DRIVE Summer 2015

PROGRAM- MBADS/ MBAFLEX/ MBAHCSN3/ MBAN2/ PGDBAN2

SEMESTER- 1
MB0040- STATISTICS FOR MANAGEMENT
Q1 Distinguish between Classification and Tabulation. Explain the structure and
components of a Table with an example.

Meaning of Classification and Tabulation

Differences between Classification and Tabulation

Structure and Components of a Table with an example

Answer.
Meaning of Classification and Tabulation
Classification
According to Secrist, Classification is the process of arranging data into sequences and
groups according to their common characteristics or separating them into different but
related parts. According to Stockton and Clark, The process of grouping large number of
individual facts and observations, on the basis of similarity among the items is called
Classification.
Tabulation
Tabulation follows classification. It is a logical or systematic listing of related data in rows
and columns. The row of a table represents the horizontal arrangement of data and column
represents the vertical arrangement of data. The presentation of data in tables should be
simple, systematic and unambiguous.
The objectives of tabulation are to:

Simplify complex data

Highlight important characteristics
Present data in minimum space
Facilitate comparison

Bring out trends and tendencies

Facilitate further analysis

Differences between Classification and Tabulation

Table depicts the few differences between classification and tabulation.
Table: Differences between Classification and Tabulation

Structure and Components of a Table with an example

Table and figure depict the parts of a table along with the explanation of each tab (tabs
from 1 to 10).

Tab 1: Table number

Table number is to identify the table for reference. When there are many tables in an
analysis, then table numbers are helpful in identifying the tables.
Tab 2: Title

Title indicates the scope and the nature of contents in a concise form. In other words, title
of a table gives information about the data contained in the body of the table. Title should
not be lengthy.
Tab 3 and Tab 4: Captions
Captions are the headings and subheadings describing the data present in the columns.
Tab 5 and Tab 6: Stubs
Stubs are the headings and subheadings of rows.
Tab 7: Body of the table
Body of the table contains numerical information.
Tab 8: Totals
The sub-totals for each separate classification and a general total for all combined classes
should be given at the bottom or right side of the figures whose totals are taken. Ruling
and spacing separate columns and rows. However, totals are separated from main body by
thick lines.
Tab 9: Head note
Head note is given below the title of the table to indicate the units of measurement of the
data and is enclosed in brackets.
Tab 10: Source note
Source note indicates the source from which data is taken. The source note related to table
is placed at the bottom on the left hand corner.
Q2. (a) Explain Arithmetic mean. 3
(b) The mean wage is Rs. 75 per day, SD wage is Rs. 5 per day for a group of 1000
workers and the same is Rs. 60 and Rs. 4.5 for the other group of 1500 workers. Find
the mean and standard deviation for the entire group. 7
Answer:
(a) Arithmetic mean: Arithmetic mean is defined as the sum of all values divided by
number of values and is represented by X . Arithmetic mean is also called average. It is
most commonly used measures of central tendency. Arithmetic Mean of a series is the

value obtained by adding all the observations of a series and dividing this total by the
number of observations. There are two types of Arithmetic Mean:
a. Simple arithmetic Mean
b. Weighted arithmetic Mean
(b) Solution:
We have by data,

Combined Mean :

Combined Standard deviation:

Q3. Mr. Arun and Mr. Bhandari play a game. If Mr. Arun picks up an even number
from 1 to 6, Mr. Bhandari will pay him double the amount equal to picked up
number. If Mr. Arun picks up an odd number then he has to pay amount equal to
double the picked up number. What is Mr. Aruns expectation? 10
Solution: Let Xi be the random variable and P(Xi) be its probability. The probabilities are
indicated in table.

Required Values for Calculating Mean and Variance for the Data

NO.
1
2
3
4
5
6
Total

(Xi)
-2
4
-6
8
-10
12

P(Xi)
1/6
1/6
1/6
1/6
1/6
1/6
1

Expectation of Mr. Arun is E()= ( ) = 1.

Q4. The probability that an employee will get an occupational disease is 20%. In a
firm having five employees, what is the probability that:
i) None of the employees get the disease 4
ii) Exactly two will get the disease 3
iii) More than four will contract the disease 3
Answer: Solution
Given that:
p 20/100
0.2
q 10.2 0.8

i) The probability that none of the employees get the disease is given by:
Therefore, the probability that none of the employees get the disease is 0.3277.
ii) The probability that exactly two employees will get the disease is given by:

Xi P(Xi
- 2/6
4/6
-1
8/6
-10/6
12/6
1

Therefore, the probability that exactly two employees will get the disease is 0.2048.
iii) The probability that more than four employees will get the disease is given by:

Therefore, the probability that more than four employees will get the disease is 0.00032.
Q5. Microsoft estimated that out of 10,000 potential software buyers, 35% wait to
purchase the new OS Windows Vista, until an upgrade has been released. After an
advertising campaign to reassure the public was released, Microsoft surveyed 3000
buyers and found 950 who are still skeptical. At 5% level of significance, can the
company conclude that the population of skeptical people had decreased? 10
Answer: Solution:
The procedure is explained in the following steps:
1. Null hypothesis Ho: p = .35
Alternate hypothesis H1: p < 0.35
2. Level of significance = 0.05 Ztab = - 1.645 and R: z < -1.645
3. Test statistics

4. Given

p = 950/3000 = 19/60 = 0.317, p = 0.35, q = 1-p = 1- 0.35 = 0.65,

N=10,000, n = 3000

5. Conclusion: Since Zcal (-4.52) < Ztab (-1.645) and is in the rejection region, Ho is
rejected. At 5% level of significance, we conclude that the proportion of skeptical people
has significantly decreased.
Q6. Explain Chi-square test and the conditions for applying chi-square test.
(Meaning, Conditions) 5, 5
Answer: Chi-Square test: The Chi-square test is one of the most commonly used nonparametric tests in statistical work. The Greek Letter 2 is used to denote this test. 2
describe the magnitude of discrepancy between the observed and the expected frequencies.
The value of 2 is calculated as:

Where, O1, O2, O3.On are the observed frequencies and E1, E2, E3En are the
corresponding expected or theoretical frequencies.
Conditions for applying the Chi-Square test: The following are the conditions for using
the Chi-Square test:
1. The frequencies used in Chi-Square test must be absolute and not in relative terms.
2. The total number of observations collected for this test must be large.
3. Each of the observations which make up the sample of this test must be independent of
each other.
4. As 2 test is based wholly on sample data, no assumption is made concerning the
population distribution. In other words, it is a non parametric-test.

5. 2 test is wholly dependent on degrees of freedom. As the degrees of freedom increase,

the Chi-Square distribution curve becomes symmetrical.
6. The expected frequency of any item or cell must not be less than 5, the frequencies of
adjacent items or cells should be polled together in order to make it more than 5.
7. The data should be expressed in original units for convenience of comparison and the
given distribution should not be replaced by relative frequencies or proportions.
8. This test is used only for drawing inferences through test of the hypothesis, so it cannot
be used for estimation of parameter value.