STATISTICS FOR BUSINESS DECISIONS

MBA (ENT) – A023_NAITIK JAIN

QUESTION 1

Answer:

A variable is a characteristic of the data being observed that may be assumed that more than one
of the set of values to which a numerical measure or a category from classification can be
assigned.

Examples of variables are: age , income , Weight, Occupation, Industry, Disease, etc.

In statistics, variable has two characteristics:

● Variable is an attribute which describes a person, place, thing or idea.

● The value of a variable can differ from one variable to another.

For example if a person’s eye colour is a potential variable then it could have value as “Brown”
for one person and “blue” for another person.

The types of variables are:

1. Qualitative Variables:
Qualitative variables can also be called categorical variables. Qualitative variables consist
of values such as name or label.
The colour of a car or the breed of a dog can be some examples of categorical or
qualitative variable

Under Qualitative data there are two types:

● Dichotomous variable:
A dichotomous variable is a qualitative variable where no ordering is possible or implied
in the levels.
Examples of Dichotomous variable are –
● Gender
● Eye color
● Marital status
A dichotomous variable can have between two levels and a large number of levels.

● Polynomic variable:
 A Polynomic variable is a qualitative variable with an order implied in the levels.
Examples of Polynomial variable are –
● Brand of PC
● Hair color
● Health (Poor, reasonable, good, or excellent)

There is clear order in these levels so health is in this case a qualitative ordinal variable.

2. Quantitative Variables:
Quantitative variables can also be called numerical variables. They represent a
measurable quantity.
We can take the population of a city or a country as an example of quantitative data.

Under Quantitative data there are two types:

● Discrete variable
When a value that a variable can take is countable and have a finite number of
possibilities then the variable can be called as a discrete variable. The values are often
integers (not necessary that it has to be an integer always).
Examples of Discrete variable are –
● No of male members in family
● No of citizens in a city
● No of student in a school
Even if it takes a lot of time to count the citizens in a city it is still doable and the number
of possibilities is finite.

● Continuous variable
When a value that a variable can take is not a countable or infinite number of possibilities
then it is a continuous variable.
Examples of continuous variables are –
1. Age
2. Weight
3. Height
4. Amount of income tax paid

For measurements we can stop at a standard level of granularity but nothing prevents us
from going deeper which leads to an infinite possibilities.
QUESTION 2

Variable 1 Variable 2
Amount Spent Age of Customer
per month (Rs) (years)

1200 18
850 22
740 28
590 38
340 33
450 28
890 19
260 18
610 23
350 18
1780 33
180 44
850 42
2050 34
770 25
800 22
1090 26
510 18
520 30
220 19
1450 33
280 22
1120 32
200 33
350 34
ANSWER 2A

As we can see from the above pie diagram that class ​251-500​ has the ​highest percentage
frequency with 6 samples.
ANSWER 2B
Descriptive statistics of age of customers

Age of Customer (years)

Mean 27.68
Standard Error 1.554262955
Median 28
Mode 18
Standard Deviation 7.771314775
Sample Variance 60.39333333
Kurtosis -0.755362693
Skewness 0.383123456
Range 26
Minimum 18
Maximum 44
Sum 692
Count 25

Mean of age of customers is 27.68

However, median and mode are 28 and 18 respectively.
The minimum and maximum range are 18 and 44 respectively.

ANSWER 2C
Scatter diagram
Correlation between both the variables

As we can see from the above correlation table that both the variables have a ​very weak
or low ​correlation which is 0.1418.
QUESTION 3

ANSWER 3A

Based on the above table, the regression equation is formed as:

Y=2.329(x​1​) + 01.271(x​2​) + 0.233(x​3​) + 82.781

Where Y is the weekly gross revenue (dependent variable)
X​1 is
​ the Television Advertising
X​2 is​ the Newspaper Advertising
X​3 is ​ the Social Media Advertising

On using the given values of X​1​, X​2​ and X​3​ from the question,
X​1​ = Rs. 3500
X​2​ = Rs 1800
X​3​ = Rs 1300

we get the value of Weekly Gross Revenue as ​Rs 108525.9335

ANSWER 3B

As we can see from the above table that the F value is less than F critical value
which means our ​null hypothesis is accepted​.
This means that there is​ NO​ ​significant difference​ between the variables.
ANSWER 3C

For this t-test hypothesis analysis, we consider the following hypothesis:

H​0​: There is no difference in the mean values of Television Advertising and Social Media
Advertising. (u​1 =
​ u​2​)
H​1​: There is a significant difference in the mean values of Television Advertising and Social
Media Advertising (u​1 ≠​ ​ u​2​)

As we can see from the above table that the t Stat value is more than t critical
two-tail value which means that our ​null hypothesis is rejected​.
This means that there is a ​significant difference​ between both the variables.