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BUSINESS STATISTICS

MODULE I – MEASURES OF CENTRAL TENDENCY

1. Calculate the simple arithmetic average of the following items


of sizes.
20, 50, 72, 28, 53, 74, 34, 54, 75, 39, 59, 78, 42, 64, 79

2. The following table gives the number of children born per


family in 735 families. Calculate the average number of
children born per family.
Number of Number of Number of Number of
Children born families children born families
per family per family
0 96 7 20
1 108 8 11
2 154 9 6
3 126 10 5
4 95 11 5
5 62 12 1
6 45 13 1

3. The following data give the sizes of shoes sold by a store


during a given week. Find the average size by the short cut
method.
Size of Shoes No. of pairs Size of Shoes No. of pairs
4.5 1 8 95
5 2 8.5 82
5.5 4 9 75
6 5 9.5 44
6.5 15 10 25
7 30 10.5 15
7.5 60 11 4

4. The following table gives the heights of 350 mean. Calculate


the mean height of the group.

Height (in 159 161 163 165 167 169 171 17


cms) (x) 3
No. of persons 1 2 9 48 131 102 40 17
(f)

5. Calculate the arithmetic average of the following by the Direct


Method.
Weekly wages 11-13 13-15 15-17 17-19 19-21 21-23 23-25
(Rs.)
No. of labourers 3 4 5 6 5 4 3
6. The following table gives the marks obtained by a set of
students in a certain examination. Calculate the average
marks per student.
Marks No. of Marks No. of
students students
10-20 1 60-70 12
20-30 2 70-80 16
30-40 3 80-90 10
40-50 5 90-100 4
50-60 7
7. Find arithmetic mean for the following data.
Class 50-59 40-49 30-39 20-29 10-9 0-9
interval
Frequenc 1 3 8 10 15 3
y
8. Given below is the distribution of 140 students obtaining
marks or higher in a certain examination (all marks are given
in whole numbers):
X 10 20 30 40 50 60 70 80 90 100
C.F 140 133 118 100 75 45 25 9 2 0
Calculate the arithmetic mean marks obtained by the candidates.
9. The following table gives the life time in hours of 400 radio
tubes of a certain make. Fine the mean lifetime of the radio
tubes.
Life time (in Number of Life time (in Number of
hours) tubes hours) tubes
Less than 300 0 Less than 800 265
Less than 400 20 Less than 900 324
Less than 500 60 Less than 374
1000
Less than 600 116 Less than 392
1100
Less than 700 194 Less than 400
1200
10. A market with 168 operating firms has the following
distribution of average number of workers in various income
groups.
Income 150-300 300-500 500-800 800- 1200-1800
groups 1200
No. of 40 32 26 28 42
firms
Average 8 12 7.5 8.5 4
No. of
workers
Find the average salary paid in the whole market.

11. Find the value of median of the following items:


5,7,9,12,10,8,7,15,21

12. Find the value of the median from the following data.
10, 18, 9, 17, 15, 24, 30, 11

13. Find the value of the median, Q1, Q3 from the following data.
Daily wages (Rs.) 10 5 7 11 8
Number of workers 15 20 15 18 12

14. Find the median, Q1, Q3 from the following distribution.


Class intervals Frequencies Class intervals Frequencies
(Rs.)
1-3 6 11-13 16
3-5 53 13-15 4
5-7 85 15-17 4
7-9 56 TOTAL 245
9-11 21

15. Calculate median, Q1, Q3 from the following data.


Value Frequency Value Frequency
0-4 328 30-39 598
5-9 350 40-49 524
10-19 720 50-59 378
20-29 664 60-69 244

16. Calculate median, Q1, Q3 from the following data.


Age Number of Age Number of
persons persons
55-60 7 35-40 30
50-55 13 30-35 33
45-50 15 25-30 28
40-45 20 20-25 14
Total 160

17. Calculate median, Q1, Q3 from the following data.


Value Frequency Value Frequency
Less than 10 4 Less than 50 96
Less than 20 16 Less than 60 112
Less than 30 40 Less than 70 120
Less than 40 76 Less than 80 125
18. Calculate median, Q1, Q3 from the following data.
Size Frequency Size Frequency
More than 50 0 More than 20 123
More than 40 40 More than 10 165
More than 30 98
19. Compute median, Q1, Q3 from the following data.
Mid values 11 125 135 145 155 165 175 185 195
5
Frequency 6 25 48 72 116 60 38 22 3

20. Find the mode of the following data relating to the weight of
10 students.
120, 130, 135, 130, 140, 130, 132, 132, 135, 141

21. Calculate the value of mode from the following data.


Class intervals Frequency Class intervals Frequency
10-20 4 60-70 22
20-30 6 70-80 24
30-40 5 80-90 6
40-50 10 90-100 2
50-60 20 100-110 1

22. Find the value of Mode from the following data.


Size of the Frequency Size of the Frequency
items items
100-110 4 140-150 33
110-120 6 150-160 17
120-130 20 160-170 8
130-140 32 170-180 2
23. Given Mean = 20; Mode = 15; Find the value of median
24. Given Mode = 25; Median = 20; Find the value of mean.
25. Calculate simple Geometric mean from the following data
133, 141, 125, 173, 182

26. The following data related to the distance traveled by 520


villagers to buy their weekly requirements.
Miles 2 4 6 8 10 12 14 16 18 20
travele
d
No. of 38 104 140 78 48 42 28 24 16 2
villager
s
Calculate the arithmetic average.
BUSINESS STATISTICS
MODULE I – MEASURES OF CENTRAL TENDENCY AND
MEASURES OF DISPERSION
1. The profits of the company for the last 8 years are given
below. Calcultate the Range and its co-efficient.

Year 1975 197 1977 1978 1979 1980 1981 1982


6
Profits (in 40 30 80 100 120 90 200 230
‘000 Rs.)

2. Calculate co-efficient of Range from the following data.

Weekly 50-60 60-70 70-80 80-90 90-100 100- 110-


wages 110 120
(Rs.)
No. of 50 45 45 40 35 30 30
labourers

3. Calculate Quartile Deviation and its co-efficient from the


following data.

Weight (in 120 122 124 126 130 140 150 160
pounds)
Frequency 1 3 5 7 10 3 1 1
Cumulativ 1 4 9 16 26 29 30 31
e
Frequency

4. Calculate Semi-Inter Quartile Range and its co-efficient from


the following data.

Marks 0-10 10-20 20-30 30- 40-50 50-60 60- 70-80 80-90
40 70
No. of 11 18 25 28 30 33 22 15 22
Student
s

5. Calculate Quartile Deviation and its relative measure

Variable Frequency Variable Frequency


20-29 306 50-59 96
30-39 182 60-69 42
40-49 144 70-79 34
6. Estimate an appropriate measure of dispersion for the
following data:

Income (Rs.) No. of persons Income (Rs) No. of persons


Less than 50 54 110-130 230
50-70 100 130-150 125
70- 90 140 Above 150 51
90-110 300 Total 1000

7. The following are the marks obtained by a batch of 9 students


in a certain test.
S.No Marks (out of 100) S.No Marks (out of 100)
. .
1 68 6 38
2 49 7 59
3 32 8 66
4 21 9 41
5 54

8. Calculate Mean Deviation (from arithmetic average) for the


following values. Also calculate its co-efficient.
4800, 4600, 4400, 4200, 4000

9. Find mean deviation from the following data.


No. of Persons having No. of Persons having
accidents said number of accidents said number of
accidents accidents
0 15 7 2
1 16 8 1
2 21 9 2
3 10 10 2
4 17 11 0
5 8 12 2
6 4 Total 100

10. Calculate mean deviation from the following data.


Marks 0-10 10-20 20-30 30-40 40-50 50-60 60-70
No. of 6 5 8 15 7 6 3
student
s

11. Calculate the standard deviation from the following data.


160, 160, 161, 162, 163, 163, 163, 164, 164,
170
12. The mean of 200 items is 48 and then Standard deviation is 3.
Find (i) the sum of all the items; (ii) the sum of squares of all the
items.

13. For two groups of observations of the following results are


available.
Group I Total of (X-5) = 3; Total of squares of (X-5) = 43; N1 =
18
Group II Total of (X-8) = - 11; Total of squares of (X-8) = 76; N2 =
17

14. Calculate the standard deviation from the following data.

Size of the Frequency Size of the Frequency


items items
6 3 10 8
7 6 11 5
8 9 12 4
9 13

15. Calculate standard deviation for the following


distribution.
Values 10 20 30 40 50 60 70
Frequenc 1 5 12 22 17 9 4
y

16. The following data relate to the age of a group of


Government employees. Calculate the arithmetic mean and
standard deviation.
Age 50-55 45-50 40-45 35-40 30-35 25-30 20-25
No. of 25 30 40 45 80 110 170
employee
s

17. Calculate the mean wages and standard deviation of all


the workers taken together.
Section No. of workers Mean wages Standard
Deviation
A 50 113 6
B 60 120 7
C 90 115 8

18. Calculate the combined mean and standard deviation of


the two series.
Series A Series B
Mean 50 40
Standard Deviation 5 6
No. of items 100 150

19. An analysis of the monthly wages paid to the workers in


two firms A and B, belonging to the same industry, gives the
following results :
Particulars Firm A Firm B
Number of wage earners 586 648
Average monthly wages 52.5 47.5
(Rs.)
Standard Deviation of the Square root of Square root of 121
distribution of wages (Rs.) 100
20. The mean and standard deviation of the 20 items was found to
be 10 and 2 respectively. Later, it was found the item 12 was
misread as 8. Calculate correct mean and standard deviation.
21. The arithmetic mean and standard deviation of a series of 20
items were calculated by a student as 20 cms and 5 cms
respectively. But, while calculating them, an item 13 was
misread as 30. Find the correct arithmetic mean and standard
deviation.

22. In a frequency distribution of 100 persons grouped in class


intervals of Rs. 10-12, 12-14, 14-16 etc., revealed the mean
wage to Rs. 32.02 and its standard deviation a Rs. 13.18.
Later, it was found that the wage of a labourer who was
getting Rs. 57 was misread as Rs. 27. Calculate the correct
mean and standard deviation.

SKEWNESS, MOMENTS AND KURTOSIS

1. Calculate the co-efficient of skewness from the following data.


Value 10 20 30 40 50 60 70
Frequenc 1 5 12 22 17 9 4
y

2. Assume that a firm has selected a random sample of 100 from


its production line and has obtained the data shown in the
table below.
Class interval Frequency Class interval Frequency
130-134 3 150-154 19
135-139 12 155-159 12
140-144 21 160-164 5
145-149 28
Total 100

3. Calculate the co-efficient of skewness based upon Mean and


Median from the following distribution.
Class 0-10 10-20 20-30 30-40 40-50 50-60 60-70 70-80
interval
Frequenc 6 12 22 48 56 32 18 6
y
4. Calculate Karl Pearson’s Measure of Skewness on the basis of
Mean, Mode and Standard Deviation.
X 14.5 15.5 16.5 17.5 18.5 19.5 20.5 21.5
F 35 40 48 100 125 87 43 22
5. Calculate the Karl Pearson’s co-efficient of skewness from the
following data.
Marks 0 10 20 30 40 50 60 70 80
(above
)
No. of 150 140 100 80 80 70 30 14 0
student
s
6. Consider the following distributions:
Particulars Distribution A Distribution B
Mean 100 90
Median 90 80
Standard Deviation 10 10
(i) The Distribution A has the same degree of the variation as
the distribution B.
(ii) Both the distributi8ons have the same degree of Skewness –
State whether it is True / False.

7. From the data given below, calculate the co-efficient of


variation.
Pearson’s measure of skewness = 0.42
Arithmetic mean = 86
Median = 80

8. Given, Mean = 30; Standard Deviation = 8; Karl Pearson’s Co-


efficient of Skewness = +0.40; Find the Median and Mode.

9. Calculate Bowley’s co-efficient of skewness.


Wages (Rs.) 30-40 40-50 50-60 60-70 70-80 80-90 90-100
No. of 1 3 11 21 43 32 9
persons

10. Calculate the Bowley’s co-efficient of skewness from the


following data.
Class 10-19 20- 30-39 40-49 50-59 60-69 70-79 80-89
intervals 29
Frequency 5 9 14 20 25 15 8 4

11. The measure of skewness for a certain distribution is – 0.8. If


the lower and upper quartiles 44.1 and 56.6 respectively. Find
the median.

12. In a frequency distribution, the co-efficient os skewness


based on quartiles is 0.6. If the sum of the upper and lower
quartiles is 100 and median is 38, find the value of upper
quartile.

13. From the data given below, calculate Karl Pearson’s, Bowley’s
co-efficients of skewness. Mean = 150; Median = 142; Q1 =
62; Q3 = 195; Standard Deviation = 30.
KARL PEARSON’S CORRELATION CO-
EFFICIENT
1. Find Out the correlation co-efficient between the sales and
expenses of the following 10 firms.
Firms 1 2 3 4 5 6 7 8 9 10
Sales 50 50 55 60 65 65 65 60 60 50
Expense 11 13 14 16 16 15 15 14 13 13
s

2. Calculate the Karl pearson’s co-efficient of correlation from


the following data.
X 65 66 67 67 668 69 70 72
Y 67 68 65 68 72 72 69 71

3. Calculate the Karl Pearson’s co-efficient of correlation


between the values of X and Y from the data given below.
Values of 15 16 17 18 19 20
X
Values of 80 75 60 40 30 20
Y

4. With the help of following data in 6 cities, calculate the co-


efficient of correlation by Karl Pearson method between the
density of population and death rate.
Cities Area in Sq. Population in ‘000 Number of deaths
miles
A 150 30 300
B 180 90 1440
C 100 40 56
D 60 42 840
E 120 72 1224
F 80 24 312

5. Calculate the co-efficient of correlation between the


corresponding values of x and y in the following table.
Values of X 2 4 5 6 8 11
Values of Y 18 12 10 8 7 5
6. Calculate the co-efficient of correlation between the variables
X and Y.
X 0.1 0.2 0.3 0.4 0.5 0.6 0.7
Y 30,000 50,000 60,000 80,000 1,00,00 1,10,00 1,30,00
0 0 0

7. Calculate the co-efficient of correlation between X and Y.


X 2 4 6 8
Y 5 9 13 17

8. Given the following information. Calculate the correlation co-


efficient by Karl Pearson’s method.
Serie Assumed Total deviations Sum of squares of
s Mean from assumed mean deviations from
assumed mean
X 41 - 170 8180
Y 32 - 20 2290
Sum of products of deviations of X and Y from their respective
assumed mean = 2880. Number of pairs of observations = 10.

9. Calculate co-efficient of correlation from the following results.


N = 10; Sum of X = 100; Sum of Y = 150; Sum of squares of (X
– 10); Sum of squres of (Y – 15) = 215; Sum of product of (X – 10)
(Y – 15) = 60.

10. Calculate the Karl Pearson’s co-efficient of correlation


between X and Y from the following information.
N = 12; Sum of X = 120; Sum of Y = 130; Sum of squares of (X
– 8) = 150; Sum of Squares of (Y – 10) = 200; Sum of product of
(X – 8) (Y – 10) = 50.

11. Test the significance of correlation for the following values


based upon the number of observations (i) 10 and (ii) 100. The
co-efficient of correlation + 0.4 and + 0.9.

12. Find the co-efficient of correlation from the following data by


the method of Karl pearson.
X 1 2 3 4 5
Y 166 184 142 180 338

13. Calculate the correlation co-efficient from the following 15


pairs of students in Projects A and Project B.
(1,10) (2,7) (3,2) (4,6) (5,4) (6,8) (7,3) (8,1) (9,11) (10,15)
(11,9) (12, 5) (13,14) (14,12) (15,13). Use Spearman’s formula
to find the rank correlation co-efficient.

14. Ten students were given tests in English and Mathematics.


Their marks are given below.
Student No. 1 2 3 4 5 6 7 8 9 10
Marks in 78 40 50 55 52 49 60 54 59 58
English
Marks in 70 60 60 75 69 55 70 65 65 60
Mathematic
s
Determine Spearman’s rank correlation co-efficient.

14. Ten competitors in a beauty contest were ranked by three


judges in the following orders. Use the Spearman’s rank
correlation method.
First 1 6 5 10 3 2 4 9 7 8
Judge
Secon 3 5 8 4 7 10 2 1 6 9
d
Judge
Third 6 4 9 8 1 2 3 10 5 7
Judge

15. Calculate the rank correlation co-efficient from the


following data.
X 60 34 40 50 45 41 22 43 42 66 64 46
Y 75 32 34 40 45 33 12 30 36 72 41 57

16. Calculate the co-efficient of correlation from the following


data by Spearman’s Rank Difference method.
Prices of Tea (Rs) 75 88 95 70 60 80 81 50
Prices of Coffee 120 134 150 115 110 140 142 100
(Rs.)

17. The co-efficient of rank correlation between the


debenture prices and share prices of a company was + 0.8. If
the sum of the squares of the difference in ranks was 33, find
the value of n.

18. The co-efficient of rank correlation of marks obtained by


10 students in Statistics and Accountancy was found to be 0.2.
It was later discovered that the difference in the ranks in the
two subjects obtained by one of the students was wrongly
taken as 9 instead of 7. Find the correct value of co-efficient
of rank correlation.

19. Calculate the co-efficient of rank correlation from the


following data.
X 48 33 40 9 16 16 65 24 46 57
Y 13 13 24 6 15 4 20 9 6 19

20. Calculate concurrent deviations from the data given


below.
No. of workers 300 350 400 450 500 550
No. of bales 30 32 33 35 40 50
consumed
21. If there is a lag of one year between price and supply (so
that the supply increases after one year of price change),
calculate the co-efficient of correlation between the price and
supply from the following data.

Year Price Supply


1973 78 115
1974 89 125
1975 97 137
1976 69 156
1977 59 112
1978 79 107
1979 68 136
1980 61 123
1981 60 108

22. From the following data, obtain two regression equations


using the method of Least Squares.

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

23. From the following data, calculate two regression


equations using the method of Least Squares.

X 10 15 35 40 50
Y 100 90 110 80 120

24. From the following data, obtain two regression equations


using the method of Least Squares.

Sales 91 97 108 121 67 124 51 73 111 57


Purchasa 71 75 69 97 70 91 39 61 80 47
es
DECISION TREE / DECISION THEORY
1. A company has to choose one of the three types of Biscuits,
Cream, Coconut and Glucose. Sales expected during the next
year are highly uncertain. Marketing Department estimates
the profits considering manufacturing cost, promotional
efforts and distribution set up etc., as given in the table
below.

Types of Profits on estimated level of sales ( in lakhs) for


Biscuits quantities
5,000 10,000 20,000
Cream (C) 15 25 45
Coconut (Co) 20 55 65
Glucose (G) 25 40 70

2. A trading company of Delhi is considering expansion of its


activities and planning to open a marketing office at Kanpur to
boost up the sales in North- East UP. It is to be decided
whether to operate from the existing office at Delhi and cover
the area by frequent traveling or else establishing the office at
Kanpur. The connected pay-offs and probabilities are as
under:

Alternatives States of Nature Probabilit Pay-off (Rs. In


y lakhs)
A. Operate from (i) increase in 0.60 50
Delhi demand by 30%
(ii) no appreciable 0.40 5
change
B. Open office at (i) increase in 0.70 40
Kanpur demand by 30%
(ii) no appreciable 0.30 - 10
change
3. Under an employment promotion programme, it is proposed to
allow sales of newspapers on the buses during off-peak hours.
The vendor can purchase the newspaper at a special
discounted rate of 25 paise per copy against the selling price
of 40 paise. Anny unsold copies are, however a dead loss. A
vendor has estimated the following probability distribution for
the number of copies demanded.

No. of copies to be demanded 15 16 17 18 19 20


Probability 0.0 0.19 0.33 0.2 0.11 0.07
4 6
How many copies should he order so that his expected profir will
be maximum ?

4. A manufacturer finds the opportunity to increase his business


beyond his present on existing production capacity. In order
to decide hether to increase the production capacity, he would
need a reliable information about increase in demand of the
product, based on which only, he can commit his resources.
He has two choices open to him, firstly, the expansion of the
existing capacity with a cost of Rs. 8 lakhs. Or the
modernization of the plant at a cost of Rs. 5 laksh. The time
required for implementation of both the options is expected to
be the same. While considering the demand pattern, he
estimates the high demand situation at a probability of 0.35 as
compared to the modern rise in demand at 0.65 probability.
He also estimates that he would be spending an additional
amount of Rs. 12 lakhs for expansion against Rs. 6 lakhs for
modernization, if the demand rise is high, whereas in the case
of moderate demand increase, the expenditure involved would
be Rs. 7 lakhs for the expansioin or Rs. 5 laksh for
modernization process.

(a) Calculate the conditional profits under various


combibinations.
(b) Establish expansion or modernization so as to maximize
its expected monetary value
(c) Work out EPPI, EVPI and EOL.

5. A manufacturer has faced with a problem of fast change in


technology and hence, fast change in production line. At this
point of time, the research and development wing of the
organization has suggested an improved new product with
easy acceptance. It will cost the manufacturer Rs. 60,000 for
the pilot testing and development testing before establishing
the product in the market. The organization has 100
customers and each customer, might purchase, at the most,
one unit of the product, due to cost and newness. The selling
price suggested is Rs. 6,000 for each unit. The probability
distribution for proportion of customers buying the product is
estimated as follows.

Proportions of customers 0.04 0.08 0.12 0.16 0.20


Probability 0.1 0.1 0.2 0.4 0.2

Work out the expected opportunity, losses and suggest


whether the manufacturer should develop the product or not.
6. A food product company is contemplating the introduction of a
revolutionary new product with new packaging to replace the
existing product at the same price (S1) or a moderate change
in the composition of the existing product with a new
packaging at a small increase in price (S2) or a small change in
the composition of the existing except the “New” with a
negligible increases in price (S3). The three possible states of
nature of events are (i) high increases in sales (N1), (ii) no
change in sales (N2) and (iii) decreases in sales (N3). The
marketing department of the company worked out the pay-offs
in terms of yearly net profits for each course of action for
these events (expected sales). This is represented in the
following table.

States of Courses of action


Nature S1 S2 S3
N1 7,00,000 5,00,000 3,00,000
N2 3,00,000 4,50,000 3,00,000
N3 1,50,000 0 3,00,000

Which strategy should he choose on the basis of (a) Maximum


criterion (b) Maximax criterion (c) Minimax Regret criterion (d)
Laplace criterion.

7. An investor has 3 options to invest, but he can invest in only


one option at a time. He can invest either in a departmental
store, a cold storage or in a car maintenance shop. If he
invests in a departmental stores and succeeds, he can invest
in the car maintenance shop. If he invests in the cold storage
and succeeds, he can invest in the departmental stores. If he
invests in the car maintenance shop, and succeeds, he can
invest in the cold storage and if he succeeds, he can invest in
the departmental store. Based on the data given below, draw
a decision tree and advice the investor on the best decision to
take.
Particulars Probability of Investment Loss on failure
success
Departmental 0.65 8,00,000 45,000
stores
Cold storage 0.60 7,50,000 40,000
Car 0.70 7,40,000 3,50,000
maintenance
shop
8. A business man has two options to sell his products. He can
set up a show room in the city or can sell from his factory
outlet. Setting up a show room will cost Rs. 3,00,000 with 60%
probability of success. If the showroom succeeds, he can earn
gross profits of Rs. 8,00,000 per year. If it fails, he can close
the show room or rent it out for an annual rent of Rs. 2,40,000
( for the rest of the year). The probability of getting rent is
80%. If he sells from the factory outlets, he has to incur Rs.
50,000 as renovating charges. The chances of successful
selling here is 40%, with a net profit of Rs. 4,00,000 per year.
(a) What would you advise the business man to do ?
(b) Advise the business man on how a decision tree helps
him to make decisions.

9. A business man from Chennai wishes to sell his products in


Bangalore. He can set up a show room will entail costs of Rs.
6,00,000 with a 55% probability of success. If the showroom
succeeds, he can gain a net profit of Rs. 10,00,000 per year. If
it fails, he can either shutdown the show room or rent it out
for an annual rent of Rs. 3,60,000 (for the rest of the year).
The probability that he gets rent for the show room is 40%. If
he sells through a wholesaler, he incurs Rs. 3,00,000 initial
costs. The chances of selling successfully are 45% with a net
profit of Rs. 5,50,000 per year.
(a) Advise the business man on the best decisions.
(b) How is the decision tree analysis useful in business
decision ?
BUSINESS STATISTICS
THEORY QUESTIONS (UNIVERSITY
QUESTIONS)
SECTION A

MODULE I
1. Define Statistics.
2. Define Matrix
3. What is a function ?
4. What do you mean by Quadratic function ?
5. Give one example for each of the following :
(a) Linear function (b) Geometric progression
6. What is meant by regret criterion ?
7. What is differentiatioin ?
8. Define Marginal Revenue. Express this concept as a
derivative.
9. What is maxima and minima ?
10. Define marginal cost. Express this concept as a
derivative.
11. Define Arithmetic Progression.
12. Find the sum of the first 20 terms of an Arithmetic
Progression, 2,5,8,……….. ?
13. What is Integration ?
14. What is ratio ?
15. What is Proportion ?
16. Find the sum of the first ten terms of an Arithmetic
Progressiion, 1,3,5,7…………..
17. Find the three numbers in Arithmetic Progression whose
sum is 21 and product is 280 ?
18. the fourth term of a GP is ½ and the seventh term is
4/27. Find the 12th term.
19. Find the sum of the first 8 terms of a Geometric
Progression, 4,8,16……….
20. Show that 1 + 3 + 5 + ……….. to n terms = n^2.
21. Find the sum of the series 3 + 7 + 11 ……. To 40 terms.
22. The third term of a Geometric Progression is 3/4 , and
the seventh term is 4/27. Find the fourth term.
23. How many terms of Geometric Progression, 4,2,1
amount to 127/16 ?
24. The first term and the last term of a Geometric
Progression are 4 and 324. The sum of the series is 384.
Find C.R.
25. A firm produces a single product and it can market as
many units as it is able to produce at a price of Rs. 1.75.
Its plant and equipment can produce as many units as
5000 units a day. The total fixed cost is Rs. 2000 daily.
Unit variable cost is Rs. 0.50. How many units per day
must be produced in order that the firm breaks even ?

MODULE II

1. What is the importance of statistics in managerial


decision making ?
2. Define Business Statistics.
3. What do you mean by Primary and Secondary Data ?
4. What purpose does a measure of central tendency serve ?
5. What are averages ? How are they useful ?
6. What are the desirable properties of an average ?
7. Define Geometric mean and Harmonic zmean.
8. Define a data array. Obtain the median of the data set:
3,0,-7,6, -10.
9. Define Arithmetic mean and median for the raw data.
10. Give any 4 merits of the Arithmetic mean.
11. What do you understand by Dispersion ? Define
Dispersion and give the properties of a good measure of
Dispersion.
12. What is co-efficient of variation ? How is this
measure useful ?
13. What are Ogives ?

MODULE III

1. What is Probability ?
2. What is Poisson Distribution ?
3. What is Binomial Distribution ?
4. What is Normal Distribution ?
5. What is standard normal variate ?

MODULE IV

1. What is Decision theory ?


2. Briefly explain decision trees.
3. What is Expected Pay-off in decision tree ?
4. What is Risk and Certainty & uncertainty ?
5. What is Administrative Decision ?
6. What is Certainty Equivalent ?
7. What is conditional pay-off ?
8. What is Decision Table ?
9. What is Decision tree ?
10. What is Expected Monetary Value ?
11. What is Expected Opportunity Loss ?
12. What is Expected Value Perfect Information /
13. What is Laplace criterion ?
14. What is Maximax criterion ?
15. What is Minimax criterion ?
16. What is Maximin criterion ?
17. What is operating decision ?
18. What is Risk Premium ?

MODULE V

1. What is sampling ?
2. Define Stratified Random Sampling. Illustrate.
3. Explain and illustrate Systematic Sampling.
4. What is meant by Cluster sampling ?
5. What is the significance of testing hypothesis ?
6. What is meant by Type I & Type II error ?
7. What are the three basic assumptions considered in the
analysis of variance ?
8. What is the sum of the square ? What is the mean square
?
9. What is Chi-square test and for what it is used ?
10. What is Quota Sampling ?

MODULE VI

1. What is correlation ? What is its significance ?


2. What is co-efficient of Determination ? How will you interpret
its value ?
3. What do you mean by lag in correlation ?
4. Explain Regression and its uses.
5. What do you mean by regression analysis ? Give its uses.
6. What is Multiple Regression ?
7. Explain the difference between correlation and regression
analysis. Correlation and Regression analyses are constructed
under different assumptions. They furnish different types of
information.
8. What are the components of Time series ?
9. List the different methods that can be used for determining
trend.
THEORY QUESTIONS (UNIVERSITY
QUESTIONS)
SECTION B & C

MODULE I

1. Define Arithmetic and Geometric Progression and give in each


case (i) the expression for the sum of first n terms and (ii) a
business application.
2. Define the concept of the derivative of a function. Give the
business applications of this concept.
3. Define Marginal Cost, Average Cost and Total Cost. What is
the relationship between the three ?

MODULE II

1. “It is never safe to take the published statistics at their face


value without knowing their meaning and limitations” -
Elucidate this statement.
2. What are the various types of measurement of averages ?
Write the relationship between them.
3. Write short notes on Skewness and Kurtosis.
4. What are the properties of a good measure of dispersion ?

MODULE III

1. Define and illustrate the concept of probability.


2. Describe the features of the following probability models (i)
Poisson model (ii) Normal model
3. How is a normal curve ?
4. Describe a binomial distribution. Illustrate the applications of
this distribution in Business Management.
5. Briefly explain the use of the Baye’s formula
6. Explain and illustrate : (i) Relative frequency approach and
(ii) Subjective approach for evaluating probabilities.
7. Write the features of the Exponential Distribution.

MODULE IV

1. What is sampling ? Explain the various methods of sampling.


2. Graphs and Diagrams have an advantage over written reports.
Comment briefly.
3. What is hypothesis ? Explain the different types of
hypothesis.
4. Explain how to set up and test a hypothesis.
5. Explain and point out the difference between one tailed and
two tailed tests.
6. What is (i) Chi-square test (ii) Sign test (iii) Median test ?

MODULE V

1. What are the various decision criteria followed in Decision


Theory ?

MODULE VI

1. What is an Index Number ? How do Laspeyres method and


Paasches method differ ?
2. Explain the method of construction used and interpretation of
the Fisher’s Ideal price Index number. Why his Index number
method is considered as the best method ?
3. What is correlation ? Distinguish between positive and
negative correlation. What is the significance of the co-
efficient of correlation ? How IS correlation ueful in dealing
with business problems ?
4. Explain the method of construction used and interpretation of
the Pearsonian correlation co-efficient.
5. “The value of the co-efficient of correlation lies beween + 1 to
– 1. Elaborate. Give the example for the following diagram.
6. List the methods of determining correlation between two
variables.
7. What is business forecasting ? Mention its methods.
Distinguish between variance and its co-efficient of variance.
8. Distinguish between cyclical variation and seasonal variation.
9. Write the differences between correlation and regression.
BUSINESS STATISTICS
PROBABILITY & SAMPLING DISTRIBUTION
SECTION B & C

1. A print shop has three presses; P1, P2 and P3, each press is
shut down 10% of the time. The probability of any press being
shut down is not influenced by the operating conditions of the
other two. Determine the probability that (a) all the three
presses are shut down; (b) atleast one press is shut down;
(c) P1 and P2, both are shut down.

2. In a Post Office, three clerks are assigned to process incoming


mail. The first clerk processes 40%, second 35% and the third
25% of the mail. The first clerk has an error rate of 0.04, the
second ha 0.06 and the third has 0.03. A mail selected at
random from a day’s output is found to have an error. The
Post Master wishes to know the probability that the mail was
processed by the first, second or third clerk respectively.

3. A sample of 100 dry battery cells tested to find the length of


the life produced the following results : Arithmetic mean =
12 hours, Standard Deviation = 3 hours. Assuming that the
data are normally distributed, what percentage of battery cells
are expected to have life (i) more than 15 hours; (ii) less
than 6 hours; (iii) between 10 and 14 hours ?
Z 2.5 2.0 1.0 0.67
Area 0.4938 0.4772 0.3413 0.2487

4. In an Intelligence test administered to 500 students, the


average score was 42 and standard deviation was 24. Find (a)
the number of students whose score exceeded 50 (b) the
number of students who got between 30 and 40 (c) the
number of students who got score above 60.

5. A survey conducted by a detergent soap manufacturer of


Brand P indicates that when men go shopping, they are likely
to buy brand P 3 out of 4 times. When women of shopping,
they are likely to buy brand P 2 out of 3 times. Find the
probability of Brand P being bought when men and women
shop together.

6. 1000 light bulbs with a mean life of 120 days are installed in a
firm. Their length of life is normally distributed with a
standard deviation of 20 days. How many bulbs will expire in
less than 90 days ?

7. The average monthly sales of 700 branch offices is 42.


(Rupees in lakhs). The standard deviation of sales is 18
(Rupees in lakhs). Find the number of branches whose sales
exceed 50 (Rupees in lakhs) assuming normal distribution.

8. An MBA graduate is selected for an interview in 3 different


firms. For the first post, there are 5 candidates, for the
second post, there are 10 candidates and for the third post,
there are 9 candidates. What are his chances of getting
atleast one post ?

9. Ten percent of the tools produced in a certain manufacturing


process turn out to be defective. Find the probability that in a
sample of 10 tools chosen at random, exactly two will be
defective by using (a) Binomial Distribution (b) Poisson
Distribution

10. The number of machine malfunctions per shift at a


factory is recorded for 180 shifts and the following data are
obtained :
No. of 0 1 2 3 4 5 6
malfunction
s
No. of 82 42 31 12 8 3 2
shifts

11. A Philanthropist wants to build a hospital in a rural area. He


can build 100, 200 or 300 bed hospital, depending upon
whether anticipated demand is low, medium or high. The
expected net profits and the prior distribution regarding the
states of nature is given below.
State of Nature Action A1 Action A2 (Action A3
(Build 100 bed (Build 200 bed (Build 300 bed
hospital) hospital) hospital)
Low Demand 20,000 - 10,000 - 30,000
Medium 25,000 30,000 - 5,000
Demand
High Demand 30,000 50,000 60,000

12. A company has to choose between two products, any one


for manufacturing. A market research was conducted and the
probabilities and the profits at different levels of market
acceptability are as follows:
Acts State of Nature
Good Fair Bad
Products “A” 0.75 0.15 0.10
Products “B” 0.60 0.30 0.10
Calculate the Expected Value of the choice of alternatives and
advise the company.
BUSINESS STATISTICS
SAMPLING DISTRIBUTION
SECTION B & C

1. 1. A simple random sample size is 36, is drawn from a finite


population consisting of 101 units. If the population standard
deviation = 12.6, find the standard error of sample mean when
the sample is drawn (a) with the replacement (b) without
replacement.

2. The mean lifetime of a sample of 100 fluorescent light tubes


produced by a company is computed to be 1570 hours, with a
standard deviation of 120 hours. The company claims that the
average life of the tubes produced by a company is 1600
hours. Using a level of significance at 5 % level, is the claim
acceptable /

3. A sample of 400 men managers is found to have a mean height


of 171.39 cms. Can it be reasonably regarded as a sample
from a large population of men managers of mean height
171.17 cms and standard deviation of 3.30 cms ? Justify your
answer statistically.

4. Intelligence test given to a group of boys and another of girls


provided the following summarized information:
Gender Mean Score Standard Deviation Numbers
Girls 75 10 50
Boys 70 12 100
Is the difference in the mean scores of boys and girls statistically
significant ? Show clearly the steps leading to your conclusion.

5. For a population with known variance 185, a sample of 64


individuals leads to 2217 as an estimate of mean. Compute
the standard error of the mean and also construct an interval
that would include the population mean 95% of the time.
What will be the width of this interval if the sample size were
to be only 16.

6. A finite population of 1000 units has been stratified into three


groups having 200, 500 and 300 units respectively. Allocate a
sample of size 100 units proportionately to the strata. What
are the chief advantages of stratifying a population before
drawing samples ?
7. The standard deviation of the wages of 400 textile workers is
Rs. 12.8. Another sample of 600 textile workers gives the
standard deviation at Rs. 15.7. Find out if the standard
deviation of the first sample significantly differs from the
combined deviation of the two samples which is 14.

8. A factory is producing 50,000 pairs of shoes daily. From a


sample of 500 pairs, 2% were found to be sub-standard
quality. Estimate the number of pairs that can be reasonably
expected to be spoiled in the daily production and assign the
limits at 95% level of confidence.

9. A psychologist claims lady students are smarter than men


students. The IQ tests of 40 females had a mean of 131 and
Standard deviation of 15. A sample of 36 males had a mean of
122 and Standard Deviation of 15. Do the data support
psychologist’s claim ? Use the 5% level of significance.
BUSINESS STATISTICS
CHI SQUARE TEST

1. One hundred students appeared for an examination and


results were categorized as follows depending upon whether
they have received special training:
Special Training Result
Pass Fail
Yes 36 12
No 30 22
Test whether the special training was useful to the
candidates. Clearly state the steps in your analysis. (You may
use the information that the relevant table value at 5% level is
3.84).

2. A Manufacturing Limited launched a new car and then interviewed 500 people. Find out
whether people consider the new model of the car as superior in style compared to the old
model of car, using Chi-square test.
Superior Not Superior Total
New Model 280 60 340
Old Model 120 40 160
Total 400 100 500

3. Using Chi-square test, determine the incidence of accidents


caused by technically skilled and unskilled personnel.
Personnel Accidents No accidents Total
Skilled 10 90 100
Unskilled 15 65 80
Total 25 155 180

4. 2000 families of a city were selected at random to test belief


that families with higher income bought the sedan type of car
and families with lower income bought the small car. Given
the following results, use the chi-square test to find out if the
belief is true.
Income Sedan type of Small car Total
car
High 594 606 1200
Low 262 538 800
Total 856 1144 2000

5. Using chi-square analysis, determine the incidence of job


related conflicts caused by trained and untrained personnel.
Personnel Conflicts No conflicts Total
Trained 20 180 200
Untrained 30 130 160
Total 50 310 360

6. The table below shows cross classification of 500 individuals


by income level and preference for ice creams of Type A or
Type B. Test whether the two attributes are associated. Draw
suitable conclusion at 5% level. (Use table value of 9.4877).
Income Preference Total
level A Indifference B
Low 170 30 80 280
Medium 50 25 60 135
High 20 10 55 85
Total 240 65 195 500

7. The following figures show the distribution of digits in


numbers chosen at random from a telephone directory.
Digit 0 1 2 3 4 5 6 7 8 9
Frequenc 102 110 997 966 107 933 110 972 964 853
y 6 7 5 7
Test at 5% level whether the digits may be taken to occur equally
frequently in the directory. (The table value for chi-square test
for 9 degrees of freedom at 5% level of significance = 16.919).

8. A political party claims that men and women voters support it


equally. In a sample survey, out of 360 men voters, 120
favoured the party, while 170 out of 490 women preferred it.
Do the survey results support the claim ? Clearly display the
main steps in your anlysis.
Men Women Total
Support 120 170 290
Do not Support 240 320 560
Total 360 490 850
BUSINESS STATISTICS
ANALYSIS OF VARIANCE TEST – F TEST
(ONE WAY CLASSIFICATION AND TWO WAY
CLASSIFICATION TESTS)

1. The following data represent the number of units of a product


produced by 3 different workers using 3 different machines.
Workers MACHINES
X Y Z
A 8 32 20
B 28 36 38
C 6 28 14

2. A new brand of soap was introduced in some targeted shops in


4 cities. The following table gives the sales.
City Sales in thousands per month
A 24 26 29 25
B 22 21 25 14
C 21 19 23 20
D 26 28 31 28
Use Analysis of Variance to test the significance of difference
between the sales of soap in the four cities.

3. A new brand of tooth paste was introduced in some targeted


sales points in 4 metros. The following table gives the sales.
Metro cities Sales in thousands per month
P 14 16 17 16
Q 12 11 13 9
R 11 9 11 11
S 16 18 20 15
Using ANOVA, test the significance of difference between the
sales of the tooth paste in the four metro cities.

4. A company has 5 show rooms in 5 cities selling the same


model of car. The number of cars sold over 4 months is given
below. Using ANOVA, advice the company whether there is a
significant difference in the sales among the different show
rooms.
Months Show Rooms
A B C D E
Septembe 8 9 7 6 9
r
October 10 11 8 9 9
Novembe 8 10 9 11 10
r
December 7 10 8 9 9
BUSINESS STATISTICS
INDEX NUMBERS

1. Calculate Fisher’s ideal index and test for the factor reversal
test and the time reversal test for the following data:
Commodity A B C D E
Base year Price 30 32 30 31 32
Base year Quantity 95 115 120 125 125
Current year Price 22 24 25 27 28
Current year 215 220 219 222 224
Quantity

2. Calculate Fisher’s ideal index number from the following data


and prove that it satisfies the time reversal test and factor
reversal test.

Commodity Base year Base year Current Current


Price Expenditure year Price year
Expenditure
A 10 55 14 80
B 12 65 16 50
C 8 40 10 60
D 16 80 18 70
E 14 70 12 95

3. Given, the following data prices and average monthly


quantities of four items purchased by children, compute price
index for the year 2000 with the year 1995 as base by Fisher’s
Method :
ITEMS 1995 2000
Price Quantity Price Quantity
Comic 8 1 10 2
Books
Toffees 1 30 2 25
Ice Cream 5 5 6 10
Play Articles 10 1 15 1

4. Compute Fisher’s index number for prices, from the following


information.
Items Price Quantity
Base year Current Base year Current
year year
Rice 400 850 100 120
Wheat 320 690 20 60
Sugar 720 1600 10 10
Dhaal 720 2100 10 20
Interpret the results.

5. Calculate Index number based on Bowley’s method and


Fisher’s method for the following data:
Commodity 2007 2008
Price Quantity Price Quantity
A 2 8 4 6
B 5 10 6 5
C 4 14 5 10
D 2 19 2 13

6. Calculate Fisher’s ideal index from the following data and


prove that it satisfies the time reversal test and factor
reversal test:
Commoditie 2007 2008
s Price Quantity Price Quantity
P 14 70 18 95
Q 16 80 20 50
R 12 55 14 75
S 20 95 22 60
T 18 85 16 85

7. A ready made Garment Industry has worked out its seasonal


index as given below :
Quarter Seasonal Index
January to March 98
April to June 90
July to September 82
October to December 130
If the total sales of garments in the first quarter is 1,00,000,
determine how much worth of garments of this type should be
kept in stock to meet the demand in each of the remaining
quarters.

8. Calculate seasonal indices from the following data.


Year QUARTER
I II III IV
2000 68 62 61 63
2001 65 58 66 61
2002 68 63 63 67

9. Construct Laspeyre’s, Paasche’s and Fisher’s ideal index for


the following data.
Commodity Base Year Current Year
Price Quantity Price Quantity
A 2 8 4 6
B 5 10 6 5
C 4 14 5 10
D 2 19 2 13
BUSINESS STATISTICS
CORRELATION AND REGRESSION ANALYSIS
1. Calculate whether there is any correlation between the
salaries and the amount spent on car maintenance. Use Karl
Pearson’s method for correlation, determine the probable
error and the comment on the significance of correlation.
Average salary (in Rs.) 10,00 12,00 15,00 18,000 20,000
0 0 0
Maintenance (in Rs.) 750 900 1,200 1,500 2,000

2. Obtain two regression equations for the following data.


X 30 50 20 80 10 20 20 40
Y 50 80 30 110 20 20 40 50

3. For the data below on the related variables X and Y, (i) Draw
the scatter diagram (ii) Compute the co-efficient of
correlation (iii) Interpret the results.
X 110 100 140 120 80 90
Y 70 60 80 60 10 20

4. Calculate the Pearson’s co-efficient of correlation between


Advertisement Cost and the Sales as per the data given
below :
Advertisement (in ‘000 39 6 6 9 82 7 2 9 3 78
Rs.) 5 2 0 5 5 8 6
Sales (in Rs. Lakhs) 47 5 5 8 62 6 6 9 5 84
3 8 6 8 0 1 1

5. In a singing competition, 7 candidates were ranked by Judges


A and B as follows.
Candidate I II III IV V VI VII
Rank by A 3 4 5 6 1 2 7
Rank by B 2 1 7 5 3 4 6

6. Four students of a class, the regression equation of marks in


Statistics (X) on the marks in Accountancy (Y) was 3 y – 5 x +
180 = 0. The mean marks in Accountancy was 44 and the
variance of marks in Statistics was 9/16th of the variance of
marks in Accountancy. Find the mean marks of Statistics and
the co-efficient of correlation between marks in two subjects.

7. The data below show the experience (X years) of machine


operators and their performance ratings as given by the
number of good parts turned out (Y) per 100 pieces by the
operator.
Operato A B C D E F G H
r
X 16 12 18 4 3 10 5 12
Y 87 88 89 68 78 80 75 83

8. A term lending institution has the following data relating to 9


units in Textile industry.
Fixed Assets as a percentage of 65 6 6 6 6 6 7 7 7
total investment 6 7 7 8 9 1 2 3
Long term debt as a percentage 65 6 6 6 7 7 7 6 7
of total investment 6 9 7 0 1 6 6 0

9. Obtain the regression equations for the following data :


Operator A B C D E F G H
Experience in years (X) 17 13 19 5 4 1 6 1
1 4
Production in units daily (Y) 86 87 88 6 6 6 7 8
7 6 9 4 2

10. The following data gives the experience of lathe


operators in a factory and the number of units of production
turned out per day.

Lathe Operator 1 2 3 4 5 6 7
Experience in years (X) 14 10 1 2 1 8 3
6
Units of production (Y) 84 80 8 6 54 7 5
7 0 8 6
Calculate the regression lines and (i) Estimate the probable units
of production of a lathe operator with an experience of 15 years
(ii) Estimate the years of experience of a lathe operator with a
daily production of 96 units.

11. The manager of a company is interested in studying the effect


of price (X) on the sales (Y) of a new product. He has selected
four similar stores in the chain and measured demand in a two
week period at each of the four prices, Rs. 20, Rs. 30, Rs. 40
and Rs. 50. The total demand at each of these prices is given
in the following table.
Price (Rs.) 20 30 40 50
Demand (Qtty) 138 111 84 47
(a) Find the least square regression line for this problem.
(b) Find the co-efficient of determination.
12. The following data gives the work experience of machine
operators in a factory and the number of units of production
turned out per day :
Machine Operator 1 2 3 4 5 6 7 8 9
Work Experience (X) 6 8 7 5 2 1 3 9 1
0
Work Experience (Y) 50 60 5 4 2 2 4 62 7
4 7 5 0 1 0
(a) Calculate the regression lines and estimate the probable units
of production of a machine operator with an experience of 12
years.
(b) Estimate the probable years of experience of a machine
operator whose daily production is 85 units.

13. From the following data, obtain the regression equations


of X and Y and predict X, when Y = 20.
X 1 2 3 4 5 6 7 8 9
Y 9 8 10 12 11 13 14 16 15
BUSINESS STATISTICS
TREND ANALYSIS

1. Fit a straight line trend by the method of least squares to the


data given below and project the probable sales for the next
two years. A graph is not necessary.
Year 2001 2002 2003 2004 200 200
5 6
Sales (in ‘000 Rs.) 164 180 186 187 190 192

2. Calculate the trend values by the method of least squares from


the following data :
Year 2001 2002 2003 2004 2005
Values 75 68 50 67 64

3. Fit a straight line trend by the method of least squares and


plot on a graph for the following data about the sales of a
trading firm.
Year 2001 2002 2003 200 200
4 5
Sales (in lakhs of rupees) 75 90 91 95 98

4. Calculate the trend values by the method of least squares from


the data given below :
Year 2001 2002 2003 2004 2005
Value 78 72 54 70 67