STATISTICS FOR MANAGEMENT

ONE LINE QUESTIONS

1. Statistics: The subject concerned with scientific method for collecting, summarizing,
presenting & analyzing data as well as drawing conclusions or making prediction on the
basis of such analysis.
2. Mean: Mean or average is the sum of a collection of numbers divided by the number of
numbers in the collection.
3. Median: Median is the central value of data series when this data series arranged in
ascending or descending order.
4. Mode: Mode is the most repetitive observation of the given data series.
5. Variance: The Square of standard deviation is called Variance and is represented by σ2
6. Sample: A subset of the population. A sample is a selected number of entities or
individuals which form a part of the population under study. The study of a sample is
more practical and economical in most situations where the population is large and is
used to make conclusions about the entire population.

7. Characteristics: The word characteristic means an aspect possessed by an individual

entity. We may study the rainfall of a certain region, or the marks scored by students in
a certain school. These are referred to as characteristics.

8. Variable & Attributes: In statistics characteristics are of two types. Measurable and
non-measurable.

 Measurable characteristics are those that can be quantified as expressed in

numerical terms. The measurable characteristics are known as variables.

 A non-measurable characteristic is qualitative in nature and cannot be

quantified. Such a characteristic e.g nationality, religion, etc are called as
attributes.

9. Tabulation: Tabulation is the process of summarizing classified or grouped data in the

form of a table. A Table is a systematic arrangement of classified data in columns and
rows.

10. Random Experiment: Any act or trial in which we are not sure about the result is
called as the random experiment. e.g.. Tossing a fair coin. Throwing a cubic die.

11. Null event: It is the event containing no sample point in it is called a null or impossible
event. It is the impossible happening and is denoted by ф e.g in the experiment of
throwing a cubic die when the sample space is S = 1,2,3,4,5,6 .We define the event A:
The no of dots appeared is a two digit number
12. Union of two events A and B (AUB): union AUB is the event containing all the
sample points in A and B together. AUB = {Elements in either A or B or in both A and
B together} Eg. A={ 1,2,3} and B={2,3,5}AUB= {1,2,3,5}
13. Intersection of two events A and B (A ∩ B): For the events A and B defined on the
sample space S associated with the random experiment E, intersection of A and B is the
event containing all the sample points common to A and B both. (A ∩ B): {Elements in
A and B both} When A={ 1,2,3} and B={2,3,5} A B= {2,3}
14. Mutually exclusive events: The two events A and B are said to be mutually exclusive
or disjoint if they have no common element in them. i.e. their intersection is an empty
set. e.g. When A={ 1,2,3} and B={4,5}
15. Positive Correlation: Sometime changes in the value of two variable are in the same
direction i.e. when the value of one variable increase/decrease, the value of other
variable also increase/decrease, so it can be said that there is direct relation between
two variable, so this type of correlation is known as positive correlation. For E.g. Price
& Supply
16. Negative Correlation: Sometime changes in the value of two variable are in the
opposite direction i.e. when the value of one variable increase , the value of other
variable also decrease and vice versa, so it can be said that there is inverse relation
between two variable, so this type of correlation is known as Negative correlation. For
E.g. Price & Demand.
17. Trend: A Trend best represented by a straight line is termed as long-run direction
(upward, downward or constant) of any business activity over a period of several years.
18. Seasonal Variation: Seasonal Variation is defined as the repetitive and predictable
pattern of data behavior in a time-series around the trend line during particular time
intervals of the year. In order to measure the seasonal effect, time period must be less
than one year such as days, weeks, months or quarters.
19. Time Series: Forecasting techniques facilities prediction on the basic of a data
available from the past. This data from the past is called a time series. A set of
observations, of a variable, taken at a regular interval of time is called time series. A
time series is a bivariate data.
20. Value Index: these pertain to compare changes in the monetary value of imports,
exports, production or consumption of commodities.
21. Index Number: an index number is a statistical measure, designed to measure changes
in a variable, or a group of related variables with respect to time, geographical location
or other characteristics such as income, profession, etc.
22. Price Index: measure changes in price over a specified period of time. It is basically
the ratio of the price of a certain number of commodities at the present year as against
base year.
 LONG ANSWERS

1. Properties of Regression Coefficient:

 r=

 byx, bxy and r always have same sign (+) or (-)

 byx = 1/ bxy if they have perfect relationship.

 bxy and byx product cannot exceeds 1.

 Regression coefficients are independent of change of origin but not of scale.

2. Properties of Correlation Coefficient:

 The sign of the correlation indicates the direction of the relationship.

 Correlation coefficient is between -1 to +1, -1≤ r ≤ +1

 The correlation is perfect and positive if r = 1 and perfect and negative if r = -1

 If r = 0, then there is no correlation between the two variables and thus the variable are
said to be independent.

 The correlation coefficient is a pure number and is not affect by a change of origin and
change of scale. By change of scale we mean that all values of x and y series are
multiplied or divided by some constant. By change of origin we mean that a constant is
subtracted from all values of x and y series.

 It is relative measure of association between two or more variable.

3. Components of Time Series: There are four components in time series.

Secular Trend:
The general tendency of the data, either to increase, to decrease or to remain
constant is called Secular Trend. It is smooth, long term movement of the data. The
changes in the values are gradual and continuous. An increasing demand for luxury
items like refrigerators or colour T.V. sets reflect increasing trend. Trend in due to
long term tendency. Hence it can be evaluation if the time series is a available over a
long duration.
Seasonal Variation:
The regular, seasonal change in the time series are called Seasonal Variation. It is
observed that the demand for umbrellas, raincoats reaches a peak during monsoon.
The causes, for these seasonal fluctuations, are thus change in weather conditions, the
traditions and customs of people etc.
 Cyclical Variation:
These are changes in time series, occurring over a period which is more than a
year. These fluctuations are due to changes in a business cycle. There are four
important phases of any business activity viz. prosperity, recession, depression and
recovery. One should know that the factors affecting the cyclical variations are quite
irregular, difficult to identify and measure.
Irregular Variation:
The changes in the time series which cannot be predicated and are erratic in nature
are called Irregular Variation. Usually, these are short term changes having
signification effect on the time series during that time interval. These are caused by
unforeseen event like wars, floods, strikes, political charges, etc.

4. Discuss Scope of Statistics:

• There has been hardly any area where statistics has not been applied, whether it be trade,
industry, commerce, economics, life sciences, education.
• However certain fields have used statistics very frequently and effectively. We list some
of the important fields.
 State
 Economics
 Business Management

1. Statistics & State: Statistics have been used by governments in framing policies on the
basis of data about population, military, crimes, education etc. The present day
governments have special departments which maintain a variety of data of significance to
the state. Besides Central & State Governments, other departments such as Central
Statistical Organization (CSO), National Sample Survey Organization (NSSO) and the
Registrar General of India (RGI), regularly collect data for the purpose of analyzing
effectiveness of various policies of government.

2. Statistics & Economics: Statistics play an important role in economics. Economics

largely depends upon statistics. National income accounts are multipurpose indicators for
the economists and administrators. In economics research statistical methods are used for
collecting and analysis the data and testing hypothesis. The relationship between supply
and demands is studies by statistical methods, the imports and exports, the inflation rate,
the per capita income are the problems which require good knowledge of statistics.

3. Statistics & Business: Statistics play an important role in business. A successful

businessman must be very quick and accurate in decision making. He knows that what
his customers wants, he should therefore, know what to produce and sell and in what
quantities.Statistics helps businessman to plan production according to the taste of the
costumers, the quality of the products can also be checked more efficiently by using
statistical methods

2. The number of students in AVS College in the year 1990 was 500, of which 200 were rural
students. In 1991, the number of students increased by 150 and the number of urban students
increased by 75. In 1992, the number rural students increased by 20%, while the total number
of students increased by 50%. Tabulate the above data.

3. Explain the method of Scatter Diagram method

(Five types of diagram which we have done in the class that ypu have to draw with its
explanation)

4. Types of Index Number:

Index numbers are names after the activity they measure. Their types are as under :

Price Index: It measures changes in price over a specified period of time. It is basically
the ratio of the price of a certain number of commodities at the present year as against
base year.

Quantity Index: As the name suggest, these indices pertain to measuring changes in
volumes of commodities like goods produced or goods consumed, etc.

Value Index: These pertain to compare changes in the monetary value of imports,
exports, production or consumption of commodities.

5. Find Standard Deviation, Variance and Coefficient of variance from the

following table:

Class 60 – 80 80 – 100 – 120 – 140 – 160 – 180 –

Interval 100 120 140 160 180 200
Frequency 30 15 32 21 30 44 28
SD = 40.19, Variance = 1615, CV = 40.19

6. Following is table of I.Q. of 100 students. Calculate Mean, Median and Mode.

Class 55 – 65 – 75 – 85 – 95 – 105 – 115 – 125 – 135 –

65 75 85 95 105 115 125 135 145
Frequency 1 2 9 22 33 22 8 2 1
Mean =99.3, Median = 99.34, Mode = 99.5
 7. Find Mean, Median and Mode from the following data:

Expenditure 100 – 150 – 200 – 250 – 300 – 350 – 400 – 450 –

in (Rs.) 150 200 250 300 350 400 450 500
Frequency 30 40 27 28 30 22 8 15

Mean = 265.25, Median = 255.35, Mode = 171.74

8. Compute the seasonal indexes by simple average method:

Quarters Years
2010 2011 2012 2013
I 75 86 85 59
II 72 65 60 80
III 53 63 66 85
IV 93 80 90 59

10. Find the moving average of length 3, 4 and 5 years for the following data.

Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Sales (in 60 69 81 86 78 93 102 107 100 109
thousand
)

11. Find the two lines of regression from the following data: [08]

Age of 50 22 28 26 30 10 11 40 20 18
Husband
(Y)
Age of 18 10 30 17 22 14 16 21 10 14
Wife
(X)

Hence Estimate: i) the age of husband when the age of wife is 19 and ii) the age of wife
when the age of husband is 30.

byx = 0.20 bxy = 0.87 X = 42 when Y = 19, Y =18 when X = 30

12. Find Q3 and P95 from the following data: [08]

 Expenditure 100 – 150 – 200 – 250 – 300 – 350 – 400 – 450 –
in (Rs.) 150 200 250 300 350 400 450 500
Frequency 24 40 33 28 30 22 16 7

Q3 = 341.67, P95 = 440.63

13. Fit straight line trend by the method of least squares for the following data
representing production in thousand units. Find the trend value of each year. Hence
estimate the trend for the years 2007.

Year 1999 2000 2001 2002 2003 2004 2005

Production (in 14 15 17 16 17 20 23
thousand unit)

Y = 13.7 + 1.32X (Y2007 = 13.47)

14. Find Determine the trend for the following data using 3 & 5 yearly moving
averages
Year 1989 1990 1991 1992 1993 199 1995 1996 1997
4
Sales in 24 28 30 33 34 36 35 40 44
Thousan
d

15. Calculate Karl Pearson’s coefficient of correlation for the following data:

X 17 19 21 26 20 28 26 27
Y 23 27 25 26 27 25 30 33
r = 0.515

16. Find Mean, Median and Mode from the following data:

Expenditure 100 – 150 – 200 – 250 – 300 – 350 – 400 – 450 –

in (Rs.) 150 200 250 300 350 400 450 500
Frequency 24 40 33 28 30 22 16 7

Mean = 266.25 , Median = 255.36, Mode = 184.78

 17. Compute the seasonal indexes by the average percentage method:

Quarters Years
2009 2010 2011 2012
I 75 86 90 59
II 60 65 72 80
III 53 63 66 85
IV 59 80 85 93

FILL IN THE BLANKS

1. Moving Averages are a series of consecutive arithmetic means obtained by averaging the
groups of successive observations in a time series.

2. Correlation and Regression is bivariate analysis type of analysis.

3. If the data series is divided into four equal parts then it is known as Quartiles

4. If the data series is divided into ten equal parts then it is known as Deciles

5. If the data series is divided into hundred equal parts then it is known as Percentiles.

6. The study of trend facilitate in making intermediate and long-term forecasting

projections.

7. A Trend best represented by a straight line is termed as long-run direction (upward,

downward or constant) of any business activity over a period of several years.

8. A time series is a bivariate data.

9. The changes in the time series which cannot be predicated and are erratic in nature are
called Irregular Variation.

10. Value Index pertains to compare changes in the monetary value of imports, exports,
production or consumption of commodities.

11. Mean is based on each and every observation of the data series

12. Measures of Dispersion helps to study the amount of variation among the values in the
data set can also be measured.

13. Range = H – L
 TRUE & FALSE

1. Median is the sum of a collection of numbers divided by the number of numbers in the
collection.
False
Reason: Mean is the sum of a collection of numbers divided by the number of
numbers in the collection.

2. Mean is very much affected by extreme observations.

True
Reason: Mean includes all the values in the calculation whether it is extreme high or
low.

3. In 1839 Karl Pearson’s introduced the concept of standard deviation.

False
Reason: In 1893 Karl Pearson first introduced the concept of standard deviation.

4. Standard Deviation consider as a best measures of dispersions.

True
Reason: It is considered as one of the best measures of dispersion as it satisfies the
requisites of a good measure of dispersion.

5. The two events A and B are said to be mutually exhaustive if they have no common
element in them.
False
Reason: The two events A and B are said to be mutually exclusive or disjoint if they
have no common element in them.

6. Correlation coefficient is between -2 to +2

False
Reason: Correlation coefficient is between -1 to +1, -1≤ r ≤ +1

7. Correlation attempts to establish the nature of relationship between two variables - that is
to study the functional relationship between the variable x and y and thereby, provides a
mechanism for prediction or forecasting.
False
Reason: Regression Analysis attempts to establish the nature of relationship
between two variables - that is to study the functional relationship between the
variable x and y and thereby, provides a mechanism for prediction or forecasting.
8. Least square method is also known as Straight Line Trend Method.
True
Reason: on the basis of this method we can find trend straight trend line as well as
we can forecast about the future value.

9. The general tendency of the data, to increase, to decrease or to remain constant is called
Seasonal Variation.
False
Reason: The general tendency of the data, to increase, to decrease or to remain
constant is called Secular Trend.

10. Index Numbers are economic thermometer to judge the inflation or deflationary
tendencies of the economy.
False
Reason: Index Numbers are economic barometers to judge the inflation or
deflationary tendencies of the economy.

11. In order to measure the seasonal effect, time period must be less than one year.
True
Reason: In one year all the seasons are cover whether it is festive or weather
condition.

12. Link relative method is also known as spearman’s method.

False
Reason: Link relative method is known as Pearson’s Method.

13. There are four methods to study seasonal indexes.

True
Reason: Following four methods are there to study the Seasonal Indexes.
1. Method of simple average
2. Ratio – to – trend method
3. Ratio – to – moving average method
4. Link relative method