STATISTICS FOR MANAGEMENT (MB0040) Assignment Set- 2 1--- (a) What are the characteristics of a good measure of central

tendency? [ 5 marks] ANS--- Graphical representation is a good way to represent summarized data. However, graphs provide us only an overview and thus may not be used for further analysis. Hence, we use summary statistics like computing averages. to analyse the data. Mass data, which is collected, classified, tabulated and presented systematically, is analyzed further to bring its size to a single representative figure. This single figure is the measure which can be found at central part of the range of all values. It is the one which represents the entire data set. Hence, this is called the measure of central tendency The data presented has to be carefully analyzed to make any inference from it. The inferences can be of various types, for example, as measures of central tendencies, dispersion, correlation, regression. Measures of central tendency will quantify the middle of the distribution. The measures in case of population are the parameters and in case of sample, the measures are statistics that are estimates of population parameters. The three most common ways of measuring the centre of distribution is the mean, mode and median. In case of population, the measures of dispersion are used to quantify the spread of the distribution. Range, inter Quartile range, mean absolute deviation and standard deviation are four measures to calculate the dispersion. (b) What are the uses of averages? ANS--- 1. Arithmetic mean is used when: a. In depth study of the variable is needed b. The variable is continuous and additive in nature c. The data are in the interval or ratio scale d. When the distribution is symmetrical 2. Median is used when: a. The variable is discrete b. There exist abnormal values c. The distribution is skewed d. The extreme values are missing e. The characteristics studied are qualitative f. The data are on the ordinal scale 3. Mode is used when: a. The variable is discrete b. There exists abnormal value c. The distribution is skewed d. The extreme values are missing e. The characteristics studied are qualitative
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4. Geometric mean is used when: a. The rate of growth, ratios and percentages are to be studied b. The variable is of multiplicative nature 5. Harmonic mean is used when: a. The study is related to speed, time b. Average of rates which produce equal effects has to be found 2----Calculate the 3 yearly and 5 yearly averages of the data in table below. Table 1: Production data from 1988 to 1997 Year 1988 1989 1990 1991 1992 1993 1994 1995 1996 Production 15 18 16 22 19 24 20 28 22 (in Lakh ton) Ans-Production 3 yearly3 yearlyShort term Year (Thousand moving moving totalsfluctuations Y Tonnes) totals Ye (Y Yc) 1988 15 1989 18 66 22.00 0 1990 16 70 23.33 - 0.33 1991 22 72 24.00 1.00 1992 19 71 23.67 0.33 1993 24 71 23.67 - 1.67 1994 20 73 24.33 0.67 1995 28 79 26.33 0.67 1996 22 1997 30 When period of moving averages is even(such as 4 years) 3-- (a) What is meant by secular trend? Discuss any two methods of isolating trend values in a time series. ANS This refers to the smooth or regular long term growth or decline of the series. This movement can be characterised by a trend curve. If this curve is a straight line, then it is called a trend line. If the variable is increasing over a long period of time, then it is called an upward trend. If the variable is decreasing over a long period of time, then it is called a downward trend. If the variable moves upward or downwards along a straight line then the trend is called a linear trend, otherwise it is called a non-linear trend. Seasonal variations Variations in a time series that are periodic in nature and occur regularly over short periods of time during a year are called seasonal variations. By definition, these variations are precise
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and can be forecasted. The following are examples of seasonal variations in a time series. i. The prices of vegetables drop down after rainy season or in winter months and they go up during summer, every year. ii. The prices of cooking oils reduce after the harvesting of oil seeds and go up after some time. Cyclic variations The long-term oscillations that represent consistent rises and declines in the values of the variable are called cyclic variations. Since these are long-term oscillations in the time series, the period of oscillation is usually greater than one year. The oscillations are about a trend curve or a trend line. The period of one cycle is the time-distance between two successive peaks or two successive troughs. Random variations Random variations are called irregular movements. Movements that occur usually in brief periods of time, without any pattern and which are unpredictable in nature are called irregular movements. These movements do not have any regular period or time of occurrences. For example, the effect of national strikes, floods, earthquakes and so on. It is very difficult to study the behaviour of such a time series. (b)What is seasonal variation of a time series? Describe the various methods you know to evaluate it and examine their relative merits. ANS*--- Seasonal variation through moving averages method is also known as percentage of moving average method. The steps involved in the computation of seasonal indices by this method are described below. i) The moving averages of the data are computed. If the data are monthly then 12-monthly moving averages, if they are quarterly, then 4-quarterly moving averages will be computed. In both the cases, time periods of moving averages are even. Hence, these moving averages are to be centered. ii) Under additive model, from each original value, the corresponding moving average is deducted to find out short time fluctuations, which is given as: YT=S+C+I iii) By preparing a separate table, monthly (or quarterly) short time fluctuations are added for each month (or quarter) over all the years and their average is obtained. These averages are known as seasonal variations for each month or quarter. iv) If we want to isolate / measure irregular variations, the mean of the respective month or quarter is deducted from the short time fluctuations. The steps involved in the chain or link relative method are described below. i) Each quarterly or monthly value is divided by the preceding quarterly or monthly value and the result is multiplied by 100. These percentages are known as Link Relatives of the seasonal values. Thus:

There shall be no Link Relative corresponding to the first. ii) The mean of the link relatives for each season is computed over all the years. Median can
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also be taken instead of mean of the Link Relatives. iii) These average link relatives are converted into chain relatives. The chain relative of first is taken as 100.

iv) The second chain relative of first is computed on the basis of the chain relative for the last:

This chain relative may or may not be 100. It is not equal to 100 due to secular trend. If it is 100, go to step vi, if it is not 100, go to step v and then go to step vi. v) Compute the differenced between the new chain relatives first obtained in step iv and chain relative assumed as 100. d is divided by the number of seasons and the resulting figure is multiplied by 1, 2, 3 and the product is deducted respectively from the chain relatives of 2nd, 3rd, and 4th quarters. These are called corrected relatives. vi) The seasonal indices are obtained when the corrected chain relatives are expresses as percentage of their relative averages 5--(a) Discuss the errors that arise in statistical survey. Ans- The term error denotes the difference between population value and its estimate provided by sampling technique. Therefore, the term is not referred in its ordinary sense in statistics. There are four types of errors

Errors in Statistics Let us understand about each of the error types and the factors causing those errors. Sampling errors The sample results are bound to differ from population results, since sample is only a small portion of the population. It is also known as inherent error and cannot be avoided. It is not worth to eliminate them completely. These errors may be due to the following factors: Faulty selection of sample Substitution of units to be studied Faulty demarcation of sampling units Error due to bias in estimation However, the sampling errors follow random or chance variations and tend to cancel out each other on averaging.
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Non-sampling errors Non-sampling errors are attributed to factors that can be controlled and eliminated by suitable actions. It is worth to eliminate these errors. They are due to the following factors: Faulty planning, faulty definitions Defective methods of interviewing Personal bias of investigator Lack of trained and qualified investigators Respondents failure to answer Improper coverage Compiling errors Publication errors Biased errors It arises in both census and sampling method. These errors occur due to personal bias of the investigator and the instruments used for measuring. They are also due to faculty collection of data, respondents bias and bias due to non-response. Biased errors have a tendency to grow with sample size. Therefore, they are also known as cumulative errors. The magnitude of biased errors is directly proportional to the sample size. Unbiased errors The errors that are due to over-estimation and under-estimation such that they are equal are known as unbiased errors. They are also known as compensatory errors. They do not increase with sample size. (b) What is quota sampling and when do we use it? ANS-- Quota sampling It is a type of judgment sampling. Under this design, quotas are set up according to some specified characteristic such as age groups or income groups. From each group a specified number of units are sampled according to the quota allotted to the group. Within the group the selection of sample units depends on personal judgment. It has a risk of personal prejudice and bias entering the process. This method is often used in public opinion studies. 6---- (a) Why do we use a chi-square test? ANS- We used one-sample tests to determine whether a mean or a proportion was significantly different from a hypothesized value. In the two-sample tests, we examined the difference between either two means or two proportions, and we tried to learn whether this difference was significant. Suppose, we have proportions from five populations instead of only two, then for these cases, the methods for comparing proportions described for testing hypothesis for two-samples do not apply; we must use the Chi-Square test (c2 test). In this unit 10, Chi-Square, we will be discuss the Chi-Square tests which enable us to test whether more than two population proportions can be considered equal. In other words, a Chi-Square is a non parametric test which can be applied on categorical data or qualitative data. This test can be applied when we have few or no assumptions about the population. Actually, ChiSquare tests allow us to do a lot more than just test for the quality of several proportions. If we classify a population into several categories with respect to two attributes (such as age and job performance), we can then use a Chi-Square test to determine whether the two attributes are independent of each other. So, Chi-Square tests can be applied on contingency table.
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(b) Why do we use analysis of variance? ANS The Chi-Square test is used for testing the differences among the two sample proportions and to make inferences whether they are from the same population distribution or not. When we have more than two populations, we have to use the analysis of variance to evaluate the mean differences between two or more populations. Analysis of variance (ANOVA) will enable us to test for the significance of the differences of variances among more than two sample means. Using analysis of variance, we will be able to make inferences about whether our samples are drawn from populations having the same mean or not. Learning objectives By the end of this unit, you should be able to: Evaluate mean differences between two or more populations using analysis of variance Explain the classification of analysis of variance Describe the procedure for carrying out the two way analysis of variance Recognize the assumptions for applying the ANOVA technique Interpret the result of F-test to reject or not reject the null hypothesis framed on two or more population variances

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