Data Analysis in Management

DATA ANALYSIS IN MANAGEMENT
1)A Project Manager want to know whether the project he has undertaken will finish on
time or not. He has historical data on projects that have been carried out within the
organisation. On analysing the data, the Project Manager finds that 60% of all projects
finished on time. He also found that 50% of historical projects gone through major scope
of changes, where 30% of projects having on-time finish records undergone at least one
major scope of change. So, what will be his conclusion regarding the on-time finish of new
project given that the project will go through a major change?
Solution:
Project manager finds that 60% of all projects finished on time.
Let A and B be the event of project finished on time and not finished on time.
P(A)=0.60 Prior probability
P(B)=0.40
50% of all historical projects gone through major scope of changes. This implies that
P(C)=0.50
Finally, data shows that 30% of projects having on-time finish records undergone at least one
major scope of change. For this,
P(C/A) = 0.3 → Likelihood (Conditional probability)
Using Baye’s theorem,
P(A/C) = P(A)× P(C/A)÷P(C) → (Posterior probability)
P(A/C) = (0.6 × 0.3) ÷ ¿)
= 0.36 or 36%
2)If Covid-19 has a prevalence of 3% in Madurai, and a particular Covid test (rRT-PCR)
has a false positive rate of .001 and a false negative rate of .01, what is the chance that a
random person who tests positive is actually infected (also known as “positive predictive
value”)?
Solution:
Prior probability:
P(A) = 0.03, Let A be the event of true positive.
P ( Ac ) = 0.97, Let Ac be the event of true negative
Event Prior Probability Likelihood Joint probability

A P(A) = 0.03 P (test +) = 0.99 P(A)× P (test +)¿ 0.0279
P (test -) = 0.01 P(A)× P (test -)¿ 0.0003
Ac P ( Ac ) = 0.97 P (test +) = 0.001 P ( Ac )× P (test +)¿ 0.00097
P (test -) = 0.999 P ( Ac )× P (test -)¿ 0.96903
Random person who tests positive is actually infected,

Positive test Positive = 0.0279
Negative test Positive = 0.00097
There are two (test +) takes place, one is Positive test positive and another one is negative test
negative. From this there is only one which is truly affected and that is positive test positive.
Therefore,
Using Bayes theorem,

P(positive/test positive)= P( A)× P ¿ ¿
0.03× 0.99
=
(0.03 × 0.99)+(0.97 ×0.001)
0.0279
=
0.0279+0.00097
0.0279
=
0.02887
= 96.64%
Chance that a random person who tests positive is actually infected (also known as “positive
predictive value”) is 96.64%
3)Suppose in 2019 General Election there will be three candidates namely Mr. Nationalist,
Mr. Silence and Mr. Prince fight for Prime Ministership in a country. The chances of their
win are 4:2:3 respectively. The chance that Mr. Nationalist, if selected the economy will
further decline is 0.3 whereas the Mr. Silence and Mr. Prince if selected the economy will
improve is 0.5 and 0.2. then, -
A) What is the chance that the economy will boom in 2019?

B) If the economy is decline in 2019, what is the chance that Mr. Price is the PM?
Solution:
Let A be the event of Mr. Nationalist becomes Prime Minister

Let B be the event of Mr. Silence becomes Prime Minister
Let C be the event of Mr. Prince becomes Prime Minister
P(A)= 0.44 (4/9) → Mr. Nationalist
P(B)=0.22 (2/9) → Mr. Silence Prior probability
P(C) = 0.33 (3/9)→ Mr. Prince
Let D be the event that economy will improve in 2019
P(D/A) = 0.7
P(D/B) = 0.5 Likelihood (Conditional probability)
P(D/C) = 0.2
Let Dc be the event that economy will decline in 2019
P ( Dc / A ¿=0.3
P ( D c /B ¿=0.5 Likelihood (Conditional probability)
P ( Dc /C ¿=0.8
a) Chance that the economy will boom in 2019:

Tabular approach:
Event Prior Probability Likelihood Joint probability
A P(A)=0.44 P(D/A) =0.7 P( A)× P( D/ A)=0.308
B P(B)=0.22 P(D/B) =0.5 P( B)× P (D/B) = 0.11
C P(C)=0.33 P(D/C) =0.2 P(C)× P( D /C )=0.066
Using baye’s theorem
P(D)= P( A)× P( D/ A)+ P(B) × P(D /B)+ P(C) × P(D /C)
= 0.44 × 0.7 + 0.22 × 0.5+ 0.33 × 0.2
= 0.484 or 48.4 %
b) Economy is decline in 2019, if Mr. Prince is Prime minister
c P(C) × P(D c /C)

P(C¿ D ¿=¿
P ( A )× P ( D c / A)+ P(B)× P( D c /B)+ P(C)× P(D c /C)
0.33 × 0.8
=
0.44 ×0.3+ 0.22× 0.5+0.33 ×0.8
0.264
= = 0.52= 52%
0.506
There will be 52%chance in decline of economy, if Mr. Prince will be the prime minister in
2019.

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DATA ANALYSIS IN MANAGEMENT

Project manager finds that 60% of all projects finished on time.

P(A)=0.60 Prior probability

P(C/A) = 0.3 → Likelihood (Conditional probability)

Using Baye’s theorem,

P(A/C) = P(A)× P(C/A)÷P(C) → (Posterior probability)

P(A/C) = (0.6 × 0.3) ÷ ¿)

Event Prior Probability Likelihood Joint probability

Random person who tests positive is actually infected,

Using Bayes theorem,

A) What is the chance that the economy will boom in 2019?

Let A be the event of Mr. Nationalist becomes Prime Minister

P ( D c /B ¿=0.5 Likelihood (Conditional probability)

a) Chance that the economy will boom in 2019:

b) Economy is decline in 2019, if Mr. Prince is Prime minister

c P(C) × P(D c /C)

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