APPLICATION OF QUANTITATIVE TECNIQUE

PROJECT
ON

RESTAURANT BUSINESS

Burger & More Food Joint





SUBMITTED BY: ROSHAN AGARWAL
ROLL NO : 14052
(SECTION A)




ACKNOWLEDGEMENT

The project assigned to me for a good learning package consisting of practicality
and etiquettes of corporate world along with fun and excitement. It provided me
an opportunity to implement theoretical knowledge into practical and to learn
more from it.

It is my great pleasure to express my gratitude to my internal guide Mr. Krishna
Murti sir who encouraged, motivated and guided me through out my live project.













METHODOLOGY
Method
Application
Data
Data Analysis
Conclusion



TOPICS COVERED
Graph and charts
Descriptive statistics
Probability
Probability Distribution
covariance
Estimation
Hypothesis


METHOD
GRAPH AND CHARTS


HISTOGRAM
A Histogram is a graphical display of data using bars of different heights
A Frequency Histogram is a special histogram that uses vertical columns to show
frequencies (how many times each score occurs)
A histogram displays continuous data in ordered columns. Categories are of
continuous measure such as time, inches, temperature, etc.
Advantages:
1. Visually strong
2. Can compare to normal curve
3. Usually vertical axis is a frequency count of items falling into each category
Disadvantages:
1. Cannot read exact values because data is grouped into categories
2. More difficult to compare two data sets
3. Use only with continuous data



LINE CHART
A style of chart that is created by connecting a series of data points together with
a line. This is the most basic type of chart used in finance and it is generally
created by connecting a series of past prices together with a line.
A line graph plots continuous data as points and then joins them with a line.
Multiple data sets can be graphed together, but a key must be used.
Advantages:
1. Can compare multiple continuous data sets easily
2. Interim data can be inferred from graph line
Disadvantages:
1. Use only with continuous data




Bar Graph
A bar graph displays discrete data in separate columns. A double bar graph can be
used to compare two data sets. Categories are considered unordered and can be
rearranged alphabetically, by size, etc.
Advantages:
1. Visually strong
2. Can easily compare two or three data sets
Disadvantages:
1. Graph categories can be reordered to emphasize certain effects
2. Use only with discrete data



PIE CHART
A Pie Chart is a circular Chart divided into sectors, each sector shows the relative
size of each value.
Advantages:
1. Visually appealing
2. Shows percent of total for each category
Disadvantages:
1. No exact numerical data
2. Hard to compare 2 data sets
3. "Other" category can be a problem
4. Total unknown unless specified
5. Best for 3 to 7 categories
6. Use only with discrete data



Burger & More Food Joint

HISTOGRAM
Year Sales
2010 5000
2011 10000
2012 7000
2013 15000



The histogram tells us about the relationship between the sales and number of
years. It is an easy way to check the performance of the restaurant.
0
2000
4000
6000
8000
10000
12000
14000
16000
2010 2011 2012 2013
SALES

LINE CHART
YEAR Table Service Take Away Home Delivery
2010 3000 2000 1000
2011 6000 2000 2000
2012 4000 2000 1000
2013 8000 4000 3000








0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2010 2011 2012 2013
Table Service
Take Away
Home Delivery
PIE CHART
ITEMS CONSUMPTION IN %
BURGERS 33
SANDWICH 20
PASTAS 16
SUBS 14
RAPS 17


PIE Chart gives combination was various consumption pattern of customers in
the restaurant also it helps the owner to know the demand is more for which
type of food.





CONSUMPTION IN %
BURGERS
SANDWITCHS
PASTAS
SUBS
RAPS
DATA
Mean, Median and mode
MONTH SALES
January 20000
February 5000
March 3000
April 30000
May 25000
June 3000
July 7000
August 15000
September 30000
October 40000
November 50000
December 60000
TOTAL 288000


Standard Deviation and Variance
FOOD ITEMS PRICE(X) X-x (x-x)2sq
Burger 120 -30 900
Sandwich 140 -10 100
Pasta 150 0 0
Subs 160 10 100
Raps 180 30 900
TOTAL 750 TOTAL 2000



Probability
TYPE OF CUSTOMERS FREQUENCY RELATIVE FREQUENCY
Students(S) 20 0.2
Couples(C) 30 0.3
Family(F) 50 0.5
TOTAL 100 1.0


Probability Distribution
The accountant of the restaurant is hoping to receive payments from two
outstanding accounts during the current month. He estimates that there is 0.6
probability of receiving rs 15000 due from A and 0.75 probability of receiving rs
40,000 due from B .

BINOMIAL DISTRIBUTION
Customers
(x)
Frequency
(f)
Xf D from
2.5

D`(d/0.5)

D`*d`

Fd`*fd`
0 4 0 -2.5 -5 25 100
1 20 20 -1.5 -3 9 180
2 40 80 -0.5 -1 1 40
3 40 120 0.5 1 1 40
4 20 80 1.5 3 9 180
5 4 20 2.5 5 25 100
TOTAL 128 320 TOTAL 640



POISSON DISTRIBUTION
Number of customers dissatisfied with the food in the restaurant
Dissatisfied customers Frequency
0 109
1 65
2 22
3 3
4 1
TOTAL 200

ESTIMATION
A random sample of 400 customers was taken to find out the average sales per
customers. The sample mean was found to be 900 and standard deviation Rs 200.
construct an interval estimation of the population mean with the confidence level
of 95.44 per cent.

HYPOTHESIS
A Restaurant has organised its sales department. The following data shown its
weekly sales before and after reorganisation. The period for comparison taken
from January to March in two successive years.
check whether the reorganisation of the sales department of the company has
resulted in a significant increase in sales


correlation
Family income and its percentage spend on food in the case of 100 families gave
the following frequency distribution.

food
percentage
family income in 000
Food% 5-
10
10-15 15-20 20-25 25-30
10-15 - - - 3 7
15-20 - 4 9 4 3
20-25 7 6 12 5 -
25-30 3 10 19 8 -

calculate the coefficient of correlation and interpret the value

DATA ANALYSIS
DESCRIPTIVE:
MEAN
MEDIAN
MODE
STANDARD DEVIATION
VARIANCE



MEAN
The "mean" is the "average" you're used to, where you add up all the numbers
and then divide by the number of numbers.

MONTH SALES
January 20000
February 5000
March 3000
April 30000
May 25000
June 3000
July 7000
August 15000
September 30000
October 40000
November 50000
December 60000
TOTAL 288000

Average sales of a restaurant in one year is
Adding all the sum of observation/total number of observation
so, 288000/12
= 24000



MEDIAN
The "median" is the "middle" value in the list of numbers. To find the median, your
numbers have to be listed in numerical order, so you may have to rewrite your list first.

MONTH SALES
January 20000
February 5000
March 3000
April 30000
May 25000
June 3000
July 7000
August 15000
September 30000
October 40000
November 50000
December 60000
TOTAL 288000

MEDIAN = n+1/2
= 12+1/2
= 6.5 that is 6th and 7th items
6th element= 30000
7th element= 7000
average of 6th and 7th element will give median30000+7000/2
Median= 18500

MODE
The "mode" is the value that occurs most often. If no number is repeated, then
there is no mode for the list.

MONTH SALES
January 20000
February 5000
March 3000
April 30000
May 25000
June 3000
July 7000
August 15000
September 30000
October 40000
November 50000
December 60000
TOTAL 288000

There are 12 observations in the series wherein sales of 15000 and 3000 occurs
maximum number of times that is 2
therefore, MODE = 15,000 and 3000



STANDARD DEVIATION AND VARIANCE
The Standard Deviation is a measure of how spread out numbers are. Its symbol is
(the Greek letter sigma)The formula is easy: it is the square root of the Variance.
Variance is defined as The average of the squared differences from the Mean

FOOD ITEMS PRICE(X) X-x (x-x)2sq
Burger 120 -30 900
Sandwich 140 -10 100
Pasta 150 0 0
Subs 160 10 100
Raps 180 30 900
TOTAL 750 TOTAL 2000

X = sum of all observation/number of observation
= 750/5
= 150

Variance = (X-x)2sq/number of observation
= 2000/5
= 400

Standard deviation = square root of variance
= 20

PROBABILITY
Probability Distribution
Binomial Probability
Poison Probability
Normal Probability


PROBABILITY
How likely something is to happen. Many events can't be predicted with total
certainty. The best we can say is how likely they are to happen, using the idea of
probability.

TYPE OF CUSTOMERS FREQUENCY RELATIVE FREQUENCY
Students(S) 20 0.2
Couples(C) 30 0.3
Family(F) 50 0.5
TOTAL 100 1.0

RULE 1:
P(S)= 0.2>0
1.0P(C)= 0.3>0
P(F)= 0.5>0
RULE 2:
P(S)+P(C)+P(F) =
0.2+0.3+0.5 =

RULE 3:
P(S) OR P(C) = 0.2+0.3 = 0.5
P(S) OR P(F) = 0.2+0.5 = 0.7
P(C) OR P(F) = 0.3+0.5 = 0.8



PROBABILITY DISTRIBUTION
A statistical function that describes all the possible values and likelihoods that a
random variable can take within a given range. This range will be between the
minimum and maximum statistically possible values, but where the possible value
is likely to be plotted on the probability distribution depends on a number of
factors, including the distributions mean, standard deviation, skewness and
kurtosis.
EXAMPLE
The accountant of the restaurant is hoping to receive payments from two
outstanding accounts during the current month. He estimates that there is 0.6
probability of receiving rs 15000 due from A and 0.75 probability of receiving rs
40,000 due from B.

What is the expected cash flow from these two accounts

SOLUTION
CALCULATION OF EXPECTED CASH FLOW

ACCOUNT AMOUNT PROBABILITY AMOUNT(xi)
A 15,000 0.60 9000
B 40,000 0.75 30000
TOTAL
EXPECTED
VALUE

39,000

IMPORTANCE OF EXPECTED VALUE
The concept of expected value is of considerable importance to management
decision making. This is because the criteria in decision problems involving
uncertainties are usually the maximisation of expected profits or utility and the
minimisation of expected costs.
BINOMIAL DISTRIBUTION
A probability distribution that summarizes the likelihood that a value will take one
of two independent values under a given set of parameters or assumptions. The
underlying assumptions of the binomial distribution are that there is only one
outcome for each trial, that each trial has the same probability of success and that
each trial is mutually exclusive.


NUMBER OF CUSTOMERS IN RESTAURANT IN ONE DAY
Customers
(x)
Frequency
(f)
Xf D from
2.5

D`(d/0.5)

D`*d`

Fd`*fd`
0 4 0 -2.5 -5 25 100
1 20 20 -1.5 -3 9 180
2 40 80 -0.5 -1 1 40
3 40 120 0.5 1 1 40
4 20 80 1.5 3 9 180
5 4 20 2.5 5 25 100
TOTAL 128 320 TOTAL 640

Mean = xf/f = 320/128 = 2.5
di= x-mean
S.D = (sqfd`*fd`/n)*(c) = (sq 640/128)*0.5 = sq5*0.5 = 1.12
since there are 6 terms n=6-1 = 5
mean = np = 5*0.5 = 2.5 p = 2.5/5 = 0.5 and q = 1-0.5 = 0.5

The calculation of standard deviation by the following formula
S.D = sq npq = sq 5*0.5*0.5 = sq5*0.5 = 2.24*0.5 = 1.12


POISSON DISTRIBUTION
A statistical distribution showing the frequency probability of specific events
when the average probability of a single occurrence is known. The Poisson
distribution is a discrete function.

Number of customers dissatisfied with the food in the restaurant
Dissatisfied customers Frequency
0 109
1 65
2 22
3 3
4 1
TOTAL 200




Calculating the theoretical frequency
The theoretical expected frequencies are given by the formula
N*lambda*2.71828/x!
In order to find the value of lambda, we have to calculate the arithmetic mean.
Dissatisfied customers(x) Frequency(f) fx
0 109 0
1 65 65
2 22 44
3 3 9
4 1 4
TOTAL 200 122


Mean = fx/n = 122/200 = 0.61
N*lambda*2.71828/x!
= 200*0.61*2.71828/x!
= 0.5435

NOW, for each value of x from 0 to 4 we have to calculate the frequency. This is
shown below :
Dissatisfied customers(x) Frequency(f)
0 200*0.5435 = 108.7
1 200*0.61*0.5435=66.3
2 200*0.61*0.61*0.5435/2=20.2
3 200*0.61*0.61*0.61*0.5435/3*2=4.1
4 200*0.61*0.61*0.61*0.61*0.5435/24=0.6


ESTIMATION
In statistics, estimation refers to the process by which one makes inferences
about a population, based on information obtained from a sample.
POINT ESTIMATES
Approximation of a single quantity or a single numerical value, instead of that of a
whole range of quantities or values.



INTERVAL ESTIMATES

Statistics an interval within which the true value of a parameter of a population is
stated to lie with a predetermined probability on the basis of sampling statistics
Compare point estimate


EXAMPLE :
A random sample of 400 customers was taken to find out the average sales per
customers. The sample mean was found to be 900 and standard deviation Rs 200.
construct an interval estimation of the population mean with the confidence level
of 95.44 per cent.
SOLUTION
Lower point as indicated earlier is x`-z s.d, where s.d = s/sq n where s is the
estimate of standard deviation.
thus x` -zsd = 900-2(200/sq 400)
= 900-2*200/20
= 900-20 = 880
upper point as indicated earlier is
x`+zsd = 900+2*(200/sq 400)
= 900 + 20 = 920
we are 94.44 per cent confident that the population mean lies between Rs 880
and 920.

HYPOTHESIS

A statistical hypothesis is an assumption about a population parameter. This
assumption may or may not be true. Hypothesis testing refers to the formal
procedures used by statisticians to accept or reject statistical hypotheses.

Example
A Restaurant has organised its sales department. The following data shown its
weekly sales before and after reorganisation. The period for comparison taken
from January to March in two successive years.
check whether the reorganisation of the sales department of the company has
resulted in a significant increase in sales.
solution
we set up the null hypothesis
h0 : the reorganisation of the sales department has not resulted in improved sales
h1: the reorganisation of the sales department has resulted in improved sales
since the observation are paired together, the pared t test may be applied. for
this purpose the t statistics is t = d`/sq (s*s/n), where d=x2-x1

Week
no:
Sales before
reorganisation
Sales after
reorganisation
Deviation
d=x2-x1
Deviation
square
1 12 16 4 16
2 15 17 2 4
3 13 14 1 1
4 11 13 2 4
5 17 15 -2 4
6 15 14 -1 1
7 10 12 2 4
8 11 11 0 0
9 18 17 -1 1
10 19 22 3 9
TOTAL 10 44

d`=d/n = 10/10 = 1
s*s = 1/10-1(44-10*10/10)
= 1/9(440-100/10) = 3.78
t = d`/sq s*s/n = 1/sq(3.78/10) = 1/0.61 = 1.64
CORRELATION
Correlation is a statistical technique that can show whether and how strongly
pairs of variables are related. For example, height and weight are related; taller
people tend to be heavier than shorter people. The relationship isn't perfect.
People of the same height vary in weight, and you can easily think of two people
you know where the shorter one is heavier than the taller one.
Example :
Family income and its percentage spend on food in the case of 100 families gave
the following frequency distribution.


food
percentage

family income in 000
Food% 5-10 10-15 15-20 20-25 25-30
10-15 - - - 3 7
15-20 - 4 9 4 3
20-25 7 6 12 5 -
25-30 3 10 19 8 -

calculate the coefficient of correlation and interpret the value.
solution :
let us take family income as x variable and expenditure on food percentage as y
variable taking the mid values of class interval we have,
mid values(x) : 7.5 12.5 17.5 22.5 27.5
mid values(y): 12.5 17.5 22.5 27.5
let ui = (xi-17.5)/5 and vi = (yi-22.5)/5
therefore, different u values are -2 -1 0 1 2
and different v values are -2 -1 0 1





calculation of fu and fu*fu
Ui fi fiui fiui*fiui
-2 10 -20 40
-1 20 -20 20
0 40 0 0
1 20 20 20
2 10 20 40
TOTAL 100 0 120


Calculation of fv and fv*fv
Vi fi fivi fivi*fivi
-2 10 -20 40
-1 20 -20 20
0 30 0 0
1 40 40 40
TOTAL 100 0 100

GIVEN : fuv = -48
r =fuv-fu*fv/N/(sq fu*fu-(fu*fu)/N)*(fv*fv-(fv*fv)/N)
r = -48/sq 120 * sq 100
r = -48/10.95* 10
r =0.438