Feb Drive 2011

MBA SEMESTER 1 MB0040 STATISTICS FOR MANAGEMENT- 4 Credits (Book ID: B1129) Assignment Set- 2 (60 Marks)
Note: Each question carries 10 Marks. Answer all the questions Q1. What are the characteristics of a good measure of central tendency? [5 Marks] (b) What are the uses of averages? [5 Marks] Answer: a). The characteristics of a good measure of central tendency are: Present mass data in a concise form The mass data is condensed to make the data readable and to use it for further analysis. Facilitate comparison It is difficult to compare two different sets of mass data. But we can compare those two after computing the averages of individual data sets. While comparing, the same measure of average should be used. It leads to incorrect conclusions when the mean salary of employees is compared with the median salary of the employees. Establish relationship between data sets The average can be used to draw inferences about the unknown relationships between the data sets. Computing the averages of the data sets is helpful for estimating the average of population. Provide basis for decision-making In many fields, such as business, finance, insurance and other sectors, managers compute the averages and draw useful inferences or conclusions for taking effective decisions. The following are the requisites of a measure of central tendency: It should be simple to calculate and easy to understand It should be based on all values It should not be affected by extreme values It should not be affected by sampling fluctuation It should be rigidly defined It should be capable of further algebraic treatment

b) Appropriate Situations for the use of Various Averages 1. Arithmetic mean is used when: a. In depth study of the variable is needed b. The variable is continuous and additive in nature c. The data are in the interval or ratio scale d. When the distribution is symmetrical 2. Median is used when: a. The variable is discrete b. There exists abnormal values c. The distribution is skewed d. The extreme values are missing e. The characteristics studied are qualitative f. The data are on the ordinal scale 3. Mode is used when: a. The variable is discrete b. There exists abnormal values c. The distribution is skewed d. The extreme values are missing e. The characteristics studied are qualitative 4. Geometric mean is used when: a. The rate of growth, ratios and percentages are to be studied b. The variable is of multiplicative nature 5. Harmonic mean is used when: a. The study is related to speed, time b. Average of rates which produce equal effects has to be found. Q2. For each one of the following null hypothesis, determine if it is a left-tailed, a right-tailed, or a two-tailed test. [10 Marks} a. 10 b. P 0.5 c. is at least 100. d. -20 e. p is exactly 0.22 Answer: a. 10 b. P 0.5

Right tailed Two tailed test

c. is at least 100. Right tailed complete Answer after payment, visit www.studenthelp.tk

Q3. What is test statistic? Why do we have to know the distribution of a test statistic? [10 Marks] Answer: Statistical hypothesis testing, a hypothesis test is typically specified in terms of a test statistic, which is a function of the sample. it is considered as 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 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 its sampling distribution under the null hypothesis, which allows us 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 Heads and Tails. 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. In this case, 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.

Q4. Suppose you are sampling from a 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 ? [ 10 Marks]

Answer: = 1,065 = 500 n=100. Expected value = / n = 500 / 100 = 500 / 10 = 50 Variance of sample mean = complete Answer after payment, visit www.studenthelp.tk

Q5. 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. [10 Marks] a) What is the 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? Answer: a) What is the probability that my call will go through in less than 1 minute? Probability P(45 < X < 42) = P (complete Answer after payment, visit www.studenthelp.tk

b) What is the probability that I will get through in less than 40 seconds? P(45 < X < 40) = complete Answer after payment, visit www.studenthelp.tk

Q6. The following data are the number of tons shipped weekly across the pacific by a shipping company. [10 marks] 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.

Answer: Population mean

= x / N = 16149 / 32 = 504.64

Population standard deviation = {(x2 / N) - (complete Answer after payment, visit www.studenthelp.tk