MBA SEMESTER 1

MB0040 – STATISTICS FOR MANAGEMENT- 4 Credits

(Book ID: B1129)
Assignment Set- 1 (60 Marks)
Note: Each question carries 10 Marks. Answer all the questions
1. Why it is necessary to summarise data? Explain the approaches available to summarize the
data distributions?
Ans:- Graphical representation is a good way to represent summarised data. However, graphs provide
us only an overview and thus may not be used for further analysis. Hence, we use summary statistics like
computing averages. to analyse the data. Mass data, which is collected, classified, tabulated and
presented systematically, is analysed further to bring its size to a single representative figure. This single
figure is the measure which can be found at central part of the range of all values. It is the one which
represents the entire data set. Hence, this is called the measure of central tendency.
In other words, the tendency of data to cluster around a figure which is in central location is known as
central tendency. Measure of central tendency or average of first order describes the concentration of
large numbers around a particular value. It is a single value which represents all units.
Statistical Averages: The commonly used statistical averages are arithmetic mean, geometric mean,
harmonic mean.

Arithmetic mean is defined as the sum of all values divided by number of values and is represented by X.
Before we study how to compute arithmetic mean, we have to be familiar with the terms such as
discrete data, frequency and frequency distribution, which are used in this unit.
If the number of values is finite, then the data is said to be discrete data. The number of occurrences of
each value of the data set is called frequency of that value. A systematic presentation of the values
taken by variable together with corresponding frequencies is called a frequency distribution of the
variable.
Median: Median of a set of values is the value which is the middle most value when they are arranged in
the ascending order of magnitude. Median is denoted by ‘M’.

Mode: Mode is the value which has the highest frequency and is denoted by Z.
Modal value is most useful for business people. For example, shoe and readymade garment
manufacturers will like to know the modal size of the people to plan their operations. For discrete data
with or without frequency, it is that value corresponding to highest frequency.
Appropriate Situations for the use of Various Averages
1. Arithmetic mean is used when:
a. In depth study of the variable is needed
b. The variable is continuous and additive in nature
c. The data are in the interval or ratio scale
d. When the distribution is symmetrical
2. Median is used when:
a. The variable is discrete
b. There exists abnormal values
c. The distribution is skewed
d. The extreme values are missing
e. The characteristics studied are qualitative
f. The data are on the ordinal scale
3. Mode is used when:
a. The variable is discrete
b. There exists abnormal values
c. The distribution is skewed
d. The extreme values are missing
e. The characteristics studied are qualitative
4. Geometric mean is used when:
a. The rate of growth, ratios and percentages are to be studied
b. The variable is of multiplicative nature
5. Harmonic mean is used when:
a. The study is related to speed, time
b. Average of rates which produce equal effects has to be found
4.9 Positional Averages
Median is the mid-value of series of data. It divides the distribution into two equal portions. Similarly,
we can divide a given distribution into four, ten or hundred or any other number of equal portions.

2. Explain the purpose of tabular presentation of statistical data. Draft a form of tabulation to
show the distribution of population according to i) Community by age, ii) Literacy , iii) sex , and
iv) marital status.
Ans:- The objectives of tabulation are to:

i. Simplify complex data

ii. Highlight important characteristics
iii. Present data in minimum space
iv. Facilitate comparison
v. Bring out trends and tendencies
vi. Facilitate further analysis

Marital Status Sex Educated Non-Educated

Age: 20-40 Above 40 Below 20yrs 20-40 Above 40
Below 20yrs
Male
Married
Female
Male
Unmarried
Female
3.Give a brief note of the measures of central tendency together with their merits & Demerits.
Which is the best measure of central tendency and why?
Ans:- Graphical representation is a good way to represent summarised data. However,
graphs provide us only an overview and thus may not be used for further analysis.
Hence, we use summary statistics like computing averages. to analyse the data. Mass
data, which is collected, classified, tabulated and presented systematically, is analysed
further to bring its size to a single representative figure. This single figure is the
measure which can be found at central part of the range of all values. It is the one which
represents the entire data set. Hence, this is called the measure of central tendency.

In other words, the tendency of data to cluster around a figure which is in central
location is known as central tendency. Measure of central tendency or average of first
order describes the concentration of large numbers around a particular value. It is a
single value which represents all units.

Arithmetic mean: Arithmetic mean is defined as the sum of all values divided by number
of values and is represented by
Merits and demerits of arithmetic mean
Merits Demerits
It is simple to calculate and easy to understand. It is affected by extreme values.
It is based on all values It cannot be determined for distributions with open-end class
intervals.
It is rigidly defined. It cannot be graphically located.
It is more stable. Sometimes it is a value which is not in the series.
It is capable of further algebraic treatment.

Median: Median of a set of values is the value which is the middle most value when they
are arranged in the ascending order of magnitude. Median is denoted by ‘M’
Merits and demerits of median
Merits Demerits
It can be easily understood and computed. It is not based on all values.
It is not affected by extreme values. It is not capable of further algebraic treatment.
It can be determined graphically (Ogives). It is not based on all values.
It can be used for qualitative data.
It can be calculated for distributions with open-end classes.
Mode: Mode is the value which has the highest frequency and is denoted by Z.
Modal value is most useful for business people. For example, shoe and readymade
garment manufacturers will like to know the modal size of the people to plan their
operations. For discrete data with or without frequency, it is that value corresponding to
highest frequency.
Merits and demerits of mode
Merits Demerits
In many cases it can be found by inspection. It is not based on all values.
It is not affected by extreme values. It is not capable of further mathematical treatment.
It can be calculated for distributions with open end classes. It is much affected by
sampling fluctuations.
It can be located graphically.
It can be used for qualitative data.

The best measure of tendency is arithmetic mean. It is defined as a value obtained by

dividing the sum of all the observation by their number, that is mean= [sum of all the
observations]/[number of the observations] Arithmetic mean is used because it is simple
to understand and easy to interpret. It is quickly and easily calculated. It is amenable to
mathematical treatments. It is relatively stable in repeated sampling experiments.
4. Machines are used to pack sugar into packets supposedly containing 1.20 kg each. On
testing a large number of packets over a long period of time, it was found that the mean weight
of the packets was 1.24 kg and the standard deviation was 0.04 Kg. A particular machine is
selected to check the total weight of each of the 25 packets filled consecutively by the machine.
Calculate the limits within which the weight of the packets should lie assuming that the machine
is not been classified as faulty.

Ans:- Since sample size is 25 which is less than 30 therefore it is a case of small sample

t-test distribution is used to calculate confidence interval.

Given, Sample size = n = 25

Standard deviation, S = 0.04

Degrees of Freedom, df = n-1 = 25-1 = 24

Mean weight, = 1.24

Weight = µ

α = 5% = 0.05

tα/2 = t 0.05/2 = t 0.025 = 2-064 at 95% confidence and degree of freedom df = 24

The limits are,

= ± tα/2 S/√n

= 1.24 ± 2.064( 0.04 / √25 )

= 1.24 ± [ 2.064 ( 0.04 / 5) ]

= 1.24 ± 0.016512

- tα/2 S/√n ≤ µ ≤ + tα/2 S/√

= 1.24 – 0.016512 ≤ µ ≤ 1.24 + 0.016512

= 1.223488 ≤ µ ≤ 1.256512

5. A packaging device is set to fill detergent power packets with a mean weight of 5 Kg. The
standard deviation is known to be 0.01 Kg. These are known to drift upwards over a period of
time due to machine fault, which is not tolerable. A random sample of 100 packets is taken and
weighed. This sample has a mean weight of 5.03 Kg and a standard deviation of 0.21 Kg. Can
we calculate that the mean weight produced by the machine has increased? Use 5% level of
significance.
Ans:- Since sample size is 100 which is a case of large sample
So Z-test statistics will be used for hypothesis testing.

Let us take the null hypothesis, H0

Let mean weight has increased

H1 and HA for alternate hypothesis

H0 : µ = 5

H1 : µ > 5 ( Right Tailed test )

Given, Sample size = n = 100

Mean Weight = = 5.03 kg

Standard deviation = S = 0.21 kg

Level of significance, α = 5%

Z = ( - µ ) / (S / √n)

= (5.03 – 5 ) / (0.21 / √100)

Z calculated = 1.428
Now, check the table for 5%

Now, Z critical = Zα = Z0.05 = 1.645 ( For one tailed test )

Since calculated value, Z calculated = 1.428 is less than its critical value Zα = 1.645

Therefore, H0 is accepted.

Hence we conclude the mean weight produced by the machine has increased.

6. Find the probability that at most 5 defective bolts will be found in a box of 200 bolts if it is
known that 2 per cent of such bolts are expected to be defective .(you may take the distribution
to be Poisson; e-4= 0.0183).
Fall 2010
Ans:- Given, total number of bolts, n = 200

P (defective bolt) = 2% = 0.02

Therefore, m = np = 200 * 0.02 = 4

P(X = 0) = P (zero defective bolt)

= (e-m m0 ) / 0!

= (e-4 40 ) / 1

= ( 0.0183 ) ( 1 ) / 1

= 0.0183
=========

P ( at most 5 defective bolts )

= P (X≤5)

= P (X=0) + P(X=1) + P(X=2) + P(X=3) + P(X=4) + P(X=5)

= (e-m m0) / 0! + (e-m m1) / 1! + ( e-m m2) / 2! + ( e-m m3) / 3! + (e-m m4) / 4! + (e-m m5) / 5!

= e-m [ 1 + m1 / 1! + m2/2! + m3/3! + m4/4! + m5/5! ]

= e-4 [1 + 41 / 1 + 8/2 + 64/6 + 256/24 + 1024/120 ]

= 0.0183 [ 1 + 4 + 8 + 10.67 + 10.67 + 8.53 ]

= 0.0183 * 42.87

= 0.784521
MBA SEMESTER 1
MB0040 – STATISTICS FOR MANAGEMENT- 4 Credits
(Book ID: B1129)
Assignment Set- 2 (60 Marks)
Note: Each question carries 10 Marks. Answer all the questions
1. What do you mean by Statistical Survey? Differentiate between “Questionnaire” and
“Schedule”.
Ans:- A search for knowledge by analysing numerical data is known as Statistical Survey or Statistical
Investigation.

A Statistical survey is a scientific process of collection and analysis of numerical data. Statistical surveys
are used to collect numerical information about units in a population. Surveys involve asking questions
to individuals Surveys of human populations are common in government, health, social science and
marketing sectors.

Statistical surveys are categorised into two stages – planning and execution. The figure 2.1 shows the
two broad stages of Statistical survey
Planning a Statistical Survey:

The relevance and accuracy of data obtained in a survey depends upon the care exercised in planning. A
properly planned investigation can lead to best results with least cost and time.
Execution of Statistical survey:

Control methods should be adopted at every stage of carrying out the investigation to check the
accuracy, coverage, methods of measurements, analysis and interpretation.

The collected data should be edited, classified, tabulated and presented in diagrams and graphs. The
data should be carefully and systematically analysed and interpreted.

Difference between a schedule and a questionnaire

There is a difference between a schedule and a questionnaire. A schedule is a form that the investigator
fills himself through surveying the units or individuals. A questionnaire is a form sent (usually mailed) by
an investigator to respondents. The respondent has to fill it and then send it back to the investigator.

Questionnaires

Often, information is collected through questionnaires. The questionnaires are filled with questions
pertaining to the investigation. They are sent to the respondents with a covering letter soliciting
cooperation from the respondents (respondents are the people who respond to questions in the
questionnaire). The respondents are asked to give correct information and to mail the questionnaire
back. The objectives of investigation are explained in the covering letter together with assurance for
keeping information provided by the respondents as confidential.

Good questionnaire construction is an important contributing factor to the success of a survey. When
questionnaires are properly framed and constructed, they become important tools by which statements
can be made about specific people or entire populations.

This method is generally adopted by research workers and other official and non-official agencies. This
method is used to cover large areas of investigation. It is more economical and free from investigator’s
bias. However, it results in many “non-response” situations. The respondent may be illiterate. The
respondent may also provide wrong information due to wrong interpretation of questions.

Schedule Filled By Investigators

Information can be collected through schedules filled by investigators through personal contact. In order
to get reliable information, the investigator should be well trained, tactful, unbiased and hard working.

A schedule is suitable for an extensive area of investigation through investigator’s personal contact. The
problem of non-response is minimised.

There is a difference between a schedule and a questionnaire. A schedule is a form that the investigator
fills himself through surveying the units or individuals. A questionnaire is a form sent (usually mailed) by
an investigator to respondents. The respondent has to fill it and then send it back to the investigator.

2. The table shows the data of Expenditure of a family on food, clothing, education, rent and
other items.
Items Expenditure
Food 4300
Clothing 1200
Education 700
Rent 2000
Others 600

Ans:-

Items Food Clothing Education Others Rent

Expenditure 4300 1200 700 600 2000
 PIE CHART

Food
2000
Clothing
600 4300 Education
Others
700
Rent
1200