Master of Business Administration- MBA Semester 1 MB0040 Statistics for Management - 4 Credits (Book ID: B1731) Assignment Set

t - 1 (60 Marks)

Q1. a. Explain the characteristics of Statistics. What are the components of Statistics? Give a

brief description of each of the components. Ans- Characteristics of Statistics

There are several characteristics of Statistics. Not only does it deal with an aggregate of facts, it also gets affected by multiple causes. Statistics numerically expressed, is estimated with varying degrees of accuracy and is collected in a systematic manner for pre-determined purposes. To ensure comparative and analytical studies, statistical facts need to be arranged in a systematic, logical order. Let us look at each characteristic in detail. 1. Statistics deals with an aggregate of facts A single figure cannot be analysed. For example, the fact Mr Kiran is 170 cms tall cannot be statistically analysed. On the other hand, if we know the heights of 60 students in a class, we can comment upon the average height and variation. 2. Statistics gets affected to a great extent by multiplicity of causes The Statistics of the yield of a crop is the result of several factors, such as the fertility of soil, amount of rainfall, the quality of seed used, the quality and quantity of fertilizer used. 3. Statistics are numerically expressed Only numerical facts can be statistically analysed. Therefore, facts such as price decreases with increasing production cannot be called statistics. The qualitative data such as, the categorical data cannot be called as statistics, for example, the eye colour of a person or the brand name of an automobile. 4. Statistics are enumerated or estimated with required degree of accuracy The facts have to be collected from the field or estimated (computed) with the required degree of accuracy. The degree of accuracy differs depending upon the purpose. For example, in measuring the length of screws, an accuracy of up to a millimetre may be required, whereas while measuring the heights of students in a class, an accuracy of up to a centimetre is enough. 5. Statistics are collected in a systematic manner The facts should be collected according to planned and scientific methods otherwise, they are likely to be wrong and misleading. 6. Statistics are collected for a pre-determined purpose There must be a definite purpose for collecting facts. Otherwise, indiscriminate data collection might take place which would lead to wrong diagnosis. 7. Statistics are placed in relation to each other The facts must be placed in such a way that a comparative and analytical

study becomes possible. Thus, only related facts which are arranged in a logical order can be called Statistics. Statistical analysis cannot be used to compare heterogeneous data.

Q2. Explain the objectives of Statistical Average. What are the requisites of a good average?

Q3. a. Mention the Characteristics of Chi-square test.

b. Two research workers classified some people in income groups on the basis of sampling studies. Their results are as follow: Investigators Income groups Total Poor A B Total Middle 160 30 140 120 300 150 Rich 10 200 40 300 50 500

Show that the sampling technique of atleast one research worker is defective.
Q4. What do you mean by cost of living index? Discuss the methods of construction of cost of

living index with an example for each. Ans- Cost of Living Index or Consumer Price Index
The Cost of living index, also known as consumer price index or Cost of living price index is the countrys principal measure of price change. The Consumer price index helps us in determining the effect of rise and fall in

prices on different classes of consumers living in different areas.

Key statistic Cost of living price index measures average change over time in the prices paid by the consumer for specific basket of goods and services. The cost of living price index numbers are designed to measure the average change in the price paid by the ultimate consumers for specified

quantities of goods and services over a period of time.

Different people consume different kinds of commodities and the same commodities in different proportions. The consumer price index helps us in determining the effect of size. Fall in price index helps us in determining the effect of rise and fall in prices on different classes of consumers living in different areas. The consumer price index number is significant because the

demand of a higher wage is based on the cost of living index and the wages and salaries in most nations are adjusted according to this index number. The cost of living index does not measure the actual cost of living or the fluctuations in the cost of living due to causes other than the change in price level. However, its object is to find out how much the consumers of a

particular class have to pay for a certain quantity of goods and services. Methods of Constructing Consumer Price Index
There are two methods for constructing consumer price index number. They are: I. Aggregate expenditure method II. Family budget method or method of weighted average of price relatives. I. Aggregate Expenditure Method This method is based on Laspeyres method where the base year quantities are taken as weights (w = Q0). II. Family budget method Family budget method or the method of weighted relatives is the method where weights are the Value (P0Q0) in the base year often denoted by W. W PW P 01 , where 100 P0 P1 P for each item and

W= value weight, i.e., P0Q0

Q5. Define trend. Enumerate the methods of determining trend in time series Q6. The following data represent the number of units of production per day turned out by 5

different workmen using different types of machines.