Chandigarh Group of Colleges,Jhanjeri

Master of Business Administration

MBA-II Semester

MBA 201-18
Business Analytics for
Decision Making

Dr. Rajinder Kaur Bhogal

Associate Professor
EMAIL:-rajinder.bilkhu@gmail.com

CAMPUS: JHANJERI, MOHALI

 Objective

• The objective of this paper is to understanding of the

research process, tools and techniques in order to
facilitate managerial decision making.

Chandigarh Group of colleges,Jhanjeri

 MBA Batch 2018 onwards
MBA 201-18
Business Analytics for Decision Making
Unit I
• CO1: Explain fundamental concepts of data collection,
classification and tabulation. Understanding (Level2)

• Introduction to Statistics: Meaning, Importance, Applications of

inferential statistics in managerial decision making.
• Collection of Data: concept of primary data and secondary data,
sources of primary data and secondary data,
• Classification and Tabulation of Data: Concept and types of
classification, construction of frequency distributions, tabulation of
data: role of tabulation, parts of table, rules of tabulation, review of
table, types of table.
• Sampling: Concept, definitions, census and sampling, probability
and non-probability methods of sampling, relationship between
sample size and errors.
•
 Unit II
CO2: Outline the concepts of sampling and sampling
distribution . Understanding (Level2)
• Sampling Distributions: Concept and standard error.
• Hypothesis Testing: Formulation of hypothesis, procedure
of hypothesis testing, errors in testing of hypothesis, tests
of significance for large samples, tests of significance for
small samples, application of t-test, Z-test, F-test and Chi-
square test and Goodness of fit, ANOVA.

▪ Techniques of association of attributes.

 Unit-III

• CO3: Apply statistical methods for Hypothesis Testing.

Applying (level 3)
• Business Forecasting: Introduction, Role of forecasting
in business, Steps in forecasting and methods of
forecasting.
• Correlation: Partial and Multiple correlation.
• Regression Analysis: Multiple regression analysis,
Testing the assumptions of regression: multicolinearity,
heteroscedasticity and autocorrelation.
 Unit IV

• CO5: Make use of Index Number method in managerial

decision making. Applying (Level 3)
• Index Number: Definition, importance of index number in
managerial decision making, methods of construction,
tests of consistency, base shifting, splicing and deflation,
problems in construction.
• Time Series Analysis: Meaning, component and, methods
of time series analysis. Trend analysis: Least square
method, linear and non linear equations, applications of
time series in business decision making.
Course Outcomes: Upon completion of this course,
students will be able to:
SNO DESCRIPTION BLOOM’S TAXONOMY
LEVEL
CO1 Explain fundamental concepts of data collection, classification and tabulation Understanding
(Level 2)
CO2 Outline the concepts of sampling and sampling distribution Understanding
(Level 2)
CO3 Apply statistical methods for Hypothesis Testing .Applying
(level 3)
CO4 Illustrate the concept of multiple correlation and multiple regression in business Understanding
forecasting (Level 2)
CO5 Make use of Index Number method in managerial decision making Applying (Level 3)

CO6 Apply the time series method to predict the future of sales in a concern. Applying
(level 3)

Chandigarh Group of colleges,Jhanjeri

 Unit-1

• CO1:-Explain fundamental concepts of data collection,

classification and tabulation
• Introduction to Statistics: Meaning, Importance,
Applications of inferential statistics in managerial decision
making.

Introduction to Statistics --Dr RAJINDER KAUR BHOGAL

 Learning objectives :-After completing this module the
students will be able to :-

• Meaning of Statistics
• Importance
• Applications of Inferential Statistics in Managerial decision making.
• Conclusion
• References/Text books
• Topic to be covered in the next lecture
 Data
• Data is a Set of raw facts figures is called Data.
• Or the collected data must be organized in a
systematic way to analyzed data

• Example:
• Age- 16, 18, 20, 21, 23,
• Name :-amit , rosy, rashmi……so on .
 What is Variable?
• Vary + able = Change + able
• Variable is a characteristic of anything that can vary
(Change).
• Examples :-
• Gender (Male, Female)
• Age (20 years, 30 years, 50 years)
• Motivation level (High, Medium, Low)

• Constant is a characteristic that do not vary e.g. If all

students are male in a class then Gender will be constant.
Introduction of statistics
• Meaning of statistics
• Definition of statistics in singular and plural sense.
• Importance of statistics
• Application of Inferential Statistics in Managerial
decision making.
Meaning of Statistics
 Meaning of statistics

• Statistics is a branch of mathematics dealing with a

decision making techniques which helps businessmen in
making suitable policies from the available data.

• Origin of statistics:-
• In Latin word ‘status ‘
• Italian word ‘statista’
• German word ‘statistik.
 Statistics
• Statistics is a form of mathematical analysis that uses
quantified models, representations and synopses for a
given set of experimental data or real-life studies.
Statistics studies methodologies to gather, review,
analyze and draw conclusions from data. Some statistical
measures include mean, regression analysis, skewness,
kurtosis, variance and analysis of variance.
 Statistics
• Statistics is a term used to summarize a process that an
analyst uses to characterize a data set. If the data set
depends on a sample of a larger population, then the
analyst can develop interpretations about the population
primarily based on the statistical outcomes from the
sample. Statistical analysis involves the process of
gathering and evaluating data and then summarizing the
data into a mathematical form.
Definition of Statistics
 Definition of statistics
• These are broadly divided into two categories :-
• 1) DEFINITION IN THE PLURAL SENSE.
• 2) DEFINITION IN THE SINGULAR SENSE
 DEFINITIONS IN THE PLURAL
SENSE
• 1). Plural Sense:

• Statistics are numerical statements of facts in any

department of enquiry placed in relation to each others

• In the plural sense, it refers to the numerical facts and

figures systematically collected for some special
purpose.
This definition has the following
features:
• Statistics are aggregate of facts:
In statistics, the single numerical figure has no meaning. It is not statistics. The
numerical figures of production, income, price of commodities, students of the
class, etc. are statistics.
• The values of statistics are numerically expressed:
The values of statistics are countable as well as numerically expressed. For
example, the numbers of students at Siddhartha College in grade 11 are 400.
Among them 264 are female and 136 are male, which constitute statistics.
• Statistics are collected in a systematic manner:
Firstly, we have to think about the field of study. Then, data should be collected
by applying suitable methods and work should be carried out in a systematic
manner. Otherwise, interpretation and conclusion may be wrong or misleading.
Features or characteristics of statistics in
terms of numerical data(Plural sense)
• Aggregate of facts
• Numerically expressed
• Affected by multiplicity of causes
• Reasonable accuracy
• Placed in relation o each other
• Pre determined purpose.
• Enumerated or estimated
• Collected in systematic manner
 FEATURES
• Statistics are collected for a pre-determined purpose:

We must have a well-defined purpose, specific aims, and objectives before we

collect data. Suppose, if we want to compare the performance of students in
grade XI in Siddhartha College in one subject or more, we must specify the
subject and the year, for which comparison is carried out.

• Statistics makes easy to comparison:

The collected numerical data constitute statistics if they are comparable. To

make a valid comparison, the data should be homogeneous. For example, the
passed number of students of Siddhartha College and other College constitute
statistics, as they are comparable. But the weight of the students and their
intelligence do not constitute statistics as they are not comparable.
2) DEFINITIONS IN THE SINGULAR
SENSE

• Bowley “statistics is the science which deals with the

collection of data, organization of data , presentation of
data , analysis of data and interpretation of numerical
data”.
• In a singular sense, it means the science of counting or
science of average. This definition has the following
features:
 Features
• There are five stages in a statistical study:-
• Collection
• Organization
• Presentation
• Analysis
• Interpretation
 Features
1.Collection of data:
Most of the statistical analysis is performed on the basis
of collected data. The methods of data collection like
primary and secondary, census and sampling, etc. are
related to data collection.
Primary data are original in nature .Primary data is
usually collected by Direct Personal investigation,
Indirect oral interview and Mailed Questionnaire.
Data which are obtained from Published or unpublished
sources are known as Secondary Data.
 2.Organization of data:

After collecting data, a systematic arrangement is essential.

The most vital part in organizing a group of data is editing,
After Editing the next step is to classify the data.
The Process of arranging the data into groups or classes
according is known as Classification.
The data can be classified on the following bases:-
1.Geographical Classification
2.Quantitative Classification
3.Chronological Classification
4.Qualitative Classification.
 3.Presentation
• They are organized and presented in the table on the
basis of rows and columns. This process is known as a
presentation of data.
• It is presented either through graphs or diagrams .
Diagram may be divided into following Categories:-
1.Pictograms
2.One Dimensional Diagram
3.Two Dimensional Diagram
4.Three Dimensional Diagram.
 4.Analysis of data:

The organized data presented need to be analyzed. There are

various tools of analysis in statistics like
▪ Measure of Central Tendency
▪ Measure of Variation
▪ Measure of Skewness
▪ Measure of Dispersion
▪ Index Number
▪ Analysis of Time Series
▪ Correlation, Regression,
▪ Business Forecasting etc.
 Interpretation of data

• This is the last phase in statistical Investigation.

• It is the last and most essential part of the work
• After analysis, results are interpreted and conclusions
are drawn.
• If findings are interpreted wrongly, the wrong
conclusion is obtained.
Limitation of Statistics
 Limitations of Statistics
• Statistics is a mathematical science pertaining to the
collection, analysis, interpretation or explanation, and
presentation of data. Statisticians improve the quality of data
with the design of experiments and survey sampling.
• (i) Statistics does not deal with isolated measurement
• (ii) Statistics deals with only quantitative characteristics
• (iii) Statistics laws are true on average. Statistics are
aggregates of facts. So single observation is not a statistics, it
deals with groups and aggregates only.
• (iv) Statistical methods are best applicable on quantitative
data.
 Limitations of Statistics
• (v) Statistical cannot be applied to heterogeneous data.
• (vi) It sufficient care is not exercised in collecting,
analyzing and interpretation the data, statistical results
might be misleading.
• (vii) Only a person who has an expert knowledge of
statistics can handle statistical data efficiently.
• (viii) Some errors are possible in statistical decisions.
Particularly the inferential statistics involves certain
errors. We do not know whether an error has been
committed or not.
Importance of Statistics
 Importance of statistics
• Business management and industrial management in
today’s business world depend very much on statistical
methods. Statistics application include the area of
production,marketing,promotion of product, financing ,
distribution, accounting, marketing research,
planning,forecasting,research and development and so on.
 Importance of Statistics
• Statistics in Planning
• Statistics in Economics
• Statistics in Business
• Statistics in Mathematics
• Statistics in Social Science
• Statistics in Trade
• Statistics in Research Work
• Statistics in Programming
• Statistics in Big Data and Data Science
• Statistics in the Health Industry
• Statistics in Business Statistics
Scope of Statistics
 Scope of Statistics

Scope

Subject
Nature Matter/Applie Limitations
d Statistics
 Nature
• As an art, statistics relate to the quantitative data to the
real life problems.
 Applied Statistics
• Applied statistics deals with the application of statistical
methods to specific problems like Population, National
Income, wages, prices .
• The applied statistics can be classified into:-
• A).Descriptive Applied statistics.
• B).Inductive or Inferential Statistics.
• C).Analytical Statistics.
Subject matters of statistics/Applied
Statistics
• Subject matters of statistics

Descriptive Statistics Inferential Statistics

Analytical Statistics.
Descriptive Statistics
• It refers to those method which are used for the
collections, presentation as well as analysis of data these
methods relates to such estimations as measurement of
central tendencies, measurement of dispersion and
measurement of correlation.
Inferential Statistics
• It refers to all such methods by which conclusions are
drawn relating to the universe or population on the basis
of given sample.
• Inferential statistics help the decision maker to draw
conclusion about the characteristics of a large population
on the basis of sample results.
 Questions
• 1.Define Statistics in Plural or Singular sense and State
its features.
• 2.Briefly describe various functions of statistics?
• 3).Write a note on Importance and Limitation of
Statistics?
 Conclusion
• Statistics is the discipline that concerns the collection,
organization, analysis, interpretation and presentation of
data. In applying statistics to a scientific, industrial, or
social problem, it is conventional to begin with a
statistical population or a statistical model .
• Now we have gone through the importance of statistics
in our daily life. Statistics is playing a crucial role in
making our lives better. It might be clear now the why
statistics is important.
 References/Text books
• Quantitative Techniques, by CR Kothari, Vikas
publication .
• Fundamentals of Statistics by SC Gupta Publisher Sultan
Chand .
• Quantitative Techniques in management by N.D. Vohra
Publisher: Tata McGraw hill.
• Business statistics T.R JAIN S.C AGGARWAL Global
Publication .
• Research Methodology CR Kothari
 Topic to be covered in the next
lecture
• Application