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1. STATISTICAL CONCEPTS AND THEIR
APPLICATIONS IN BUSINESS
INTRODUCTION TO ANALYTICS
Part 10

2. • Referred to as “distribution free”, as they don’t involve making assumptions of any data.
• They have lower power than the parametric tests and hence are always given the second
preference after the parametric tests.
• These tests are typically focused on median rather than mean.
• They involve straight-forward procedures like counting and ordering.
• There are at least one non-parametric test done for each parametric test and are classified into the
following categories.
• Tests of differences between groups (independent samples)
• Tests of differences between variables (dependent variables)
• Tests of relationships between variables.
NON PARAMETRIC TESTING

3. NON PARAMETRIC TESTS
Test Parametric Non Parametric
One Qualitative Response
Variable
One Sample Test Sign Test
One Quantitative Response
Variable – Two Values from
Paired Samples
Paired sample t-test Wilcoxon Signed Rank Test
One Quantitative Response
Variable – One Qualitative
Independent Variable with
twogroups
Two Independent Sample t-
test
Wilcoxon Rank Sum orMann
Whitney Test
One Quantitative Response
Variable – One Qualitative
Independent Variable with
three or more groups
ANOVA Kruskall Wallis

4. • Measure of association between variables
• Positive and negative correlation, ranging between +1 and -1
• Positive correlation example:
• Earning and expenditure
• Negative correlationexample
• Speed and time
• Parametric – normal distribution and homogenous variance
• Pearson correlation
• Non parametric – no assumptions, nominal variables
• Spearmancorrelation
CORRELATION

5. • r : correlationcoefficient
• +1 : Perfectlypositive
• -1 : Perfectly negative
• 0 – 0.2 : No or very weakassociation
• 0.2 – 0.4 : Weak association
• 0.4 – 0.6 : Moderate association
• 0.6 – 0.8 : Strongassociation
• 0.8 – 1 : Very strong to perfect association
CORRELATION COEFFICIENT

6. ● Overview of statistical methods
● Descriptive statistics – Measures of Central Tendency and Measures of
Dispersion
● A business case study to understand the concepts of descriptive statistics
● Probability distribution
● What are tests of significance
● The process flow of hypothesis testing
● One sided and two sided hypothesis tests
● Various tests used in calculating the p-value
● What is non parametric testing and why is it used
● Non parametric alternatives for the usual tests of significance
SUMMARY
Here is a quick
recap of what we
have learned in this
lesson

7. QUIZ
Quiz

8. QUIZ
1
Which of the following is NOT a part of measure of central tendency?
a. Mean
b. Median
c. Mode
d. Standard Deviation

9. QUIZ
1
a. Mean
b. Median
c. Mode
d. Standard Deviation
Answer:d
Explanation: Standard Deviation is used to measure dispersion and not to measure central
tendency.
Which of the following is NOT a part of measure of central tendency?

10. a. Mean = 8.67, Median = 9, Mode = 10
b. Mean = 9, Median = 9, Mode = 10
c. Mean = 9, Median = 10, Mode = 9
d. Mean = 8.67, Median = 10, Mode = 10
Calculate the mean, median and mode of the following data and choose the rightQUIZ
2
option:
13, 3, 10, 9, 7, 10, 12, 8, 6

11. a. Mean = 8.67, Median = 9, Mode = 10
b. Mean = 9, Median = 9, Mode = 10
c. Mean = 9, Median = 10, Mode = 9
d. Mean = 8.67, Median = 10, Mode = 10
Answer:a.
Mean is the average of all the values, median is the middle value and the mode is the most
commonly occurring value.
Calculate the mean, median and mode of the following data and choose the rightQUIZ
2
option:
13, 3, 10, 9, 7, 10, 12, 8, 6

12. QUIZ
3
a. 15.41
b. 14.41
c. 9.14
d. 12.41
Calculate the variance of the following data and choose the right option:
5,10,12,4,8,9,16

13. QUIZ
3
a. 15.41
b. 14.41
c. 9.14
d. 12.41
Answer:b.
Variance is the average of squared deviations about the mean, given by
Calculate the variance of the following data and choose the right option:
5,10,12,4,8,9,16

14. From the research question below, choose the alternative hypothesis from the followingoptions.
Given a sample of body temperatures of 50 persons, and the average temperature μ0 , decide if the
average body temperature has increased over time.
a. μ =μ0
b. μ >μ0
c. μ <μ0
d. μ ≠μ0
QUIZ
4

15. Thank You
If you are looking for business analytics courses in Bangalore / Bengaluru then
visit: http://beamsync.com/business-analytics-training-bangalore/
Next Part We will Publish Soon.