QUANTITATIVE

TECHNIQUES IN
BUSINESS CASE
STUDY




Submitted by:
TULIAO, Maria Athena E.
Submitted to:
Prof. Febre


1. Case Study of Air Conditioner
Market

INRODUTION OF THE CASE
The Case study is about Indian Air conditioner
Industry.
Some brief of the Indian consumer durable
industry. The total market size is of around
Rs.250,000 million. The Home Appliance Industry
size is around Rs 87,500 million. Among them
Refrigerator contribute the largest share of Rs
38000 million. followed by room air conditioners
at around Rs 27,500 million. And washing machine
at Rs 14,000 million.
Among them Air conditioner Industry enjoys the
highest growth of 20% per year. Due to reduction
in excise duty and a decline in import duties
narrowed down the gap between organized and
unorganized sector.
The Share of Unorganized market was 70% in
1980 has dropped down and is now 25%.
Increasing in the disposable income and change in
the life style are the major factors that supports the
demand of the air conditioner industry.





The graph shows the market Share of the air conditioners
in the different segments.


The another graph shows the market share in the
different region in India









SHARES,
DOMESTI
C, 20, 20%
SHARES,
GOVERME
NT, 15,
15%
SHARES,
CORPORA
TES/INDU
STRIES,
20, 20%
SHARES,
SMALL
PRIVATE
SECTOR,
25, 25%
SHARES,
HOSPITAL
S, 5, 5%
SHARES,
PUBLIC
SECTOR,
15, 15%
Chart Title
DOMESTIC
GOVERMENT
CORPORATES/I
NDUSTRIES
SMALL PRIVATE
SECTOR
HOSPITALS
PUBLIC SECTOR
SHARE,
NORTH,
37, 37%
SHARE,
EAST, 8,
8%
SHARE,
WEST,
33, 33%
SHARE,
SOUTH,
22, 22%
SHARE IN DIFFERENT REGION
NORTH
EAST
WEST
SOUTH


Here the air conditioner in Organized and Unorganized
Sector in windows and Split Air conditioner market share
is given below.











Major Players in the Market
An Increase in the market has allowed various major
players to participate in the race for maximizing their
own market share . Blue Star, LG, Voltas ,Carrier,
Amtrex Hitachi, Samsung, National etc are some of the
major players in the market.
The Indian Air conditioner Industry is growing rapidly.
Now to Analyze the market. We have to go for Sampling
.



, Window
ac, 75
, Split ac,
85
, Window
ac, 25
, Split ac,
15

INTRODUCTION OF THE SAMPLING
"Sampling" basically means selecting people/objects from a
population. The researcher generally takes sample portion of
the whole population for the study. The process of selecting
the sample from the population is called the sampling.
Reasons For Sampling
Sampling can save money.
Sampling can save time.
For given resources, sampling can broaden the scope of
the data set.
Because the research process is sometimes destructive,
the sample can save product.
If accessing the population is impossible; sampling is
the only option.

Sampling Procedure
In the design of the sampling process there are 5 steps.
1. Target population must be defined.
2. Sampling Frame must be determined.
3. Appropriate sampling technique must be selected.
4. Sample size must be determined.
5. Sampling process must be executed


In the reference to the case of Air conditioner industry
in India.

SAMPLING FRAME
Sampling Frame is a list that possesses the information
about the subjects that a researcher wants to research.
Our Sampling frame is taken to be Metropolitan Cities as
use of AC was found to be comparatively more in metros
than non-metro cities. It was found to be 60% of total AC
users.

SAMPLING TECHNIQUES
Sampling techniques are broadly classified into two
Random Sampling Techniques
Non-Random Sampling Techniques

Random Sampling Techniques

In this type of sampling each member of population has equal
chance of being included in the sample.

We cannot consider this type of sampling as we cannot ask
each and every person in the city that if he uses airconditioners
or not.

So we took Non Random Sampling Techniques

Non Random Sampling Techniques

In this type of sampling techniques, the selection of sampling
units is not based on random selection.

In this type of sampling, Quota Sampling is been considered
for our study.

Quota Sampling

In this type of sampling, certain classes such as age, gender,
income group, and education level are used as strata. A
researcher uses non-random sampling methods to gather data
from one stratum until the required quota fixed by the
researcher is fulfilled.

As all type of customers cant afford an AC, we have decided to
categorize them into strata based on their Income Group.
Probability Technique or Non Probability Technique
Probability technique in each of the population has the same
probability of being selected as a part of the sample. In random
sampling, the chance factor comes into play in the process of
sample selection. For statistical analysis a random sample is
ideal.
However in same probability technique is not applicable. In that
case non-probability technique every unit of the population does
not have the same chance of being selected. In Non Probability
Technique member of the sample are not selected by chance as
per convenient.
In these cases we use Non Probability Technique because in that
we will not consider whole city as it is heterogeneous in nature
so we select an area of a city.

SAMPLING AND NON-SAMPLING ERRORS
The error caused by the selection of a sample instead of
conducting a census of the population.

Sampling error has the origin in sampling itself.
1. It can occur due to faulty selection of the sample.
CONTROL -Select the sample which is true
representative of the population.
2. Sometime researchers demarcate sampling units
wrongly and hence provide scope for committing
sampling errors.
CONTROL -Selecting a sample randomly, sampling
errors can be computed and analysed very easily.
Researcher objective must be clear.

NON-SAMPLING ERROR
Errors occur due to forces generally present in every
research. These error arises at the stages of observation,
ascertainment and processing of data.
1. Faulty designing and planning of survey
The questionnaries is the primary sources of the
data collection. Some time this data collection do
not match with the objectives
No trained and qualified staff for survey.
CONTROL: By hiring the trained staff and using
proper questionnnearies. This error can be
reduced.
2. Response error-
Some times respondents do not provide pertinent
information during the survey.
CONTROL: Try to reduce the bias of the
interviewer.
3. Error in coverage:
When the objectives of the research are not clearly
defined , the possibilities are always high that few
sampling units that should not have been included
are included in the sample list.
CONTROL: Objective must be clear
4. Compiling error
A researchers can commit error during
compilation of the data. Various operations of the
data processing, such as editing and coding of the
response, tabulation, and summerization of the
data. Errors can occur during presentation and
printing of the results.

CONTROL:
Employing trained and experienced personnel.































2. CASE ON MANUFACTURING
PERSONAL COMPUTERS IN NIGERIA
Micro-company is nigeria based manfacturer of personal
computer. The company is planning to build a new
manufacturing and distributing facility in port-harcourt, Aba,
lagos, Abuja, and kaduna. It will take approximately five years to
build the necessary infrastructure and put it into operation. The
company has estimate the facility cost in millions in each city.
ECONOMIC CLIMATE
Cities Decline same improve
Port-harcourt 21.7 19.1 15.2
Aba 19.0 18.5 17.6
Lagos 19.2 17.1 14.7
Abuja 22.5 16.8 13.8
Kaduna 25.0 21.2 12.5

Determine the best decision using the following decision criteria
(a) MAXIMIN (b)MINIMAX (c)HURWITZ(=0.4)
(d)Equally likelihood

SOLUTION
(a)MAXIMIN(criterion of pessimism)
Cities Decline same improve
minimum in

row
Port-harcourt 21.7 19.1 15.2
15.2
Aba 19.0 18.5 17.6
17.6
Lagos 19.2 17.1 14.7
14.7
Abuja 22.5 16.8 13.8
13.8
Kaduna 25.0 21.2 12.5
12.5
The maximum in row is 17.6 which implies that the best decision is
to build the facility in ABA

(b)MINIMAX(savage criterion)
Opportunity loss table
Cities Decline same improve
Port-harcourt 25.0- 21.7 21.1-19.1 17.6-
15.2
Aba 25.0- 19.0 21.1-18.5 17.6- 17.6
Lagos 25.0- 19.2 21.1-17.1 17.6- 14.7
Abuja 25.0- 22.5 21.1- 16.8 17.6- 13.8
Kaduna 25.5- 25.0 21.1-21.2 17.6-12.5

Opportunity loss table
Cities Decline same improve
maximum in row
Port-harcourt 3.3 2.1 2.4
3.3
Aba 6.0 2.7 0.0
6.0
Lagos 5.8 4.1 2.9
5.8
Abuja 2.5 4.4 3.8
4.4
Kaduna 0.0 0.0 5.1
5.1

The minimum in row is 3.3 which implies that the best decision is
to build the facility in port-harcourt.


(c)HURWITZ(criterion of realism) =0.4
Hurwitz = (maximum in row) + (1-
)(minimum in row)
Hurwitz(port) =0.4(21.7) + (1-0.4)(15.2) = 17.8
Hurwitz(aba) =0.4(19.0) + (1-0.4)(17.6) = 18.16
Hurwitz(lagos) =0.4(19.2) + (1-0.4)(14.7) = 16.5
Hurwitz(abuja) =0.4(22.5) + (1-0.4)(13.8) = 17.28
Hurwitz(kaduna)=0.4(25.0) + (1-0.4)(12.5) = 17.5
In this case the best option is to build the facility in Aba

(d)equally likelihood

Cities Decline same improve
average in row
Port-harcourt 21.7 19.1 15.2
18.7
Aba 19.0 18.5 17.6
18.4
Lagos 19.2 17.1 14.7
17.0
Abuja 22.5 16.8 13.8
17.7
Kaduna 25.0 21.2 12.5
19.6
Using equally likelihood the best alternative is to build the facility
in Kaduna.













3. CASE ON AIRLINE TICKETING

As a first step towards planning new facilities at one of
its city centre ticket offices, an airline has collected data
on the length of time customers spend at a ticket desk
(the service time). One hundred customers were
investigated and the time in minutes each one was at an
enquiry desk was measured. The data are shown below.



Classify the data in intervals one minute wide. Form a frequency
histogram. What service time is likely to be exceeded by only
ten per cent of customers.







4. Case on JP Carruthers Co.

The JP Carruthers Co. is a medium-sized manufacturing firm. Its
sales figures are about 220 million and its employment level
has been around 1100 for the last ten years. Most of its sales are
in the car industry. JPCs profit last year was 14480000. They
have always enjoyed a reputation for reliability and have
generally been regarded as being well managed.

With few exceptions JPCs direct labour force, numbering about
600, is represented by the TWU, the Transport Workers Union.
It is the practice in this industry to negotiate employee benefits
on a company-wide basis, but to negotiate wages for each class
of work in a plant separately. For years, however, this
antiquated practice has been little more than a ritual.

Supposedly, the system gives workers the opportunity to
express their views, but the fact is, the wages settlement in the
first group invariably sets the pattern for all other groups within
a particular company. The Door Trim Line at JPC was the key
group in last years negotiations. Being first in line, the
settlement in Door Trim would set the pattern for JPC that year.

Annie Smith is forewoman for the Door Trim Line. There are
many variations of door trim and Annies biggest job is to see
that they get produced in the right mix. The work involved in
making the trim is about the same regardless of the particular
variety. That is to say, it is a straight piecework operation and
the standard price is 72p per unit regardless of variety. The
work itself, while mainly of an assembly nature, is quite intricate
and requires a degree of skill.

Last years negotiations started with the usual complaint from
the union about piece prices in general. There was then,
however, an unexpected move. Here is the unions demand for
the

Door Trim Line according to the minutes of the
meeting:

Well come straight to the point. 72p a unit is
diabolical A fair price is 80p. The women average
about 71 units/day. Therefore, the 8p more that we
want amounts to an average of 5.68 more per
woman per day. This is the smallest increase weve
demanded recently and we will not accept less than
80p.

(It was the long-standing practice in the plant to
calculate output on an average daily basis. Although
each persons output is in fact tallied daily, the bonus
is paid on daily output averaged over the week. The
idea is that this gives a person a better chance to
recoup if she happens to have one or two bad days.)

The unions strategy in this meeting was a surprise. In
the past the first demand was purposely out of line
and neither side took it too seriously. This time their
demand was in the same area as the kind of offer that
JPCs management was contemplating.



Prior to the negotiations management had thought that seven
per cent would be a reasonable offer, being approximately the
rate at which productivity and inflation had been increasing in
recent years. Privately they had set ten per cent as the upper
limit to their final offer. At this level they felt some scheme
should be introduced as an incentive to better productivity,
although they had not thought through the details of any such
scheme.
As a result of the unions strategy, however, JPCs negotiating
team decided not to hesitate any longer. Working late, they put
together their best package using the ten per cent criterion. The
main points of the plan were as follows:








The next meeting with the union lasted only a
few minutes. A union official stated his understanding
of the offer and after being assured that he had stated
the details correctly, he announced that the union
approved the plan and intended to recommend its
acceptance to its membership. He also added that he
expected this to serve as the basis for settlement in
the other units as usual and that the whole wage
negotiations could probably be completed in record
time.
And that was that. Or was it? Some doubts
remained in the minds of JPCs negotiating team. Why
had the union been so quick to agree? Why had the
Production Performance report been stolen? While
they were still puzzling over these questions, Annie
Smith phoned to say that the Production Performance
Report had been returned.

In the hope of satisfying their curiosity, the
negotiating team asked Annie to bring the Report
down to the office. Had any mistakes been made? Was
JPCs offer really 9.8 percent? If not, what was the
true offer?









5. Case Study on Newspaper
Letters

The two attached letters appeared recently in a
newspaper. In the first letter, Dr X concludes that
dentists should not give anaesthetics. In the second,
Mr Y concludes that dentists are thesafest
anaesthetists there are.
Danger in the Dental Chair
Sir As a medically qualified anaesthetist responsible
for a large number of dental anaesthetics I read (June
17) with great distress and despair of the death under
an anaesthetic of Miss A.
It is a source of great concern to me that dentists are
permitted to give anaesthetics. Any fool can give an
intravenous injection, but considerable skill and
experience is needed to handle an emergency
occurring in anaesthetics. For anyone, however
qualified, however competent, to give an anaesthetic
with no help whatsoever is an act of criminal folly; the
BDA, BMA and all the medical defence societies would
agree with this.
A Dental Safety Record that Cant Be Matched
Sir Dr Xs feelings (Letters, June 25) about the tragic
death of Miss A will be shared by many, and they do
him credit; but they have also led him astray. Miss A
was not anaesthetised; she was heavily sedated with
a combination and dosage of drugs which produced a
severe respiratory depression which the practitioner
was
unable to reverse.

In calling for a ban upon the giving of general
anaesthetics by dentists, Dr X is on very unsafe
ground. The possession of a medical degree does not
of itself confer immunity from stupidity or
negligence; many other people would still be alive if it
did. If Dr X consults the records produced by the
Office of Population Censuses and
Surveys, he will find that, overall, more deaths
associated with dental anaesthesia occur when the
anaesthetist is medically qualified than when he is a
dentist. Excluding the hospital service (where all
anaesthetists are medically qualified but where
nearly 50 per cent of deaths occur), medically
qualified anaesthetists give 36 per cent of the dental
anaesthetics; they have 45 per cent of the associated
deaths. Not only a balance in favour of the dentist
anaesthetist, but one which shows that mischance can
occur to anyone, however skilled.
Not even Dr X, I think, would claim that all the deaths
which occurred with medically qualified anaesthetists
were due to misadventure, and all those which
occurred with dentists were negligence.
However, these figures should be put in their proper
perspective. In general dental practice and in the
Community Dental Service, about 1.5 million
anaesthetics are given each year. Over the last 15
years, deaths have averaged 4 a year. It is a safety
record which cannot be matched by any other form of
general anaesthesia.


















The Quantitative
Approach

Quantitative information:
We can get data quickly, but we need to be sure
that we are working on the right problem and that
the data is valid.
Data means
a few recording
an extensive national or international survey
An item of data becomes information when it
informs the user.
Internet has transformed the flow and availability
of data.
The ability to manage data, produce information
and work with problems are all seen as and
important business competencies.
Desk research:
First you need checking what work has already
been done.
Provide information or identify techniques.
It is always helpful to find a questionnaire that has
been used previous study and may only require
some modification.
Managing numbers is an important part of
understanding and solving problems.
The collecting together of numbers, and other
facts and opinions provides data.
This data only becomes information when it
informs the user!!
The quantitative approach is more than just doing
sums.
It is about making sense of numbers within a
context.

PROBLEM SOLVING

To understand problems within a context, it can
be useful to work through a number of stages:
defining (and redefining) the problem,
searching for information,
problem description (and again redefinition if
necessary),
idea generation,
solution finding and finaly,
acceptance and implementation.


METHODOLOGY
Old methods New methods
Reliability and validity of findings (conclusions)
Was the purpose of the research clear?
Was this research necessary? (desk research)
Was the means of data collection appropriate?
What can we infer?
(-inductive approach generalization
-deductive approach)


MEASUREMENT
Measurement is about assigning a value or a score to
an observation.
Measurement is the representation of
type,
size or
quantity by numbers.
How we work with data will depend on the level of
measurement achieved.
Measurement can be categorized as:
nominal, ordinal, interval, ratio
Nominal (or categorical) level of measurement:
If responses merely classified into a number of
distinct categories, where no order or value.
The classification of survey respondents on the basis
of
religious affinity,
voting behaviour or
car ownership.
The numbers assigned give no measure of amount
or importance.
For data processing convenience, we may code
respondents 0 or 1 (e.g. YES or NO) or
1, 2, 3 (Party X, Party Y, Party Z), but these
numbers do not relate to meaningful origin or to a
meaningful distance.
We cannot calculate statistics (mean, standard
deviation).
We can make percentage comparisons (e.g. 30 % will
vote for party X), present data using bar charts or use
more statistical methods
Ordinal level of measurement:
has been achieved when it is possible to rank order
all categories according to some criteria.
The preferences indicated on a rating scale ranging
from strongly agree to strongly disagree or the
classification of respondents by social class
(occupational groupings A, B, C1, C2, D, E) are both
common examples where ranking is implied.
Individuals are often ranked as a result of
performance in sporting events or business appraisal.
In these examples we can position a response or a
respondent but cannot give weight to numerical
differences.
It is as meaningful to code a five point rating scale 7,
8, 12, 17, 21 as 1, 2, 3, 4, 5 though the latter is
generally expected.
Only statistics based on order really apply.
You will, however, find in market research and other
business applications that the obvious codings are
made (e.g. 1 to 5) and then a host of computer-
derived statistics calculated.
Many of these statistics can be useful for descriptive
purposes, but you must always be sure about the type
of measurement achieved and its statistical
limitations.
Interval scale:
is an ordered scale where the differences between
numerical values are meaningful.
Temperature is a classic example of an interval scale,
the increase on the centigrade scale between 30 and
40 is the same as the increase between 70 and 80.
However, the heat cannot be measured in absolute
terms (0
o
C does not mean no heat) and it is not
possible to say that 40
o
C is twice as hot as 20
o
C, but
we can say it is hotter.
In practice there are few business-related
measurements where the subtlety of the interval
scale is of consequence.
Ratio scale:
The highest level of measurement,
- which has all the distance properties of the
interval scale and in addition,
- zero represents the abscence of the
caracteristic being measured.
Distance and time are good examples.
It is meaningful, for example, to refer to 0 time and 0
distance and refer to one journey taking twice as long
as another journey or
one distance as being twice as long as another
distance.
In summary, it is considered more powerful to
achieve measurement at higher level as this will
contain more discriminating information;
it is more useful to know how many cigarettes a
respondent smokes on average (0 or more) than just
whether they smoke or not.
The measurement sought will depend on the
purpose of the research.
Another useful system of classification is whether
measurement is discrete or continuous.
Measurement is discrete if the numerical value is the
consequence of counting. (the number of respondets,
the number of companies)
Continuous measurement can take any value within
a continuum, limited only by the precision of the
measurement instrument. (5 seconds or 5.17 seconds)

MARKET RESEARCH
Market research can be directly concerned with a
market (which will need definition) and can provide
information on market size, market trends, market
share by brand, customer characteristics and other
factors.
Aspects of market research include advertising and
promotional research, product research and
distribution.
Market research companies also sell a range of
services, and will frequently undertake research for
government, both national and local, academic
projects and not-for-profit organizations.
CONCLUSION
Obtaining and using data as information is an
important part of understanding and solving any
problem.
There is little doubt about the volume of data now
available, and any search of the Internet can easily
produce reams of computer printout.
As with all problem solving we need to work within
boundaries that ensure the problem remains
manageable and yet does not exclude new avenues of
enquiry.
Given the diversity of possible data sources we need
to check that data is appropriate, adequate and
without bias.
As discussed, the choice is rarely between secondary
data (existing data) or primary data (new data that
needs to be collected for the specific purpose).
Secondary data will help describe and define the
existing problem.
The examination of secondary data can also provide
guidance on what research methods work and which
don't.
Primary data will generally be needed to add specific
detail.
The purpose of any statistical investigation needs to
be clear.
A statement that we wish to investigate the
management of change within the organization will
mean different things to different people.
In this case, we need to be clear about our meaning
of change or changes, 'management' and the general
context.
Decisions will need to be made on who to include
and who to exclude.
In all statistical work the definition of population (all
those people or items of interest) is particularly
important.
If we refer to the workforce, for example, do we
mean only full-time employees, those at a particular
location or those doing a particular job?
It is a frequently reported experience that 'desk
research' yields some of the information required but
also yields other data of interest and a wealth of new
ideas.
It is also worth considering how much research is
genuinely original!
If the purpose of the statistical investigation requires
the collection of original data, then the sample survey
is probably the most widely used method in business
and economics.
The choice that you make will depend on the size of
the survey, the resources available and the
sophistication of the analysis necessary.