QUANTITATIVE METHODS FOR BUSINESS

Paper – MC- 102

UNIT-I

2. (a) What is Bayes Theorem and discuss its expression ?

(b) Find the probability that in a random arrangement of the letters of the word ASSASSINATION, the
four Ss come consecutively ?

Ans-

(b) Total number of elements in the event space is the number of permutation of the letters of
assassination that is (13!)/(3!*4!*2!*2!*), because in assassination letter a repeated thrice, letter s
repeated four times, letter i twice and letter n twice. If we want that word that contains four S
consecutively , then let x=ssss. So there are 10 letters where letter a repeated thrice, letter i twice
and letter n twice. So permutation of this new word is (10!)/(3!*2!*2!*). We also can put x in 10
places ( 8 places in between 9 letter , left of beginning letter and right of ending letter). So
number of favorable case is (10*10!)/(3!*2!*2!*).

Now by using Classical definition of Probability we get the required probability is

(10*10!)(3!*4!*2!*2!*)/(3!*2!*2!*)(13!)=10*2/143=20/143.

3. (a) Discuss properties of binomial distribution and prove that mean of the binomial distribution is np
and standard deviation √npq.

(b) A bag contains 10 white and 6 black balls; balls are successively drawn out and not replaced. What is
the probability that they are alternately of different colours ?

(a) Binomial Distribution

The binomial distribution is, in essence, the probability distribution of the number of heads resulting
from flipping a weighted coin multiple times. It is useful for analyzing the results of repeated
independent trials, especially the probability of meeting a particular threshold given a specific error rate,
and thus has applications to risk management. For this reason, the binomial distribution is also
important in determining statistical significance.

Properties of the Binomial Distribution

  The mean, or expected value, of a distribution gives useful information about what average one
would expect from a large number of repeated trials.
 The median of a distribution is another measure of central tendency, useful when the distribution
contains outliers (i.e. particularly large/small values) that make the mean misleading.
 The mode of a distribution is the value that has the highest probability of occurring.
 The variance of a distribution measures how "spread out" the data is. Related is the standard
deviation, the square root of the variance, useful due to being in the same units as the data.

Three of these values--the mean, mode, and variance--are generally calculable for a binomial
distribution. The median, however, is not generally determined.

mean of the binomial distribution is np

The mean of a binomial distribution is intuitive:

In other words, if an unfair coin that flips heads with probability ppp is flipped nnn times, the expected
result would be npnpnp heads.

standard deviation √npq.

For a Binomial- distribution b (n, p ) , the probability of x success in n trials is given by:

P( X = x ) = C(n, x)(p^x) (q^(n-x) ) ; x = 0,1,2,··· ·· n

and q = 1 - p .

To find s.d. of the Binomial- distribution, let us first find its mean. For that, we have,

mean = (μ1)’ = E(X) = Sum[ x C(n,x)p^x (q^(n-x)] where the sum is taken over x ,from x = 0 to
n . Note that after simplification r.h.s.

= np[q + p]^(n-1) = np (as q+p=1 ). Thus (μ1)’ = np . Similarly find,

(μ2)’ = E(X^2) = Sum[ x^2 C(n,x) p^x (q^(n-x) )]

= npq + (np)^2 .

Therefore the variance(μ2) of the distribution is ;

μ2 = (μ2)’ - {(μ1)’}^2 = npq + (np)^2 - (np)^2

= npq

Hence s.d. = √μ2 =√npq .

(b) They are two ways of picking balls of alternating colours. You could draw WBWB or BWBW.

The probability of picking WBWB is (10/16)x(6/15)x(9/14)x(5/13) and of picking BWBW is

(6/16)x(10/15)x(5/14)x(9/13).

Both probabilities are equal to 2700/4368 or 45/728.

Therefore 45/728+45/728 = 45/364.

This is equal to about a 12.36% chance of picking balls of alternating colours.

UNIT-III
7. (a) What do you mean by analysis of variance? Explain the technique of analysis of variance for two
way classification of data.

b) Two samples are drawn from two normal populations. From the following data test whether
the two samples have the same variance at 5% level.
Sample 1 : 60 65 71 74 76 82 85 87
Sample 2 : 61 66 67 85 78 63 85 86 88 91

Ans-(a) Analysis of variance

Analysis of variance (ANOVA) is a collection of statistical models and their associated estimation
procedures (such as the "variation" among and between groups) used to analyze the differences among
group means in a sample. ANOVA was developed by statistician and evolutionary biologist Ronald
Fisher. The ANOVA is based on the law of total variance, where the observed variance in a particular
variable is partitioned into components attributable to different sources of variation. In its simplest
form, ANOVA provides a statistical test of whether two or more population means are equal, and
therefore generalizes the t-test beyond two means.

the technique of analysis of variance for two way classification of data.

In statistics, the two-way analysis of variance (ANOVA) is an extension of the one-way ANOVA that
examines the influence of two different categorical independent variables on one continuous dependent
variable. The two-way ANOVA not only aims at assessing the main effect of each independent variable
but also if there is any interaction between them.

Two-way ANOVA technique is used when the data are classified on the basis of two factors. For
example, the agricultural output may be classified on the basis of different varieties of seeds and also on
the basis of different varieties of fertilizers used. A business firm may have its sales data classified on the
basis of different salesmen and also on the basis of sales in different regions. In a factory, the various
units of a product produced during a certain period may be classified on the basis of different varieties
of machines used and also on the basis of different grades of labour. Such a two-way design may have
repeated measurements of each factor or may not have repeated values. The ANOVA technique is little
different in case of repeated measurements where we also compute the interaction variation.

(b)