Subject Name Statistics for Business Decisions

Subject Code
Subject Credits 4
This course covers the concepts with the basic techniques of business
statistics and to provide a comprehensive overview of its scope and
limitations and techniques concerning exploratory data analysis, frequency
distributions, central tendency and variation, probability, sampling, inference,
correlation and regression. Students will be exposed to these topics and how
Summary / Overview each applies to and can be used in the business environment. Students will
master problem solving using both manual computations and statistical
software. Moreover, this course is designed to introduce management
students to develop the analytical and interpretation skills. An addition to this
course has been designed with to give students exposure to data analysis using
MS-Excel.

Students will be able to evaluate relevant data and apply the outcome to make
Aims
decisions with reference to the specific empirical question or problem.

CCore Learning Outcomes

Learning Outcomes Assessment Criteria

Sl.
No. On completion of this subject you To achieve the learning outcome you must
should be able to: demonstrate the ability to:

1. Distinguish between qualitative 1. Organize raw data into tables, charts, and graphs
and quantitative data. 2. Analyze and interpret data represented in tabular
1 2. Represent data using tables, charts and/or graphical form.
and graphs, and analyze and
interpret them.

1. Compute the different measures 1. Compute descriptive measures of central

2
of central tendency, dispersion, tendency, dispersion, and skewness for
and skewness. ungrouped and grouped data.
 1. Understand the differences 1. Distinguish between univariate and bivariate
between univariate and bivariate situations.
analysis. 2. Construct scatterplot diagrams.
2. Graphically analyze the 3. (a) Identify specific scenarios for applicability of
relationship between two correlation and regression.
variables using scatterplot
3 diagrams. (b) Construct regression equations using
correlation coefficients, and vice versa.
3. Understand the differences and
inter-connections between 4. Calculate the covariance, correlation coefficients
correlation and regression. and simple linear regression coefficients.

4. Compute the different measures

of association.

1. Distinguish between cross- 1. Identify situations where time series analysis is

sectional and time series data. applicable.
2. Understand the different 2. Identify different components of a time series data.
4 components of a time series. 3. Estimate linear and/or exponential trend for time
3. Identify linear and exponential series data.
trend patterns in time series.

1. Understand the concepts of

classical probability. 1. Calculate probability of an event in simple random
experiments.
2. Understand Bayes’ theorem and
its applications. 2. Use Bayes’ theorem to update conditional
probabilities.
3. Understand the concepts of
5 discrete and continuous random 3. Calculate probabilities using discrete and
variables and probability continuous probability distributions.
distributions. 4. Calculate the probabilities, mean and variance of
4. Understand the applications of the discrete and continuous random variables.
binomial, negative binomial,
hypergeometric, Poisson, uniform,
exponential, and normal
distributions.

1. Distinguish between the 1. Calculate sample means, sample proportions, and

6 population parameters and sample sample variance/standard deviation, and standard
statistics. errors of estimates.
 2. Understand the concepts of 2. Calculate confidence intervals for population
sampling distributions. means, proportions, and variances.
3. Construct point estimators and 3. Use suitable formulae to determine sample size in
confidence intervals for a single different estimation contexts.
population mean, single 4. Apply the hypothesis testing procedure in different
population proportion, and single contexts (as specified on the left-hand-side):
population variance, and the
corresponding constructions for (a) Formulate hypotheses.
two populations. (b) Identify and compute appropriate test
4. Understand the determination of statistics.
sample size for statistical (c) Identify the critical region and critical values.
inference.
(d) Calculate p-values.
5. Understand the general concepts
and procedure of hypothesis (e) Draw statistical inferences about the
testing, including: formulation of population.
null and alternative hypotheses,
identification of the test statistic,
sampling distribution under the
null hypothesis, type I and type II
errors in hypothesis testing, level
of significance, critical region,
critical values, p-values.
6. Distinguish between application
of tests for means, proportions,
and variances.
7. Distinguish between small sample
and large sample tests for means.
8. Understand the application of z-
tests, t-tests, χ2-tests, F-tests, and
ANOVA.

The pedagogy will be a mix of lectures, experience sharing and

assignments. In addition to the reading materials, additional readings and
cases may be distributed in the class from time to time. Students are
responsible for discussion of the required readings and for completion of
Approach to Learning
group and individual exercises assigned by the instructor. Emphasis is on
participatory learning, and students are required to actively participate in
class discussions throughout the course.

Assessment Strategy
 Learning Outcomes
Assessment Description of Assessment Weight Assessed
No
Method* Method %
1 2 3 4 5 6

A combination of Case Study,

group/individual assignment
Assignments 25 X X X X X X
depending on the discretion of
the instructor

During Term Mid-term examination worth 50

20 X X X
Assessment marks

Final Term-end examination worth

50 X X X X X X
Examination 100 marks

Total - 100 marks

Textbook:
“Statistics for Business and Economics,” Anderson, Sweeney, and Williams, Cengage Learning, New
Delhi.

*The following codes for assessment methods apply:-

LR literature review PC practical

CB computer-based PF performance

CS case study PL placement

DI dissertation or project PO portfolio

EX exam PR presentation

GR group report RE individual report

DTA during term test OR oral

OT other
Outline Teaching Schedule

No. Topic to be covered

Introduction and Basic Concepts of Statistics

1 Definition of Statistics - Use of Statistics - Types of Statistical Applications in Business -
Fundamental Elements of Statistics - Types of Data - The Role of Statistics in Managerial
Decision Making

Descriptive Statistics
Describing Qualitative and Quantitative Data - Grouped and Ungrouped Data - Graphical
Displays of Categorical Data - bar charts, pie charts - Graphical Methods for Describing
2 Quantitative Data - histograms, ogives - Data Summarisation and Presentation in MS-
Excel - pivot tables and charts

Numerical Measures of Central Tendency - mean, median, mode, percentiles - Numerical

Measures of Variability- range, variance, standard deviation, mean absolute deviation,
quartile deviation, percentile deviation - coefficient of variation, coefficient of quartile
deviation - Numerical Measures of Skewness - range, moment coefficient of skewness,
Bowley’s coefficient of skewness, Pearson’s coefficient of skewness - Methods of
Detecting Outliers - z-score/standardized variables, boxplots - Computation of Descriptive
Statistics in MS-Excel using formulae and Data Analysis Add-In

Bivariate Correlation and Regression

3 Bivariate Data - Graphical Representation of Bivariate Relationships - Scatterplots -
Covariance, Pearson’s product-moment coefficient of linear correlation, Spearman’s
coefficient of rank correlation

Simple linear regression, method of least squares, regression of Y on X and regression of X

on Y, relationship between correlation and regression coefficients, coefficient of
determination

Computation of Correlation and Regression Coefficients in MS-Excel using formulae and

Data Analysis Add-In

Time Series
4 Components of Time Series; Decomposition of a Time Series, Moving Average Smoothing,
Trend Fitting (linear and exponential trend), Trend Projections, Seasonal Indices, Ratio to
Moving Average Method, Seasonalised Projections, Computation of Trend and Seasonalised
Projections in MS-Excel using formulae

5
 Probability Theory
5 Introduction- Sample Space, Events, and Probability - Concepts in Probability - Unions
and Intersections, Mutually Exclusive Events - Addition Law of Probability -
Conditional Probability - Independent Events - Multiplicative Rule - Bayes’ Theorem -
Applications

Random Variables and Probability Distributions

6 Definition - Types of Random Variables - Discrete Probability Distributions: Binomial,
Negative Binomial, Hypergeometric, and Poisson Distributions - Continuous Probability
Distributions: Uniform, Exponential, and Normal Distributions - Applications-
Computation of Probabilities in MS-Excel

Sampling and Sampling Distribution

Sampling Distribution of the sample mean and sample proportion, Point and Interval
7 Estimation: Confidence Intervals, Sample Size Determination for Estimating mean and
proportion - Central Limit Theorem - Large Sample vs. Small Sample Estimation

Introduction to Hypothesis Testing

Concept of Hypothesis - The Elements of a Test of Hypothesis - Null and Alternative
Hypotheses – Test statistic and its sampling distribution - Type I and Type II Errors –
critical region, level of significance, p-values.

Classical Tests: Tests for a Single Population Mean, Test for a Single Population Proportion,
Test for a Single Population Variance, Tests for Equality of Two Population Means
8 (Independent-Samples), Test for Paired-Samples, Test for Equality of Two Population
Proportions, Test for Equality of Two Population Variances.

The Analysis of Variance (ANOVA) – Test for Equality of Several Population Means - one-
way and two-way ANOVA.

Chi-square Test for Goodness-of-Fit - discrete distributions, Binomial, Poisson, and Normal -
Chi-square Test for Independence of Attributes.

Hypothesis Testing in MS-Excel using formulae and Data Analysis Add-In

Introduction to Decision Theory

Elements of Decision-Making, Alternatives, States of Nature, Decision Trees, Payoff Tables,

9 Decision Criteria.

Decision-Making under Certainty - Decision-Making under Risk, Expected Payoff Criterion,

Expected Value of Perfect Information - Decision-Making under Uncertainty, Maximin,
Maximax, Hurwicz, Laplace, and Minimax Opportunity Cost Criteria, Bayesian Analysis of
Sampling Information, Expected Value of Sampling Information, Efficiency of Sampling
Information - Computation in MS-Excel

6
 Recommended Resources

1) “Business Statistics for Contemporary Decision Making,” Black

2) “Statistics for Management,” Levin and Rubin
3) “Complete Business Statistics,” Aczel and Soundarapandyan