Business Research-II Notes

 SCALES:

N O I R

 Data Types:

Categorical/Qualitative Numerical/Quantitative

 Variant Analysis:
i. Uni- Z-test, T-test, T-paired test
ii. Bi- Bi-variant, Regression, Chi-square
iii. Multi- ANNOVA, Factor analysis
 Distributions:

i. Normal distribution
ii. Right skewed is positive
iii. Left skewed is negative

 Types of analytics/statistics:
i. Visual
ii. Descriptive statistics – mean median mode min max standard deviation variation error etc.
iii. Inferential

 Tests:
i. Parametric - data is ratio or interval in nature
ii. Non-parametric – data is nominal or ordinal in nature

 To check and treat outliers:

i. Standardized/Z score
ii. Box plot
iii. Empirical rule
iv. Chebyseff’s rule
 Confidence interval
±1.96 i.e. 95% of data/observation lie between the points in the graph

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F-distribution:

To compare two groups of data sets

Means(µ) can be compared using Z-test / T-test
Xbars (x̅)
Variances can be compared using F-distribution

For 2 groups, techniques are T-paired, Z or T test, Independent T test, Equal or Unequal variance.
For more than 2, ANNOVA is used.

Hypothesis are done for population parameter i.e. pp using µ and not sample statistics i.e. ss using x̅.

One factor/one way/single factor ANNOVA

CASE 1: Malhotra spices

Research objective: Is there a difference in sales because of difference in packaging (plastic, glass,
tetra)

Statistical Hypothesis:
H0: µ1=µ2=µ3
H1: µ1≠µ2≠µ3 …. at least one of them differs

Technique used for analysis is ANNOVA-ONE WAY

Calculation: degrees of freedom i.e. df1= k-1 where k is number of levels of independent variable
df2 = n-k where n is the total sample size

Since we check for variances, F-distribution is followed

Fcal=mean sum of squares between the groups/mean sum of squares within the
group=1904/116=16.37

Fcrit is being found out using a function which is =FINV (probability, df1, df2)
=FINV (0.05,2,27)
=3.35

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Approach 1: Fcrit vs Fcal
Left skewed graph

Rule: if Fcal > Fcrit, H0 is rejected

Since, 16.37 > 3.35, we reject null hypothesis which means there
exists a significance difference in the sales of Malhotra spices
amongst 3 types of packaging.

Approach 2: p-value vs α
p-value is also called as observed level of significance whereas α is standard/stated value of
significance. It gives us the evidence of occurrence of null hypothesis in the probability terms.
If p-value < α, we reject null hypothesis.

For the given case, p-value is found out to be 0.000022. Since, the occurrence/probability of null
hypothesis to be true is very small we fail to accept null hypothesis, therefore we reject null
hypothesis. (“IF P IS LOW, NULL WILL GO.”)

CASE 2: Table 16.2

Research objective: Is there a difference in sales because of in-store promotion (High,Medium,Low)?

Statistical Hypothesis:
H0: µ1=µ2=µ3
H1: µ1≠µ2≠µ3 …. at least one of them differs

Technique used for analysis is ANNOVA-ONE WAY

Calculation: degrees of freedom i.e. df1= k-1 = 2

df2 = n-k = 27
Since we check for variances, F-distribution is followed
Fcal=mean sum of squares between the groups/mean sum of squares within the group
= 53.03/ 2.956= 17.94
Fcrit is being found out using a function which is =FINV (probability, df1, df2)
=FINV (0.05,2,27)
=3.35
Approach 1: Fcrit vs Fcal
Rule: If Fcal > Fcrit, H0 is rejected
Since, 17.94 > 3.35, we reject null hypothesis which means there exists a significance difference in the
sales because of in-store promotion amongst 3 types of promotions.

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 Approach 2: p-value vs α
Rule: If p-value < α, we reject null hypothesis.
For the given case, p-value is found out to be 0.000011. Since, the occurrence/probability of null
hypothesis to be true is very small we fail to accept null hypothesis, therefore we reject null
hypothesis. (“IF P IS LOW, NULL WILL GO.”)

SPSS:

Oneway
Descriptives
Sales

95% Confidence Interval for Mean

N Mean Std. Deviation Std. Error Lower Bound Upper Bound Minimum Maximum

High 10 8.3000 1.33749 .42295 7.3432 9.2568 6.00 10.00

Medium 10 6.2000 1.75119 .55377 4.9473 7.4527 4.00 9.00
Low 10 3.7000 2.00278 .63333 2.2673 5.1327 1.00 7.00
Total 30 6.0667 2.53164 .46221 5.1213 7.0120 1.00 10.00

ANOVA
Sales

Sum of Squares df Mean Square F Sig.

Between Groups 106.067 2 53.033 17.944 .000

Within Groups 79.800 27 2.956
Total 185.867 29

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CASE 3: Luxury cars

Research Objectives:
1) Is there a significant difference in the perception of luxury car type because of Income?

H0: There is no significance difference between mean of luxury car type across income. [µ1=µ2=µ3]
H1: There is significance difference between mean of luxury car type across income. [µ1≠µ2≠µ3]

p-value=0.165 which is greater than α=0.05

So, we accept the null hypothesis.

Case: Detergent whiteness score(Xr14-95)

Research objective:
Is there a significant difference in the whiteness score differ across the types of detergents?
Is there a significant difference in the whiteness score differ across the degrees of temperature?
Is the score varying because of interaction on different detergents at different temperatures?
Conclusion:
The Fcal values are higher than Fcrit values. Also, the p-values are less than α. Hence, there is
significant difference in the whiteness scores of different detergents at different temperatures.

Proportion Estimation
Case: Number of viewers of BBT
Using sampling, blah blah
Mega stat -> confidence interval -> mean -> 275 is p from count and 5000 is sample size with 90,95 n 99%
confidence level, calculate proportion.
Multiplying, that with whole population i.e. 115 million, we get number of viewers.
Case: General products
p is proportion of selling
p1 is brightly colored design, p2 is light green colored design
because we need brightly colored 20% high i.e. p1>p2 to select p1 therefore, p1-p2
With no Hypothesized difference, H0: p1=p2
H1: p1>p2
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H0: There is no significance difference between proportions of sales of brightly colored and light green color.
[p1=p2 => p1-p2=0.2]
H1: There is significance difference between sales of both designs. [p1-p2≠0.2]
Calculation: Mega stat ->Hypothesis test -> Compare two independent proportions -> Hypothesized difference
(0 and 0.2)
Conclusion:

Correlation and Regression

Case 10: Toyota
Objective: To find out correlation and dependency
Hypothesis: H0: [β=0] There is no correlation between the 2 variables i.e. price and odometer.
H1: [β≠0] There is a correlation
Output:

Descriptive Statistics

Mean Std. Deviation N

Odometer 36.0110 6.59613 100

Price 14.8410 .54774 100

Correlations

Odometer Price

Odometer Pearson Correlation 1 -.805**

Sig. (2-tailed) .000

N 100 100
Price Pearson Correlation -.805** 1

Sig. (2-tailed) .000

N 100 100

**. Correlation is significant at the 0.01 level (2-tailed).

Conclusion:
Slope is significant i.e. change in x causes significant change in y.

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 Multiple regression
Case 11: La quinta
Since number of independent variables (IV) are more than one, we answer/evaluate this case using multiple
regression. A situation becomes multi when there is correlation existence between any two independent
variables.
Y(margin)=DV (dependent variable) =profitability. x1 to x6 are the six independent variables. β0 is the constant
β1 is slope. So mathematical equation becomes:
Y= β0+ β1x1+β2x2+ β3x3+ β4x4+ β5x5+ β6x6+ ∑ βnxn
Output:

Using SPSS, we check for multi co-linearity.

Correlations

Number Nearest Office_space Enrollment Income Distance

Number Pearson Correlation 1 .082 -.093 -.064 .037 .073

Sig. (2-tailed) .419 .355 .528 .714 .470

N 100 100 100 100 100 100

Nearest Pearson Correlation .082 1 .043 .071 -.045 .091
Sig. (2-tailed) .419 .673 .481 .654 .366
N 100 100 100 100 100 100
Office_space Pearson Correlation -.093 .043 1 -.001 .153 .033
Sig. (2-tailed) .355 .673 .992 .130 .746
N 100 100 100 100 100 100
Enrollment Pearson Correlation -.064 .071 -.001 1 -.113 .097
Sig. (2-tailed) .528 .481 .992 .265 .335
N 100 100 100 100 100 100
Income Pearson Correlation .037 -.045 .153 -.113 1 -.052
Sig. (2-tailed) .714 .654 .130 .265 .611
N 100 100 100 100 100 100
Distance Pearson Correlation .073 .091 .033 .097 -.052 1

Sig. (2-tailed) .470 .366 .746 .335 .611

N 100 100 100 100 100 100

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Hypothesis:

Sr. No. Hypothesis (Action or H1) p-value Conclusion

1 β1≠0 Null Hypothesis is rejected i.e. slope is significant. Since, p-
2.766E-08 value<α
2 β2≠0 Null Hypothesis is rejected i.e. slope is significant. Since, p-
0.0108033 value<α
3 β3≠0 Null Hypothesis is rejected i.e. slope is significant. Since, p-
9.243E-08 value<α
4 β4≠0 Null Hypothesis is accepted i.e. slope is insignificant. Since, p-
0.1158513 value>α
5 β5≠0 Null Hypothesis is rejected i.e. slope is significant. Since, p-
0.0038988 value<α
6 β6≠0 Null Hypothesis is accepted i.e. slope is insignificant. Since, p-
0.2106514 value>α

Case 10: Toyota

Considering color variable as well, we use multiple regression with one IV as nominal/categorical.

Equation: Y= β0+ β1x1+β2x2

Number of classes (m) = 3

Number of dummy variables = m-1 = 2 i.e. I1 and I2

I1 I2
1 0
0 1
0 0
Regression equation: y=16.837-0.0591*x+0.0911*I1+0.3304*I2

Situation 1: When the color of the vehicle is white

Ŷ=16.837+0.0911-0.0591x = 16.928-0.0591x

Situation 2: When the color of vehicle is silver

Ŷ=16.837+0.3301-0.0591x = 17.167-0.0591x

Interpretation:

 From R2 which has increased to 70% from 64% by introducing another variable ( i.e. color) we can know say that
we are more certain about the price because of coefficient of determination increased to 70%.
 We conclude that there are differences in auction selling prices between 3 years old silver colored tauruses and
the other color category with the same odometer reading as p-value < α
 Also, there are no differences in the auction selling prices for white color category as p-value > α

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Case 12: Excel Xr 17-14
Aim: Predicting grade point performance of the MBA students
Regression equation: Y = 0.2-0.006*x1+0.013*x2+0.098*x3-0.345*I1+0.706*I2+0.03*I3

Where I1 indicate presence of base variable BA degree, I2 indicate BBA degree and I3 indicate BE degree, respectively.

Interpretation: We conclude that there are significant differences in MBA GPA of students from BBA as compared to the
students from other undergrad degree (As only p-value of I2 < α).

Case 13: Excel Xr 16-06

Aim: Analyzing the test score depending on video length and type of the video

Interpretation:

 From Bi-variant regression, we conclude that length of the video is a good predictor of test score i.e. the people
remember the content of the video having more length
 R2 in multi-variant has improved by 7% by including the indicator variables

Forecasting Techniques
Time series analysis
Case 12: Xr 20-01
Output:

Chart Title
100

80

60
SALES

Gasoline Sales
40
MA-3
20 MA-5

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
TIME

Conclusion:
We conclude that 3 months moving average should be preferred as it gives a better (i.e. smooth) line graph
which makes it easier to predict the future trend line.
Also, we can predict that the 17th month sales prediction is 66.
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Case 13: Xr 03-32
Output:

Chart Title
2000

1500

1000

500

Female Male MA-3

Conclusion: Since the data itself was with less variation, the 3 period moving average was also smooth line.
And the predicted employment data for females for the year 2010 is 1823.

Case 14: Xm 20-00

We calculate regression. Then seasonality index through which we calculate ratio for the next year in turn to
predict the values.
1 61 9.79 16.39 0.60
2 62 10.78 16.47 0.65
3 63 16.22 16.55 0.98
4 64 17.79 16.63 1.07
5 65 18.57 16.71 1.11
6 66 20.01 16.79 1.19
7 67 20.33 16.87 1.21
8 68 20.81 16.95 1.23
9 69 18.67 17.03 1.10
10 70 17.50 17.11 1.02
11 71 17.13 17.19 1.00
12 72 14.66 17.28 0.85

Case 15: Xm 20-03

2011 1 21 0.659 0.75 0.88
2 22 0.811 0.75 1.07
3 23 0.882 0.76 1.16
4 24 0.672 0.77 0.88
2012 1 25 0.678 0.77 0.88
2 26 0.834 0.78 1.07
3 27 0.907 0.78 1.16
4 28 0.691 0.79 0.88

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