Name : Ali Asger Bohra

Roll No. : 531010146

Program : Master of Business Administration – MBA

Semester : I

Subject Code : MB0040

Subject Name : Statistics for Management

Assignment : Set – 1

Center Code : 2527

Date of Submission : 10th August, 2010

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Q. 1 Elucidate the functions of statistics.

Ans. Functions of Statistics

Statistics is used for various purposes. It is used to simplify mass data and to make
comparisons easier. It is also used to bring out trends and tendencies in the data as
well as the hidden relations between variables. All this helps to make decision
making much easier. Let us look at each function of Statistics in detail.

1. Statistics simplifies mass data

The use of statistical concepts helps in simplification of complex data. Using

statistical concepts, the managers can make decisions more easily. The
statistical methods help in reducing the complexity of the data and consequently
in the understanding of any huge mass of data.
Solved Problem 1: Fifty people were interviewed to rate a regional movie on the
scale of 1 to 10, with number 1 being for the top movie and number 10 being for
the worst movie. The table 1.1a shows the ratings given by 50 customers.
Simplify the data?
Table 1.1a The ratings (scale of 1 to 10) for a regional movie given by 50
customers

The data in table 1.1a can be condensed and is presented in table 1.1b using the
statistical concepts such as calculating frequency and frequency distribution to
draw conclusions and then frequency table is prepared. In this example, from
the bulk data consisting of 50 rating scores, the frequency table was prepared.
The frequency table is in condensed and simple form. From the tabled data, we
can easily interpret that for the regional movie, most of the customers gave a 7
rating (that is, 11 customers). Only two customers gave a rating of 1 for the
regional movie, which means only two out of 50 customers surveyed liked the
regional movie the most.
Table 1.1b Frequency table

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2. Statistics makes comparison easier

Without using statistical methods and concepts, collection of data and

comparison cannot be done easily. Statistics helps us to compare data collected
from different sources. Grand totals, measures of central tendency, measures of
dispersion, graphs and diagrams, coefficient of correlation all provide ample
scopes for comparison.
Example 3
The graphical curve represented in figure 1.7 and figure 1.8 shows the profits of
CBA Company and ZYX Company respectively, for ten years from 1998 to 2008.
The profits are plotted on the Y-Axis and the timeline in years on X-Axis. From
the graphs, we can compare the profits of two companies and derive to a
conclusion that profits of CBA Company in the year 2008 are higher than that of
ZYX Company.

The graphical curve in case of figure 1.7 shows that the profits for CBA Company
are increasing, whereas the profits curve in figure 1.8 is constant for ZYX
Company from middle of the decade (1998-2008).

Hence, visual representation of numerical data helps you to compare the data
with less effort and can make effective decisions.

3. Statistics brings out trends and tendencies in the data

After data is collected, it is easy to analyze the trend and tendencies in the data
by using the various concepts of Statistics.

4. Statistics brings out the hidden relations between variables

Statistical analysis helps in drawing inferences on data. Statistical analysis

brings out the hidden relations between variables.

5. Decision making power becomes easier

With the proper application of Statistics and statistical software packages on the
collected data, managers can take effective decisions, which can increase the
profits in a business.

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Q. 2 What are the methods of statistical survey? Explain briefly.

Ans. Collection of data is the first and most important stage in any Statistical Survey.
The method for collection of data depends upon various considerations such as
objective, scope, nature of investigation and availability of resources. Direct
personal interviews, third party agencies, and questionnaires are some ways
through which data is collected.

A. Primary data

Data collected for the first time keeping in view the objective of the survey is known
as primary data. They are likely to be more reliable. However, cost of collection of
such data is much higher. Primary data is collected by the census method. In other
words, information with respect to each and every individual of the population is
observed.

Collection of primary data can be done by any of the following methods.

1. Direct personal observation

2. Indirect oral interview
3. Information through agencies
4. Information through mailed questionnaires
5. Information through schedule filled by investigators

A. Secondary data

Any information, that is used for the current investigation but is obtained from
some data, which has been collected and used by some other agency or person in a
separate investigation, or survey, is known a secondary data. They are available in
published or unpublished form.
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In published form, secondary data is available in research papers, news papers,

magazines, government publication, international publication, and websites.
Secondary data is collected for different purposes. Therefore, care should be
exercised while making use of it.

The accuracy, reliability, objectives and scope of secondary data should be

examined thoroughly before use. Secondary data may be collected either by census
or by sampling methods.

The various sources of published data are:

• Reports and official publications of international and national

organizations as well as central and state governments
• Publications of several local bodies such as municipal corporations and
district boards
• Financial and economic journals
• Annual reports of various companies
• Publications brought out by research agencies and research scholars
• Some of the journals (both academic and non-academic) are published at
regular intervals like yearly, monthly, weekly whereas other publications
are more ad hoc. Internet is a powerful source of secondary data, which
can be accessed at any time for any further analysis of the study.

Unpublished sources

It is not necessary that all statistical contents have to be published. Unpublished

data such as records maintained by various government and private offices, studies
made by research institutions and scholars can also be used where necessary. The
following are some of measures that need to be considered while using secondary
data.
1. The collection and processing of the data
2. Accuracy of the data
3. The degree of summarization of the data
4. The degree of comparable the data is with other tabulations
5. How to interpret the data, especially when figures collected for one
purpose is used for another

With secondary data, people have to compromise between what they want and
what they are able to find.

The merits of secondary data are that:

• Secondary data is cheaper to obtain. Many government publications are
relatively cheap and libraries stock quantities of secondary data produced
by the government, by companies and other organizations.
• Large quantities of secondary data can be accessed through the internet.
• Much of the available secondary data has been collected over a course of
many years and therefore it can be used to plot trends.
• Secondary data is valuable to the government, business and research
areas. In governments, it helps in making decisions and in planning future
policies. In the business and industry areas such as marketing and sales,
it is used to appreciate the general economic and social conditions and to
provide information on competitors. To the research organizations, it
helps by providing social, economical and industrial information.
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The demerits of secondary data are that:

• It is difficult to judge whether the secondary data is sufficiently accurate.

• It might be difficult to fit secondary data to the needs of the investigator.
• Secondary data might not be available for certain investigations. In such
situations, primary data has to be collected.

A. Pilot Survey

Pilot survey is a small trial survey undertaken before the main survey. It gives a
measure of efficiency of the questionnaire. It reduces the inconveniences and loss
of information. It helps in introducing necessary changes.

When some prior information about the nature of population under study, the
operational and cost aspects of data collection and analysis is not available from
surveys, it is desirable to design and carry out a pilot survey.

Pilot survey is a preliminary research conducted before a complete survey to test

the effectiveness of conducting the research. Pilot survey should be completed
before the final survey begins. By conducting the pilot survey, the investigator will
be able to know any difficulties that might arise that were not known at the survey
proposal stage.

Pilot surveys have many other advantages.

• Pilot surveys provide the investigator with many ideas, approaches and
clues that are not foreseen before conducting the pilot survey. Such ideas
and clues increase the chances of getting accurate findings in the main
survey.
• Pilot surveys help in making necessary alterations in the data collecting
methods. Hence investigators can analyze data in the main survey more
efficiently.
• Pilot surveys save a lot of time and provide enough data for the
investigator to decide whether to go ahead with the main survey or not.

Apart from advantages, pilot survey also has certain limitations which are discussed
below.

• Pilot surveys are not based on strong statistical foundation and are based
on very small sample sizes.
• There is a possibility that the investigator might make wrong predictions
or assumptions on the basis of pilot data.
• If data and results from pilot surveys are included in the main survey then
it might lead to incorrect decisions.
• If the pilot participants are included in the main survey, then data
obtained from these participants might result in corruption of main data.
• Sometimes, if an expensive pilot study is unsuccessful, then the
investigator might find it very difficult to stop the main survey.

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Q. 3 Tabulate the following data:

Age: 20-40; 40-60;60-above
Departments: English, Hindi, Political science, History, sociology
Degree level: Graduates, Post graduates; PhD,
Total students in age group and in degree level.

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AGE
Departm Degree
20 - 40 - 60 60 Total
ent Level
40 Above

Graduate

Post
English
Graduate

PhD

Graduate

Post
Hindi
Graduate

PhD

Graduate

Political Post
Science Graduate

PhD

Graduate

Post
History
Graduate

PhD

Graduate

Post
Sociology
Graduate

PhD

Total

Ans.

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Q. 4 The data given below is the distribution of employees of a business

according to their efficiency. Find the mean deviation and
coefficient of mean deviation from Mean and Median:
Efficiency Index 22-26 26-30 30-34 34-38 38-42
Emloyees 25 35 15 5 2

Ans.
Efficien Employe x Fx F(x-
x−x f x−x ( x − median)
cy es media

Index n)
F

22-26 25 24 600 -4.29 107.25 8 200

26-30 35 28 980 -.29 10.15 4 140

30-34 15 32 480 3.71 55.65 0 0

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34-38 5 36 180 7.71 38.55 4 20

38-42 2 40 80 11.71 23.42 8 16

82 2320 235.02 24 376

∑ fx 2320
mean = x = = = 2829
.
∑f 82

∑ x−x 2.87
md from Mean = = = 0.1014
n 2829
.

= 0.10

∑( x − median) 376
md from median = [ ]= = 1175
.
median 32

md from median 11.75

coff of md (median ) = = = 0. 367
median 32

Q. 5 What is conditional probability? Explain with an example.

Ans. Sometimes we wish to know the probability that the price of a particular
petroleum product will rise, given that the finance minister has increased the
petrol price. Such probabilities are known

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as conditional probabilities.

Thus the conditional probability of occurrence of an event ‘A’ given that the
event ‘B’ has already occurred is denoted by P (A / B). Here, ‘A’ and ‘B’ are
dependent events. Therefore, we have the following rules.

If ‘A’ and ‘B’ are dependent events, then the probability of occurrence of ‘A
and B’ is given by:

For any bivariate distribution, there exists two marginal distributions and ‘m
+ n’ conditional distributions, where ‘m’ and ‘n’ are the number of
classifications/characteristics studied on two variables.

Example 7
Consider the example of a librarian who analysed the type of visitors and
their choice of library section. The data is represented in table 5.1a.

Table: Bivariate distribution

Type of Sections
visitors News Magazi Novel Subjec
Total
Level of Paper ne (story) t
education
Under
50 100 120 50 320
Graduates
Graduates 70 90 50 100 310
Post
100 60 30 150 340
Graduates
Total 220 250 200 300 970

We can get the following distributions.

i) The table 5.1b represents the distribution of level of education irrespective

of their sections. Therefore, it is called marginal distribution.

Table : Marginal distribution of level of education irrespective of

their sections

Type of Visitors Frequency

Undergraduates 320
Graduates 310
Post graduates 340
Total 970

ii) The table 5.1c represents the distribution of people in sections

irrespective of their educational levels. It is another marginal distribution.
Thus, there are two marginal distributions for bivariate data, variables being
sections and level of education.
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Q. 6 The probability that a football player will play Eden garden is 0.6
and on Ambedkar Stadium is 0.4. The probability that he will get
knee injury when playing in Eden is 0.07 and that in Ambedkar
stadium is 0.04.What is the probability that he would get a knee
injury if he played in Eden.

Ans.
1
P(E1) = P (E 2) =
2

P (E1) = 0.6 P(E2) = 0.4

A be the engree (AE1) = 0.07

P (A / E2) = -

= 0.3
1
× 0.4
P(A/E 2 )2 = 2
1 1
× 0.6+ × 0.7
2 2

Probability that he would get a knee injury if he played in Eden is 0.3

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