Expect

edTheor
yQuest
ionsandAnswer
s

Busi
nessSt
ati
sti
csandAnal
yti
cs

Quest
ion1:
Whati
sdat
a?
Answer
:Dat
aist
hesubst
rat
efordeci
sion-
maki
ngpr
ocess.Dat
aismeasur
eofsomead
ser
vabl
echar
act
eri
sti
cofchar
act
eri
sti
cofasetofobj
ect
sofi
nter
est
.St
ati
sti
csi
sa
v
astar
eaofappl
i
edmat
hemat
icswher
eindat
aar
ecol
l
ect
ed,cl
assi
fi
ed,pr
esent
edand
anal
yzedf
oraspeci
fi
cpur
pose.

Quest
ion2:
Whati
srol
eofst
ati
sti
csi
nbusi
nessdeci
sion?
Answer
:St
ati
sti
cs pl
ays an i
mpor
tantr
olei
n busi
ness,because i
tpr
ovi
des t
he
quant
it
ati
vebasi
sforar
ri
vi
ngatdeci
sionsi
nal
lmat
ter
sconnect
edwi
thoper
ati
onsof
busi
ness.St
ati
sti
cshel
psi
nabusi
nesst
opl
anpr
oduct
ionaccor
dingt
othet
ast
esof
t
heconsumer
s.St
ati
sti
csi
nbusi
nesscanal
soser
veasat
oolofmanagementt
o
ev
aluat
eper
for
manceofmachi
nesandper
sonnel
.Ital
soenabl
est
hebusi
nessmant
o
j
udget
heef
fi
ci
encyofnewpr
oduct
ionmet
hodsbyst
udy
ingr
elat
ionshi
pbet
weencost
s
andmet
hodsofpr
oduct
ion.

Quest
ion3:
Def
ineFr
equencyTabl
e.
Answer
:fr
equencyi
sthenumberofoccur
rencesofadat
ait
em.At
abl
esuchast
heone
shownabov
ethatsummar
izesnumberofcasesagai
nstacol
umnofi
nter
esti
scal
l
eda
f
requencyt
abl
e.

Quest
ion4:
Whati
sCent
ral
Tendency
?
Answer
:Inaser
iesofst
ati
sti
caldat
athatpar
amet
erwhi
chr
efl
ect
sacent
ralv
alueof
t
heser
iesi
scal
l
edt
hecent
ralt
endency
.Cent
ralt
endencyr
efer
stoasi
ngl
eval
uet
hat
r
epr
esentt
hewhol
esetofdat
a.

Quest
ion5:
Def
ineAv
erageanddi
scussv
ari
oust
ypesofav
erages.
Answer
:Anav
eragecanbedef
inedasacent
ralv
aluear
oundwhi
chot
herv
aluesof
ser
iest
endt
ocl
ust
er.Anav
eragei
scomput
edt
ogi
veaconci
sepi
ctur
eofal
argegr
oup.
Byt
heuseofav
eragecompl
exgr
oupsofl
argenumber
sar
epr
esent
ed i
naf
ew
si
gni
fi
cantwor
dsorf
igur
es.Av
erageshel
pinobt
aini
ngapi
ctur
eofuni
ver
sewi
tht
he
hel
pofsampl
e.Al
thoughsampl
eandt
heuni
ver
sedi
ff
eri
nsi
ze,st
il
lthei
rav
eragemay
be v
ery much i
dent
ical
.Av
erage may be cl
assi
fi
ed i
ntot
ree boar
dty
pes:1)
Mat
hemat
ical
Aver
ages:
a)Ar
it
hmet
ical
meanb)Geomet
ri
cmeanc)Har
moni
cav
erage

Quest
ion6:
Def
ineMeanDev
iat
ion.
Answer
:Meandev
iat
ional
soknownasav
eragedev
iat
ion,meandev
iat
ioni
sthemean
oft
heabsol
uteamount
sbywhi
cht
hei
ndi
vi
dual
itemsdev
iat
efr
om t
hemean.

Quest
ion7:
DiscussMer
it
sandDemer
it
sofSt
andar
dDev
iat
ion.
Answer
:Mer
it
s
(
1)Thest
andar
ddev
iat
ioni
sthebestmeasur
eofv
ari
ati
onbecauseofi
tsmat
hemat
ical
char
act
eri
sti
cs.I
tisbasedonev
eryi
tem oft
hedi
str
ibut
ion.Al
soi
tisamenabl
eto
al
gebr
aict
reat
mentandi
slessaf
fect
edbyf
luct
uat
ionsofsampl
i
ngt
hanmostot
her
measur
esofdi
sper
sion.(
2)I
tispossi
blet
ocal
cul
atet
hecombi
nedst
andar
ddev
iat
ion
oft
woormor
egr
oups.Thi
sisnotpossi
blewi
thanyot
hermeasur
e.(
3)Forcompar
ing
t
hev
ari
abi
l
ityoft
woormor
edi
str
ibut
ionscoef
fi
cientofv
ari
ati
oni
sconsi
der
edt
obe
mostappr
opr
iat
eandt
hisi
sbasedonmeanandst
andar
ddev
iat
ion.(
4)St
andar
d
dev
iat
ioni
smostpr
omi
nent
lyusedi
nfur
therst
ati
sti
cal
wor
k.
Li
mit
ati
ons
(
1)Ascompar
edt
oot
hermeasur
esi
tisdi
ff
icul
ttocomput
e.Howev
er,i
tdoesnot
r
educet
hei
mpor
tanceoft
hismeasur
ebecauseofhi
ghdegr
eeofaccur
acyofr
esul
tsi
s
gi
ves.(
2)I
tgi
vesmor
ewei
ghtt
oext
remei
temsandl
esst
othosewhi
char
eneart
he
mean.I
tisbecauseoft
hef
actt
hatt
hesquar
esoft
hedev
iat
ionswhi
char
ebi
ginsi
ze
woul
d be pr
opor
ti
onat
elygr
eat
ert
han t
he squar
esoft
hose dev
iat
ionswhi
ch ar
e
compar
ati
vel
ysmal
l
.

Quest
ion8:
Compar
emean,
medi
anandmode
Mean,medi
anandmodear
eal
ldi
ff
erentt
ermsofcent
ralt
endencyort
heav
eragebut
t
heyar
eal
ldi
ff
erentf
rom eachot
her
.Acompar
isonoft
het
hreei
sther
efor
enecessar
y.
Letussupposet
her
ear
easetoff
iveobser
vat
ions-1,
1,2,
5,and6.
Themeani
swhatmostpeopl
ecal
ltheav
erageandi
tisf
oundbyaddi
ngal
lthese
number
sanddi
vi
dingi
twi
tht
henumberofobser
vat
ions:
1+1+2+5+6=15/
5=3.
Themedi
anont
heot
herhandi
sonewher
ehal
fthev
aluesar
ebel
owandhal
fthev
alues
ar
e abov
e.I
n ourabov
e obser
vat
ion set
,the medi
an i
s 2 because t
her
e ar
e2
obser
vat
ions(
5and6)gr
eat
ert
han2andt
wo(
1and1)whi
char
elesst
han2,
maki
ngi
t
t
hemedi
an.
Themodei
stheobser
vat
iont
hati
srepeat
edt
hemaxi
mum numberoft
imes.t
her
efor
e
i
nourobser
vat
ionseti
tis1because1i
stheonl
ynumbert
hatoccur
stwi
ce,maki
ngi
t
t
hemode.

Cor
rel
ati
onAnal
ysi
s

Quest
ion1:
Whati
scor
rel
ati
onanal
ysi
s?
Answer
:Cor
rel
ati
oni
sameasur
eofdegr
eeofassoci
ati
onbet
weent
wo(
ormor
e)
v
ari
abl
esi
nadat
aset
.Thus,i
fiti
sknownt
hatt
wov
ari
abl
esar
ehi
ghl
ycor
rel
atedt
hen
onecanpr
edi
ctt
hev
alueofonev
ari
abl
eont
hebasi
soft
hev
alueoft
heot
herv
ari
abl
e.
t
wov
ari
abl
es–sayXandY–ar
esai
dtobecor
rel
atedi
f:a.Bot
hincr
easeanddecr
ease
t
oget
her
.Int
hiscaset
hev
ari
abl
esar
esai
dtobeposi
ti
vecor
rel
ated.b.Onei
ncr
ease
t
hent
heot
herdecr
ease,
whent
hev
ari
abl
esar
esai
dtobenegat
ivel
ycor
rel
ated.

Quest
ion2:
Whati
sscat
terdi
agr
am?
Answer
:Thesi
mpl
estdev
icef
ordet
ermi
ningr
elat
ionshi
pbet
weent
wov
ari
abl
esi
sa
speci
alt
ypeofdotchar
tcal
l
edscat
terdi
agr
am.Whent
hismet
hodi
susedt
hegi
ven
dat
aar
epl
ott
edonagr
aphpaperi
nthef
orm ofdot
s,i
.e.
,foreachpai
rofXandYv
alue
weputadotandt
husobt
ainasmanypoi
ntst
henumberofobser
vat
ions.Byl
ooki
ngt
o
t
hescat
teroft
hev
ari
ouspoi
ntswecanf
orm ani
deaast
owhet
hert
hev
ari
abl
esar
e
r
elat
edornot
.Themor
ethepl
ott
edpoi
nts“
scat
ter
”ov
erachar
t,t
hel
essr
elat
ionshi
p
t
her
eisbet
weent
het
wov
ari
abl
es.Themor
enear
lyt
hepoi
ntscomef
all
i
ngonal
i
ne,
t
hehi
thert
hedegr
eeofr
elat
ionshi
p.I
fal
lthepoi
ntsl
i
eonast
rai
ghtl
i
nef
all
i
ngf
rom t
he
l
eft
-handcor
nert
otheupperr
ightcor
ner
,cor
rel
ati
oni
ssai
dtobeper
fect
lyposi
ti
ve.On
ot
herhand,i
fal
lthepoi
ntsar
ely
ingonast
rai
ghtl
i
ner
isi
ngf
rom t
heupperl
efthand
cor
nert
othel
owerr
ighthandcor
neroft
hedi
agr
am cor
rel
ati
oni
ssai
dtobeper
fect
ly
negat
ive.

Quest
ion3:
Stat
eKar
lPear
sonCoef
fi
cientofLi
nearCor
rel
ati
on.
Answer
:weobser
vedt
hatt
hemor
eist
hecov
ari
ancet
hemor
ewi
l
lbecor
rel
ati
on
bet
weent
het
wov
ari
abl
es.Ther
efor
e,cov
ari
ancecanbet
reat
edasameasur
eof
cor
rel
ati
onbet
weent
wov
ari
abl
es.Howev
er,t
hemagni
tudeofcov
ari
ancewi
l
ldepend
ont
heuni
tsofmeasur
ement
s.Thef
oll
owi
ngexpr
essi
onder
ivedf
rom cov
ari
ancedoes
notsuf
ferf
rom t
he ofuni
tsofmeasur
ement
sandhencei
scal
l
edKar
lPear
son
coef
fi
cientofl
i
nearcor
rel
ati
onorsi
mpl
ycoef
fi
cientofcor
rel
ati
onandi
sdenot
edbyr
.

Quest
ion4:
Whati
sRegr
essi
onAnal
ysi
s?
Answer
:Thest
ati
sti
calt
oolwi
tht
hehel
pofwhi
chwear
einposi
ti
ont
oest
imat
e(or
pr
edi
ct)t
heunknownv
aluesofonev
ari
abl
efr
om knownv
alueofanot
herv
ari
abl
eis
cal
l
edr
egr
essi
on.Wi
tht
hehel
pofr
egr
essi
onanal
ysi
s,wear
einaposi
ti
ont
ofi
ndout
t
heav
eragepr
obabl
echangei
nonev
ari
abl
egi
venacer
tai
namountofchangei
n
anot
her
.

Quest
ion5:
Stat
etheSpear
man’
sRankCor
rel
ati
on.
Answer
:Thi
smeasur
eisespeci
all
yusef
ulwhenquant
it
ati
vemeasur
esf
orcer
tai
n
f
act
ors(
suchasi
ntheev
aluat
ionofl
eader
shi
pabi
l
ityort
hej
udgmentoff
emal
ebeaut
y)
cannotbef
ixed,butt
hei
ndi
vi
dual
sint
hegr
oupcanbear
rangedi
nor
dert
her
eby
obt
aini
ngf
oreachi
ndi
vi
dual
anumberi
ndi
cat
inghi
s(her
)ranki
nthegr
oup.I
nanyev
ent
,
t
her
ankcor
rel
ati
oncoef
fi
cienti
sappl
i
edt
oasetofor
dinalr
anknumber
s,wi
th1f
ort
he
i
ndi
vi
dualr
ankedf
ir
sti
nquant
it
y,orqual
i
ty,
andsoon,
tonf
ort
hei
ndi
vi
dualr
ankedl
ast
i
nthegr
oupofni
ndi
vi
dual
s(ornpai
rsofi
ndi
vi
dual
s).

Quest
ion7:
Whati
sdi
ff
erencebet
weenRegr
essi
on&Cor
rel
ati
on?
Answer
:Fol
l
owi
ngar
ethepoi
ntsofdi
ff
erencebet
weencor
rel
ati
onandr
egr
essi
on:1.
Wher
eascor
rel
ati
oncoef
fi
cienti
sameasur
eofdegr
eeofcov
ari
abi
l
itybet
weenXandY,
t
heobj
ect
iveofr
egr
essi
onanal
ysi
sist
ost
udyt
he„
nat
ureofr
elat
ionshi
p‟bet
weent
he
v
ari
abl
essot
hatwemaybeabl
etopr
edi
ctt
hev
alueofoneont
hebasi
sofpr
oduct
ion
i
scal
l
edt
hei
nter
dependentv
ari
abl
eandt
hev
ari
abl
ethati
stobepr
edi
ctedi
sref
err
ed
t
oast
hedependentv
ari
abl
e.2.Thecauseandef
fectr
elat
ioni
scl
eari
ndi
cat
edt
hrough
r
egr
essi
onanal
ysi
sthanbycor
rel
ati
on.Cor
rel
ati
oni
smer
elyat
oolofascer
tai
ningt
he
degr
eeofr
elat
ionshi
pbet
weent
wov
ari
abl
esand,t
her
efor
e,wecannotsayt
hatone
v
ari
abl
eist
hecauseandt
heot
hert
heef
fect
.

TI
MESERI
ESANALYSI
S

Quest
ion1:
Expl
aint
imeser
iesdat
aandwhatar
eit
sfourcomponent
s?
Answer
:Ti
meser
iesi
sser
iesofdat
acol
l
ect
edov
eraper
iodoft
imesepar
atedby
successi
vet
imei
nter
val
s.Techni
cal
l
y,at
imeser
iesi
sabi
var
iat
edat
aseti
nwhi
chone
v
ari
abl
eist
imeandhencecanbeexpr
essedas:TS={
(t,Yt
)ti
ssuccessi
vet
imewhen
Y‘
swer
erecor
ded}Thet
imeser
iesi
sempl
oyedf
ort
wobasi
cpur
poses:1)Tost
udyand
char
act
eri
zet
hepastbehav
iourofdat
a2)Tomakeapl
ausi
blef
orecastf
ort
hef
utur
e
Fori
l
lust
rat
ionl
etusl
ookataf
undament
alconcept
ualmodelofapr
oductl
i
fecy
cle
t
hroughf
ourst
ages—i
ntr
oduct
ion,
growt
h,mat
uri
tyanddecl
i
ne.Thesal
esper
for
mance
oft
hispr
oductgoest
hrought
hesef
ourst
ages1)Secul
art
rend.2)Per
iodi
cvar
iat
ions
compr
isi
ng ofseasonalv
ari
ati
ons.3)Cy
cli
calv
ari
ati
ons.4)Random ori
rr
egul
ar
v
ari
ati
ons.

Quest
ion2:
Whati
sseasonal
var
iat
ion&i
tspur
pose?
Answer
:Thi
sisshor
t-
ter
m per
iodi
cmov
ement
,wher
eper
iodi
snotl
ongert
hanoney
ear
.
Mostoft
hebusi
nessact
ivi
ti
eshav
easl
ackandbr
iskper
iodsev
eryy
ear
,andsuch
per
iodsar
emost
lyr
elat
edt
othechangi
ngseasons(
weat
her
)or
tohol
i
day
sort
osoci
al
cust
omsr
ecur
ri
ngwi
thr
emar
kabl
eregul
arl
yaf
teraper
iodoft
ime,
notexceedi
ngay
ear
.
Thi
ski
ndofmov
ementofdat
aisconv
eni
ent
lyt
ermedasseasonalv
ari
ati
on.Pur
poseof
measur
ingseasonalv
ari
ati
ons:
-1)Toanal
ysepastseasonalbehav
iour
.2)Topr
edi
ct
seasonal
var
iat
ionsasanai
dtoshor
t-
ter
m pl
anni
ng.
Quest
ion3:
Whati
srandom ori
rr
egul
arv
ari
ati
on?
Answer
:Ir
regul
arv
ari
ati
onsar
eofar
andom nat
ureandr
iseduet
ooccat
ionalf
act
ors
and changeev
ent
sli
kef
loods,dr
ought
,ear
thquakesand ot
hernat
uralcal
ami
ti
es,
st
ri
ckes,
lockout
s,et
c.

Quest
ion4:Expl
aint
hemeani
ngandi
mpor
tanceoft
imeser
ies?Al
soexpl
aincy
cli
cal
v
ari
ati
ons?
Answer
:At
imeser
iesi
sanar
rangementofst
ati
sti
caldat
arecor
dedwi
thi
tst
imeof
occur
ance.suchdat
adi
scl
oset
hev
ari
ati
oni
nthev
aluesofv
ari
abl
eduet
ochangesof
t
ime.Theannualpr
oduct
ionofwheati
nIndi
a,quar
ter
lyexpor
tofcof
fee,mont
hlysal
es
i
nast
orer
ainf
all(
incm)i
ndi
ff
erentday
s,et
c.,
aret
hedat
aoft
imeser
ies.I
mpor
tance:
-
Ti
meser
iesi
sser
iesofdat
acol
l
ect
edov
eraper
iodoft
imesepar
atedbysuccessi
ve
t
imei
nter
val
s.Techni
cal
l
y,at
imeser
iesi
sabi
var
iat
edat
aseti
nwhi
chonev
ari
abl
eis
t
imeandhencecanbeexpr
essedas:TS={
(t,Yt
)ti
ssuccessi
vet
imewhenY‘
swer
e
r
ecor
ded}The t
ime ser
iesi
sempl
oyed f
ort
wo basi
cpur
poses:4)To st
udyand
char
act
eri
zet
hepastbehav
iourofdat
a5)Tomakeapl
ausi
blef
orecastf
ort
hef
utur
e
Fori
l
lust
rat
ionl
etudl
ookataf
undament
alconcept
ualmodelofapr
oductl
i
fecy
cle
t
hroughf
ourst
ages—i
ntr
oduct
ion,
growt
h,mat
uri
tyanddecl
i
ne.Thesal
esper
for
mance
oft
his pr
oductgoes t
hrough t
hese f
ourst
ages Char
act
eri
sti
cs:
-The gr
aphi
cal
r
epr
esent
ati
onofat
imeser
iesr
eveal
s(i
nmostcases)
:1)somemov
ement
sexhi
bit
(
per
sist
ent
)gr
owt
hordecl
i
ne.2)Fewmov
ement
sar
eregul
arandper
iodi
cinnat
urenot
exceedi
ngay
ear
.3)Agai
nsomear
eir
regul
arandper
iodi
cexceedi
ngay
ear
.4)Some
i
rr
egul
ar,
mil
dorv
iol
enti
nmov
ement
s.
Thusat
imeser
iesi
sther
esul
toft
heabov
efourt
ypesofmov
ement
s.Thef
our
component
sar
easf
oll
ows.
(
i)
Secul
art
rend(
T):
-
Thi
sisasmoot
h,r
egul
arandl
ong-
ter
m upwar
dordownwar
dmov
ementi
nthedat
a.I
t
r
eveal
sthegener
alt
endencyofgr
aduali
ncr
easedecr
easeov
eral
ongper
iodoft
ime.
Thei
ncr
easemaybeduet
ojoi
ntact
ionofv
ari
ousf
act
orsl
i
kechangesoft
ast
esand
habi
tsofpeopl
e,popul
ati
ongr
owt
h,dev
elopmentt
onew t
echni
ques,et
c.agai
nthe
downwar
dmov
ementmayber
elat
edt
oepi
demi
cs,deat
hsduet
oav
ail
abi
l
ityofbet
ter
andcheapersubst
it
uteordi
ff
icul
tyi
nget
ti
ngr
awmat
eri
alsordecr
easeofdemand,
etc.
Accor
dingt
osi
mpsonandkal
ka,― t
rendal
socal
l
edsecul
arorl
ong-
tr
end,i
sthebasi
c
t
endencyofser
iest
ogr
owordecl
i
neov
eraper
iodoft
ime.Theconceptoft
renddoes
noti
ncl
udeshor
t–r
angeosci
l
lat
ions,
butr
athert
hest
eadymov
ementov
eral
ongt
ime‖
.
(
ii
)seasonalv
ari
ati
ons:
-Thi
sisshor
t-
ter
m per
iodi
cmov
ement
,wher
eper
iodi
snot
l
ongert
hanoney
ear
.Mostoft
hebusi
nessact
ivi
ti
eshav
easl
ackandbr
iskper
iods
ev
eryy
ear
,andsuchper
iodsar
emost
lyr
elat
edt
othechangi
ngseasons(
weat
her
)ort
o
hol
i
day
sort
osoci
alcust
omsr
ecur
ri
ngwi
thr
emar
kabl
eregul
arl
yaf
teraper
iodoft
ime,
notexceedi
ng a y
ear
.Thi
ski
nd ofmov
ementofdat
aisconv
eni
ent
lyt
ermed as
seasonalv
ari
ati
on.(
ii
i)cy
cli
calv
ari
ati
on(
c):
-thi
sisanot
hert
ypeofper
iodi
cmov
ement
wher
etheper
iodi
smor
ethanay
ear
.Themov
ement
sar
eosci
l
lat
ory
.Onecompl
ete
per
iodi
scal
l
edacy
cle.I
neconomi
candbusi
nessact
ivi
ti
eshav
efourdi
sti
nctphases:
Pr
osper
it
y,decl
i
ne,depr
essi
onandr
ecov
ery
;theyconst
it
utet
hebusi
nesscy
cleand
t
hesef
ourphasesr
ecuraf
teraper
iodoft
imel
ongert
henay
ear
.(i
v)I
rr
egul
aract
ivi
ty:
-
I
rr
egul
arv
ari
ati
onsar
eofar
andom nat
ureandr
iseduet
ooccasi
onalf
act
orsand
changeev
ent
sli
kef
loods,dr
ought
,ear
thquakesandot
hernat
uralcal
ami
ti
es,st
ri
kes,
l
ockout
s,et
c.

Pr
obabi
l
ityDi
str
ibut
ion

Quest
ion1:
Whati
sBay
esTheor
em?
Answer:Bay
esr
ule 
prov
idesuswi
thawayt
oupdat
eour
 bel
i
efs 
basedont
hear
ri
val
of
new,
rel
evantpi
ecesof
 ev
idence.Forex
ampl
e,i
fwewer
etr
yingt
opr
ovi
det
hepr
obabi
l
ity
t
hatagi
venper
sonhascancer
,wewoul
dini
ti
all
yjustsayi
tiswhat
everper
centoft
he
popul
ati
onhascancer
.Howev
er,
giv
enaddi
ti
onal
evi
dencesuchast
hef
actt
hatt
he
per
soni
sasmoker
,wecanupdat
eourpr
obabi
l
ity
,si
ncet
hepr
obabi
l
ityofhav
ingcancer
i
shi
ghergi
vent
hatt
heper
soni
sasmoker
.Thi
sal
l
owsust
out
il
iz
epr
iorknowl
edget
o
i
mpr
oveourpr
obabi
l
ityest
imat
ions.
TheRul
e
Thebel
owequat
ioni
sBay
esr
ule:
Ther
ulehasav
erysi
mpl
eder
ivat
iont
hatdi
rect
lyl
eadsf
rom t
her
elat
ionshi
pbet
ween
j
ointandcondi
ti
onal
probabi
l
iti
es.Fi
rst
,not
ethatP(
A,B)=P(
A|B)
P(B)=P(
B,A)=
P(
B|A)
P(A)
.Nex
t,wecansett
het
wot
ermsi
nvol
vi
ngcondi
ti
onal
probabi
l
iti
esequal
to
eachot
her
,soP(
A|B)
P(B)=P(
B|A)
P(A)
,andf
inal
l
y,di
vi
debot
hsi
desbyP(
B)t
oar
ri
veat
Bay
esr
ule.
I
nthi
sfor
mul
a,
 A 
i
stheev
entwewantt
hepr
obabi
l
ityof
,and 
B i
sthenewev
idencet
hat
i
srel
atedt
oAi
nsomeway
.
P(
A|B)
 i
scal
l
edt
he 
post
eri
or;
thi
siswhatwear
etr
yingt
oest
imat
e.I
ntheabov
e
ex
ampl
e,t
hiswoul
dbet
he“
probabi
l
ityofhav
ingcancergi
vent
hatt
heper
soni
sa
smoker
”.
P(
B|A)
 i
scal
l
edt
he 
l
ikel
i
hood;
thi
sist
hepr
obabi
l
ityofobser
vingt
henewev
idence,
giv
en
ouri
nit
ial
hypot
hesi
s.I
ntheabov
eex
ampl
e,t
hiswoul
dbet
he“
probabi
l
ityofbei
nga
smokergi
vent
hatt
heper
sonhascancer
”.
P(
A) 
i
scal
l
edt
he 
pri
or;
thi
sist
hepr
obabi
l
ityofourhy
pot
hesi
swi
thoutanyaddi
ti
onal
pr
iori
nfor
mat
ion.I
ntheabov
eex
ampl
e,t
hiswoul
dbet
he“
probabi
l
ityofhav
ingcancer
”.
P(
B) 
i
scal
l
edt
he 
mar
ginal
li
kel
i
hood;
thi
sist
het
otal
probabi
l
ityofobser
vingt
he
ev
idence.I
ntheabov
eex
ampl
e,t
hiswoul
dbet
he“
probabi
l
ityofbei
ngasmoker
”.I
n
manyappl
i
cat
ionsofBay
esRul
e,t
hisi
signor
ed,
asi
tmai
nlyser
vesasnor
mal
i
zat
ion.

Pr
ojectManagement

Quest
ion1:
Dif
fer
encebet
weenPERTandCPM

Answer
:

COMPARI
SON PERT CPM

Meani
ng PERTisapr ojectmanagement CPM isastat
ist
icaltechni
queof
techni
que,usedt omanage pr
ojectmanagementt hat
uncert
ainacti
v i
ti
esofaproj
ect
. manageswelldefinedacti
vit
iesof
aproject
.
 COMPARI
SON PERT CPM

Whati
sit
? Atechni
queofpl
anni
ngand Amethodt
ocont
rol
costand
cont
roloft
ime. t
ime.

Or
ient
ati
on Ev
ent
-or
ient
ed Act
ivi
ty-
ori
ent
ed

Ev
olut
ion Evol
vedasResear
ch& Ev
olv
edasConst
ruct
ionpr
oject
Devel
opmentproj
ect

Model Pr
obabi
l
ist
icModel Det
ermi
nist
icModel

Focuseson Ti
me Ti
me-
costt
rade-
off

Est
imat
es Thr
eet
imeest
imat
es Onet
imeest
imat
e

Appr
opr
iat
efor Hi
ghpr
eci
siont
imeest
imat
e Reasonabl
eti
meest
imat
e

Managementof Unpr
edi
ctabl
eAct
ivi
ti
es Pr
edi
ctabl
eact
ivi
ti
es

Nat
ureofj
obs Non-
repet
it
ivenat
ure Repet
it
ivenat
ure

Cr
iti
calandNon- Nodi
ff
erent
iat
ion Di
ff
erent
iat
ed
cr
it
ical
activ
iti
es

Sui
tabl
efor Resear
chandDev
elopment Non-r
esearchproj
ect
slikeci
vi
l
Proj
ect const
ruct
ion,shi
pbuil
dinget
c.