MB0040 Set2

Name:
Roll No:
Learning Centre:
Subject: MB0040 – STATISTICS FOR MANAGEMENT
Assignment No: Set 2
Date of Submission at the Learning Centre:

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Q1. What do you mean by Statistical Survey? Differentiate between “Questionnaire”

and “Schedule”.

Answer:

1. Definition of statistical survey

A Statistical survey is a scientific process of collection and analysis of numerical data.

Statistical surveys are used to collect numerical information about units in a population.
Surveys involve asking questions to individuals. Surveys of human populations are
common in government, health, social science and marketing sectors.

Stages of Statistical Survey

Statistical surveys are categorised into two stages –

• Planning and
• Execution.

The figure below shows the two broad stages of Statistical survey.

Fig.1: Stages of Statistical Survey

Information is collected through mailed questionnaires

Often, information is collected through questionnaires. The questionnaires are filled with
questions pertaining to the investigation. They are sent to the respondents with a covering
letter soliciting cooperation from the respondents (respondents are the people who respond
to questions in the questionnaire). The respondents are asked to give correct information
and to mail the questionnaire back. The objectives of investigation are explained in the
covering letter together with assurance for keeping information provided by the respondents
as confidential.

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Good questionnaire construction is an important contributing factor to the success of a

survey. When questionnaires are properly framed and constructed, they become important
tools by which statements can be made about specific people or entire populations.

This method is generally adopted by research workers and other official and non-official
agencies. This method is used to cover large areas of investigation. It is more economical
and free from investigator’s bias. However, it results in many “non-response” situations.
The respondent may be illiterate. The respondent may also provide wrong information due
to wrong interpretation of questions.

If the questionnaire consists of invalid questions, or questions in incorrect order, or

questions in inappropriate format, or questions that are biased, then the survey would be
useless. An important method for checking and making sure whether a questionnaire is
accurately capturing the intended information is to pre-test among a smaller subset of target
respondents.

Success of questionnaire method of collection of data depends mainly on proper drafting of

the questionnaire. You have to keep the following points in mind while preparing a
questionnaire:

The respondent should not take much time in completing the questionnaire. It should be
small and not lengthy.
· The questions asked should be well structured and unambiguous.
· The questions asked should be in proper logical sequence.
· Questions should be unbiased. The questions in the questionnaire should not disturb the
privacy of the respondents.
· The task of completion of questionnaire should not have much writing work.
· Necessary instructions and glossary should be given in covering letter.
· Questions involving technological jargons and mathematical calculations should be
avoided.
· The completed questionnaire should be kept confidential and used only for the purpose of
the survey as mentioned in the investigation.
· There should not be any scope for misinterpretation in the questions.

There are different types of questions that can be used in the questionnaire. A questionnaire
can have Contingency questions, Matrix questions, Closed ended questions and Open ended
questions. Let’s have a look at each one in detail

Contingency questions are questions that are answered only if the respondent gives a
particular response to a previous question. This avoids asking people questions that do not
apply to them

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Matrix questions are questions which are placed one under the other, forming a matrix.
The response categories are placed along the top and a list of questions are placed down the
side. This is used to efficiently occupy page space and respondents’ time.

Closed ended questions are those where the respondents’ answers are limited to a fixed set
of responses. Usually scales are closed ended.

There are various types of closed ended questions.

Yes/no questions – here the respondents answer with “yes” or “no”. Some of the examples
are:

Multiple choices – here the respondents have several options from which to choose. For
example:

Scaled questions – here the responses are graded on a continuum (For example, rating the
appearance of a product on a scale from 1 to 10, with 10 implying the most preferred
appearance and 1 implying the least preferred appearance). Scaled questions are mostly
questions related to attitudes. A Likert scale provides a number of attitude statements. The
respondent has to say how much they agree or disagree with each one.

Open ended questions are those questions for which the respondent supplies their own
answer without any fixed set of possible responses. Examples of types of open ended
questions include:

Sentence completion – In these, respondents complete an incomplete sentence.

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Story completion – In these, respondents complete an incomplete story.

Picture completion – In these, respondents fill in an empty conversation balloon.

Thematic Apperception Test – In these, respondents explain a picture or make up a story

about what they think is happening in the picture.

Information through schedule filled by investigators

Information can be collected through schedules filled by investigators through personal

contact. In order to get reliable information, the investigator should be well trained, tactful,
unbiased and hard working.

A schedule is suitable for an extensive area of investigation through investigator’s personal

contact. The problem of non-response is minimised.

There is a difference between a schedule and a questionnaire. A schedule is a form that the
investigator fills himself through surveying the units or individuals. A questionnaire is a
form sent (usually mailed) by an investigator to respondents. The respondent has to fill it
and then send it back to the investigator.

Difference between Questionnaire and Schedule is as follows:

S.No. Basis Questionnaire Schedule

1. Liability for Informant is liable for filling it up. Enumerator fills it up after
filling up getting answers from informants.

2. Means of It is sent to the informants by post. Enumerators themselves take up

Information schedules and contact the
informants.

3. Personal Investigator does not have a Both investigator and informants

Relationship personal contact with the have personal contact through
informants. schedule.

4. Nature of Sometimes incomplete as there is Complete information is received

Information lack of personal contact. because of the personal contact
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between the investigator and

informants.

5. Scope of The use of Questionnaire is suitable Schedule can be used for both
Enquiry where the informants are literate. literate as well as illiterate
persons.

6. Economical Information by mailed It is comparatively a costly

questionnaire method is method as most of the
economical. enumerators are paid.

7. Reliability The information collected through It is reliable method as the

it is less reliable as informants enumerators can get correct
cannot give correct answers to answers after clarifying the
some of the questions. questions to the informants.

8. Delay There is delay in the receipt of The information is quickly

information by this method. collected by the enumerators.

Q2. The table shows the data of Expenditure of a family on food, clothing, education,
rent and other items.

Items Expenditure

Food 4300

Clothing 1200

Education 700

Rent 2000

Others 600

Depict the data shown in the table using Pie chart.

Answer:

Items Food Clothing Education Others Rent

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Expenditure 4300 1200 700 600 2000

PIE CHART

2000
Food
Clothing
600 Education
Others
4300 Rent
700

1200
Q3. Average weight of 100 screws in box „A‟ is 10.4 gms. It is mixed with 150 screws
of box „B‟. Average weight of mixed screws is 10.9 gms. Find the average weight of
screws of box „B‟.

Answer:

Given: Average Weight in Box ‘A’ [XA] = 10.4 gms.

Number of Screws in Box ‘A’ [NA] = 100.

Number of Screws in Box ‘B’ [NB] =150.

Average Weight of mixed Screws [XAB] =10.9 gms.

[XAB] = NA XA + NB XB

NA + NB

10.9 = (100 X 10.4) + (150 X XB)

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100 + 150

XB = 11.23 gms.

Q4. (a) Discuss the rules of “Probability”.

(b) What is meant by “Conditional Probability”?

Answer:

4(a)Rules of Probability (unit-5) (5.2 and 5.3)

Managers very often come across with situations where they have to take decisions about
implementing either course of action A or course of action B or course of action C.
Sometimes, they have to take decisions regarding the implementation of both A and B.

For Example: A Sales manager may like to know the probability that he will exceed the
target for product A or product B.sometimes,he would like to know the probability that the
sales of product A and B will exceed the target.the first type of probability is answered by
addition rule.the second type of probability is answered by multiplication rule.

Addition rule:

The addition rule of probability states that:

i) If ‘A’ and ‘B’ are any two events then the probability of the occurrence of either ‘A’
or ‘B’ is given by:

ii) If ‘A’ and ‘B’ are two mutually exclusive events then the probability of occurrence
of either A or B is given by:

iii) If A, B and C are any three events then the probability of occurrence of either A or
B or C is given by:

In terms of Venn diagram, we can calculate the probability of occurrence of either event ‘A’
or event ‘B’, given that event ‘A’ and event ‘B’ are dependent events. From the figure 5.5,
we can calculate the probability of occurrence of either ‘A’ or ‘B’, given that, events ‘A’
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and ‘B’ are independent events. From the figure 5.6, we can calculate the probability of
occurrence of either ‘A’ or ‘B’ or ‘C’, given that, events ‘A’, ‘B’ and ‘C’ are dependent
events.

iv) If A1, A2, A3………, An are ‘n’ mutually exclusive and exhaustive events then the
probability of occurrence of at least one of them is given by:

Multiplication rule :

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

4(b) Conditional Probability :

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 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:

It follows that:

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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.

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Q5. (a) What is meant by “Hypothesis Testing”? Give Examples

(b) Differentiate between “Type-I” and “Type-II” Errors

Answer:

5(a) In hypothesis testing, we must state the assumed or hypothesised value of the
population parameter before we begin sampling. The assumption we wish to test is called
the null hypothesis and is symbolised by ’Ho’.

The term ‘null hypothesis’ arises from earlier agricultural and medical applications of
statistics. In order to test the effectiveness of a new fertilizer or drug, the tested hypothesis
(the null hypothesis) was that it had no effect, that is, there was no difference between
treated and untreated samples. If we use a hypothesised value of a population mean in a
problem, we would represent it symbolically as ‘µ H0’. This is read – ‘The hypothesised
value of the population mean’.

If our sample results fail to support the null hypothesis, we must conclude that something
else is true. Whenever we reject the hypothesis, the conclusion we do accept is called the
alternative hypothesis and is symbolised H1 (“H sub-one”).

For the null hypothesis H0: µ = 200, we will consider three alternative hypothesis as:

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H1: µ ≠ 200 (population mean is not equal to 200)

H1: µ > 200 (population mean greater than 200)

H1: µ < 200 (population mean less than 200)

Example

We want to test the hypothesis that the population mean is equal to 500.
We would symbolise it as follows and read it as,

The null hypothesis is that the population mean = 500 written as,

The purpose of hypothesis testing is not to question the computed value of the sample
statistic but to make a judgment about the difference between that sample statistic and a
hypothesised population parameter.
The next step after stating the null and alternative hypotheses is to decide what criterion to
be used for deciding whether to accept or reject the null hypothesis. If we assume the
hypothesis is correct, then the significance level will indicate the percentage of sample
means that is outside certain limits (In estimation, the confidence level indicates the
percentage of sample means that falls within the defined confidence limits).

5(b) Type I error:

Suppose that making a Type I error (rejecting a null hypothesis when it is true) involves the
time and trouble of reworking a batch of chemicals that should have been accepted. At the
same time, making a Type II error (accepting a null hypothesis when it is false) means
taking a chance that an entire group of users of this chemical compound will be poisoned.
Obviously, the management of this company will prefer a Type I error to a Type II error
and, as a result, will set very high levels of significance in its testing to get low β ’s.

Type II error:

Suppose, on the other hand, that making a Type I error involves disassembling an entire
engine at the factory, but making a Type II error involves relatively inexpensive warranty
repairs by the dealers. Then the manufacturer is more likely to prefer a Type II error and
will set lower significance levels in its testing.

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Q6. From the following table, calculate Laspyres Index Number, Paasches Index
Number, Fisher‟s Price Index Number and Dorbish & Bowley‟s Index Number
taking 2008 as the base year?

Commodity 2008 2009

Price (Rs) per Kg Quantity in Kg Price (Rs) per Quantity in Kg

Kg

A 6 50 10 56

B 2 100 2 120

C 4 60 6 60

D 10 30 12 24

E 8 40 12 36

Answer:

2008 2009

Price Qty in Price Qty in

Commodity P0q0 P1q1 P0q1 P1q0
(Rs.) per Kg (Rs.) per Kg
Kg (P0) Kg (P1)
(q0) (q1)

A 6 50 10 56 300 560 336 500

B 2 100 2 120 200 240 240 200

C 4 60 6 60 240 360 240 360

D 10 30 12 24 300 288 240 360

E 8 40 12 36 320 432 288 480

Total (Σ) 1360 1880 1344 1900

a) Laspeyer’s Method= P01= Σ P1q0 X 100

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Σ P0q0

Laspeyer’s Index Number= P01= 1900 X 100 = 139.71

1360

b) Paasche’s Method= P01= Σ P1q1 X 100

Σ P0q1

Paasche’s Index Number= P01= 1880 X 100 = 139.88

1344

c) Dorbish and Bowley’s Method= P01= Σ P1q0 + Σ P1q1

Σ P0q0 Σ P0q1 X 100

Or

L+P

Dorbish & Bowley’s Index Number= P01= 139.71+139.88 = 139.80

d) Fisher’s Method= P01= √Σ P1q0 X Σ P1q1 X 100

Σ P0q0 Σ P0q1

Fisher’s Price Index Number= P01= √ 1900 X 1880 X 100 = 139.79

1360 1344

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