NAME

ROLL NO.
DRIVE
PROGRAM
SEMESTER
SUBJECT CODE &
NAME
CREDITS
MARKS
1.

Sourav Biswas
1311005099
WINTER 2013
MBAN2
2nd
STATISTICS FOR MANAGEMENT

4
60

Distinguish between Classification and Tabulation. Explain the structure and

components of a Table with an example.

Meaning of Classification and Tabulation

Differences between Classification and Tabulation
Structure and Components of a Table with an example

Classification is a process of arranging things or data in groups or classes according to

their resemblances and affinities
Definition of classification
According to Secrist, Classification is the process of arranging data into sequences and groups
according to their common characteristics or separating them into different but related parts.
According to Stockton and Clark, The process of grouping large number of individual facts and
observations, on the basis of similarity among the items is called Classification.
Tabulation follows classification.
It is a logical or systematic listing of related data in rows and columns. The row of a table represents the
horizontal arrangement of data and column represents the vertical arrangement of data. The presentation
of data in tables should be simple, systematic and unambiguous.
The objectives of tabulation are to:
Simplify complex data
Highlight important characteristics
Present data in minimum space
Facilitate comparison
Bring out trends and tendencies
Facilitate further analysis

 Differences between Classification and Tabulation

Classification
It is the basis for tabulation
It is the basis for simplification
Data is divided into groups and subgroups
on the basis of similarities and dissimilarities.

Tabulation
It is the basis for further analysis
It is the basis for presentation
Data is listed according to a logical sequence of
related characteristics

Structure and Components of a Table with an example

Departme
nt
Accounts
Finance
Personal
Production
Marketing
Total

Age(20-40)
(40and avobe)
2.564
2.564
3.846
2.564
1.282
12.920

1.282
1.795
1.282
2.051
1.795
8.205

Table number
Table number is to identify the table for reference. When there are many tables in an analysis, then table
numbers are helpful in identifying the tables.
Tab 2: Title
Title indicates the scope and the nature of contents in a concise form. In other words, title of a table gives
information about the data contained in the body of the table. Title should not be lengthy.
Tab 3 and Tab 4: Captions
Captions are the headings and subheadings describing the data present in the columns.
Tab 5 and Tab 6: Stubs
Stubs are the headings and subheadings of rows.
Tab 7: Body of the table
Body of the table contains numerical information.
Tab 8: Totals

The sub-totals for each separate classification and a general total for all combined classes should be given
at the bottom or right side of the figures whose totals are taken. Ruling and spacing separate columns and
rows. However, totals are separated from main body by thick lines.
Tab 9: Head note
Head note is given below the title of the table to indicate the units of measurement of the data and is
enclosed in brackets.
Tab 10: Source note
Source note indicates the source from which data is taken. The source note related to table is placed at the
bottom on the left hand corner.

2. a) Describe the characteristics of Normal probability distribution.

b) In a sample of 120 workers in a factory, the mean and standard deviation of wages were
Rs. 11.35 and Rs.3.03 respectively. Find the percentage of workers getting wages between
Rs.9 and Rs.17 in the whole factory assuming that the wages are normally distributed.
Characteristics of Normal probability distribution
Formula/Computation/Solution to the problem
Ans:
A) The characteristics of Normal probability distribution.
A probability distribution which has the following probability density function (p.d.f) is called Normal
distribution.
1. Normal distribution is a Continuous probability distribution
2. Its probability density function is given by:
F(x)=
3. Its mean is

<x< , >0, < <

and standard deviation is , where

and

4. It is a bell-shaped curve and is symmetric about its mean,

are the parameters of the distribution

a. It is symmetrical (Non-skew). That is 1 = 0

b. The mean, median and mode are equal
5. The Mean divides the curve into two equal portions
6. Its quartile deviation, Q.D. = 2/3
7. Its mean deviation, M.D.

4/5

8. The X axis is an asymptote to the curve

[ Asymptote is a straight line that touches the curve at infinity]
9. The point of inflexion occurs at
10. It is a unimodal distribution
11. Mean, Median and Mode coincide
12. The area under normal curve within certain limits

b)X is a normal variant with parameter , = 11.35 and

therefore ,Z= X-

= 3.03

= (X- 11.35)/3.03

P(9 X 17)= (9-11.35

3.03
= (-0.775

17-11.35)
3.03

1.864)

= P (-0.775 to 0) + P( 0 to 1.864)
= .2580 + .4641
=0.7221

3 a) The procedure of testing hypothesis requires a researcher to adopt several steps.

Describe in brief all such steps.
b) Distinguish between:
i. Stratified random sampling and Systematic sampling
ii. Judgement sampling and Convenience sampling

Hypothesis testing procedure

Differences
Ans:

a) The procedure of testing hypothesis requires a researcher to adopt several steps.

Having calculated appropriate z-statistic or t-statistic, to reject or accept the null hypothesis, it is
necessary to identify the rejection region with reference to the given level of significance. If the
calculated statistic is in the rejection region, we accept the alternative hypothesis against the null
hypothesis at that level of significance. Otherwise, we accept null hypothesis at given level
of significance.

Kinds of Tests
Kind of test z- statistic t- statistic
Two tail test R: |z| > |ztable| R: |t| > |ttable|
Lower tail test R: z < ztable R: t < ttable
Upper tail test R: z > ztable R: t > ttable

b) Distinguish between:
i. Stratified random sampling and Systematic sampling:

Stratified random sampling- This sampling design is most appropriate if the population is
heterogeneous with respect to characteristic under study or the population distribution is

highly skewed. We subdivide the population into several groups or strata such that:
i) Units within each stratum is more homogeneous
ii) Units between strata are heterogeneous
iii) Strata do not overlap, in other words, every unit of the population belongs to one and only one stratum

Systematic sampling:- This design is recommended if we have a complete list of sampling

units arranged in some systematic order such as geographical, chronological or alphabetical order.

Suppose the population size is N. The population units are serially numbered 1 to N in some
systematic order and we wish to draw a sample of n units. Then we divide units from 1 to N into K
groups such that each group has n units.

ii. Judgement sampling and Convenience sampling

Judgement sampling

Convenience sampling

1. Your judgement as the researcher is used

here as to who is representative of the
population. This of course depends on the
nature of the research. Market researchers
might judge a particular town centre
shopping centre to be representative of
their target market.
2. The researcher chooses the sample based
on who they think would be appropriate for
the study. This is used primarily when there
is a limited number of people that have
expertise in the area being researched.

1.Just as it sounds, the sample is selected from the

population as they are convenient to the researcher
e.g. workplace colleagues or households in the
neighborhood. A researcher wishing to ask small
businesses about internet development may ask the
Chamber of Commerce for a list of small
businesses in the area where he or she lives etc. A
concern here is whether representativeness is
achieved using this sampling method. However,
there are situations where this is the only approach
possible.
2. members of the population are chosen based on
their relative ease of access. To sample friends, coworkers, or shoppers at a single mall, are all
examples of convenience sampling. Such samples
are biased because researchers may unconsciously
approach some kinds of respondents and avoid
others (Lucas 2013), and respondents who
volunteer for a study may differ in unknown but
important ways from others (Wiederman 1999).

4 a) What is regression analysis? How does it differ from correlation analysis?

b) Calculate Karl Pearsons coefficient of correlation between X series and Y series.
X
Y

110
12

120
18

130
20

120
15

140
25

135
30

155
35

160
20

165
25

155
10

Ans: a)
Regression analysis:- Correlation analysis attempts to study the relationship between the two
variables X and Y. In regression, it is attempted to quantify the dependence of one variable on
the other.

Correlation analysis:- Two or more variables move in sympathy with the other, then they are
said to be correlated. If both variables move in the same direction, then they are said to be positively
correlated. If the variables move in the opposite direction, then they are said to be negatively correlated. If
they move haphazardly, then there is no correlation between them.

 Difference between the Regression & Correlation analysis:Regression analysis

Correlation analysis

1) Regression analysis involves

identifying the relationship
between a dependent
variable and one or more
independent variables. A
model of the relationship is
hypothesized, and estimates
of the parameter values are
used to develop an estimated
regression equation. Various
tests are then employed to
determine if the model is
satisfactory. If the model is
deemed satisfactory, the
estimated regression
equation can be used to
predict the value of the
dependent variable given
values for the independent
variables.

1) Correlation and regression

analysis are related in the
sense that both deal with
relationships among
variables. The correlation
coefficient is a measure of
linear association between
two variables. Values of the
correlation coefficient are
always between -1 and +1.
A correlation coefficient of
+1 indicates that two
variables are perfectly
related in a positive linear
sense, a correlation
coefficient of -1 indicates
that two variables are
perfectly related in a
negative linear sense, and a
correlation coefficient of 0
indicates that there is no
linear relationship between
the two variables

Karl Pearsons coefficient of correlation between X series and Y series.

X
Y

110
12

X
110
120
130
120
140
135
155
160
165
155
X=1390

120
18

130
20

Y
12
18
20
15
25
30
35
20
25
10
Y=210

120
15

XY
1320
2160
2600
1800
3500
4050
5425
3200
4125
1550
XY=29,730

140
25

135
30

155
35

X2
12100
14400
16900
1440
19600
18225
24025
25600
27225
24025
X2=1,96,5000

160
20

Y2
144
324
400
225
625
900
1225
400
625
100
Y2=4968

165
25

155
10

Karl Pearsons coefficient of correlation= N XY - X Y

N X2-(X)2 N Y2 ( Y)2

= 10* 29730 -(1390)(4968)

10*196500 (1390)2 10*4968 (210)2
=
5400
181.38* 74.699

= 0.3985

5. Briefly explain the methods and theories of Business forecasting.

Meaning of Business forecasting
Methods of Business forecasting
Theories of Business forecasting
Ans:

Meaning of Business forecasting:- Business forecasting refers to the analysis of past and
present economic conditions with the object of drawing inferences about probable future business
conditions. The process of making definite estimates of future course of events is referred to as
forecasting and the figure or statements obtained from the process is known as forecast; future
course of events is rarely known.

Methods of Business forecasting:The following are the main methods of business forecasting.
1. Business barometers
2. Time series analysis
3. Extrapolation
4. Regression analysis
5. Modern econometric methods
6. Exponential smoothing method

Business Barometers

As business indices are the indicators of future conditions, they are also known as business
barometers or economic barometers.

Time series analysis

Time series analysis is also used for the purpose of making business forecasting.

Extrapolation

Extrapolation is the simplest method of business forecasting. By extrapolation, a businessman

finds out the possible trend of demand of his goods and also about the future price trends.

Regression analysis

The regression approach offers many valuable contributions to the solution of the forecasting
problem. It is the means by which we select from among the many possible relationships between
variables in a complex economy, which will be useful for forecasting.

Modern econometric methods

Econometric techniques, which originated in the eighteenth century, have recently gained
popularity for forecasting. Econometrics refers to the application of mathematical economic theories and
statistical procedures to economic data to verify economic theorems.

Exponential smoothing method

This method is regarded as the best method of business forecasting as compared to other
methods. Exponential smoothing is a special kind of increasing exponential weighted average assigned to
recent observation data and is found extremely useful in short-term forecasting of inventories and sales.

Theories of Business forecasting:There are a few theories that are followed while making business forecasts.
Some of them are:
1. Sequence or time-lag theory
2. Action and reaction theory
3. Economic rhythm theory
4. Specific historical analogy
5. Cross-cut analysis theory

Sequence or time-lag theory

This is the most important theory of business forecasting.

Action and reaction theory

This theory is based on the following two assumptions.
1. Every action has a reaction
2. Magnitude of the original action influences the reaction ,When the price of rice
goes above a certain level in a certain period, there is a likelihood that after some
time it will go down below the normal level.
Economic Rhythm Theory

The basic assumption of this theory is that history repeats itself and hence assumes that all
economic and business events behave in a rhythmic order. According to this theory, the speed and time of
all business cycles are more or less the same and by using statistical and mathematical methods, a trend is
obtained which will represent a long term tendency of growth or decline.

Specific historical analogy

History repeats itself is the main foundation of this theory. If conditions are the same, whatever
happened in the past under a set of circumstances is likely to happen in future also.

6. Construct Fishers Ideal Index for the given information and check whether
Fishers formula satisfies Time Reversal and Factor Reversal Tests.
Items
P0
Q0
P1
A
16
5
20
B
12
10
18
C
14
8
16
D
20
6
22
E
80
3
90
F
40
2
50
Formula of Fishers Ideal Index

Q1
6
12
10
10
5
5

Computation of Fishers Ideal Index

Fishers formula satisfies Time Reversal Test
Fishers formula satisfies Factor Reversal Test
Ans:
Formula of Fishers Ideal Index:FP01=

P1Q0 *

P1 Q1)

( P0 Q0 *

P0 Q1)

Computation of Fishers Ideal Index:Items

A
B
C
D
E
F

P0
16
12
14
20
80
40

Q0
5
10
8
6
3
2

P1
20
18
16
22
90
50

Q1
6
12
10
10
5
5

P1Q0

100
180
128
132
270
100
P1Q0 =910

P1 Q1
120
216
160
220
450
250
P1 Q1=1416

P0 Q0
80
120
112
120
240
80
P0 Q0=752

P0 Q1
96
144
140
200
400
200
P0 Q1=1180

FP01=

P1Q0 *

P1 Q1)

( P0 Q0 *

P0 Q1)

910 *1416

= 1.4521 = 1.20504

752 * 1180

Fishers formula satisfies Time Reversal Test

This test requires the formula for calculating the index number that should
be such that it will give the same ratio between one period of comparison
and the other. Symbolically, P01 * P 10 =1
P 10 =

P0 Q1 *

( P1 Q1 *

P0 Q0) =

1180 * 752

P1 Q0)

1416 * 910

=0.8298
So, P01 * P 10 = 1.20504 * 0.8298 = 0.99995

Fishers formula satisfies Factor Reversal Test:P01

Q01 =

Q01=

P1 Q1/

P0 Q1 * P1 Q1 )

( P0 Q0 *
P01

P0 Q0

P1 Q0)

1180 * 1416
752 * 910

Q01= 1.20504 * 1.56258 =1.8829

P1 Q1
= 1416/ 752 = 1.8829
P0 Q0

= 1.56258

= 941.99/1135.147

So, P01

Q01 =

P1 Q1/

P0 Q0 (Proved)