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70073173 BB0010 Quantitative Techniques in Business 2

70073173 BB0010 Quantitative Techniques in Business 2

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Published by Ashraf Hussain

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Published by: Ashraf Hussain on Dec 27, 2011
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02/22/2013

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Assignment Set- 1Q.1. Based on the questions provided, interpret themComment on the following statements bringing out clearly thefallacy occurring in them.
(
a) In a factory, the labour union asked for increase in salariesbecause they claim that 50% of the employees get less than Rs. 800per month. The management claims that there is no case forincrease in salaries because the average salary of the employees isRs. 1200 per month. Which view will you support and why? [5Marks](b) “The number of Bus accidents committed in a city in a particularyear by women drivers is much less than committed by maledrivers.
Hence women are safe drivers? [5 Marks]
(a) The average is a very dicey term when used with extreme data pointers. The above casestudy of wages is a typical reason why there is confusion between the Labour union and theManagement. It’s quite obvious that some of the employees in the above said organisationare highly paid and some have very low salary structure.Let us look at the following data points to understand the same.
Employee NameABCDEFGHIJWagesin Rs3000190018001200750750750750650600
The above data is skewed as there is a high variation between the wages of the employees.(Standard Deviation being 786). Looking at the data from the employee union perspective,it is evident that 6 out of 10 people are getting low wages. However at the same time assome of the employees are getting as high at Rs 3000, the average salary paid would bearound Rs 1200 per employee. This again stands correct as per the Employer point of view.So as a management it is very important to check why there are so many differences in thesalary structures. Also we need to understand is it because of the “Type of Work” the salaryis different; for example a quality analyst would be in a higher package compared to anormal worker, if it is so then management should make employees understand the sameand also encourage people to work well so that they can become quality analyst in nearfuture.There are lot more other nitty-gritty to be looked into while addressing the salary problem.Salary could also be low if the employee is a part-timer or a contract employee. Furtherdepending on other allowances given; like medical-claim, insurance, housing facility,
 
conveyance the salary could go down. Hence a transparent HR intervention is required tomake people understand all these small things and come to a conclusion.(b) Just by looking into a year data for a particular city we cannot conclude that women’sare safer drivers. This can be because we have analyzed data for only one city we have gota biased data. The same study should be done by collecting data from different cities. This
Q.2 a. Present the following information in a suitable tabular formsupplying the figures not directly given.In 1989, out of 2,000 workers in a factory, 1550 were members of atrade union. The number of women workers employed was 250, outof which 200 did not belong to any trade union.In 1990, the number of union workers was 1725 of which 1600 weremen.The number of non-union workers was 380, among whom 155 werewomen. [5 marks]
Answer 2 a.
YearSexMember of TUNon Member of TUTotal1989F50200250M15002501750
Total 1989 15504502000
1990F125155280M16002251825
Total 1990 17253802105
b. What are the characteristics of a good measure of centraltendency? [5 Marks]
The characteristics of a good measure of central tendency are:
Present mass data in a concise form: The mass data is condensed to make the datareadable and to use it for further analysis.
Facilitate comparison: It is difficult to compare two different sets of mass data. Butwe can compare those two after computing the averages of individual data sets.While comparing, the same measure of average should be used. It leads to incorrectconclusions when the mean salary of employees is compared with the median salaryof the employees.
Establish relationship between data sets: The average can be used to drawinferences about the unknown relationships between the data sets. Computing theaverages of the data sets is helpful for estimating the average of population.
 
Provide basis for decision-making: In many fields, such as business, finance,insurance and other sectors, managers compute the averages and draw usefulinferences or conclusions for taking effective decisions.The following are the requisites of a measure of central tendency:1.It should be simple to calculate and easy to understand2.It should be based on all values3.It should not be affected by extreme values4.It should not be affected by sampling fluctuation5.It should be rigidly defined6.It should be capable of further algebraic treatment
Q.3. The means of two samples of sizes 50 and 100 respectively are54.1 and 50.3 and the standard deviations are 8 and 7. Find themean and standard deviation of the sample of size 150 obtained bycombining the two samples. [10 marks]Ans :
Currently, pretax profit = $2.5B ─ 2B ─ 0.4B = $0.1B. Weassume that variable costs are proportional to sales. Sales in thenew year are 2.5(1.15) = $2.875B. Costs are 2.0(1.15) = $2.3B.So, pretax profit = 2.875 ─ 2.3 ─ 0.4 = $0.175B, a 75% increase. This problem demonstrates the potential effects of operatingleverage.
Q.4.The coefficients of variation of two series are 66% and 80% andtheir standard deviation are 20 & 16 respectively. Find theirarithmetic means. (
X bar
=
= 30.3 and X bar =20)
[10 Marks]Ans :
LowMeanHigh(1) Sales (units)160500960

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