‘Quantitative Analysis for Management yo Wa ee z Slate cere tateedecdin ray a oY a eAEPR ty 7a sedate hn) gates baeval = ee droll pepression — preeled. 7 ae Se orsee20 : \ LZ Androl Ttroduction ox) - Satter DiagramWhere Coronavirus Cases Are Still Growing Fast Cumulative confirmed COVID-19 cases in selected countries from day 1 after 100+ cases Brazil = Chile = India — Russia —Peru Mexico = Saudi Arabia 600,000 sour 526,447} 500,000 fi23.741 | 400,000 300,000 Teast 200,000 170,039, 105,159, 100,000 3,435 ° 2.132 710 2 30 40 50 60 70 - 80 ‘as of june %3o20-———__ Source: European COC via Our World in Data (STOXS) statista "a Analysis fg wpe cosas Stead th caves COD easements ead ie toddavau snag Alok at some ofthe os bv eft coun ous of aro shows ta the casefcxcasrs inition till felt yry teh pane in arsed uses a ow hea ate cosa wie shar as ata mooning ni PC, Sen Abia and Mason eg dab be Earpan CDC a (total caus ihr hn 50,200 malate cresotsict Earp, ome anions hav alec been ucesiin (Bong ene cfincdant- stg ry sae Oram t © 2018 Pearcen Eduction, Lis Al Rights Resorvad 01-Sep-20Triple A Construction ¢ of7) “Tile Constucten arses oldheres ‘Tre aa vursornovaton ore appandenten a tea pay TABLE AA Tie ACen Corp Ses re La Pay ve TRIPLEA'SSALES LOCAL PAYROLL 100, be by 2 a & 4 2 9 Oren Copy © 2048 parm Ebsco, tal ight Kasra Triple A Construction @of7) FIGURE 4.1 Scat Dayiam of Tope AGonstusien Company Data 4 * Pearson Copyright © 2018 Peorcon Education, Lt Al Rights Razorvec 01-Sep-20imple Linear Regression ( of2) renee opyiight © 2018 pearson Eaucaton, all Rights Resor imple Linear Regression (2 of2) a + True vies for the slope and intercept are not known Estimated using somal ~ by + bX vice = posed aus ot ¥ by, =exirao fy based on sample resus ‘EY = estimate off based on ample resus Pearson Copyright © 2018 Peorcon Education, Lt Al Rights Razorvee 01-Sep-20Triple A Construction 6 of7) + Precict sales based on area payroll Y= Sales >= Area payroll — Tho ine Figure 4.1 minimizes tho orrors Error = (Actual value) ~ (Predicted value) CBr Regression anak malnizes the sum of squared eros ~ Least-squares regression renee copyiight © 2018 pearson educaton tt All RighesRasorvad Triple A Construction (4 0f7) + Fox for simple near regression, ntercent and slope V=b, + bX R= 2% average (mean) ofX values y= zy average (mean) of ¥ values Dx XY by =Y-bX pearson Copyright © 2019 aren Eduction A, Rights Resrved 01-Sep-20Triple A Construction (s o£7) ‘TABLE 4.2 Regression Calelatons fo Tipe & Construction ¥ x (x= RY %) 6 3 (B= 4)(6-7)=1 8 4 (4-48 -7)=0 8 6 (@-4y9-1=4 5 4 (4-4)(5-7) 45 2 (2-445 -7)=5 95 5 6-410. By=42 EK=24 2X-XY- Y= 125 @ Pearsen copyright © 2018 pearson Education, Ld. Al RightsReserved Triple A Construction (0:7) + Regression Calculations yp LXV) 128 YOOX? io b= bX =7-(4.25)4)=2 Copyright © 2038 Pearson Education, Ld. Al Rights Resorvd 01-Sep-20Ee esTriple A Construction (7 o£7) + Regression eakulatons KX 24 _ Each $109 mtton (represontes by x) neease inthe payral, we woul expect Resales fo increase by $128,000 Orne enya @ 2008 Poco Ron, AU gh asad Measuring the Fit of the Regression Model (1 of 5) + Regression medes canbe develope rary vanales Xard Y + How nap ene most proaing ¥? + Win average enor poste and nepatneercrs cancel each oer oi. We need ous squares + Sum of squares total: ssT=S(Y-YP + lfwe di nase Xt ret. ne wo simpy ue the mean of asthe prec, an the SST nous rresnio he array of our presctone. However, 9 egesa0n ie may be ied orcs te vae oY, {ind white Dre ae stl arace Pwoled, tne sum ofthese equated erore wil be fess than th oll tan of ‘squares ust computed ‘Copyright © 2018 Posrson Education id. AU Rights Resorved 01-Sep-20Measuring the Fit of the Regression Model « of 5) + Sum of squares error: SSE=Ee"=D(v-¥F + Sum of squares regression: How much of the total variability in Y is explained by the regression model. + Three measures of variability: ssk= 50-77 ~ SST—Teal vataity abutthe mean ~ SSE arab about he reesson ne ~ SSR Total vans mats exaned by be model Sum of squares total = (Sum of squares due to regression + Sum of squares error) @rew0n Comisht @ 2018 Fennel igh Rese Measuring the Fit of the Regression Model of 5) + Sum of squares total sst=5(v-¥F + Sum of squares error (unexplained variability in Y) 885 -Se-Sey-vF + Sum of squares regression (explained variability in Y) ssr-E-7F + An important relationship SST-S9R+ SSE Orne riot 2 2010 Foran Edenton, l nigh Reserves 01-Sep-20Measuring the Fit of the Regression Model (3 of 5) TABLE 4.3 Sum of Squares for TisleA Construction yx ew ¥ (-¥F (7 F 6 3 G-7F=1 2+ 125()=575 0.0625 1568 8 4 @-7F=1 1 ° 9 6 025 625 5 4 4 0 4502 ° 625 os 5 2 125(9)=825 1.5625 1563 ye? BY WR=6875 SIV Y= 15.025 SSE=6.875 —_ SSR= 19.625 renee opyiight © 2018 pearson Eaucaton, all Rights Resor Measuring the Fit of the Regression Model «4 of 5) Oram Copy © 2018 aren Education i Aight Ravan 01-Sep-20 10Measuring the Fit of the Regression Model s of 5) FIGURE 42 Deviations om ne Regression Linea fom he Mean Z| i a] % +++ 4 oe 10000300 x @rew0n Comish @ 2018 Fennel igh Rese Coefficient of Determination (i 2) +The roperton ofthe vant in Yeas byte regression equaton The coethilent of aetermination is 2_SSR_, SSE sst' Sst ~ ForTipleA Construction 15.828 9.6044 Orem Copyright x 2018 Pearson Edveation, Ld Al Rights Resvoé 01-Sep-20 "Coefficient of Determination of) 1 every point inthe sample were an the regression tne (meaning al eters are 0), then 100% of the ‘abit in could be expanes by he regression equation, 1 In gevelping repression equations, a good model il ave an value coset 1. @rew0n Comisht @ 2018 Fennel igh Rese Correlation Coefficient + Anexgresson of he stengh ofthe ines reltonsip = Avays between + and 1 = The correlation coeiien i r=aNP For TipleA Construction (postive because slope is poste} 1 =VORBH = 0.8209 Orne riot 2 2010 Foran Edenton, l nigh Reserves 01-Sep-20 12Four Values of the Correlation Coefficient FIGURE 4.3 Four Vaties ofthe Coelaton Coetilet @rew0n Conrright © 2018 Porn Education, Ld lights Reserva USING COMPUTER USE EXCEL - SPSS or MEGASTAT TO SEE THESE CONCEPTS... Orr Copyright 2 2018 aatsn Edveaton, Ll ott Reseed 01-Sep-20 13Assumptions of the Regression Model wi corn assumptions about the eas, tata tests canbe permed ia dtermine he modes ‘sels 5 Eros ate ingependent 2 rors are normaly cstroited 8. mors havea mean of zero 4 Eros have a constant variance + Alot ote resiuals era) often nighights gang vottons of assumptions Oran Copyright @ 2038 Penson Eton, lights Reserved Residual Plots «i of3) FIGURE 44a Patem of Erorsnseang Randornnass: assumptions ae met andthe modes appropiate Orne riot 2 2010 Foran Edenton, l nigh Reserves 01-Sep-20 14Residual Plots (2 of3) FIGURE 4.48: Noncoretant Err Variance. te rors increase ae X ncreaees, violating the constant variance _ssumplon run Comsht ©2018 Feanen in, al igh Reseed Residual Plots (3 £3) FIGURE 4.40 Patem of Eo Inacatng Relationship Is Not Ler and some oer orm (pemaps quadrats) Orne roe 2018 Foran Edenton, lng Reza 01-Sep-20Estimating the Variance (1 0:2) + tors are assumed to pave a constant variance (0), usualy unkown atv using the mean square error MSE}. = gs =mse - SSE wee ‘= nant sosenatons ne samp {amines taeda varies @rew0n Comisht @ 2018 Fennel igh Rese Estimating the Variance @0f2) + For Tape A Constucton SOME TB Estate ne standara deviation. ~The stanaar error ot te estimate or ne stant cevatan of he reresson| = WSE = ST7TEB = 1.31 Orne riot 2 2010 Foran Edenton, l nigh Reserves 01-Sep-20 16Testing the Model for Significance «i or4) “+ When te sample sei 0 smal, you can get good vals for MSE and even ner no etaonship ‘between he wales Teng ne modeler slgniteance nes determine re values ave meanngn ~ Perteming astasical mpomest est @rew0n Const @ 208 Feanon in, igh Rese Testing the Model for Significance (2 or) = -Westat va ne general near mode Y¥=A+0X+e 18,0, ne nut nypotmess i that ere i na elatonslip tween X aed ¥ The atemate mypathesis is that tere is a inearreationship (2, #0) ~ ftherul hyptiess can be rected, wo have proven tere arelabonship = Weuse ne F statistic Orem Copyright 2 2018 Psarson Edveation, i Al Right Reserve 01-Sep-20 7Testing the Model for Significance @3 or4) +The F statistic is based onthe NSE and MSR (tan Squared Regression) sok vise S88 wine, c= numer of independent variates in the mee + The Fstatstess ‘bescrtes an Fasrouion wt grees of eedom rth numeratr = ‘earees of eeaom forthe denominator =a. =n~ k= 1 @rew0n Const @ 208 Feanon in, igh Rese Testing the Model for Significance (or) tere is veri ear MSE wos be smal and he F statistic would be large ~ model usc + ttme Fst i large, ne signcance vel (pvaue) ale lw, —untkey wou nave ocues By nance When he F value sage can eject he nl ypoesis and accep that there i 2 near relationship btwn Xan Y andthe vales of he MSE and are meaning Orem Copyright 2 2018 Psarson Edveation, i Al Right Reserve 01-Sep-20 18Steps in a Hypothesis Test «1 of2) 4 Spec nl ana ater myponeses 2 Select heleve of sgrticance (a) 5 ‘Coron values ar 0.1 ara 0.06, 5. Calle me vate oF he test statste @rew0n Comisht @ 2018 Fennel igh Rese Steps in a Hypothesis Test (2 of2) 4 Nake a decison using one ofthe folowing mens 1) Rejeshe ul hypothesis ne tx stati greater han he F valve Rom te ate in ‘Appera D-Ohhentse, dont reject ne nul pores Refectf Fao Foe ent 9) Reject then potest te observes Sniicance lee, o p-value, eles han he tevel of Sineance menses do nt eect ns nus mypomens pave =F > cata tet ssc) Reject vate cer Orem Copyright 2 2018 Pearson Edveation, Ld Al Rights Resvoé 01-Sep-20 19Triple A Construction (1 3) spt f4:f:20 (olen retnanitatoeen Xan Y) fhco:#0 nator ext btwn Xeno swo2 suet a= 008 sues cate ae oe et sate 50 sca it i a Orn Copyright © 2018 Pearson Edestion, Ld RightsReserved Triple A Construction (03) + Step “ “Rejet ne nul pote ite test sass s eater than he F vale in Append D ‘Te va of Fascia wah a 5% Soe et sgnncance and wah degrees of ted tan 8 ound Inappena ESSE, cecause 909 771 Copyright 2 2018 aatsn Edveaton, Ll ott Reseed 01-Sep-20 20Triple A Construction (3 03) FIGURE 4.5 F Distston for THpleA Constucion Tes for Sinitcanoe —wacan conchae mere a tatty agntcart relations between Xan Te value ot 0.69 means aout 69% oe vananaty in sales (Y] ‘ emplane by local pyr) @rew0n Comisht @ 2018 Fennel igh Rese Analysis of Variance (ANOVA) Table + win sontare models, an ANOVA abl is pay created tal snows the observed sigiicance evel (ovale) tor heeaeites vane Tis canbe compared to ne tevel of antcance (to make a decison TABLE 44 Anat of Variance Tale or Regression DF ss Ms F SIGNIFICANCE F Regassion SSR MSR=SSR=K MSR=MSE AF» MSR=MSE) Residual n-k-1 SSE MSE=SSE=(n-k-1) Total n-1 ser Copyright 2 2018 aatsn Edveaton, Ll ott Reseed 01-Sep-20 21ANOVA for Triple A Construction PROGRAM 4.16 Exc! 2016 Output or Tle A Construction Example ropeston SSE ns oreo ond SST {Seirae ora ine e | AF > 80000) = 0 0894 @rear00 Comisht @ 2018 eanon ion, igh Rese Using Software « or10, PROGRAM 4.18 Accessing he Regression Option in Excel 2016 ‘When Data Analysis window opens, roll down t highight Regression Copyright 2 2018 Psorsn Edenton, Al Right Reserve 01-Sep-20 22Using Software @ of10) PROGRAM 4.18 Data nut fy Regression in Excel 2016 4A 1 Triple A Construction 2 9 Sales! n a6 3 5 8 4 s 9 6 ‘Check th Labels box the at 8 rowinthe Xana Vrangesincues | $\ the versie neoan speci locaton forthe outa To pu this tthe cient woraheat ck Out Rang Shave acl locaton fo this eg ce @rer00 Comish @ 2018 Feanon in, ight Rese Using Software 6 or10) PROGRAM 4.1¢ Excl 2016 Outpt or Tepe A Construction Example ‘Abigh 2 lose to 1) ‘sdesrabl, ‘Allow (e.. lss than 0.05) Sigtcance FP “Tho SSR ogress) SSE (tesdual or enor, and SST {total are shown in the SS ‘alum ofthe ANOVA table. Orne arg 2 2018 eran Edenton, rights Reserved 01-Sep-20 23Using Software (of 10) PROGRAM 4.28 Using Fxce! i oy Regression @rear00 Comish ©2018 eanon ion, ight Rese Using Software (s ot10) PROGRAM 4.28 Izing the Spreadsheet in Exc! aa namoert pom pmecrtan ay Sa = | Input the number of Dou. , Eee) ometeres 4 ie tat Stings Ca epyghe 2018 Person Enon, i. gts Reserved 01-Sep-20 24Using Software (6 or10) PROGRAM 4.26 Input and Resuts for Regression in Excel ht mn her Gena @rear0n Comoh @ 2018 Feanen in, lights Revved Using Software (7 ot10) PROGRAM 4.28 GM fo Windows Regression Opn in Forecasting Module [te 7 ater selecting the Forecasting module, lick New and Daw i select Least Squares Simple and Multiple Regression. | | Time Seis nays Reyes Projector oe Anahis Orne caprghe 2018 Person Enon, i. lg Reserved 01-Sep-20 25Using Software (s of10) PROGRAM 4.38 0M for Windows Scren oie the Pb @rear0n Specily the number = —\ chabservatons. Cannas Conrright © 2018 Pearson Eduaton, Ld Al Rights Reserved Using Software ¢ or 10, PROGRAM 4.2¢ Cat Input fo TipleA Consrucion Example Triple A Construction l Dpndnt var. Y_ xt Observation 1 6 3 Observation 2 [ 8 4 Observation 3 | 9 6 | Observatior - 5 4 Observation 5 | 45 2 Observation 6 95 5 Oren ‘copyright © 2018 Person Edveaton td. Al RightsReserved 01-Sep-20 26Using Software co of10) PROGRAM 4.30 OM for Windows Output for Tisle Constcton Example == ol Oran Copyright @ 2038 Penson Eaton, lights Reserved Multiple Regression Analysis « of2) + Eiterson tothe simple near model dels wih more tan one ndependent arse YB B81 BOE pendent vale (eponse vata ‘independent variate edict vata) terept e of Y whan a=) efit of te ndapendent vatabe number ot ndepence wataes Oren ‘copyright © 2018 Peorson Education, Lt. Al Rights Reserved 01-Sep-20 27Multiple Regression Analysis @ 0:2) + Toestate nese valves, a sarge tken the flowing equation developed Y= b, + D,X,4+D,X, b+ DX prs ae of Y me hist (on exit) mp cto te var (nestle of @rew0n Const @ 208 Feanon in, igh Rese Jenny Wilson Realty « os» + Develop a modelo determine the suggested sting pice or houses base on the size and age of he Y =b, +B,X,+b,X, vere rote vat of dependent vars (ng pris) a= Pinecept 2X and X= lus othe wo ncepenset vans (quae ftage and 258) respecte ‘andba= ops tr and repay selects sample ot noses that nave Solaray and rons he ata Orne Cepyght 2018 Person Evento, i. gts Reserved 01-Sep-20 28Jenny Wilson Real Estate Data TABLE 4.5 Jenny Wilson Real Estate Data —SELLNG PRES) SGUAREFOOIGE AGE CONDTTON — 1000 1386 13 Gand ‘2000 108 2 Mn 15000 1380 at tes000 awe 2 Excelent ‘e000 2286 Mt teaac0 a2 Good 20.00 2200 1 Gina 2ac0 a8 Gand 216.00 4.900 40 Exaent 29.00 110 2 en Oren Cont @ 208 Enno Con, al igh ese Jenny Wilson Realty @ 0:9 PROGRAM 44 input Szren or Jey Wilson Reaty Muse Regression in Excel 2016 a 81 /The cokanns containing data for We J mony witen tasty the Xvarabes should be adjoining. tao ee The Xrange is rom the sta ofthe fest) $ Seem ter | column tothe bottom of the second column. ) Orn epright = 2018 Fasrion Edun, Al Rights Reseved 01-Sep-20 29EP eee ERE Oe VEJenny Wilson Realty (3 09) PROGRAM 4.48 Exce! 2016 Output Seren or Jenny Wison Realy Mule Regresion Bxarple he coecien of determinations 0.47.) Y= +0,X,+BX, = 146,630.89 + 43.82X, ~ 2898.69X, @rear00 Const @ 2018 Fennen ion al igh Rese Evaluating the Multiple Regression Model of 2) + Siar simple near regression models +The vale forthe Fat and intergrated the same + The mpomess i erent eecause mere is mote tan one cependet varable + The Ftestis investigating whee lhe coeMcents are equal 9 0 athe same tine Orne riot 2 2010 Fearn Edenton, Al nis Reserves 01-Sep-20 30