RES 311 Quantitative Methods In Decision Making

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RES 311Quantitative Methods In Decision Making

• Dr. Yudhi Ahuja
• July 2006

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Welcome!

• Instructors background
• Course Information

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Agenda

• Technical Check
• Introductions
• Course Design
• Syllabus Review
• Statistical Analysis An Introduction

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Technology

• It is O.K.
• Dont Panic.
• Be Patient

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Technical Set-up

• Check your headset and microphone connections.
• Set volume on your microphone and speakers (NOT
  mute)
• Questions - Press the Hand Icon
• Wait until your Hand Icon is highlighted.
• Press the Ctrl key to speak.
• Press the Pencil Icon to send a note.

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Technical Difficulties

• Contact Technical Support for any difficulty with
  the interactive software.
• Technical support available 24/7
• Phones [phone] or [phone].
• E-mail wiu-tech_at_apollogrp-edu

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Introduction

• Name.
• Major at WIU.
• Place of Employment.
• Occupation.
• Experience.
• Your Location
• Please post your Bio in
• MyWIU Member Area Message Board Off-topic

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Questions
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Schedule

• Live Sessions (Mondays, 6pm PST)
• Recorded Lessons Schedule
• Use Interwise Participant to view live sessions
  and pre-recorded lessons

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MyWIU

• Website www.wintu.edu.
• Provides all information about the course and its
  communication.
• Website navigation
• Member Area
• Chat Room
• Email
• Message Board
• Attendance
• Discussion Questions
• Off-topic, and more ..
• Student Tools
• Assignments
• Grades, and more ..

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Attendance

• MUST post in the Attendance Forum for all 9 weeks
• Must be timely to receive credit
• Attendance for week 9 must be posted within 24
  hours.
• Attendance Policy
• Must attend one of the first two classes
• 4 absents will lead to administrative withdrawn
  from the class and a grade of W.
• Go to www.wintu.edu, follow the link for
  Interactive Online students for directions on how
  to post attendance.

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Message Board

• General Discussion
• Weekly discussions posted here ( to get the week
  participation points).
• Off-topic
• Non-course related discussion.
• Post your Bio here
• Questions
• Course related questions only.

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Course Design

• Live Sessions
• Recorded Sessions
• Text Book
• Assignments
• Student Tools
• My Assignments view and submit assignments
• Student Presentations (slides due 8/21/06)

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Questions
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History of Statistics

• The word Statistik comes from the Italian word
  Statista(meaning statesman)
• Later on used for statistical accounts
• Official Government records(Population, revenue
  etc.)
• Predictions from statistics ( Births, deaths,
  mortality, national income etc.)

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Syllabus Review

• Descriptive Statistics
• More Descriptive Statistics
• Basic Probability
• Probability Distributions
• Normal Distribution
• Statistical Inference
• More Statistical Inference
• Statistical Hypothesis
• Statistical Inference Two Populations
• Three Assignments Based on Above
• Weekly Discussion Questions and Participation
• Student Presentations

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Course Objectives

• Prepare students for evaluating problems using
  statistical analysis of data
• Interpret numerical data and learn statistical
  techniques
• Develop analytical skills for managerial decision
  making
• Apply quantitative techniques to live business
  situations

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What is Statistics?

• Statistics
• is a science which deals with facts and figures
• means different things to different people
• Functionally, statistics is a facilitator for
• presenting facts and figures
• simplifying mass of figures
• comparison and prediction
• testing hypotheses
• formulating suitable policies

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What is Statistics? Contd ..

• Some famous quotes on Statistics
• There are 3 kinds of lies lies, damned lies, and
  
• Statistics - Benjamin Disraeli
• The crooks already know these tricks, honest men
• must learn them in self defense Darel Huff in
  his book, How to lie with Statistics

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Scope of Statistics

• Vast and ever increasing
• Statistics and the state
• Statistics in business and management
• Marketing
• Production
• Finance
• Banking
• Investments
• Purchase
• Accounting Statistics and Economics
• Statistics and research
• Statistics and computers

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Categories of Statistics
Categories of Statistics
Decision Theory
Descriptive Statistics
Inferential Statistics
Generalizations made
Uncertainty conditions
Aggregative no generalizations
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Approach

• Simple Symbols
• No mathematical apprehensions
• Simple arithmetic and algebra
• Problems related to live situations
• Learning made easier through
• Margin notes
• Real world exercises
• Review of terms
• Master glossary
• Equation review
• Chapter concepts
• Statistics at work
• Computer database exercise
• Flow charts

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Frequency Distribution

• Purpose/objective defined
• Arrangement of raw data
• Collection of data
• Tabulation of data
• Presentation of data
• Population Collection of all elements about
  which we trying to draw conclusions.
• Sample A collection of data from a population
  for which we are drawing an inference based on
  the sample
• Frequency Distribution For finding a meaningful
  pattern in the data, we divide the data into
  similar categories/classes and count the number
  of observations that fall into each category

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Frequency Distribution .. Contd.

• Some Examples
• Classes
• Discrete/continuous variable/distribution
• Inclusive/Non-overlapping classes
• Over-lapping classes
• Open-ended/Closed classes
• Relative Frequency Distribution

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Graphical Representation of Data

• Histogram
• Frequency Polygon
• Frequency Curve
• Ogives

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Measures of Central Tendency

• Central Tendency is ..
• a single numbers called summary statistics to
  describe characteristics of a data set
• the middle point of a distribution OR a single
  quantity/number which describes the
  characteristics of the entire distribution
• important for decision making
• Central Tendency measures
• Arithmetic Mean
• Geometric Mean
• Weighted Mean
• Median
• Mode

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Measures of Dispersion

• Spread or variation of the data in a distribution
• Extent to which the observations are scattered

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Measures of Dispersion contd ..

• Importance of Dispersion/Variation
• Two or three sets of data within the same same
  central tendency but with one more spread than
  the other.
• Simply working out the mean of the data means
  missing something, i.e., the differences in the
  distributions.
• Similarly, mean, mode, and median reveal only
  part of the characteristics of the data.
• For increasing understanding of the pattern of
  the data, we must also measure Dispersion/Spread/V
  ariation

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Measures of Dispersion contd ..

• Some uses of Dispersion
• Provides additional information on the
  reliability of measure of central tendency
• Widely spread distributions pre-known
• Helps comparison of distributions
• Financial analysts concerned about dispersion of
  a firms earnings
• Statistical quality control (Quality checks)

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Measures of Dispersion contd ..

• How to measure Dispersion?
• Range
• Interquartile/Interfractile range
• Average deviation
• Standard deviation/Variance
• Coefficient of variation (Relative measure of
  dispersion)

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Symmetrical Curve

• Curves in which a vertical line drawn from the
  center of the curve to the horizontal axis
  divides the area of the curve into equal parts.
• Each part is a measure of the other

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Skewness

• Lack of symmetry is called skewness
• Frequency distribution concentrated at either the
  low end or the high end of the measuring scale on
  the horizontal axis
• Values are not equally distributed
• Positively Skewed a curve skewed to the right
  and tails towards the high end of the scale
• Negatively Skewed a curve skewed to the left
  and tails towards the low end of the scale

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Kurtosis

• Measure the peakedness of a distribution
• Curves may have the same central location,
  dispersion, and skewness, but different degrees
  of Kurtosis.

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Correlation and Regression

• Learn how business decisions depend upon knowing
  the specific relationship between two or more
  variables
• Practical examples

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Correlation and Regression .. Contd.

• Types of relationships
• Independent dependent variables
• Direct inverse relationships
• Positive negative relationships (Correlation)
• Cause effect relationship
• Scatter Diagrams
• Straight line relationship
• Curvilinear relationship
• Applications

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Correlation and Regression .. Contd.

• Regression Lines
• Method of least squares
• Standard error of estimate
• Coefficient of determination

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RES 311 Review

• Attendance Forum One Post/Week
• Discussion Question One Question/Week, Three
  Posts/Question, Two Different Days/Week.
• Assignments as specified and scheduled.
• Interwise Lesson Recordings.
• Live Sessions as Scheduled.
• Student Presentations Due (8/21/06)

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Live Session 1 Conclusion

• Get connected to MyWIU.
• Instructor will logon daily to participate and/or
  monitor discussion.
• Participation in discussions and practice can
  take you closer to the subject and strengthen
  your logical and analytical skills for managerial
  decision under uncertainty.
• Enjoy the course and apply it to live situations
  in your presentations.

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Questions?