INSTITUTE –University

School of Business
DEPARTMENT -Management
M.B.A
QUANTITATIVE TECHNIQUES
FOR MANAGERS
By : AMAN JINDAL
(Associate Professor)
UNIT-3 DISCOVER . LEARN .
EMPOWER

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Course Outcome After undergoing this Course, the students will be able:

To learn the use of descriptive Statistics in taking business

CO1
decisions

To understand the concept of regression lines & Probability

CO2
distribution of data for making futuristic predictions.

To gain an Understanding of inferential statistics for

CO3
making business decisions.
 Sampling Approaches and
Considerations

Learning Objectives:
1. Understand the key principles in sampling.
2. Appreciate the difference between the
target population and the sampling frame.
3. Recognize the difference between
probability and non-probability sampling.
4. Describe the different sampling methods.
5. Determine the appropriate sample size.

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 Sampling vs. Census ?

A census involves collecting data from all

members of a population.

A sample is a relatively small subset of the

population that is selected to be
representative of the population’s
characteristics.

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 Sampling Design Process

The sampling design process involves answering

three questions:
1. Should a sample or a census be used?
2. If a sample, then which sampling approach is
best?
3. How large a sample is necessary?

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 To obtain a representative
sample . . . .

Steps to follow:

1. Define the target population.

2. Choose the sampling frame.

3. Select the sampling method.

4. Determine the sample size.

5. Implement the sampling plan.

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 Representative
Sample
A representative sample mirrors
the characteristics of the
population and minimizes the
errors associated with sampling.

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 Target Population

. . . the complete group of

objects or elements relevant to
the research project. They are
relevant because they possess the
information the research project is
designed to collect.

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 Sampling Unit

. . . . elements or objects available for

selection during the sampling process are
known as the sampling unit.

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 Sampling Frame

. . . . as complete a list as possible

of all the elements in the population
from which the sample is drawn.

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The sampling frame often is flawed
because . . .
It may not be up to date.
It may include elements that do not
belong
to the target population.
It may not include elements that do
belong
to the target population.
It may be compiled from multiple lists
and
contain duplicate elements.
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Sampling Methods

Probability

Non-Probability

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Probability vs. Non-Probability Sampling

Probability = each element of the population has

a known, but not necessarily equal, probability of
being selected in a sample.

Non-Probability = not every element of the

target population has a chance of being selected
because the inclusion or exclusion of elements in a
sample is left to the discretion of the researcher.

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 Types of Sampling
Methods

Probability Non-Probability
Simple Random Convenience
Systematic Judgment
Stratified Snowball/Referral
Cluster Quota
Multi-Stage

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Simple Random Sampling

. . . . a sampling method in which

each element of the population has
an equal probability of being
selected.

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Systematic Sampling

. . . a process that involves

randomly selecting an initial
starting point on a list, and
thereafter every nth element
in the sampling frame.

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Stratified Sampling

. . . requires the researcher to

partition the target population into
relatively homogeneous
subgroups that are distinct and
non-overlapping.

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 Two Types of Stratified Sampling

Proportionate = the number of elements chosen

from each of the strata is proportionate to the size
of a particular strata relative to the overall sample
size.

Disproportionate = the number of elements

chosen from each of the strata is not based on the
size of the stratum relative to the target
population size, but rather is based either on the
importance of a particular stratum or its
variability.

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Cluster Sampling

. . . a form of probability
sampling in which the
relatively homogeneous
individual clusters where
sampling occurs are
chosen randomly and not
all clusters are sampled.

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Multi-Stage Cluster Sampling

Cluster sampling involves dividing

the population into clusters and
randomly selecting a pre-specified
number of clusters and then either
collecting information from all the
elements in each cluster or a random
sample. With multi-stage cluster
sampling the same process is
completed two or more times.

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Convenience Sampling

. . . involves selecting
sample elements that are
most readily available to
participate in the study and
who can provide the required
information.

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 Judgment
Sampling
. . . a form of convenience
sampling, sometimes referred to
as a purposive sample, in which
the researcher’s judgment is
used to select the sample
elements.

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 Quota Sampling

. . . . similar to proportionately
stratified random sampling but the
selection of the elements from the
strata is done on a convenience basis.

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 Snowball Sampling

. . . also called a referral sample, the

initial respondents typically are chosen
using probability methods and these
respondents then identify others in the
target population.

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Determining sample size involves achieving
a balance between several factors:

• The variability of elements in the target

population.
• The type of sample required.
• Time available.
• Budget.
• Required estimation precision.
• Whether findings will be generalized.

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Three decisions to make when
statistical formulas are used to
determine sample size:
1. The degree of confidence
(often 95%).
2. The specified level of
precision
(amount of acceptable
error).
3. The amount of variability
(population homogeneity).

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 Introduction to
Hypothesis Testing
Hypotheses
A hypothesis is a prediction about the outcome of a
research study
Hypothesis Testing
Hypothesis testing is an inferential procedure that uses
sample data to evaluate the credibility of a
hypothesis about a population
Overview of Hypothesis
Testing
1. State a hypothesis about a population
1. Usually in terms of the value of a population parameter
1. Typically the mean or the difference between means
Overview of Hypothesis
Testing -- Continued
If the data are consistent with the hypothesis, conclude
that the hypothesis was reasonable, and fail to reject
it
Example
Babies birth weight will not differ between
smoking and non-smoking mothers (null)
Babies born to women who smoke during
pregnancy will be more likely to be of low birth
weight (alternative)
Independent Variable:
Smoking during pregnancy
Dependent Variable:
Birth weight
Example -- Continued
1. Obtain a random sample of women who are
pregnant and smoke
2. Obtain a random sample of non-smoking
pregnant women, or compare to the national
average
3. Weigh the babies at birth
4. Compare sample data to hypothesis
5. Make decision:
1. Reject the null hypothesis
2. Fail to reject the hypothesis
Null Hypothesis
The null hypothesis predicts that the Independent
Variable (treatment) will have no effect on the
Dependent Variable for the population
Alternative Hypothesis
The alternative hypothesis predicts that the
Independent Variable (treatment) will have an effect
on the Dependent Variable for the population
Directional Alternative
Hypotheses
Researcher has reason to believe before conducting the
test that a difference will lie in a specified direction
1. Prior research
2. Theory
Non-directional Alternative
Hypotheses
Researcher has no reason to believe that there will be a
difference in a specified direction

There is insufficient research or information or theory to

make a specific prediction
Type I Error
Committed when H0 is rejected as false although it is
true

Type II Error

Committed when H0 is not rejected although it is false

Jury’s Decision
Did Not Commit Crime Committed Crime

Guilty Type I Error Correct Verdict

Convict Innocent Convict Guilty
Person Person

Not Guilty Correct Acquittal Type II Error

Fail to Convict Innocent Fail to Convict
Person Guilty Person
Assessment Pattern

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References
Black, K. (2008). Business statistics for contemporary
decision making, New Delhi: Wiley India.
Spiegel, M. R., Schiller, J., & Srinivasan, R. A. ,
Probability and statistics New Delhi: Tata McGraw Hill.
Gupta, S. P., & Gupta, M. P, . Business statistics. Delhi:
Sultan Chand & Sons.
Levin, R. I., & Rubin, D. S. (1999). Statistics for
management, New Delhi: Prentice Hall of India.
Webster, A. (2006). Applied statistics for business and
economics,. New Delhi: McGraw Hill.
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THANK YOU

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