1st SEMESTER

PAPER-II

QUANTITATIVE TECHNIQUES
FOR MANAGERIAL DECISIONS

Assignment -1

Questions and Answers

1. Elucidate about the Permutations and Combinations

## Guideline: Permutations and Combinations

### 1. Objective:
The primary goal of this guideline is to elucidate the concepts of
permutations and combinations, highlighting their differences, and
providing clear understanding through simple illustrations.

### 2. Introduction:
In various disciplines like economics, business, and social sciences,
problems often arise concerning the arrangement of items into different sets
or groups. The concepts of permutations and combinations offer solutions
to such problems, with significant applications in probability theory.

- **Permutations**: Refers to different arrangements of items from a given

set, without repeating any element, and selecting one or more at a time.
- **Combinations**: Represent distinct groups or sets formed by selecting
items from a given set without considering the order.

### 3. Basic Rules of Counting:

Two fundamental rules govern counting or selection processes, based on
principles of addition and multiplication:

- **Theorem**: If one thing can be done in 'm' ways and another thing can
be done in 'n' ways after the first, then both together can be done in 'mxn'
ways.
- Example: Tossing two coins yields 2x2=4 possible outcomes (HH, HT,
TH, TT).

### 4. Permutations:
Permutations involve arranging a certain number of elements from a set
without repeating any element. Mathematically, for 'n' distinct objects
arranged 'r' at a time, permutations are given by 'nPr = n! / (n-r)!'.

- **Factorial Notation**: Denoted by 'n!', factorial represents the product

of the first 'n' natural numbers.
### 5. Permutations of 'n' Different Things:
The number of permutations of 'n' distinct objects taken 'r' at a time is
calculated by 'nPr = n(n-1)(n-2)...(n-r+1)'.

### 6. Circular Permutations:

Circular permutations involve arranging objects in a circular manner, where
the relative position depends on the first object placed. For 'n' objects,
circular permutations are (n-1)!.

### 7. Permutations of Things Not All Different:

When items contain repetitions, permutations are calculated using factorial
notation considering repetitions.

### 8. Combinations:
Combinations are formed by selecting items from a set without regard to the
order. The number of combinations of 'n' objects taken 'r' at a time is denoted
by 'nCr' and calculated as 'nCr = n! / (r!(n-r)!)'.

### 9. Solved Problems:

Illustrative examples demonstrate the application of permutations and
combinations in solving various problems.

This structured guideline provides a clear explanation of permutations and

combinations, accompanied by simple illustrations and solved problems for
better comprehension.
2. Write about the Concept of differentiation and Concept
of integration

**Concept of Differentiation**

Differentiation is a fundamental concept in calculus that deals with the rate

at which a quantity changes. It is the process of finding the rate at which one
quantity varies with respect to another. In simpler terms, it involves
determining how a function behaves as its input (or independent variable)
changes. Differentiation is primarily used to analyze the behavior of
functions, such as determining their maximum and minimum values, finding
slopes of curves, and understanding the nature of change in various
phenomena.

**Basic Notions of Differentiation**

1. **Derivative:** The derivative of a function represents the rate of change

of that function with respect to its independent variable. It gives the slope
of the tangent line to the graph of the function at any point. The derivative
is denoted by symbols like \(f'(x)\), \(\frac{df}{dx}\), or \(\frac{dy}{dx}\),
where \(y = f(x)\).

2. **Rules of Differentiation:** Various rules exist to differentiate different

types of functions, such as power rule, product rule, quotient rule, chain rule,
etc. These rules provide a systematic way to find the derivatives of complex
functions.

3. **Applications:** Differentiation has wide-ranging applications in

various fields such as physics, engineering, economics, and biology. For
instance, in physics, derivatives are used to calculate velocity and
acceleration, while in economics, they help in maximizing profit or
minimizing cost functions.

4. **Optimization:** One of the key applications of differentiation is

optimization, where the goal is to find the maximum or minimum values of
a function. This involves finding critical points (where the derivative is zero
or undefined) and using the first or second derivative test to determine
whether these points correspond to maximum, minimum, or saddle points.
5. **Graphical Interpretation:** Graphically, differentiation corresponds to
finding the slope of the tangent line to the curve at a specific point. The
derivative at a point represents the slope of the curve at that point.

**Concept of Integration**

Integration is the reverse process of differentiation. It involves finding the

accumulation of quantities or the total of a function over a given interval. In
simpler terms, integration is the process of finding the area under a curve. It
helps in determining the total change or accumulated effect of a quantity
over a given range.

**Basic Notions of Integration**

1. **Antiderivative:** Integration involves finding the antiderivative or

indefinite integral of a function. An antiderivative of a function \(f(x)\) is a
function \(F(x)\) whose derivative is equal to \(f(x)\). The symbol used to
denote integration is the integral sign (\(\int\)).

2. **Definite Integral:** While the antiderivative represents the general

accumulation of a function, the definite integral gives the precise numerical
value of the accumulated quantity over a specified interval. The definite
integral is denoted by \(\int_a^b f(x) dx\), where \(a\) and \(b\) are the lower
and upper limits of integration, respectively.

3. **Rules of Integration:** Similar to differentiation, integration has its

own set of rules, such as the power rule, substitution rule, integration by
parts, and trigonometric integrals. These rules help in simplifying the
process of integrating complex functions.

4. **Applications:** Integration finds applications in various fields, such as

physics, engineering, economics, and statistics. For example, in physics,
integration is used to calculate the work done by a force, while in
economics, it helps in determining the total revenue or profit functions.

5. **Area Under the Curve:** Graphically, integration corresponds to

finding the area under the curve of a function over a given interval. This
area represents the accumulated effect or total change of the quantity
represented by the function.
Differentiation and integration are two fundamental concepts in calculus
that play crucial roles in analyzing the behavior of functions and solving
real-world problems. Differentiation helps in understanding the rate of
change of a quantity, while integration helps in determining the total change
or accumulated effect of a quantity. Both concepts have wide-ranging
applications in various fields and provide powerful tools for making
managerial decisions and solving complex problems. Mastering these
concepts is essential for anyone seeking to understand and apply advanced
mathematical techniques in decision-making processes.
3. Briefly describe the Correlation Analysis.

This lesson provides a comprehensive understanding of correlation analysis,

a statistical technique used to measure the relationship between two or more
variables. Let's break down the key points:

**Objective:**
The lesson aims to elucidate the concept of correlation and methods for
calculating the correlation coefficient.

**Introduction:**
It highlights the shift from analyzing single variables to exploring
relationships between multiple variables, emphasizing the importance of
correlation analysis in understanding these relationships.

**Definitions:**
Various definitions of correlation are provided by different scholars,
emphasizing the quantitative nature of the relationship between variables.

**Significance of Correlation Analysis:**

The practical importance of correlation analysis is discussed, showing its
relevance in fields like economics and business decision-making. It helps
measure the degree of relationship between variables, allowing for better
estimation and decision-making.

**Correlation and Causation:**

It distinguishes between correlation and causation, emphasizing that while
correlation indicates a relationship, it doesn't necessarily imply causation.
The lesson explores potential reasons for correlation, cautioning against
assumptions of causation based solely on correlation.

**Types of Correlation:**
Different types of correlations are outlined, including positive/negative,
simple/partial/multiple, and linear/non-linear correlations, providing a
framework for understanding various relationships between variables.

**Methods of Studying Correlation:**

Several methods for studying correlation are discussed, including scatter
diagram, graphic method, Karl Pearson’s coefficient of correlation,
Spearman’s rank correlation coefficient, and the concurrent deviation
method. Each method offers different insights into the relationship between
variables.

**Properties of Karl Pearson’s Coefficient of Correlation:**

Key properties of Karl Pearson’s coefficient of correlation are outlined,
including its range (-1 to +1), independence from scale and origin, and its
relationship with regression coefficients.

**Rank Correlation Coefficient:**

The lesson introduces Spearman’s rank correlation coefficient as an
alternative method for analyzing the relationship between variables,
especially useful when data distribution is unknown or when quantitative
measures are unavailable.

**Concurrent Deviation Method:**

Lastly, the concurrent deviation method is discussed as a simple approach
for studying correlation, focusing on the direction of change in variables.

Overall, the lesson provides a comprehensive overview of correlation

analysis, its significance, methods, and applications in various fields
4. Calculate the coefficient of correlation by Karl Pearson’s
method:
X 6 2 10 4 8
Y 9 11 ? 8 7
Arithmetic means of X and Y are 6 and 8 respectively.
Assignment: Coefficient of Correlation Calculation using Karl Pearson’s
Method

Given Data:
X: 6, 2, 10, 4, 8
Y: 9, 11, ?, 8, 7

The arithmetic mean of X (µx) = 6

The arithmetic mean of Y (µy) = 8

Solution:
Step 1: Finding Missing Value in Y

To calculate the missing value in Y, we use the arithmetic mean formula:

Arithmetic mean = (Sum of all values) / (Number of values)

Given:
Arithmetic mean of X = µx = 6
Arithmetic mean of Y = µy = 8

For X:
6 = (6 + 2 + 10 + 4 + 8) / 5
6 = 30 / 5
6=6

For Y:
8 = (9 + 11 + ? + 8 + 7) / 5
40 = 35 + ?
? = 40 - 35
?=5
Now, the complete data is:

X: 6, 2, 10, 4, 8
Y: 9, 11, 5, 8, 7

Step 2: Calculating Deviations

We calculate deviations from the mean for X and Y:

deviation of X = X - µx
deviation of Y = Y - µy

Calculating deviations:

X deviation of X Y deviation of Y
6 0 9 1
2 -4 11 3
10 4 5 -3
4 -2 8 0
8 2 7 -1

Step 3: Calculating Cross-Products and Sums

We calculate cross-products and sums for correlation calculation:

Cross-product = (deviation of X) * (deviation of Y)

X deviation of X Y deviation of Y Cross-product

6 0 9 1 0
2 -4 11 3 -12
10 4 5 -3 -12
4 -2 8 0 0
8 2 7 -1 -2

Sum of Cross-products = Σ((deviation of X) * (deviation of Y)) = -26

Step 4: Calculating Correlation Coefficient

Using Karl Pearson's formula:

r = Σ((X - µx)(Y - µy)) / sqrt(Σ(X - µx)² * Σ(Y - µy)²)
Substitute values into the formula:
r = -26 / √(16 + 16 + 4 + 4) * (1 + 9 + 9 + 1)
r = -26 / √800
r = -26 / 28.28
r ≈ -0.92

Conclusion:

The coefficient of correlation between X and Y by Karl Pearson’s method

is approximately -0.92, indicating a strong negative linear relationship
between the variables X and Y.
5. A set of 5 coins is tossed 3200 times and the number of
heads appearing each time is noted. The results are given
below:

No of heads 0 1 2 3 4 5
Frequency 80 570 1100 900 500 50
Test the hypothesis that the coins are unbiased.

Sure, here's a step-by-step solution that you can copy and paste into Word:

**Step 1: Formulate Hypotheses**

Null Hypothesis (H0): The coins are unbiased.

Alternative Hypothesis (H1): The coins are biased.

**Step 2: Set Significance Level**

Let's set the significance level (α) to 0.05.

**Step 3: Determine Test Statistic**

We'll use the Chi-Square (χ²) test statistic for the goodness-of-fit test.

**Step 4: Create Observed Frequency Table**

| No of Heads | 0 | 1 | 2 | 3 | 4 | 5 |
|-------------|-----|------|------|-----|-----|-----|
| Frequency | 80 | 570 | 1100 | 900 | 500 | 50 |

**Step 5: Calculate Expected Frequencies**

Under the assumption of unbiased coins, each outcome should have the
same probability, which is 1/2 for heads and 1/2 for tails. Therefore, for 5
coin tosses, the expected frequency for each outcome is 3200 * (1/2)^5 =
100.
| No of Heads | 0 | 1 | 2 | 3 | 4 | 5 |
|-------------|------|------|------|------|------|------|
| Expected | 100 | 100 | 100 | 100 | 100 | 100 |

**Step 6: Calculate Chi-Square Statistic**

The formula for the Chi-Square statistic is:

χ² = Σ [(Observed - Expected)^2 / Expected]

Calculating this for each outcome and summing up:

χ² = [(80-100)^2 / 100] + [(570-100)^2 / 100] + [(1100-100)^2 / 100] +

[(900-100)^2 / 100] + [(500-100)^2 / 100] + [(50-100)^2 / 100]

χ² = (400 + 2116 + 10000 + 6400 + 1600 + 2500) / 100

χ² = 22116 / 100

χ² = 221.16

**Step 7: Determine Degrees of Freedom**

Degrees of Freedom (df) = Number of categories - 1 = 6 - 1 = 5

**Step 8: Determine Critical Value**

At α = 0.05 and df = 5, the critical value from the Chi-Square distribution

table is approximately 11.07.

**Step 9: Compare Test Statistic and Critical Value**

Since χ² (221.16) > Critical Value (11.07), we reject the null hypothesis.

**Step 10: Conclusion**

We reject the null hypothesis that the coins are unbiased. There is sufficient
evidence to conclude that the coins are biased.