STX 1110

INTRODUCTION TO
QUANTITATIVE METHODS
Introduction to the Module

Lecturer and Seminar Tutor:

Zhu Lei

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COMPULSORY ATTENDANCE
Lecture Seminar
• Friday • Friday
• 8:20am-10:55am • 2pm-3:40pm
• Room B705 • Room B705
• Weeks 1-11 • Week 2-11
• Purpose: • Purpose:
To deliver and share To discuss solutions on
the main concepts, seminar questions, to share
principles and ideas of and resolve problems and to
the topics covered in enhance understandings on
the syllabus. the topics learned.
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 OPTIONAL ATTENDANCE
Tutorial (Drop In Advice Session) during teaching
weeks in Room B810:

Thursday 9am-11:30am

Purpose: To discuss your assignments or any other

relevant problems that you do not dealt
with during the seminars.

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 ASSESSMENT
3 Elements:
1st  Coursework (30% of overall course grade)
- Mid-module test (16 MCQ in 1 hour)
in the Seminar of Week 8 (i.e. 10 Nov. 2006)
2nd  Main Exam (70% of overall course grade)
- Unseen exam (Section A & B in 3 hours)
in Jan. 2007
3rd  80% Attendance
PASS ALL 3 elements  Successful Completion of Module!
Form of assessment:
• 20-point scale grade
• Pass – 40% (Point 16) 4
 SYLLABUS
Statistics
Basic ideas, techniques
and application:
1. Collecting Data
2. Summarising and Presenting
Data
3. Analysing and Interpreting
Data
4. Correlation and Regression
5. Estimation
Mathematics
Useful skills and application:
1. Investment Appraisal
2. Index Number
3. Probability
4. Normal Distribution
5. Linear Equation
6. Linear Programming and
Optimisation
7. Time series analysis
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 LEARNING MATERIALS
AND RESOURCES
1. Module Handbook and Module Notes
2. Core Textbook
- Business Basics: Quantitative Methods, BPP Publishing (2000)
Third Edition
- Essential Quantitative Methods for Business, Management and
Finance(2006) Third edition, Les Oakshot.

3. Oasis – Such as Module Content (e.g. extra activities)

4. Library – Reference Books and Online Learning Materials

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 THE END
&
THANK YOU

For more detailed information, please refer to the

Module Handbook.

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 STX 1110
INTRODUCTION TO
QUANTITATIVE METHODS
LECTURE 1

COLLECTING DATA 1

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 CONTENTS
1. Statistics
- definition
- relevance/importance

2. Definition of statistical terms

3. Sampling

4. Characteristics of sampling frame

5. Sampling methods

6. The size of a sample

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 WHAT IS STATISTICS?

Statistics is concerned with scientific methods for

collecting, summarizing, presenting and analyzing
data (information) which may be numerical or
non numerical so as to enable the users to make
the best decision or draw the most reasonable
conclusion.
Examples: -
(b) Individual – height; weight; gender; age.
(c) Company – gross profit; net profit; industry; size.

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WHY WE NEED STATISTICS?

1. Statistics are a big part of everyday life.

2. Make sense of the information.

3. Informed decision making.

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 Some Claims Heard on Several Occasions
• Almost 85% of lung cancers in men and 45% in women are
tobacco-related.
• Men are at least 10 times more likely than women to commit
murder.
• People tend to be more persuasive when they look others
directly in the eye and speak loudly and quickly.
• Women make 75 cents to every dollar a man makes when they
work the same job.
• A surprising new study shows that eating egg whites can
increase one's lifespan.
• There is an 80% chance that in a room full of 30 people that at
least two people will share the same birthday.
• People predict that it is very unlikely there will ever be
another baseball player with a batting average over 400.
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“8 out of 10 owners who expressed a preference said their
cat preferred Whiskers”

Number of Whiskers Some other No

people asked brand preference

10 8 2

100 8 2 90

1000 8 2 990

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 The Great Pepsi Challenge
“In recent side-by-side blind taste tests nationwide, more people
preferred Pepsi over Coca-Cola”

Coca Cola Pepsi

49%

51%
Are there any problems with this claim?

Recent?
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1. Are you being taken in by advertising and “influential”
statistics? Do you wish you weren’t?

2. Do you want to be influential yourself?

3. Do you want to get RICH?

Solution:
Learn the tricks of the trade!

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Stages in a statistical investigation

• Pose a question
• Collect relevant data
• Analyse the data
• Interpret the results

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 Collecting relevant data
• Identifying individuals or items to question,
test or measure (sampling)

• Collecting information from each person or

item identified (questionnaire design)

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 DEFINITION OF
STATISTICAL TERMS
• Population
The entire set of individuals or objects of
interest.
• Sample
A portion, or part, of the population of interest.

• Sampling Frame
A numbered list of all the items in the population.

• Census
A survey in which all of the population is examined.

• Sampling
Involves selecting a sample of items from a population.

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 Population and Sample
• What is the average amount of time each week that
Middlesex University Students spend in the library?
– Population : All Middlesex University Students
– Possible sample: Students registered for STX1110

• What proportion of the components coming off a

production line are defective?
– Population : All products produced
– Possible sample: Every 50th item produced.

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 Sampling Frame Example
1 Damien Murphy
2 Emma Ball
3 Cathy Smith
4 Alison Megeney
5 Jaswinder Verdi
6 Kooi See Yeap
7 Gary Hearne
.
.
.
12 Zainab Kazim

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 CHARACTERISTICS OF
SAMPLING FRAME

• Completeness
• Accuracy
• Up to date

• Convenience

• Non-duplication

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 SAMPLING
Why taking a sample?
(1) Cost-benefit analysis
- Cost  expensive; time consuming
- Benefit  sample results are adequate
- Cost > Benefit
(2) The destructive nature of some tests

The main disadvantage of taking a sample

Sample might be biased  unrepresentative of the population
 Sample results cannot be generalised to the whole population.
Important consideration when taking a sample
Make sure that a selection of individuals or items in the sample
cover all areas of the population to be examined.

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 SAMPLING METHODS
No. Types of Sampling Process/Steps Involved
1 Simple random sampling Random number
2 Stratified sampling Subgroup; Random number
3 Systematic sampling Every nth item
4 Quota sampling Set number of items

(1) Sample is selected in such a way that every item in the population has an equal
chance of being selected.
(2) A population is divided into subgroups, called strata, and a sample is randomly
selected from each stratum.
(3) A random starting point is selected, and then every nth item of the population
is selected.
(4) Sample is selected up to a certain quota.
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 Simple Random Sampling
• An adequate sampling frame might not
exist.

• The numbering of the population might be

laborious.

• Each selected item needs to be located

and questioned. This may take a long time
and the individual may be untraceable.

• Certain attributes may be over or under 24

 Stratified Sampling
Gender Number of Proportion of Number in sample
workers total (p) (p × n)

Male 350 350  

= 0.7 0.7 *100 = 70
 
500

Female 150 150   = 0.3 0.3 *100 = 30

500  

Total 500 1 100

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 Stratified Sampling
Gender Status Number of Proportion Number in samp
workers (p) (p × n)

Male Full Time 250 250

500 = 0.5 0.5 *100 = 50

Part time 100

0.2 20

Women Full time 100 0.2 20

Part time 50 0 .1 10

 
Total 500 1 100
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 Systematic Sampling
• It can be used with or without a sampling frame.

• It is particularly useful for situations where the

population is physically in evidence.
– items coming off a production line
– a row of houses

• Bias can occur if recurring sets in the population are

possible.

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 Quota Sampling
• The most popular method of sampling in areas such
as market research.
• The method can result in certain biases.
• Biases can be partly overcome by subdividing the
quota into different types to ensure the sample
represents the population.
• No sampling frame is necessary, although a fairly
detailed knowledge of the characteristics of a
population is required.
• It is administratively easy and relatively cheap.

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 THE SIZE OF A SAMPLE
• No specific rule
• The larger the more accurate, but …
• Mattersto consider in determining the size of
a sample:
- money and time available
- aims of the study and the precision required
- the number of subgroups or strata required
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