ASSIGNMENT STATISTICS FOR MANAGEMENT MB0040

ASSIGNMENT
STATISTICS FOR MANAGEMENT

REG NO NAME COURSE SEMESTER SUBJECT CODE SUBJECT NAME SET NO

: : : : : : : MOHAMMED THOUFEEQ MBA FIRST SEMISTER MB 0040 STATISTICS FOR MANAGEMENT 1&2

ASSIGNMENT SET - 1
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Q.1 (a) What is the difference between qualitative & quantitative variable?
Qualitative variables are based on qualitative aspect or descriptive characteristics of a phenomenon viz. sex, beauty, literacy, honesty, intelligence, religion, eye-sight etc. Such variables are usually dichotomous in nature in which the whole data are divided into two groups viz. a group with presence of the attribute and a group with absence of the attribute such as blind and not blind, deaf and not deaf etc. However in certain cases variables can also be made in manifold manner in which the data are grouped under more than two classes. This type of classification is made when the qualitative aspect are defined by some grade or performance. For instance, in the field of education, the classification can be made in to different group viz. primary, secondary, higher secondary, and higher education. Similarly on the basis of eye sight, the data may be grouped under different grades of eye-sight viz. A, B, C, etc. Further, qualitative classifications are made in made manner when more than on e attribute are taken into consideration at a time, the classification will lead to a type of manifold classification. Quantitative variables are numerical in nature. In simple these variables can be measured in quantitative terms. For example- mark, income, expenditure, profit, loss, height, weight, age, price, production etc. which is capable of quantitative expression and measurement. Quantitative variables may be defined as a characteristic which varies in amount of magnitude under different time and place e.g. mark, age, and height etc. These variables can be of two types viz. a) discrete variables, b) Continuous variables. A variable that assumes only some specified values in a given range is known as discrete variable. A variable that assumes all the values in the series is known as continuous variables.

ASSIGNMENT STATISTICS FOR MANAGEMENT MB0040

Q.1 (b) A town has 15 neighborhoods. If you interviewed everyone

living in one particular neighborhood, would you be interviewing a population or a sample from the town? Would this be a random sample? If you had a list of everyone living in the town, called a frame, and you randomly selected 100 people from all neighborhoods, would this a random sample?
Before answering this question we need to know what population is and what a sample is. The totality of all individual in a survey is called population or universe. If the number of objects in a population is finite then it is called finite population otherwise it is known as infinite population. A sample is a part or subset of the population. By studying the sample, we can predict the characteristics of the entire population from where the sample is taken. The data that describes the characteristics of sample is known as statistics. Now if we interview only one particular neighborhood then it would be a sample survey not a population survey. Because here we interviewed every individuals of a particular group not the whole population. But by selecting 100 people from all neighborhoods for a survey would be called as a random sample.

Q.2. (a) Explain the steps involved in planning of statistical survey?

Stages in a statistical survey a). Nature of the problem to be investigated should be clearly defined in an unambiguous manner. b). Objectives of investigation should be stated at the outset. Objectives could be Obtain certain estimates. Establish a theory. Verify an existing statement. Find relationship between characteristics c). The scope of investigation has to be made clear. The scope of the investigation refers to the area to be covered, identification of units to be studied, nature of characteristics to be observed, accuracy of measurement, analytical method, time cost and other resources required.

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d). Whether to use data collected from primary sources or secondary sources should be determined in advanced. e). The organization of investigation is the final step. It encompasses the determination of investigator required, training, supervision work, funds required.

Q.2(b) What are the merits & Demerits of Direct personal observation and Indirect Oral Interview?
Direct personal observation: In the direct personal observation method, the investigator collects data by direct contact with the units of investigation. The accuracy of data depends upon ability, training, and attitude of the investigator. Merits We get the original data which is more accurate and reliable.
Satisfactory information can be extracted through indirect questions.

Data is homogenous and comparable. Additional information can be gathered. Misinterpretation of question can be avoided. Demerits This method consumes more cost. This method costs more time. This cannot be used when the scope of the investigation is wide.

Indirect oral interview: Indirect oral interview is used when the area to be covered is large. The investigator collects the data from a third party or witness or had of the institution. This method is generally used by police department in cases related to enquiries on causes of fires, theft or murders. Merits Economical in terms of time, cost and man power. Confidential information can be collected. Information is likely to be unbiased and reliable. Demerits -

ASSIGNMENT STATISTICS FOR MANAGEMENT MB0040

The degree of accuracy of information is less.

Q.3. (a) Draw Ogives from the following data and measure the median value. Verify it by actual calculations.
Central size Frequency 5 5 15 11 25 21 35 16 45 10

Central Value 5 15 25 35 45 Total

Limits 0-10 10-20 20-30 30-40 40-50

Frequency 5 11 21 16 10 63 10 20 30 40 50

Less than 5 16 37 53 63 0 10 20 30 40

Greater than 63 58 47 26 10

Now from the meeting points of these two ogives if we draw a perpendicular to the X axis, the point where it meets X axis gives median of the series. So here midpoint of 20-30 limit is 25. So median is 25. By actual calculation Here n=63, hence median is (N+1)/2th item which is (63+1)/2=32nd item =25. So ogive median and actual median are same.

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Q.3. (b) Complete the following distribution, if its Median is 2,600 and compute the value of Arithmetic Mean.
Size
Frequency

10001500 120

15002000 ?

20002500 400

25003000 500

30004000 ?

40005000 50

50006000 20

Total 1500

Size 1000-1500 1500-2000 2000-2500 2500-3000 3000-4000 4000-5000 5000-6000

f 120 f1 400 500 410-f1* 50 20

cf 120 120+f1 520+f1 1020+f1 1430 1480 1500 N=1500(given)

*N = 1500 - (120+400+500+50+20) - f1Median = (N)th item , 1500/2=750th item ,but median is 2600 (given) This lies between 2500-3000 groups Now M= L1 + L2-L1 (m-c) F 2600= 2500+ 3000-2500/500 *(750-(520+f1)) = >2600 = 2500+ 500/500* (750-520-f1) = >2600 = 2500- 230-f1 = >2600-2500= 320-f1 = > 100= 320- f1 = > f1 =130 Then f2 = 410-130=280

ASSIGNMENT STATISTICS FOR MANAGEMENT MB0040

Ci 1000-1500 1500-2000 2000-2500 2500-3000 3000-4000 4000-5000 5000-6000 1500

f 120 130 400 500 280 50 20

m 1250 1750 2250 2750 3500 4500 5500 fm =

fm 150000 227500 900000 1375000 980000 225000 110000 3967500

X= fm = 3967500 f =3967500/1500 = 2645 (ans)

Q.4.(a) What is the main difference between correlation analysis and regression analysis?

Correlation analysis: When two or more variables move in sympathy with other, 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 opposite direction then they are said to be negatively correlated. If they move haphazardly then there is no correlation between them. Regression analysis: Regression analysis is used to estimate the values of the dependent variables from the values of the independent variables. Regression analysis is used to get measure of the error involved while using the regression line as a basis for estimation. Regression coefficient is used to calculate correlation coefficient. The main difference between these two is: - correlation analysis attempts to study the relationship between the variable X and Y. Regression analysis attempts to predict the average X for a given Y. It is attempted to quantify the dependence of one variable on the other.
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Difference between regression coefficient and correlation coefficient Correlation coefficient The correlation coefficients, rxy = ryx. It indirectly helps in estimation. It has no units attached to it. There exists nonsense correlation. It is not based on cause and effect relationship. Regression Coefficient The regression coefficients, byx = bxy It is meant for estimation. It has units attached to it. There is no such nonsense correlation. It is based on cause and effect relationship.

Q.4.(b) In Multiple regressions analysis is an extension of two variable regression analyses. In this analysis, two or more independent variables are used to estimate the values of a dependent variable, instead of one independent variable.
In Multiple regressions analysis is an extension of two variable regression analyses. In this analysis, two or more independent variables are used to estimate the values of a dependent variable, instead of one independent variable. Objectives of multiple regression analysis are To derive an equation, this provides estimates of the dependent variable from values of the two or more independent variables? To obtain the measure of the error involved in using the regression equation as a basis of estimation. To obtain a measure of the proportion of variance in the dependent variable accounted for or explained by the independent variables. In the given question N=12, hence degree of freedom will be v=n-1, where n is the sample size. So the degree of freedom will be 12-1=11

Q.5 (a) Discuss what is meant by Quality control and improvement.

Quality control - is defined as the part of quality management focused on fulfilling quality requirements. Ideally, prevention based controls should prevent problems from occurring, but in reality, no system is foolproof and problems do

ASSIGNMENT STATISTICS FOR MANAGEMENT MB0040

occur. Accordingly, controls to detect quality problems must be established so that customers receive only products that meet their requirements. ISO 9000 Lead Auditor Training Detection based controls are reactive the problem and cost have already occurred and the company is resorting to damage control. The intent of detection is to evaluate output from processes and activities by implementing controls to catch problems when they do occur. For example, final inspection to catch defective product before it gets shipped. Quality Improvement is defined as the part of quality management focused on increasing the ability to fulfill requirements. Continual improvement results from ongoing actions taken to enhance product characteristics or increase process effectiveness and efficiency. This is one of the key characteristics that differentiate a quality management system from a quality assurance system, i.e., being able to improve the effectiveness and efficiency and of a process or activity by setting measurable objectives and using performance data to manage the achievement of these objectives. Effectiveness is defined as the extent to which planned activities are realized and planned results are achieved. In determining the effectiveness of quality assurance and quality improvement activities, the following questions should be asked: To what extent have problems in product or processes been prevented? To what extent have planned objectives for quality been met? Efficiency is defined as the relationship between result achieved and resources used. The measure of efficiency is determined by asking the following: Can we get the same output using fewer resources? Can we get more output without adding resources? These questions may be applied to the output of any activity within the quality management system of an organization. It should be noted that ISO 9001 requires organizations to achieve QMS effectiveness through quality assurance and continual improvement activities. QMS efficiency is desirable, but not currently required by ISO 9001. ISO 9004 provides guidelines that consider both the effectiveness and efficiency of the QMS.

ASSIGNMENT STATISTICS FOR MANAGEMENT MB0040

Quality improvement actions may include Measuring and analyzing situations Establishing improvement objectives Searching for possible solutions Evaluating these solutions Implementing the selected solution Measuring, verifying, and analyzing results Formalizing the changes

Q.5. (b)

What are the limitations of a quality control charts?

Ans.: The quality control chart is based on the research of Villefredo Pareto. He found that approximately 80 percent of all wealth of Italian cities he researched was held by only 20 percent of the families. The Pareto principle has been found to apply in other areas, from economics to quality control. Pareto charts have several disadvantages, however. Easy to Make but Difficult to Troubleshoot Based on the Pareto principle, any process improvement should focus on the 20 percent of issues that cause the majority of problems in order to have the greatest impact. However, one of the disadvantages of Pareto charts is that they provide no insight on the root causes. For example, a Pareto chart will demonstrate that half of all problems occur in shipping and receiving. Failure Modes Effect Analysis, Statistical Process Control charts, run charts and cause-and-effect charts are needed to determine the most basic reasons that the major issues identified by the Pareto chart are occurring. Multiple Pareto Charts May Be Needed
Pareto charts can show where the major problems are occurring.

However, one chart may not be enough. To trace the cause for the errors to its source, lower levels of Pareto charts may be needed. If mistakes are occurring in shipping and receiving, further analysis and more charts are

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needed to show that the biggest contributor is in order-taking or labelprinting. Another disadvantage of Pareto charts is that as more are created with finer detail, it is also possible to lose sight of these causes in comparison to each other. The top 20 percent of root causes in a Pareto analysis two to three layers down from the original Pareto chart must also be compared to each other so that targeted fix will have greatest impact. Qualitative Data versus Quantitative Data Pareto charts can only show qualitative data that can be observed. It merely shows the frequency of an attribute or measurement. One disadvantage of generating Pareto charts is that they cannot be used to calculate the average of the data, its variability or changes in the measured attribute over time. It cannot be used to calculate the mean, the standard deviation or other statistics needed to translate data collected from a sample and estimate the state of the real-world population. Without quantitative data and the statistics calculated from that data, it isn't possible to mathematically test the values. Qualitative statistics are needed to whether or not a process can stay within a specification limit. While a Pareto chart may show which problem is the greatest, it cannot be used to calculate how bad the problem is or how far changes would bring a process back into specification.

Q.6. (a) Suggest more suitable average in each of following cases: (i) Average size of ready-made garments. (ii) Average marks of a student.
Average size of readymade garments: Arithmetic mean will be used because it is continuous and additive in nature. Average marks of a student: Arithmetic mean will be used because the data re in the interval and the distribution is symmetrical.

Q.6. (b)

State the nature of symmetry in the following cases: (i) When median is greater than mean, and
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(ii) When Mean is greater than median.

When median is greater than mean, the series is said to have negative skewness. The following characteristics can be seen

Mode > Median > Mean The left tail of the curve is longer than the right tail, when the data are The formula of skewness and its coefficients give negative figures.

plotted through a histogram, or a frequency polygon.

When mean is greater than median, the series is said to have positive skewness. the following characteristics can be seen

Mean > Median > Mode The right tail of the curve is longer than its left tail, when the data are The formula of skewness and its coefficients give positive figures.

plotted through a histogram, or a polygon.

Following example show the above distributions and respective characteristics:

Value (X) Positively Skewed F 10 20 30 40 50 60 70 Total 5 15 13 11 9 7 5 65 FX 50 300 390 440 450 420 350 2400 CF 5 20 33 44 53 60 65 Negatively Skewed F 5 7 9 11 13 15 5 65 FX 50 140 270 440 650 900 350 2800 CF 5 12 21 32 45 60 65 -

Mean= 2400/65= 37 Median=(65+1)/2=33th

Mean= 2800/65= 43

Median= 33th item =50 Item =30

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Assignment Set - 2 Q.1. (a) What are characteristics of good measure of central tendency?
The statistics, mean median and mode are known to be the most common measures of central tendency. A measure of central tendency is a sort of average or a typical value of the item in the series or some characteristic of members in a group. Each of these measures of central tendency provides a single value o represent the characteristic of the whole group in its own way. According to Tete measure of central tendency is: "A sort of average or typical value of the items in the series and its function is to summarize the series in terms of this average value." Mean represents the average for an ungrouped data; the sum of the scores divide by the total number of the scores gives the value of the mean. Median is the score or value of that central item which divides the series in exactly two equal halves. Mode is defined as the size of the variable that occurs most frequently in the series. 1). Characteristics of the mean include Every score influences the mean. Changing a score changes the mean.
Adding or subtracting score changes mean (unless score equals mean).

If a constant value is added to every score, the same constant will be added to the mean. If a constant value is subtracted from every score, the same constant will be subtracted from the mean. If every score is multiplied or divided by a constant, the mean will change in the same way.
It is inappropriate to use the mean to summarize nominal and ordinal

data; it is appropriate to use mean to summarize interval and ratio data.

If the distribution is skewed or has some outliers, the mean will be

distorted.

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2). Characteristics of the Median include

It is inappropriate to use the median to summarize nominal data; it is

appropriate to use median to summarize ordinal, interval, and ratio data. The median depends on the frequency of the scores, not on the actual values. The median is not distorted by outliers or extreme scores. The median is the preferred measure of central tendency when the distribution is skewed or distorted by outliers. 3). Characteristics of the Mode include
This may be used to summarize nominal, ordinal, interval, and ratio data.

There may be more than one mode. The mode may not exist.

Q.1. (b)

What are the uses of averages?

Ans.: Below are the usages of various Averages 1). Arithmetic mean is used when In depth study of the variable is needed The variable is continuous and additive in nature The data are in the interval or ratio scale When the distribution is symmetrical 2). Median is used when The variable is discrete There exists abnormal values The distribution is skewed The extreme values are missing The characteristics studied are qualitative The data are on the ordinal scale

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3). Mode is used when

The variable is discrete

There exists abnormal values The distribution is skewed The extreme values are missing The characteristics studied are qualitative 4). Geometric mean is used when The rate of growth, ratios and percentages are to be studies The variable is of multiplicative nature 5). Harmonic mean is used when The study is related to speed, time Average of rates which produce equal effects has to be found

Q.2.For each one of the following null hypothesis, determine it is a left tailed a right-tailed, or a two-tailed test. a. 10. b. P 0.5. c. is at least 100. d. -20. e. p is exactly 0.22.
The hypothesis that contains an = is the null, implied by the question. a) Ho: 10, Ha: <10 so left tailed. b) Ha: P>0.5, so right tailed c) at least 100 means 100 so Ha: < 100 and left-tailed d) Ha: >-20, right-tailed e) Could be left, right or two tailed.

Q.3. What is test statistic? Why do we have to know the distribution of a test statistic?
In statistical hypothesis testing, a test statistic is a numerical summary of a set of data that reduces the data to one or a small number of values that can be used to perform a hypothesis test. Given a null hypothesis and a test

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statistic T, we can specify a "null value" T0 such that values of T close to T0 present the strongest evidence in favor of the null hypothesis, whereas values of T far from T0 present the strongest evidence against the null hypothesis. An important property of a test statistic is that we must be able to determine sampling distribution under null hypothesis, which allows to calculate p-values. For example, suppose we wish to test whether a coin is fair (i.e. has equal probabilities of producing a head or a tail). If we flip the coin 100 times and record the results, the raw data can be represented as a sequence of 100 Head's and Tail's. If our interest is in the marginal probability of obtaining a head, we only need to record the number T out of the 100 flips that produced a head, and use T0 = 50 as our null value. The exact sampling distribution of T is the binomial distribution, but for larger sample sizes the normal approximation can be used. Using one of these sampling distributions, it is possible to compute either a one-tailed or two-tailed p-value for the null hypothesis that the coin is fair. Note that the test statistic in this case reduces a set of 100 numbers to a single numerical summary that can be used for testing. A test statistic shares some of the same qualities of a descriptive statistic, and many statistics can be used as both test statistics and descriptive statistics. However a test statistic is specifically intended for use in statistical testing, whereas the main quality of a descriptive statistic is that it is easily interpretable. Some informative descriptive statistics, such as the sample range, do not make good test statistics since it is difficult to determine their sampling distribution. After deciding what level of significance to use, our next task in hypothesis testing is to determine the appropriate probability distribution. We have a choice between the normal distribution and the t distribution.

Q 4. Suppose you are sampling from population with mean = 1,065 and standard deviation = 500. The sample size is n=100. What are the expected value and the variance of a sample mean ?
If sample mean is xbar, E(xbar)==1065 Var(xbar) = (population variance)/n==100^2/100=500

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E[Xbar] = = 1,065 Var(Xbar) = ^2/n = 500^2/100 = 2500

Q.5 The time it takes an international telephone operator to place an overseas phone call is normally distributed with mean 45 seconds and standard deviation 10 seconds. a) What is probability that my call will go through in less than 1 minute? b) What is the probability that I will get through in less than 40 seconds?
a. First thing is, let

be the time it takes to the telephone operator to place an Pr(X<60) in the following

overseas phone call. The probability we are looking for is

In order to compute this probability, we need to normalize way. We know that compute

has standard normal distribution, so we

(Since the mean is given in seconds, we have to write 1 minute as 60 seconds)

b. Same as before, let

be the time it takes to the telephone operator to place

an overseas phone calls. The probability we are looking for is Pr(X<60) In order to compute this probability, we need to normalize in the same way

we did before. We know that compute

has standard normal distribution, so we

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Q.6. The following data are the number of tons shipped weekly across the pacific by a shipping company. 398, 412, 560, 476, 544, 690, 587, 600, 613, 457, 504, 477, 530, 641, 359, 566, 452, 633, 474, 499, 580, 606, 344, 455, 505, 396, 347, 441, 390, 632, 400, 582 Assume these data represent an entire population. Find the population mean and the population standard deviation.

Population Mean = Sum of X values / N(Number of values) = 16150 / 32 = 504.7 Standard Deviation is given by

Population Standard Deviation is given by

S = 94.54

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