Academic Year: 2022-23

Trimester 1
Program: PGDM-E

Course Name: Business Statistics & Analytics for Decision Making

Course Code: E031-11007

Assignment No. 1

Submitted By:

Name: Utkarsh Rajkotia

Enrolment No.: 2022E081

Trimester: 1

Section: B

Date of Submission: 26/sep/2022

Submitted To:

Name of Course Teacher: Dr. Sanjay Mangla

Q.No 1 2 3 4 5 6 Total

CO

Max. Marks

Marks Obtained
(The above given table is for the use of faculty only)

Department of Entrepreneurship Education

Entrepreneurship Development Institute of India, Ahmedabad

Q1: Hero Honda Motors Lid; Aiming to Capture the Growing Market in India

Calculate appropriate descriptive statistics of total income of Hero Honda

Motors Ltd. and prepare a statistical report on success story of this company.

Total
Year on
Income
Year
Year (in
growth
million
(in %)
rupees)
1990 1523.3
1991 2187 43.56988
1992 2757.3 26.07682
1993 3134.7 13.6873
1994 3667.1 16.98408
1995 5087.6 38.73633
1996 6187.1 21.61137
1997 8914.65 44.08447
1998 11642.2 30.59627
1999 15655.3 34.47029
2000 22698 44.98604
2001 32060 41.24592
2002 45132.7 40.77573
2003 51520.3 14.15293
2004 67864.8 31.72439
2005 86656.2 27.68946
2006 101879.5 17.56747
 Total Income
(in million
Year rupees)

Mean 1998 Mean 27562.80882

Standard Error 1.224744871 Standard Error 7759.222737

Median 1998 Median 11642.2

Standard Standard
Deviation 5.049752469 Deviation 31992.09492

Sample Sample
Variance 25.5 Variance 1023494137

Kurtosis -1.2 Kurtosis 0.54769436

Skewness -6.29126E-17 Skewness 1.277636224

Range 16 Range 100356.2

Minimum 1990 Minimum 1523.3

Maximum 2006 Maximum 101879.5

Sum 33966 Sum 468567.75

Count 17 Count 17

TOTAL INCOME (IN MILLION RUPEES)

101879.5
86656.2
67864.8
51520.3
45132.7
15655.3
11642.2
8914.65

32060
22698
6187.1
5087.6
3667.1
3134.7
2757.3
1523.3
INCOME

2187

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

YEAR

Total Income (in million rupees)

120000

100000

80000

60000

40000

20000

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Total Income (in million rupees)

1.The query does not include the company's entire revenue for 1997, which is
shown in the table above. Its past and subsequent values were averaged to find the
missing value.

2. To depict the evolution of the business over time, data on total income was
displayed as a line graph. It highlights the company's remarkable year-over-year
growth as well as its enormous market penetration and accomplishments.

3. The company saw maximum growth of roughly 45% between 1993 and 2000, and
minimal growth of roughly 13.69%.

4. The company predicts a bright future for the population earning an income of
between Rs. 200,000 and Rs. 500,000 per year, growing by three times the current
population by 2009–2010, based on information provided in the question and a
study conducted by the National Council of Applied Economic Research in 2005.

Q2: What is sampling? Distinguish between various probability and non-

probability sampling methods with example of their use in business research.

In statistical analysis, sampling is the process of selecting a predetermined number

of observations from a larger population. Depending on the sort of study being done,
a variety of methods, including systematic sampling and simple random sampling,
may be employed to draw samples from a broader population.

Two categories of sampling techniques exist:

Random selection is a key component of probability sampling, which enables you to

draw robust statistical conclusions about the entire group.
The results produced can be generalised from the sample under study to the
intended audience, allowing researchers to draw statistical judgments. The
probability sampling techniques are listed below.

1. Simple Random Sampling

2. Stratified Sampling
3. Cluster Sampling
4. Systematic Sampling

Non-probability sampling entails non-random selection based on practicality or other

factors, making it simple to gather data.
As such, no probability is associated with the population unit under this method, and
the researcher's subjective judgement is used to make the selection. As a result, the
sampler's conclusions cannot be generalised to the entire population. The following
is a list of non-probability sampling techniques:

1. Convenience Sampling
2. Quota Sampling
3. Judgment or Purposive Sampling
4. Snowball Sampling
Comparison of probability and non-probability sampling: Significant differences

1. 1.Probability sampling is a sampling method in which every member of the

population has an equal chance of being chosen as a representative sample.
Non-probability sampling is a sampling technique where the person who will
be chosen as a sample from the population is unknown.
2. Probability sampling is also referred to as random sampling because it is
based on chance or randomization. Contrarily, the randomization approach is
not used for choosing a sample in non-probability sampling. As a result, it is
regarded as non-random sampling.
3. In non-probability sampling, the subject is picked arbitrarily; in probability
sampling, the sampler randomly selects the representative to be a member of
the sample, to belong to the sample by the researcher.
4. In probability sampling, the odds of selection are fixed and predictable. The
selection probability is 0, as opposed to non-probability sampling, meaning
that it is neither known nor stated. 

5. For conclusive studies, probability sampling is used. On the other hand, non-
probability sampling ought to be employed when the research is
exploratory. 

6. Non-probability sampling produces outcomes that are more or less skewed,
whereas probability sampling produces results that are free from bias.

7. Probability sampling has a better degree of population representation than

non-probability sampling since the participants are chosen at random by the
researcher. Because of this, results from probability sampling can be
extrapolated to the entire population, whereas results from non-probability
sampling cannot. 
Although non-probability sampling creates the hypothesis,
probability sampling tests it.

Example

• probability sampling

1. Simple random sampling

Imagine that you own a movie theatre and you are offering a special horror movie
film festival next month. To decide which horror movies to show, you survey
moviegoers to ask them which of the listed movies are their favorites. To create the
list of movies needed for your survey, you decide to sample 10 of the 100 best
horror movies of all time. One way of selecting a sample would be to write all of the
movie titles on slips of paper and place them in an empty box. Then, draw out 10
titles and you will have your sample. By using this approach, you will have ensured
that each movie had an equal probability of selection. You could even calculate this
probability of selection by dividing the sample size (n=10) by the population size of
the 100 best horror movies of all time (N=100). This probability would be 0.10
(10/100) or 1 in 10.

2. Systematic sampling

Suppose you run a large grocery store and have a list of the employees in each
section. The grocery store is divided into the following 10 sections: deli counter,
bakery, cashiers, stock, meat counter, produce, pharmacy, photo shop, flower shop
and dry cleaning. Each section has 10 employees, including a manager (making
100 employees in total). Your list is ordered by section, with the manager listed first
and then, the other employees by descending order of seniority. If you wanted to
survey your employees about their thoughts on their work environment, you might
choose a small sample to answer your questions. If you use a systematic sampling
approach and your sampling interval is 10, then you could end up selecting only
managers or only the newest employees in each section. This type of sample would
not give you a complete or appropriate picture of your employees’ thoughts.

• Non probability sampling

Example of volunteer sampling is callers to a radio or television show, when an

issue is discussed and listeners are invited to call in to express their opinions. Only
the people who care strongly enough about the subject one way or another tend to
respond. The silent majority does not typically respond, resulting in a large selection
bias. Volunteer sampling is often used to select individuals for focus groups or in-
depth interviews (i.e. for qualitative testing, where no attempt is made to generalize
to the whole population).

Q3: Alpha Motors is the dealer of a leading car company in Gujarat. It

conducted an analysis of sales in the past 250 days for opening a new
showroom in another locality. Data collected on the number of cars sold in the
past 250 days revealed that there were 35 days with zero cars sold, 60 days
with one car sold, 75 days with two cars sold and remining days with 4 cars
sold. Find out expected number of cars sold on any random day in future in
another locality based on this data.

No of cars sold No of Days P(X) E(X)

0 35 0.14 0
1 60 0.24 0.24
2 75 0.3 0.6
4 80 0.32 1.28
total 250 1 2.12

Total expected no of cars sold on any random day in future in another

locality based on this data is 2
Q4: Use data on Wholesale Price Index of All Commodities – Annual Average
(Table 37, Handbook of Statistics on Indian Economy, RBI 2021) and display
the trend using appropriate graph during 1972-73 to 2020-21 with Base Year
2004-05; and comment on inflation in India during this period.

Year AC inflation
1972-73 8.907809
1973-74 10.70009 20.12038
1974-75 13.39618 25.19685
1975-76 13.25065 -1.08634
1976-77 13.52639 2.080925
1977-78 14.23105 5.209513
1978-79 14.23871 0.053821
1979-80 16.66672 17.05218
1980-81 19.69982 18.19853
1981-82 21.54572 9.37014
1982-83 22.60146 4.9
1983-84 24.30357 7.530982
1984-85 25.8764 6.471631
1985-86 27.01833 4.412989
1986-87 28.59116 5.821372
1987-88 30.9181 8.138659
1988-89 33.24504 7.526132
1989-90 35.70125 7.388205
1990-91 39.36402 10.25951
1991-92 44.772 13.73837
1992-93 49.27505 10.05775
1993-94 53.39028 8.351552
1994-95 60.11746 12.6
1995-96 64.92258 7.992895
1996-97 67.91244 4.605263
1997-98 70.9023 4.402516
1998-99 75.12013 5.948795
1999-00 77.57608 3.269367
2000-01 83.12867 7.157605
2001-02 86.11853 3.59666
2002-03 89.05499 3.409795
2003-04 93.91351 5.455635
2004-05 100 6.480955
2005-06 104.5 4.5
2006-07 111.4 6.602871
2007-08 116.6 4.667864
2008-09 126 8.06175
2009-10 130.8 3.809524
2010-11 143.3 9.556575
2011-12 156.1 8.93231
2012-13 166.8709 6.9
2013-14 175.6125 5.238541
2014-15 177.7979 1.244444
2015-16 171.2417 -3.68745
2016-17 174.2076 1.731996
2017-18 179.3589 2.956989
2018-19 187.0078 4.264578
2019-20 190.1298 1.669449
2020-21 192.6274 1.313629
 AC
250

200

150

100

50

0
1982-83

1996-97

2008-09
1972-73
1974-75
1976-77
1978-79
1980-81

1984-85
1986-87
1988-89
1990-91
1992-93
1994-95

1998-99
2000-01
2002-03
2004-05
2006-07

2010-11
2012-13
2014-15
2016-17
2018-19
2020-21
-50

Inflation
30

25

20

15

10

0
1976-77

2002-03

2012-13
1972-73
1974-75

1978-79
1980-81
1982-83
1984-85
1986-87
1988-89
1990-91
1992-93
1994-95
1996-97
1998-99
2000-01

2004-05
2006-07
2008-09
2010-11

2014-15
2016-17
2018-19
2020-21

-5

-10

The above chart, which was prepared using 2004–2005 as the base year and taken
from the RBI 2021 Handbook of Statistics on the Indian Economy, displays the
wholesale price index for all commodities. The graph above shows how inflation,
which peaked in 1972–1973 at 20 and was below zero in 1973–1974, remained
mostly constant from 1982–1983 until 1988–89, inflation remained mostly constant.
Then, from 2000 to 2020, it ranged from 10 to 21. (-5).
Q5: Associated Cement Companies Ltd (ACC) came into existence in 1936,
after the merger of 10 companies belonging to four important business
groups. ACC Ltd. Like others, ACC Ltd. also spend a good amount of money
on advertising to promote its sales. Following table exhibits sales turnover
and advertisement expenses of ACC from 1995 to 2007.

Regression Statistics
Multiple R 0.927394342
R Square 0.860060266

Adjusted R Square
0.847338472

Standard Error 4687.83629

Observations 13

ANOVA

df SS MS F Significance F

Regression 1 1485680416 1.486E+09 67.605266 5.03E-06

Residual 11 241733899.9 21975809
Total 12 1727414316

Coefficients Std. Error t Stat P-value Lower 95% Upper 95%

Intercept 14504.70327 2576.87912 5.6287868 0.0001536 8833.030563 20176.376

Advertisement Exp.
(in million Rs.)
89.94325171 10.93901762 8.2222421 5.03E-06 65.86663626 114.01987
5.1 What is correlation between sales and advertisement? What does it
indicate?

Sales and advertising have a 0.92 very high correlation. It implies that there is a
considerable relationship between advertising spending and sales.

5.2 What is difference between R Square and Adjusted R Square? Which one
is applicable in this case? How much variation in sales is explained by
advertisement?

The coefficient of determination, often known as the R square, indicates how much
input contributes to the variation in output. It also goes by the name "quality of fit."
The use of adjusted R square, a specific form of R square, in multiple regression
models enables the confirmation of the contribution of input quantity to output
variance.

R square will be sufficient in this case of the bivariate regression model.

According to the MS Excel output sheet for the bivariate regression model,
advertising thus accounts for 86.006% of the variation in sales.

5.3 What is the sales without advertisement?

Around 14% of sales, according to the answer to the previous query, take place
without any advertising.

5.4 What is the impact of advertisement expenses on sales for ACC when it is
increased by 1.5 million Rs?

Let's answer this by using the variation part of the regression equation provided by
the MS Excel output page.
An increase in sales results in an increase in advertising expenses of 89.94325171.
The sales growth is equal to 89.94325171 * 1.5, or 134.915 million Indian rupees.
This suggests a 134.915 billion rupee increase in revenues.

5.5 Formulate the regression model and predict the sales when advertisement
expenses are 500 and 550 million Rs. Respectively.

The regression model's equation is Sales = 89.94325171* Advertisement Expenses

+ 14504.70327
For a 500 million rupee advertisement budget, sales = 89.94325171* 500 +
14504.70327 = 59476.33 million Indian rupees.
Sales: 89.94325171*550 + 14504.70327 = 63973.51 million rupees for the 550
million rupee advertisement spend.