Management Issues

In the mail order business, excessive catalog costs quickly squeeze margins. Many mailings fail to reach receptive or active buyers. What is the relationship between various categories of mailing that delete inactive customers and the improvement in profit margins?
Shurveer 1

Issue -2

Medium – sized companies often have difficulty attracting the cream of the MBA , and when they are successful, they have trouble retaining them. What is the relationship between the ranking of candidates based on executive interviews and the ranking obtained from testing and assessment.
Shurveer 2

During a period of decline.Issue 3  Retained cash flow. capital expenditure suffers. undistributed profits plus depreciations. What is relationship between retained cash flow and equipment investment over the last year? Between cash flow and dividend growth ? Shurveer 3 . is a critical source of funding for equipment investment.

Regression) Shurveer 4 . ( Nominal. Interval measures . Can we predict next year‟s sales based on present investment. Ordinal.Issue 4  Aggressive Reliance company have invested heavily in the retail market and their sales have grown 20% over the three largest companies in retail sector.

Yes .Data Types Data Order Distance Unique Origin No No No No Remark Nominal No Ordinal Yes classification Determination of greater or lesser Rank or order (researcher know the order but not the amount of difference) Interval Yes Ratio Yes Yes yes No Shurveer Determination of equality of intervals or differences Determination of 5 equality of ratios.

Lecturer Department of Accountancy & Business Statistics B.G. Udaipur (“A” grade Accredited by UGC-NAAC) Shurveer 6 .CORRELATION Dr. Bhanawat Sr.Shurveer S. College.P.N.

Statistical Techniques  Uni -variate Bi-variate Multi-variate   Shurveer 7 .

Meaning   Correlation is a statistical technique which measures and analyses the degree or extent to which two or more variable fluctuate with reference to one another. Correlation coefficient reveal the direction and magnitude of relationship.Correlation . Shurveer 8 . • The sign of coefficient signifies the direction of relationship • The magnitude (degrees) are expressed by a coefficient which ranges between -1 and +1.

Types  Positive & Negative Simple. partial & Multiple Linear and Non Linear Nonsense Shurveer 9    .

Methods  Karl Pearson‟s or Co-variance Method Rank Correlation Method Concurrent Deviation Method   Shurveer 10 .

sdy or When deviations are taken from assumed mean r= Product Moment correlation Shurveer 11 .Karl Pearson’s Method   Original When deviations are taken from actual mean r = summation dxdy/ n.sdx.

Shurveer 12 .Assumptions    Linear relationship Casual relationship Each of the Variable is being affected by a large number of independent contributory causes of such a nature as to produce normal distribution.

Properties 1. Pearson correlation coefficient lies between -1 and +1\ Correlation of coefficient is a pure number independent of the unit of measurement. Shurveer 13 . 2.

Properties 3. Correlation coefficient is independent of the change of origin (subtracting a constant from every value of x and y) and scale of reference (Dividing or multiplying by some constant every given value of X & Y) Shurveer 14 .

honesty etc.  R = 1- 6 summation D square N cube – N Shurveer 15 .Spearman’s rank Correlation Coefficient When to use ( Ordinal )  It is applied in the problems in which data cannot be measured quantitatively but qualitative assessment is possible such as beauty.

 Shurveer 16 .Cases  When No digit is repeated When some digits are repeated.

generally. in indicating relationship between short term oscillations. Shurveer 17 .Concurrent Deviation Method When to use  The coefficient of concurrent deviation is of use.

Testing the Significance of r   Is the coefficient representing the relationship between two variables real or does it occur by chance? Basis for testing • Probable Error • Student „t‟ Test ( n<30) Shurveer 18 .

P. with a probability of 50% Shurveer 19   .E.E.6745*(1. = 0. is a old measure of ascertaining the reliability of the value of Pearson‟s coefficient of correlation.Probable Error  P.r square)/under root n An amount added to and deducted from the coefficient of correlation produce a range within which coefficient of correlation of other groups selected from same series at random will fall.

E. Perhaps there is no evidence of correlation • If r > 6P. • If r < 6P.E.E (r)  Test of significance. then it is not significant.Functions  Determination of limit Correlation of population = r _+ P.) > 6 = significant Shurveer 20 .E. then it is significant correlation exists. (r / P.

Shurveer 21 . Ho: p=0 this implies no correlation between the variables in the population. H1 : p>0 This implies that there is positive correlation in the population.Student ‘t’ Test    t‟ test is used.

Formulae r „t„= Under root n-2 Under root 1. Shurveer 22 . r is significant and variables are correlated. the variable is not correlated. (Accepted) If calculated t > critical value.r square If calculated t< critical value at 5% level of significance.

 R square = Explained Variance/Total Variance Shurveer 23 .Coefficient of Determination (R  square) The coefficient of determination is preferred to the coefficient of correlation because it explains the process of variation in the dependent variable which is explained by change in the independent variable. It is highly useful measure.

9 24 . of employee ('000) 16.2 425.1 10.8 35.Exercise: Produce a correlation Matrix using computer Program BSE top 30 companies Rs.7 20.1 11.4 191.8 1.9 3.2 267 137.8 172.3 145.5 380 326.6 No.5 18.6 Shurveer Cash flow 126.1 806.6 5 44 2.1 337. In lacs Asset s 1000 956 1890 1133 11682 6080 31044 5878 1721 market sales value 1510 785 2533 532 3790 635 3296 3204 981 697 1271 1783 752 4149 291 2705 2100 1573 NP 82.3 413.6 89 176 82.

Babin. Sanceti.K.Suggested Readings   Business Research Methods by Donald R Cooper Pamela S Schindler Irwin Mcgraw-Hill Multivariate Data Analysis Hair.S. Tatham Pearson Education    Business Research Method K. Bhardwaj Shurveer Excel Books 25 . Anderson. V.R. Black. Sharma Statistics.C.Theory Methods and Applications D.Kapoor Business Statistics R.

Shurveer 26 .

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