Master of Business Administration-MBA Semester 1

MB0024 – Statistics for Management

Assignment Set- 1

1Q. ABC Branch of XYZ Bank has decided to give 10 Lakh of loan each on long term basis to only
two of their customers (accountholders), who are businessmen of the locality. About 20
businessmen had applied for loan in order to develop their business further. In order to reject some
of the applications (as the fund was limited), the Bank decided that accountholder who had
maintained a minimum balance of 50000 INR would only be considered for the loan. As a result, 10
applications were automatically rejected as they were not satisfying the requirement of minimum
balance. Now, the 10 applications remained and it was found that monthly minimum balance in all
the cases were more than 50000 INR for the last 12 months. Their account details of monthly
minimum balance are given below.

Months Monthly Minimum Balance in INR

A/C A/C A/C A/C A/C A/C A/C A/C A/C A/C
Holde Holder Holder Holder Holder Holder Holder Holder Holder Holder
r1 2 3 4 5 6 7 8 9 10
Jan, 2008 60000 56000 66000 86000 56000 59000 59000 52000 53000 56000

Feb, 2008 70000 76000 74000 96000 76000 96000 78000 73000 98000 76000

Mar, 2008 55000 110000 112000 190000 110000 120000 115000 112000 113000 120000

Apr, 2008 90000 89000 90000 98000 89000 97000 87000 93000 66000 89000

May, 2008 56000 88000 84000 84000 88000 98000 90000 89000 87000 86000

Jun, 2008 80000 52000 57000 57000 52000 57000 55000 54000 59000 72000

Jul, 2008 82000 58000 96000 66000 58000 56000 86000 55000 98000 98000

Aug, 2008 79000 95000 55000 93000 95000 98000 99000 96000 59000 95000

Sept, 2008 51000 86000 76000 74000 86000 88000 89000 97000 87000 84000

Oct, 2008 95000 90000 95000 99000 90000 99000 95000 99000 95000 90000

Nov, 2008 82000 82000 87000 84000 82000 88000 87000 88000 86000 82000

Dec, 2008 83000 55000 56000 57000 55000 59000 59000 59000 52000 53000
You as an Assistant Branch Manager of the Bank are entrusted the task of selecting two account
holders for sanctioning the loans. How you will select the two individuals among the 10 applicants
to give the loan using appropriate statistical techniques? Give proper justification for your
selection.

Ans:

Objective of Customer Selection:

As per the given scenario, the Bank Loan must be sanctioned to the appropriate Customers.

Problem of Customer Selection:

(i) Due to limited funds, minimum two customers out of ten can only be granted with the loan.
(ii) The customers maintaining a minimum balance of 50000 INR only are eligible for the loan
(iii) The bank has to check the customer’s credit worthiness.

Calculation of Mean [on the basis of Discreet method]

Account Holder 1: Mean = ∑X = 883000 = 73583.33

N 12

Account Holder 2: Mean = ∑X = 937000 = 78083.33

N 12

Account Holder 3: Mean = ∑X = 948000 = 79000.00

N 12

Account Holder 4: Mean = ∑X = 1084000 = 90333.33

N 12

Account Holder 5: Mean = ∑X = 937000 = 78083.33

N 12

Account Holder 6: Mean = ∑X = 1015000 = 84583.33

N 12

Account Holder 7: Mean = ∑X = 999000 = 83250.00

N 12
Account Holder 8: Mean = ∑X = 967000 = 80583.33
N 12

Account Holder 9: Mean = ∑X = 953000 = 79416.67

N 12

Account Holder 10: Mean = ∑X = 1001000 = 83416.67

N 12

Recommendation of Customer Selection:

As per the above calculation, Account Holder 4 and Account Holder 6 are selected with regard to
sanctioning of Rs.10 lakh loan on long term basis.

Conclusion:

Hence using appropriate statistical techniques, Account Holder 4 and Account Holder 6 are eligible &
are being sanctioned of Rs.10 lakh loan.