Assignment N0.

1
MATH - 505 Business Maths & Stats
(MBA 2K14 A & B)

PROBLEM 1:
a.) A storeowner kept a tally of the sizes of suits purchased in her store. Which measure of
central tendency should the storeowner use to describe the average size suit sold?
ANSWER: MODE

b.) A tally was made of the number of times each color of crayon was used by a kindergarten
class. Which measure of central tendency should the teacher use to determine which color is the
favorite color of her class?
ANSWER: MODE, BECAUSE REPETION OF COLOR WILL BE THE MOST FAVIOURITE
COLOR BY CLASS.

c.) The science test grades are posted. The class did very well. All students taking the test
scored over 75. Unfortunately, 4 students were absent for the test and the computer listed their
scores as 0 until the test is taken. Assuming that no score repeated more times than the 0's, what
measure of central tendency would most likely give the best representation of this data?
ANSWER: 75, 76, 77, 78, 79 I WILL USE MEDIAN BECAUSE MEDIAN TELLS US THE
MOST CENTRAL VALUE OF DATA.

PROBLEM 2:
There are three different basketball teams and each has played five games. You have each team's
score from each of its games.
Jaguars
Wolves
Lions

Game 1
67
85
32

Game 2
87
90
101

Game 3
54
44
65

Game 4
99
80
88

Game 5
78
46
55

ANSWER:
JAGUARS 54, 67, 78, 87, 99
101

WOLVES 44, 46, 80, 85, 90

LIONS 32, 55, 65, 88,

A.M = Sum of all values / no of values

MEAN OF JAGUARS = 77, MEAN OF WOLVES = 69, MEAN OF LIONS = 68.2

1.) Suppose you want to join one of the three basketball teams. You want to join the one that is
doing the best so far. If you rank each team by their mean scores, which team would you join?
ANSWER: I WILL CHOOSE JAGUARS BECAUSE OF HIGHER SCORE.

2.) Instead of using mean scores, you use the median score of each team to make your decision.
Which team do you join?
ANSWER:
JAGUARS 54, 67, 78, 87, 99
101

WOLVES 44, 46, 80, 85, 90

LIONS 32, 55, 65, 88,

MEDIAN IS THE MOST CENTRA VALUE. FOR UNGROUP DATA, WE WILL USE FORMULA
AS MENTION BELOW,
MEDIAN= (n+1)/2 th item, Calculations as follows
MEDIAN OF JAGUARS = (5+1)/2 th item = 3th item = 78
MEDIAN OF WOLVES = (5+1)/2 th item = 3th item = 80
MEDIAN OF JAGUARS = (5+1)/2 th item = 3th item = 65
RESULT: I WILL CHOOSE WOLVES BECAUSE OF HIGHER SCORE.

3.) Pretend you are the coach of the Lions and you were being interviewed about your team for
the local newspaper. Would it be better for you to report your mean score or your median score?
ANSWER: WE USE MEASURE OF CENTRAL TEDENCY ACCORDING TO SITUATION.
THE MEDIAN IS THE MOST CENTRAL VALUE WHILE MEAN IS ALWAYS AVG VALUE OF
DATA (DATA IN SYMMMETRIC FORM).
IN THIS,THE MOST CENTRAL VALUE (MEDIAN) IS GREATER THEN AVG (MEAN), SO I
WILL USE MEDIAN SCORE.

PROBLEM 3:
You have four 10 km segments to your automobile trip. You drive your car:

100 km/hr for the first 10 km

110 km/hr for the second 10 km

90 km/hr for the third 10 km

120 km/hr for the fourth 10 km. What is harmonic mean speed?

ANSWER:
1ST 10 KM

2ND 10 KM

1OO KM/H

110 KM/H

3RD 10 KM

4RTH 10 KM

9O KM/H

12O KM/H

DATA IS UNGROUP SO WE WILL USE BELOW MENTIONN FORMULA FO SOLUTION

H.M = n / (1/n)
= 4 / (1/100 + 1/110 + 1/90 + 1/120)
= 4/0.03853
= 103.81

PROBLEM 4:
Given the following frequency distribution of first year students of a particular college. Calculate
the Harmonic Mean.
Age (Years)
Number of Students

13
2

14
5

15
13

16
7

17
3

ANSWER:
DATA IS in GROUP FORM SO WE WILL USE ABOVE MENTIONN FORMULA FO
SOLUTION
H.M = f / (f / n)
= 2+5+13+7+3 / (2 / 13 + 5/ 14 + 13/15 + 7 /16 + 3/17)
= 30 / 1.99
= 15.15

PROBLEM 5:
Your investment earns 20% during the first year, but then realizes a loss of 10% in year 2, and
another 10% in year 3.
a) Calculate the arithmetic mean for the average rate of return?
ANSWER:
A.M = Sum of all values / No of values

= 20 % + (- 10%) + (- 10%) / 4 = 0

b) Calculate the geometric mean rate of return?

ANSWER: FOR G.M RATE OF RETURN, FOLLOWING FORMULA WILL BE USED FOR
CALCULATION,
1+ R (G) =

R (G) =
=

[ 1+ R(1)][1+ R(2)][1+ R(T )]

[1+ R(1)][1+ R(2)][1+ R(T )]

3 [1+ 20 ][ 110 ][110 ]

3 [ 1.20 ][0.90][0,90]

3 0.972

-1

-1

-1

-1

= 0.9905 1
= - 0.009421
= 0.9421 (-VE SIGN IS SHOWING LOSS)

c) Which of the two averages is accurate?

ANSWER: WE WILL USE G.M (Rate of Return) BECAUSE THIS IS SHOWING THE TRUE
PICTURE OF DATA.

PROBLEM 6:
Sales data for drug X for a small drug manufacturer is shown below.
Year
2002
2003
2004
2005
Cases
12500
13250
14310
15741

2006
17630

a) Calculate the percent increase from the previous in sales for years 2003, 2004, 2005 and 2006
ANSWER:
FOR
FOR
FOR
FOR
FOR

2003,
2003 =
2003 =
2003 =
2003 =

VALUE OF 2003 VALUE OF 2002 / VALUE OF 2002

13250 12500 /12500
0.06
6%

FOR
FOR
FOR
FOR
FOR

2004,
2004 =
2004 =
2004 =
2004 =

VALUE OF 2004 VALUE OF 2003 / VALUE OF 2003

14310 13250 /13250
0.08
8%

FOR
FOR
FOR
FOR
FOR

2005,
2005 =
2005 =
2005 =
2005 =

VALUE OF 2005 VALUE OF 2004 / VALUE OF 2004

15741 14310 /14310
0.10
10 %

FOR
FOR
FOR
FOR
FOR

2006,
2006 =
2006 =
2006 =
2006 =

VALUE OF 2006 VALUE OF 2005 / VALUE OF 2005

17630 15741 /15741
0.12
12 %

b) Using the percentage numbers from above, calculate the arithmetic average percentage
increase.
ANSWER:
A.M = 6% + 8% + 10% + 12% / 4
A.M = 9%

c) Calculate the geometric mean rate of increase using numbers in a)

ANSWER:
G.M = Antilog [ log x / n]
FOR 2003 = Log 6 = 0.7781
FOR 2005 = Log 10 = 1

FOR 2004 = Log 8 = 0.9030

FOR 2006 = Log 12 = 1.0791

G.M = Antilog [ (0.7771 + 0.9030 + 1 + 1.0791 / 4]

G.M = Antilog (0.9400)
G.M = 8.71%

d) Project sales for the year 2009 using the geometric mean rate of increase calculated in c)
ANSWER:
FOR 2006 = 17630
FOR 2007 = 17630 * 8.711% = 1535.74
FOR 2007 = 17630 + 1535.74 = 19165.74

FOR 2007 = 19165.74

FOR 2008 = 19165.74 * 8.711% = 1669.33
FOR 2008 = 19165.74 + 1669.33 = 20835.07
FOR 2008 = 20835.07
FOR 2009 = 20835.07* 8.711% = 1814.94
FOR 2009 = 20835.07+ 1814.94 = 22650.01
FOR 2009 = 22650.01