 141 156 63

Illustrations

Q1) Three varieties A, B, and C of crops are tested

in a randomised block design with four

replications. The plot yields in kgs. Are given in

following table. Analyse the experimental yield

and state your conclusions at 5 % level of

significance.

A6 C5 A8 B9

C8 A4 B6 C9

B6 B7 C 10 A6

For d.f.(2,6) 5.143 and (3,6) 4.757

64

65

Remaining Questions

Of

Probability

66

Illustration

The probability that a boy will solve the

problem is 3/4 & that a girl will solve the

problem is 4/5. Find the probability that

67

Illustration

A bag contains 3 black, 4 white and 5 red balls. One

ball is drawn at random. Find the probability that :

a) it is either a black ball or non white ball

b) it is either a white ball or non red ball

c) it is either a red ball or non black ball

Illustration

A dice is thrown. What is the probability of getting : -

a) a multiple of 2 or 3

b) A multiple of 2 or 4

68

Illustration

X can solve 80 percent of the problem given in a book and

Y can solve 60 percent. What is the probability that:-

a) both will solve problem

b) none will be able to solve a problem

c) problem will be solved

d) atleast one them will not be able to solve the problem

e) only one of them will solve the problem.

Illustration

X can solve 3 problems out of 5, Y can solve the 2 out of 5

and Z can solve 3 out of 4. What is the probability that : -

a) the problem will be solved

b) only two of them will be solve a problem

c) atleast two of them will solve a problem

69

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