MOHIT DHAWAN

SEMESTER – III
Roll no – 2314508175

QUANTITATIVE TECHNIQUES FOR MANAGEMENT

Assignment Set – 1

1.Describe function of Statistics briefly.

Functions of Statistics

Statistics is a branch of mathematics that deals with collecting, analyzing, interpreting,

presenting, and organizing data. It helps in making informed decisions by providing a method to
understand and interpret data patterns and trends. The functions of statistics can be summarized
as follows:

1. Data Collection

Statistics provides techniques for systematically collecting data from various sources, such as
surveys, experiments, or observations. The goal is to gather accurate and relevant data that can
later be analyzed. The methods for data collection include sampling, questionnaires, interviews,
and observational studies.

2. Data Organization

Once data is collected, it needs to be organized for further analysis. This is done through:

• Tabulation: Arranging data in tables to facilitate easy interpretation.

• Categorization: Grouping data into categories or classes based on common features.
• Graphical Representation: Using charts, graphs, and plots like histograms, pie charts,
and bar charts to present data visually, which makes it easier to understand and analyze.

3. Data Analysis

Statistical analysis involves using various methods to process and analyze data. Some common
techniques include:

• Descriptive Statistics: Summarizing data using measures such as mean, median, mode,
variance, and standard deviation. It helps in understanding the central tendency and
spread of the data.
• Inferential Statistics: Making predictions or generalizations about a population based on
a sample of data. It includes techniques like hypothesis testing, confidence intervals, and
regression analysis.
4. Data Interpretation

After analyzing the data, statisticians interpret the results. The interpretation involves:

• Drawing conclusions from the analyzed data.

• Understanding relationships or patterns in the data, and explaining the findings in simple
terms.
• Determining the significance or relevance of the findings in relation to the research
problem or hypothesis.

5. Prediction and Forecasting

One of the key functions of statistics is to make predictions about future events or outcomes
based on historical data. Techniques like time-series analysis, regression models, and probability
distributions are often used for forecasting. This helps businesses, governments, and
organizations plan for the future and make data-driven decisions.

6. Decision Making

Statistics helps in making informed decisions by providing empirical evidence rather than relying
on intuition or guesswork. Decision makers can assess risks, benefits, and outcomes based on
statistical data. For example, a company may use statistical analysis to determine the success of a
product launch or decide on inventory management.

7. Summarizing and Reporting Findings

Statistics also plays a crucial role in summarizing and reporting research findings in a way that is
clear and meaningful. It provides tools to present data in formats that are easy to understand and
interpret, helping both researchers and stakeholders make informed decisions.

Conclusion

The functions of statistics—data collection, organization, analysis, interpretation, prediction, and

decision-making—are fundamental to turning raw data into valuable information. By applying
statistical methods, we can make sense of complex data, identify trends, and make informed
decisions in various fields, including business, economics, healthcare, and social sciences.

2. Explain Classification of data and all its types.

Classification of Data

In statistics, classification of data refers to the process of organizing data into categories,
groups, or classes that share similar characteristics. The purpose of classification is to simplify
large datasets by grouping similar data points together, making it easier to analyze and interpret.
Data can be classified based on various criteria such as the nature of the data, measurement
scales, and levels of data.
Types of Classification of Data

Data can be classified into several categories based on different criteria. The primary
classifications of data are:

1. Based on Nature of Data

a) Qualitative Data (Categorical Data)

• Definition: Qualitative data consists of categories or attributes that describe qualities or

characteristics. These data are non-numeric and cannot be measured.
• Examples: Gender (male, female), marital status (single, married), color (red, blue,
green).
• Further Classification:
o Nominal Data: This is the most basic form of qualitative data, where the data
items are simply labels or names. There is no inherent order or ranking.
▪ Example: Eye color (blue, brown, green).
o Ordinal Data: Ordinal data have a meaningful order or ranking, but the
differences between the ranks are not uniform or measurable.
▪ Example: Education level (high school, bachelor's, master's, doctorate).

b) Quantitative Data (Numerical Data)

• Definition: Quantitative data consists of numbers that can be measured and expressed in
terms of quantity. These data can be subjected to mathematical operations.
• Examples: Age, height, weight, income.
• Further Classification:
o Discrete Data: Discrete data are countable and represent distinct, separate values.
They cannot take fractions or decimals.
▪ Example: Number of students in a class (20 students, 21 students, etc.).
o Continuous Data: Continuous data are measurable and can take any value within
a range, including fractions or decimals.
▪ Example: Height (5.6 feet, 5.75 feet, etc.), weight (60.5 kg, 60.55 kg).

2. Based on Time Period

a) Cross-Sectional Data

• Definition: Cross-sectional data are collected at a single point in time or over a very short
time period.
• Example: A survey conducted in 2023 asking people about their preferences for a new
product.

b) Time-Series Data
 • Definition: Time-series data is collected over a period of time at regular intervals (e.g.,
daily, monthly, yearly) to observe changes or trends.
• Example: Stock market prices recorded every day over the past year, or the average
monthly temperature for a city over the past decade.

c) Longitudinal Data

• Definition: Longitudinal data involves repeated observations or measurements over a

long period of time, often used to study changes over time.
• Example: A study tracking the health outcomes of individuals over several years to
observe the effects of lifestyle changes.

3. Based on Measurement Scales (Levels of Measurement)

Data can also be classified based on the level of measurement, which determines how data can
be analyzed. The four main scales of measurement are:

a) Nominal Scale

• Definition: Data categorized by names, labels, or qualities without any specific order or
ranking.
• Example: Blood type (A, B, AB, O), car brand (Toyota, Honda, Ford).

b) Ordinal Scale

• Definition: Data that can be ordered or ranked, but the differences between data points
are not uniform or measurable.
• Example: Ranking of movies (1st, 2nd, 3rd) in a competition, survey responses like
"very satisfied," "satisfied," "neutral," "dissatisfied."

c) Interval Scale

• Definition: Data that have meaningful intervals between them but no true zero point. The
differences between values are consistent and measurable.
• Example: Temperature in Celsius or Fahrenheit (the difference between 30°C and 40°C
is the same as the difference between 70°C and 80°C), calendar years.

d) Ratio Scale

• Definition: Data that have both meaningful intervals and an absolute zero point. This
allows for the calculation of ratios between values.
• Example: Height, weight, income, age (e.g., a person who is 30 years old is twice as old
as someone who is 15 years old).
4. Based on Source of Data

a) Primary Data

• Definition: Data that is collected directly from the original source for a specific research
purpose. It is fresh and not previously analyzed.
• Examples: Surveys, interviews, experiments, and observations.

b) Secondary Data

• Definition: Data that was collected for a different purpose but is being used for the
current research or analysis.
• Examples: Government reports, academic papers, historical data, and data from previous
studies.

5. Based on Variables

a) Univariate Data

• Definition: Data involving a single variable or attribute.

• Example: The heights of a group of people (measuring only height without considering
other factors like age or gender).

b) Bivariate Data

• Definition: Data involving two variables, often to explore the relationship between them.
• Example: The relationship between hours studied and exam scores.

c) Multivariate Data

• Definition: Data involving more than two variables, used to analyze complex
relationships.
• Example: Examining the effect of age, education, and income on consumer spending
behavior.

Conclusion

The classification of data is crucial in organizing and analyzing information effectively. Data can
be classified in various ways, including based on nature (qualitative or quantitative), time period
(cross-sectional or time-series), measurement scale (nominal, ordinal, interval, or ratio), source
(primary or secondary), and variables (univariate, bivariate, multivariate). Understanding the
different types of data allows researchers and analysts to choose the appropriate methods for data
collection, analysis, and interpretation, which ultimately leads to better insights and informed
decision-making.
 3. Calculate the mean of the following frequency distribution:
Marks X 10 20 30 40 50 60
Frequency f 8 12 20 10 7 3

To calculate the mean of the given frequency distribution, we use the formula:

Mean=∑(f×X)∑f\text{Mean} = \frac{\sum (f \times X)}{\sum f}Mean=∑f∑(f×X)

Where:

• XXX = marks (values of the variable)

• fff = frequency (the number of occurrences of each value)

We need to:

1. Multiply each value of XXX by its corresponding frequency fff.

2. Sum the products of f×Xf \times Xf×X.
3. Sum all the frequencies fff.
4. Divide the sum of the products by the sum of frequencies to get the mean.

Given Data:

Marks XXX Frequency fff f×Xf \times Xf×X

10 8 10×8=8010 \times 8 = 8010×8=80

20 12 20×12=24020 \times 12 = 24020×12=240

30 20 30×20=60030 \times 20 = 60030×20=600

40 10 40×10=40040 \times 10 = 40040×10=400

50 7 50×7=35050 \times 7 = 35050×7=350

60 3 60×3=18060 \times 3 = 18060×3=180

Step 1: Calculate f×Xf \times Xf×X for each class.

Marks XXX Frequency fff f×Xf \times Xf×X

10 8 80

20 12 240
Marks XXX Frequency fff f×Xf \times Xf×X

30 20 600

40 10 400

50 7 350

60 3 180

Step 2: Sum of f×Xf \times Xf×X and Sum of frequencies fff

∑(f×X)=80+240+600+400+350+180=1850\sum (f \times X) = 80 + 240 + 600 + 400 + 350 + 180 =

1850∑(f×X)=80+240+600+400+350+180=1850 ∑f=8+12+20+10+7+3=60\sum f = 8 + 12 + 20 + 10 + 7 + 3 =
60∑f=8+12+20+10+7+3=60

Step 3: Calculate the Mean

Mean=185060=30.83\text{Mean} = \frac{1850}{60} = 30.83Mean=601850=30.83

Answer:

The mean of the given frequency distribution is 30.83.

(B)Find Quartile one Q1 and Quartile three Q3 of the following series:

Size: 4 4.5 5 5.5 6 6.5 7 7.5 8

Frequency: 10 18 22 25 40 15 10 8 7

To find the Quartile 1 (Q1) and Quartile 3 (Q3) of a frequency distribution, we need to follow
the steps below:

Steps to calculate Q1 and Q3:

1. Calculate the cumulative frequency for each class.

2. Determine the position of Q1 and Q3:
o Q1 is the 25th percentile of the data, and its position is calculated as:

Position of Q1=14×N\text{Position of Q1} = \frac{1}{4} \times NPosition of Q1=41×N

where NNN is the total number of observations.

o Q3 is the 75th percentile of the data, and its position is calculated as:
 Position of Q3=34×N\text{Position of Q3} = \frac{3}{4} \times NPosition of Q3=43×N

3. Use the cumulative frequency table to locate the values corresponding to Q1 and Q3.

Given Data:

Size XXX Frequency fff Cumulative Frequency (CF)

4 10 10

4.5 18 10 + 18 = 28

5 22 28 + 22 = 50

5.5 25 50 + 25 = 75

6 40 75 + 40 = 115

6.5 15 115 + 15 = 130

7 10 130 + 10 = 140

7.5 8 140 + 8 = 148

8 7 148 + 7 = 155

Step 1: Calculate the total number of observations (N)

N=10+18+22+25+40+15+10+8+7=155N = 10 + 18 + 22 + 25 + 40 + 15 + 10 + 8 + 7 =
155N=10+18+22+25+40+15+10+8+7=155

Step 2: Calculate the positions of Q1 and Q3

• Position of Q1:

Position of Q1=14×155=38.75\text{Position of Q1} = \frac{1}{4} \times 155 =

38.75Position of Q1=41×155=38.75

• Position of Q3:

Position of Q3=34×155=116.25\text{Position of Q3} = \frac{3}{4} \times 155 =

116.25Position of Q3=43×155=116.25

Step 3: Find Q1 and Q3

Q1:
To find Q1, locate the cumulative frequency that is just greater than or equal to 38.75.

• From the cumulative frequency table, the cumulative frequency just greater than 38.75 is 50 (for
size 5).
• Q1 lies in the class 5 (between 4.5 and 5).

To calculate Q1, we use the formula for interpolation:

Q1=L+(N4−CFf)×hQ1 = L + \left( \frac{\frac{N}{4} - CF}{f} \right) \times hQ1=L+(f4N−CF)×h

Where:

• LLL = Lower boundary of the class containing Q1 = 4.5

• NNN = Total frequency = 155
• CFCFCF = Cumulative frequency before Q1 = 28 (for size 4.5)
• fff = Frequency of the class containing Q1 = 22 (for size 5)
• hhh = Class width = 0.5 (difference between 4.5 and 5)

Substituting the values:

Q1=4.5+(38.75−2822)×0.5Q1 = 4.5 + \left( \frac{38.75 - 28}{22} \right) \times 0.5Q1=4.5+(2238.75−28

)×0.5 Q1=4.5+(10.7522)×0.5Q1 = 4.5 + \left( \frac{10.75}{22} \right) \times 0.5Q1=4.5+(2210.75)×0.5
Q1=4.5+0.244×0.5=4.5+0.122=4.622Q1 = 4.5 + 0.244 \times 0.5 = 4.5 + 0.122 =
4.622Q1=4.5+0.244×0.5=4.5+0.122=4.622

Thus, Q1 = 4.622.

Q3:

To find Q3, locate the cumulative frequency that is just greater than or equal to 116.25.

• From the cumulative frequency table, the cumulative frequency just greater than 116.25 is 115
(for size 6), and Q3 lies in the class 6 (between 5.5 and 6).

Using the same formula for interpolation:

Q3=L+(3N4−CFf)×hQ3 = L + \left( \frac{\frac{3N}{4} - CF}{f} \right) \times hQ3=L+(f43N−CF)×h

Where:

• LLL = Lower boundary of the class containing Q3 = 5.5

• NNN = Total frequency = 155
• CFCFCF = Cumulative frequency before Q3 = 75 (for size 5.5)
• fff = Frequency of the class containing Q3 = 40 (for size 6)
• hhh = Class width = 0.5
Substituting the values:

Q3=5.5+(116.25−7540)×0.5Q3 = 5.5 + \left( \frac{116.25 - 75}{40} \right) \times

0.5Q3=5.5+(40116.25−75)×0.5 Q3=5.5+(41.2540)×0.5Q3 = 5.5 + \left( \frac{41.25}{40} \right) \times
0.5Q3=5.5+(4041.25)×0.5 Q3=5.5+1.03125×0.5=5.5+0.5156=6.0156Q3 = 5.5 + 1.03125 \times 0.5 = 5.5 +
0.5156 = 6.0156Q3=5.5+1.03125×0.5=5.5+0.5156=6.0156

Thus, Q3 = 6.016.

Final Answer:

• Q1 = 4.622
• Q3 = 6.016
• Assignment Set – 2
•
4. Explain coefficient of correlation. Discuss the methods of calculating coefficient of correlation.

Coefficient of Correlation

The coefficient of correlation is a statistical measure that quantifies the strength and direction of
the relationship between two variables. It is represented by rrr and ranges from -1 to 1.

• r=1r = 1r=1: Perfect positive correlation (as one variable increases, the other also increases in
exact proportion).
• r=−1r = -1r=−1: Perfect negative correlation (as one variable increases, the other decreases in
exact proportion).
• r=0r = 0r=0: No correlation (there is no predictable relationship between the variables).
• 0<r<10 < r < 10<r<1: Positive correlation (as one variable increases, the other also tends to
increase).
• −1<r<0-1 < r < 0−1<r<0: Negative correlation (as one variable increases, the other tends to
decrease).

The closer the coefficient is to 1 or -1, the stronger the relationship between the variables.

Methods of Calculating Coefficient of Correlation

There are several methods to calculate the coefficient of correlation, with the most commonly
used being Pearson's correlation coefficient, Spearman's rank correlation coefficient, and
Kendall's tau coefficient. Below, we focus on Pearson's method, which is the most widely used.

1. Pearson's Correlation Coefficient (r)

Pearson’s correlation coefficient measures the linear relationship between two continuous
variables. It is calculated using the formula:
r=n∑XY−∑X∑Y(n∑X2−(∑X)2)(n∑Y2−(∑Y)2)r = \frac{n \sum XY - \sum X \sum Y}{\sqrt{(n \sum X^2 - (\sum
X)^2)(n \sum Y^2 - (\sum Y)^2)}}r=(n∑X2−(∑X)2)(n∑Y2−(∑Y)2)n∑XY−∑X∑Y

Where:

• XXX and YYY are the two variables being correlated.

• nnn is the number of pairs of data.
• ∑XY\sum XY∑XY is the sum of the product of corresponding values of XXX and YYY.
• ∑X\sum X∑X and ∑Y\sum Y∑Y are the sums of the individual variables XXX and YYY.
• ∑X2\sum X^2∑X2 and ∑Y2\sum Y^2∑Y2 are the sums of the squares of the variables XXX and
YYY.

Steps for calculation:

1. Calculate the sums: Find ∑X\sum X∑X, ∑Y\sum Y∑Y, ∑X2\sum X^2∑X2, ∑Y2\sum Y^2∑Y2, and
∑XY\sum XY∑XY.
2. Substitute into the formula: Plug the sums into the Pearson correlation formula.
3. Interpret the result: The result will give you the correlation coefficient rrr, which ranges from -1
to 1.

Example:

Given the following data for variables XXX and YYY:

X Y X × Y X² Y²

122 1 4

236 4 9

3 4 12 9 16

4 5 20 16 25

Calculate the sums and then substitute them into the formula for rrr.

2. Spearman’s Rank Correlation Coefficient

Spearman’s rank correlation is used when the data is ordinal (ranked) or when the relationship
between the variables is not linear. It measures the strength and direction of the relationship
between the ranks of two variables.

The formula for Spearman's rank correlation is:

rs=1−6∑d2n(n2−1)r_s = 1 - \frac{6 \sum d^2}{n(n^2 - 1)}rs=1−n(n2−1)6∑d2

Where:

• ddd is the difference between the ranks of corresponding values of XXX and YYY.
• nnn is the number of data pairs.

Steps for calculation:

1. Rank the values of XXX and YYY.

2. Find the differences ddd between the ranks of each pair.
3. Square the differences and sum them up (∑d2\sum d^2∑d2).
4. Substitute into the formula for rsr_srs.

Example:

Given the data of two variables XXX and YYY:

XY

14

23

32

41

• Rank XXX and YYY and calculate the differences in ranks ddd.
• Calculate ∑d2\sum d^2∑d2 and then compute rsr_srs.

3. Kendall’s Tau Coefficient

Kendall’s tau is another method for calculating correlation, mainly used for small sample sizes or
ordinal data. It is based on the idea of concordant and discordant pairs.

The formula for Kendall's tau is:

τ=(C−D)12n(n−1)\tau = \frac{(C - D)}{\frac{1}{2} n (n-1)}τ=21n(n−1)(C−D)

Where:

• CCC is the number of concordant pairs.

• DDD is the number of discordant pairs.
• nnn is the number of pairs.

Steps for calculation:

 1. Identify all possible pairs of data points.
2. Count the number of concordant pairs (where the ranks of XXX and YYY agree) and discordant
pairs (where the ranks disagree).
3. Compute τ\tauτ using the formula.

Conclusion

The coefficient of correlation provides valuable insights into the relationship between two
variables. Pearson’s correlation coefficient is the most commonly used method for linear
relationships with continuous data. Spearman’s rank correlation is used for ranked or ordinal
data, and Kendall’s tau is useful for small sample sizes or ordinal data.

By calculating the correlation coefficient, we can determine whether two variables are related,
the strength of their relationship, and the direction (positive or negative). This is particularly
useful in fields like economics, business, social sciences, and natural sciences.

5.Describe components of time series analysis.

Components of Time Series Analysis

Time series analysis is a statistical technique used to analyze data points collected or recorded at
successive points in time. The goal of time series analysis is to identify patterns in the data over
time, which can help in forecasting future values. Time series data typically includes multiple
observations of a variable over time, such as monthly sales, quarterly profits, or daily
temperatures.

There are four main components in a time series analysis that can affect the observed values:

1. Trend (T)
2. Seasonality (S)
3. Cyclic Patterns (C)
4. Irregular or Random Fluctuations (I)

1. Trend (T)

• Definition: The trend represents the long-term movement or direction in the data over time. It
shows whether the data is generally increasing, decreasing, or remaining constant over a long
period.
• Characteristics:
o A positive trend indicates that the variable is generally increasing over time.
o A negative trend indicates a decrease in the variable over time.
o A constant trend suggests that the data does not show any significant upward or
downward movement over time.
• Example: In the case of company sales, a trend might show steady growth over several years
due to increasing market demand or expansion efforts.
2. Seasonality (S)

• Definition: Seasonality refers to the regular, repeating fluctuations or patterns in the data that
occur at specific, known intervals within a year, month, week, or day. These fluctuations are
typically influenced by factors such as weather, holidays, or specific time-related factors (like
monthly or quarterly cycles).
• Characteristics:
o Seasonality can be yearly (e.g., higher retail sales during the holiday season), monthly
(e.g., higher electricity usage in summer months), or even weekly or daily (e.g.,
increased demand for transport during peak hours).
o These patterns are predictable and recur at fixed periods, often tied to external events
or factors.
• Example: Retail sales often experience seasonality, with increased sales during the holiday
season (December) or back-to-school season (August-September).

3. Cyclic Patterns (C)

• Definition: Cyclic patterns represent long-term oscillations in data that do not occur at fixed
intervals like seasonality. Unlike seasonality, which has a fixed period, cyclical fluctuations can
last for several years and are often influenced by factors like economic cycles, business cycles, or
political changes.
• Characteristics:
o Cyclic changes are less predictable compared to seasonal variations, as they are often
influenced by economic conditions, market forces, or large-scale socio-political events.
o They can last for several years, and the length of a cycle may not be constant.
• Example: The economic cycle (expansion, recession, recovery) is a classic example of a cyclic
pattern that affects various industries, such as the real estate market, consumer spending, and
stock market performance.

4. Irregular or Random Fluctuations (I)

• Definition: Irregular fluctuations (also known as "random fluctuations" or "noise") refer to

random variations in the data that cannot be explained by trend, seasonality, or cyclical
patterns. These are unpredictable and occur due to chance or unforeseen events.
• Characteristics:
o These fluctuations are typically random and do not follow any consistent pattern.
o Irregular fluctuations can result from unexpected events like natural disasters, strikes,
accidents, or sudden market changes.
o While they are difficult to predict or model, statistical methods can be used to estimate
their impact and minimize their effect.
• Example: A sudden spike in sales due to an unexpected event, such as a viral marketing
campaign, or an unexpected decline in sales caused by a natural disaster.

Summary of Components:
 Component Description Example

Long-term movement in the data (upward, Increasing company profits over the
Trend (T)
downward, or constant). years.

Regular, predictable fluctuations occurring Higher sales during the holiday

Seasonality (S)
at fixed periods within a year. season.

Fluctuations that occur in cycles but without Economic cycles (boom, recession,
Cyclic Patterns (C)
fixed periodicity. recovery).

Irregular Random, unpredictable variations in data Sales spike from a viral event or a
Fluctuations (I) due to unforeseen events. sudden drop due to a disaster.

Use of Components in Time Series Analysis

Time series analysis involves decomposing a time series into these components to identify the
underlying patterns and make forecasts. For example:

• Trend analysis is used to understand long-term movements.

• Seasonal adjustments are made to account for predictable, recurring patterns.
• Cyclic analysis can help businesses anticipate broader economic conditions.
• Noise reduction or smoothing techniques are applied to minimize the impact of irregular
fluctuations.

By isolating and analyzing these components, businesses and analysts can make more accurate
predictions and decisions about future trends.

6. (a)Construct an index number for 2015 taking 2014 as base:

Price in 2014 Price in 2015
Commodity
90 95
A
40 60
B
90 110
C
30 35
D

Constructing an Index Number for 2015 with 2014 as the Base

An index number is a statistical tool that expresses the relative change in a variable over time.
In this case, we will calculate the price index number for the year 2015 using 2014 as the base
year. The base year index is set to 100.
We will use the Laspeyres Price Index formula to calculate the index number. The formula is:

Price Index for 2015=(∑(P2015×Q2014)∑(P2014×Q2014))×100\text{Price Index for 2015} = \left(

\frac{\sum (P_{2015} \times Q_{2014})}{\sum (P_{2014} \times Q_{2014})} \right) \times
100Price Index for 2015=(∑(P2014×Q2014)∑(P2015×Q2014))×100

Where:

• P2015P_{2015}P2015 = Price in 2015

• P2014P_{2014}P2014 = Price in 2014
• Q2014Q_{2014}Q2014 = Quantity in 2014 (assuming the quantity of each commodity remains
constant)

Steps to Calculate the Price Index:

1. Set up the data:

Price in 2014 Price in 2015 Quantity in 2014

Commodity (P2014P_{2014}P2014) (P2015P_{2015}P2015) (Q2014Q_{2014}Q2014)

A 90 95 1

B 40 60 1

C 90 110 1

D 30 35 1

(Note: Quantity remains the same as the base year, so we assume Q2014=1Q_{2014} = 1Q2014
=1 for simplicity.)

2. Calculate the numerator (the sum of the product of prices in 2015 and quantities in 2014):

Numerator=(PA,2015×QA,2014)+(PB,2015×QB,2014)+(PC,2015×QC,2014)+(PD,2015×QD,2014)\text{Nu
merator} = (P_{A, 2015} \times Q_{A, 2014}) + (P_{B, 2015} \times Q_{B, 2014}) + (P_{C, 2015} \times
Q_{C, 2014}) + (P_{D, 2015} \times Q_{D, 2014})Numerator=(PA,2015×QA,2014)+(PB,2015×QB,2014
)+(PC,2015×QC,2014)+(PD,2015×QD,2014) =(95×1)+(60×1)+(110×1)+(35×1)= (95 \times 1) + (60 \times
1) + (110 \times 1) + (35 \times 1)=(95×1)+(60×1)+(110×1)+(35×1) =95+60+110+35=300= 95 + 60 + 110 +
35 = 300=95+60+110+35=300

3. Calculate the denominator (the sum of the product of prices in 2014 and quantities in 2014):

Denominator=(PA,2014×QA,2014)+(PB,2014×QB,2014)+(PC,2014×QC,2014)+(PD,2014×QD,2014)\text{D
enominator} = (P_{A, 2014} \times Q_{A, 2014}) + (P_{B, 2014} \times Q_{B, 2014}) + (P_{C, 2014} \times
Q_{C, 2014}) + (P_{D, 2014} \times Q_{D, 2014})Denominator=(PA,2014×QA,2014)+(PB,2014×QB,2014
)+(PC,2014×QC,2014)+(PD,2014×QD,2014) =(90×1)+(40×1)+(90×1)+(30×1)= (90 \times 1) + (40 \times 1)
+ (90 \times 1) + (30 \times 1)=(90×1)+(40×1)+(90×1)+(30×1) =90+40+90+30=250= 90 + 40 + 90 + 30 =
250=90+40+90+30=250

4. Now, calculate the index number for 2015:

Index Number for 2015=(NumeratorDenominator)×100\text{Index Number for 2015} = \left(

\frac{\text{Numerator}}{\text{Denominator}} \right) \times
100Index Number for 2015=(DenominatorNumerator)×100
Index Number for 2015=(300250)×100=1.2×100=120\text{Index Number for 2015} = \left(
\frac{300}{250} \right) \times 100 = 1.2 \times 100 = 120Index Number for 2015=(250300
)×100=1.2×100=120

Final Result:

The index number for 2015 (taking 2014 as the base year) is 120.

This means that the prices of the commodities in 2015 have increased by 20% compared to the
base year (2014).

b) Write Short note:

Parameter (ii) Estimator

Short Note on Parameter and Estimator

Parameter:

• A parameter is a numerical value that describes a characteristic of a population. It is a

fixed, but often unknown, quantity that provides insights into the overall distribution or
nature of the entire population.
• Examples of Parameters:
o Population mean (μ\muμ): The average value of a variable for the entire population.
o Population variance (σ2\sigma^2σ2): The variability of a variable for the entire
population.
o Population proportion: The fraction or percentage of the population that has a
particular characteristic.
• Properties:
o A parameter is usually a constant, but it can be difficult or impossible to compute for the
entire population, especially when the population is large or infinite.
o Parameters are typically estimated through sampling.

Estimator:
 • An estimator is a rule or method used to estimate a population parameter based on
sample data. It is a statistical technique or formula that provides an estimate of the
unknown parameter.
• Examples of Estimators:
o Sample mean (xˉ\bar{x}xˉ): Used as an estimator for the population mean (μ\muμ).
o Sample variance (s2s^2s2): Used as an estimator for the population variance
(σ2\sigma^2σ2).
o Sample proportion: Used to estimate the population proportion.
• Properties of an Estimator:
o Unbiased: An estimator is unbiased if the expected value of the estimator is equal to the
true value of the parameter.
o Consistent: An estimator is consistent if it converges to the true value of the parameter
as the sample size increases.
o Efficient: An estimator is efficient if it has the smallest possible variance among all
unbiased estimators.

Relationship Between Parameter and Estimator:

• Parameter: Refers to the actual value for the entire population (which is often unknown).
• Estimator: Refers to the statistic derived from the sample data used to estimate the value of the
population parameter.

In practice, since the parameters of a population are rarely known, estimators are used to make
inferences about the population based on sample data. For example, you might use the sample
mean as an estimator to infer the population mean.