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DISC 203-Probability and Statistics-Meher Alam

POMA (Lahore University of Management Sciences)

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Lahore University of Management Sciences

DISC 203 – PROBABILITY AND STATISTICS

Fall 2021
Instructor Meher Alam
Room No. TBA
Office Hours Monday & Wednesday by appointment
Email meher.alam@lums.edu.pk
Telephone
Secretary
TA Office Hours TBA
Course URL (if any) https://lms.lums.edu.pk/portal

COURSE TEACHING METHODOLOGY

Teaching methodology Synchronous and asynchronous learning
Lecture details 40% recorded, 60% live

COURSE BASICS
Credit Hours 3
Lecture(s) Nbr of Lec(s) Per Week 2 Duration 75 minutes
Recitation/Lab (per week) Nbr of Lec(s) Per Week Duration
Tutorial (per week) Nbr of Lec(s) Per Week Duration

COURSE DISTRIBUTION
Core Yes
Elective
Open for Student Category Sophomore
Close for Student Category

COURSE DESCRIPTION
This course is designed to provide students majoring in management and finance with an elementary introduction to probability and statistics
with applications. Both descriptive and inferential statistics are covered. We first review techniques for organizing and presenting the raw data
and elementary probability theory. Next, we discuss various techniques to make inferences. Along with probability theory, sampling distribution
and central limit theorem shall be discussed. The idea of central limit theorem will naturally lead towards the confidence intervals and hypothesis
tests for mean and proportion. We follow this discussion with single and multiple regression analysis, model building, design of experiments and
categorical data analysis. The course also aims to give a hands-on experience with using a statistical package, R for carrying out data analysis. The
main objective of the course is to provide students with the foundations of statistical inference mostly used in business and economics.

COURSE PREREQUISITE(S)

• Calculus I (Math 101)

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COURSE LEARNING OBJECTIVES (CLO)
1. To enable students to solve problems using basic concepts of probability
2. To introduce students to the theory of inferential statistics
3. To enable students to analyze data by identifying appropriate statistical techniques, computing statistics and interpreting results
4. To enable students to use R for statistical analysis of data
5. To enable students to present and defend their empirical analysis effectively

LEARNING OUTCOMES (LO)

By the end of the course, students should be able to:
1. summarize the data in a useful and informative manner
2. use the basic concepts of probability and random variables
3. explain the concept of the sampling distribution of a static and describe the behavior of the sample mean
4. describe the foundations of classical inference involving confidence intervals and hypothesis testing and apply inferential
methods
5. apply modeling techniques in simple and multiple linear regression analysis
6. discuss critical elements in the design of a sampling experiment and analyze designed experiments using analysis of variance
7. analyze count data with two or more categories
8. use R for statistical analysis of data
9. defend empirical analysis effectively, both in oral and written forms

UNDERGRADUATE PROGRAM LEARNING GOALS & OBJECTIVES

General Learning Goals & Objectives
Goal 1 –Effective Written and Oral Communication
Objective: Students will demonstrate effective writing and oral communication skills
Goal 2 –Ethical Understanding and Reasoning
Objective: Students will demonstrate that they are able to identify and address ethical issues in an
organizational context.
Goal 3 – Analytical Thinking and Problem Solving Skills
Objective: Students will demonstrate that they are able to identify key problems and generate viable
solutions.
Goal 4 – Application of Information Technology
Objective: Students will demonstrate that they are able to use current technologies in business and
management context.
Goal 5 – Teamwork in Diverse and Multicultural Environments
Objective: Students will demonstrate that they are able to work effectively in diverse environments.
Goal 6 – Understanding Organizational Ecosystems
Objective: Students will demonstrate that they have an understanding of Economic, Political,
Regulatory, Legal, Technological, and Social environment of organizations.

Major Specific Learning Goals & Objectives

Goal 7 (a) – Discipline Specific Knowledge and Understanding
Objective: Students will demonstrate knowledge of key business disciplines and how they interact
including application to real world situations (Including subject knowledge).
Goal 7 (b) – Understanding the “science” behind the decision-making process (for MGS Majors)
Objective: Students will demonstrate ability to analyze a business problem, design and apply
appropriate decision-support tools, interpret results and make meaningful recommendations to support
the decision-maker

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Indicate below how the course learning objectives specifically relate to any program learning goals and
objectives.

Program Learning Goals and Objectives
Goal 1 –Effective Written and Oral
Communication
Goal 2 –Ethical Understanding and
Reasoning
Goal 3 – Analytical Thinking and Problem
Solving Skills
Goal 4 – Application of Information
Technology
Goal 5 – Teamwork in Diverse and
Multicultural Environments
Goal 6 – Understanding Organizational
Ecosystems
Goal 7 (a) – Discipline Specific Knowledge
and Understanding
Goal 7 (b) – Understanding the “science”
behind the decision-making process
Course Learning Objectives Course Assessment Item
Students get a number of opportunities to Project, Exam
demonstrate their ability to communicate
effectively (CLO # 5)
Students demonstrate an honest reporting Project
and use of data (CLO #5)
This is an important objective of the Assignments, Project and Exam
course (CLO # 1,3,5)
Students learn to use R for data analysis Assignments and Project
(CLO # 4)
Students work in groups on the project Project
NA NA
Comprehensive coverage of topics in Assignments, Project and Exam
elementary probability and statistics (CLO
# 1-5 & LO # 1-9)
Students apply appropriate statistical Assignments, Project and Exam
methods to answer data based decision
problems
(CLO # 1-5)

Grading Breakup and Policy

Quizzes/Assignment(s): 30 %
Participation in class activities: 3%,
Participation in data collection: 4%
Project: 28% (to be completed in groups of up to 5 students. Note: Group peer assessments will be used to assess participation.)
Final Examination: 35%

Project Breakup:
Research Question (10%)
Peer review (5%)
Group Presentation (5%)
Final Paper (8%)

Each of these components will have to be submitted at various points throughout the course so that the instructor can track the progress of the
group. The peer review form is attached at the end of this document.

Important: Students will be expected at all times to uphold principles of “professional ethics” just as they would in a corporate environment. They
are expected to review uploaded materials prior to each class and join meetings on time or inform the instructor beforehand for persistent
connectivity issues. In case of in person classes, students are expected to show up on time and will be marked absent should they enter class after
the first 5 minutes. They are also expected to show integrity and respect for fellow classmates and the instructor. Anyone causing disruption in the
on-line classes/in-person will be penalized immediately and severely. Group projects will be closely monitored, and students will be evaluated on
their individual performance. Finally, this course expects students to deliver on all commitments in a timely fashion.

Anyone having more than 7 absences will not be allowed to take the final exam.

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Note: The principles of truth and honesty are recognized as fundamental to a community of teachers and students. This means that all academic
work is to be done by the student to whom it is assigned without unauthorized aid of any kind. Plagiarism, cheating and other forms of academic
dishonesty are prohibited. Any instances of academic dishonesty in this course (intentional or unintentional) will be dealt with swiftly and
severely.

Examination Detail

Midterm Yes/No: No
Exam

Yes/No: Yes
Combine Separate: Combine
Final Exam
Duration: Tentative
Exam Specifications: Take home final exam

COURSE OVERVIEW
Recommended
Lecture Topics Objectives
Readings
Statistics, Data and Statistical Thinking Chapter 1 • Understand the nature and scope of
The Science of Statistics; Types of Statistical Statistics
1
Applications in Business; Fundamental Elements of Statistics;
Types of Data
Methods for Describing Sets of Data using R Chapter 2 • Choose a suitable way of presenting
Graphical Methods; Summation Notation; Central raw Statistical Data
2–4
Tendency; Variability; Relative Standing; Standard Deviation; • Discuss the advantages and
Distorting the Truth with Descriptive Techniques disadvantages of different ways of
representing data
• Calculate and interpret measures of
central tendency and variability
• Describe data using R
Probability Chapter 3 • Describe the sample space for
Events, Sample Spaces and Probability; Unions and certain random experiments
Intersections; Complementary Events; The Additive Rule and • Compute probabilities
5–7
Mutually Exclusive Events; Conditional Probability; The • Understand the notion of Random
Multiplicative Rule and Independent Events; Random Sampling
Sampling; Bayes’ Rule
Random Variables and Probability Distributions • Find probabilities for distributions
Two Types of Random Variables: over discrete sets
Discrete Random Variables: Probability Distributions for Chapter 4 • Calculate the mean and variance of
Discrete Random Variables; Expected Values of Discrete a discrete random variable
Random Variables; The Binomial Random Variable; The • Recognize cases where Binomial
8 - 11 Poisson Random Variable Distribution could be an appropriate
Continuous Random Variables: Probability Distributions for model; compute probabilities for a
Continuous Random Variables; The Uniform Distribution; Binomial Distribution
The Normal Distribution; The Exponential Distribution • Find probabilities for continuous
Sampling Distributions: The Concept of Sampling
4

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Distributions; Properties of Sampling Distributions: distributions
Unbiasedness and Minimum Variance; The Sampling Chapter 5 • Use the key properties of the
Distribution of the Sample Mean Normal Distributions
• Recognize cases where Poisson,
Uniform and Exponential
Distributions could be appropriate
and compute corresponding
probabilities
• Describe properties of the sampling
distribution of sample mean
• Understand and apply Central Limit
Theorem
Inference Based on a Single Sample: • Calculate and interpret Confidence
Estimation with Confidence Intervals Chapter 6 Intervals and Confidence Levels
Large-Sample Confidence interval for a Population Mean; • Remember steps in Classical
Small-Sample Confidence Interval for a Population Mean; Hypothesis testing
Large-Sample Confidence Interval for a Population • Describe Type I and Type II Errors
Proportion; Determining the sample size; Sample Survey • Conduct Tests of Hypothesis
Designs according to a given situation and
12 - 14 Tests of Hypothesis interpret the results.
The Elements of a Test of Hypothesis; Large-Sample Test of Chapter 7
Hypothesis About a Population Mean; Small-Sample Test of
Hypothesis About a Population Mean; Large-Sample Test of
Hypothesis About a Population Proportion; Observed
Significance Levels: p-values – Class 1
Inference Based on Two Samples Chapter 8 • Apply Classical Hypothesis Testing
Comparing Two Population Means: Independent to compare two populations and
Sampling; Comparing Two Population Means: Paired draw inference
15 – 16 Difference Experiments; Comparing Two Population
Proportions: Independent Sampling; Determining the
Sample Size; Comparing Two Population Variances:
Independent Sampling – Class 2 & 3
Simple Linear Regression Chapter 11 • Define the concept of least squares
Probabilistic Models; Fitting the Model: The Least estimation in linear regression
Squares Approach; Model Assumptions; Assessing the Utility • Explain why correlation need not
of the Model: Making Inference about the Slope; The necessarily imply causation
Coefficients of Correlation and Determination; Using the • Evaluate the fit of a linear model
17 – 18 Model for Estimation and Prediction • Conduct inference for the slope and
Class 3 & 4 intercept parameters
• Fit a linear regression model using
R, do post-estimation analysis and
explain computer output
Multiple Regression and Model Building using R Chapter 12 • Define the concept of Least Squares
19 - 23 Regression in Multiple Regression
Multiple Regression • Test the utility of a Multiple
Multiple Regression: The Model and the Procedure; Regression Model and use it for
The Least Squares Approach; Model assumptions; Inference estimation and prediction
About the Slope Parameters; Checking the Usefulness of the • Interpret the results of a Multiple
Model: R2 and the Analysis of Variance F-Test; Using the Regression Model and draw
Model for Estimation and Prediction, Residual Analysis: inference
Checking the Regression Assumptions • Understand how to select a model
Class 5-9 that is appropriate for given data
Model Building • Use R for Multiple Regression
The Two Types of Independent Variables: Analysis
Quantitative and Qualitative; Models with a Single
Quantitative Independent Variable; Models with Two or
More Quantitative Independent Variables; Testing Portions
5

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of a Model; Models with One Qualitative Independent
Variable; Comparing the Slopes of Two or More Lines;
Comparing Two or More Response Curves
24 – 25 Class
Project Presentations

• Give students a real-world

26 Course review perspective of the various
applications of statistics in industry

Textbook(s)/Supplementary Readings
Required Text:
James McClave, P.George Benson, Terry Sincich. Statistics for Business and Economics. 13th Edition. Prentice Hall, NJ. 2018

Online resources to help you learn R:

https://www.r-project.org/

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Peer Evaluation Form
This form is a means to assess contribution of each group member towards the final project. Please be fair and honest while filling out this form.

Write the names of your group members against the numbers and then rate each of them including yourself on the following attributes. Rate
against each attribute on a scale of 1-5, at the end just sum the ratings:

5=Superior 4=Above Average 3=Average 2=Below Average 1=Weak

Attribute Myself 1. 2. 3. 4.

Participated in
group discussions

Volunteered for
project tasks

Helped other group

members

Practiced active
listening & was
receptive to group
feedback
Shared resources
and added value to
the project

Contributed to EACH
stage of the project

Submitted
deliverables on time

Contributed good
quality work

Sum

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