MB0040 - Statistics for Management semester-I

Assignment Set-1
Q.1a. What is the difference between a qualitative and quantitative variable?
Answer: ScientiIic experiments will normally have three types oI variables; controlled, independent and dependent.
Variables are a condition or Iactor that is used in testing a hypothesis and generating a conclusion. These three
types oI variables can also be quantitative or qualitative in nature.
Qualitative:
By deIinition something that is qualitative concerns or describes a quality. A qualitative variable is a descriptive.
Qualitative variable are sometimes reIerred to as categorical. The variable may be colors in the light spectrum or a
comparison between red and green grapes.
Qualitative variables can inIluence the outcome oI an experiment or research because they can inIluence other
Iactors or parameters. Qualitative variables are Irequently used in social research. Qualitative research is considered
to be inductive.
Quantitative:
By deIinition something that is quantitative can be expressed as a quantity or number. Quantitative variables are
something that can be measured. Quantitative variables are numerical. A quantitative variable can be a percentage
oI something, a number oI units or any other measurement.
Temperature is a quantitative value or variable by the number oI degrees. Speed, area population, voltage and time
are all examples oI quantitative variables that can be measured. Quantitative variables are most oIten considered to
be deductive in nature.
Deduction and induction in experimentation and research:
Deduction works Irom a general idea to a speciIic idea. Deductive research starts with a theory, Iorms a hypothesis,
gathers observations and then conIirms or disproves the original thought.
Induction works in the reverse. Inductive experimentation will start with an observation and then look Ior patterns
in the observation. Once patterns Iorm a hypothesis is developed. The hypothesis is then tested Ior a resulting
theory.
The best results in experimentation come Irom having only one independent variable. The controlled variable is
something that does not change and must remain constant. The independent variable is the variable that is changed
by the researcher. The dependent value is the variable that changes due to the independent variable.
An example oI quantitative variables in an experiment would be testing the change in speed on a turntable as
additional weight is applied. The turntable itselI is the controlled variable. The experimenter will only use one. The
independent quantitative variable is the amount oI weight applied Ior each measurement. The dependent
quantitative variable is the resulting speed that is measured.

An example oI a qualitative variable in testing would be the drying time require Ior red and green grapes at a
constant temperature. The outcome, or dependent variable, oI time is measured and thereIore quantitative. The
controlled variable being used is temperature, also quantitative. The independent variable is qualitative, the
diIIerence between red and green grapes. In this particular example the weight oI each grape, a quantitative variable
would also need to be consistent or controlled.
Q2. (A) Explain the steps involved in planning of a statistical survey?
Answer:
Stages in a statistical survey:

1. ature oI the problem to be investigated should be clearly deIined in an unambiguous manner.
2. Objectives oI the investigation should be stated at the outset. Objectives could be
Obtain certain estimates.
stablish a theory.
VeriIy an existing statement.
ind relationship between characteristics.
3. The scope oI investigation has to be made clear. The scope oI the investigation reIers to the area to be
covered, identiIication oI units to be studied, nature oI characteristics to be observed, accuracy oI
measurement, analytical method, time cost and other resources required.
4. Whether to use data collected Irom primary sources or secondary sources should be determined in advanced.
5. The organization oI investigation is the Iinal step in the process. It encompasses the determination oI the
number oI investigator required, their training, supervision work needed, Iunds required.

Q.1 b. What are the merits & Demerits of Direct personal observation and Indirect Oral Interview?

Answer: Direct personal observation: In the direct personal observation method, the investigator collects data by
having direct contact with the units oI investigation. The accuracy oI the data depends upon the ability, training,
and attitude oI the investigator.
Merits
O We get the original data which is more accurate and reliable.
O SatisIactory inIormation can be extracted by the investigator through indirect questions.
O Data is homogenous and comparable.
O Additional inIormation can be gathered.
O isinterpretation oI question can be avoided.
Demerits
O This method consumes more cost.
O This method costs more time.
O This cannot be used when the scope oI the investigation is wide.

Indirect oral interview: Indirect oral interview is used when the area to be covered is large. The investigator
collects the data Irom a third party or witness or had oI the institution. This method is generally used by police
department in cases related to enquiries on causes oI Iires, theIt or murders.


Merits
O conomical in terms oI time, cost and man power.
O onIidential inIormation can be collected.
O InIormation is likely to be unbiased and reliable.

Demerits
O The degree oI accuracy oI inIormation is less.

Q.3 a)


entral Value Limits requency Less than Greater than
5 0-10 5 10 5 0 63
15 10-20 11 20 16 10 58
25 20-30 21 30 37 20 47
35 30-40 16 40 53 30 26
45 40-50 10 50 63 40 10
Total 63



ow Irom the meeting points oI these two ogives iI we draw a perpendicular to the X axis, the point where it meets
X axis gives median oI the series. So here midpoint oI 20-30 limit is 25. So median is 25.

By actual calculation
Here n63, hence median is (1)/2
th
item which is (631)/232
nd
item 25.
So ogive median and actual median are same.



3 (b) Size I cI
1000-1500 120 120
1500-2000 I
1
120I
1

2000-2500 400 520I
1
2500-3000 500 1020I
1

3000-4000 410-I
1
*

1430

4000-5000 50 1480
5000-6000 20 1500
1500(given)
*1500-(1204005005020)-I
1

edian ()
th
item , 1500/2750
th
item ,but median is 2600 (given)
2
This lies between 2500-3000 groups
ow L
1
L
2
-L
1
(m-c)


2600 2500 3000-2500/500 *(750-(520I
1
))
~2600 2500 500/500* (750-520-I
1
)
~2600 2500- 230-I
1

~2600-2500 320-I
1

~ 100 320- I
1

~ I
1
130
Then I
2
410-130280

i I m Im
1000-1500 120 1250 150000
1500-2000 130 1750 227500
2000-2500 400 2250 900000
2500-3000 500 2750 1375000
3000-4000 280 3500 980000
4000-5000 50 4500 225000
5000-6000 20 5500 110000
1500 3967500

X L Im
L I
3967500/1500 2645 (ans)




Q.4a) What is the main difference between correlation analysis and regression analysis?

Answer: orrelation analysis: When two or more variables move in sympathy with other, they are said to be
correlated. II both variables move in the same direction then they are said to be positively correlated. II the
variables move in opposite direction then they are said to be negatively correlated. II they move haphazardly then
there is no correlation between them.


#egression analysis: #egression analysis is used to estimate the values oI the dependent variables Irom the values
oI the independent variables. #egression analysis is used to get measure oI the error involved while using the
regression line as a basis Ior estimation. #egression coeIIicient is used to calculate correlation coeIIicient.
The main diIIerence between these two is:- correlation analysis attempts to study the relationship between
the variable X` and Y`. #egression analysis attempts to predict the average X` Ior a given Y`. It is attempted to
quantiIy the dependence oI one variable on the other.

DiIIerence between regression coeIIicient and correlation coeIIicient
orrelation coefficient Regression oefficient
O The correlation coeIIicients, rxy ryx. The regression coeIIicients, byx bxy
O It indirectly helps in estimation. It is meant Ior estimation.
O It has no units attached to it. It has units attached to it.
O There exists nonsense correlation. There is no such nonsense correlation.
O It is not based on cause and eIIect It is based on cause and eIIect relationship.
relationship.

Q.4b)
Answer: In ultiple regressions analysis is an extension oI two variable regression analyses. In this analysis, two
or more independent variables are used to estimate the values oI a dependent variable, instead oI one independent
variable.

Objectives oI multiple regression analysis are:
O To derive an equation, this provides estimates oI the dependent variable Irom values oI the two or more
independent variables?
O To obtain the measure oI the error involved in using the regression equation as a basis oI estimation.
O To obtain a measure oI the proportion oI variance in the dependent variable accounted Ior or explained by
the independent variables.
In the given question 12, hence degree oI Ireedom will be vn-1, where n is the sample size. So the degree oI
Ireedom will be 12-111






. a) Discuss what is meant by Quality control and quality improvement.

Answer:
Quality ontrol - is deIined as the part oI quality management Iocused on IulIilling quality requirements. Ideally,
prevention based controls should prevent problems Irom occurring, but in reality, no system is IoolprooI and
problems do occur. Accordingly, controls to detect quality problems must be established so that customers receive
only products that meet their requirements. ISO 9000 Lead Auditor Training Detection based controls are reactive

the problem and cost have already occurred and the company is resorting to damage control. The intent oI detection
is to evaluate output Irom processes and activities by implementing controls to catch problems when they do occur.
or example, Iinal inspection to catch deIective product beIore it gets shipped.

Quality Improvement - is deIined as the part oI quality management Iocused on increasing the ability to IulIill
requirements. ontinual improvement results Irom ongoing actions taken to enhance product characteristics or
increase process eIIectiveness and eIIiciency. This is one oI the key characteristics that diIIerentiate a quality
management system Irom a quality assurance system, i.e., being able to improve the eIIectiveness and eIIiciency
and oI a process or activity by setting measurable objectives and using perIormance data to manage the
achievement oI these objectives.
IIectiveness is deIined as the extent to which planned activities are realized and planned results are achieved. In
determining the eIIectiveness oI quality assurance and quality improvement activities, the Iollowing questions
should be asked:
To what extent have problems in product or processes been prevented?
To what extent have planned objectives Ior quality been met?
IIiciency is deIined as the relationship between result achieved and resources used.
The measure oI eIIiciency is determined by asking the Iollowing:
an we get the same output using Iewer resources?
an we get more output without adding resources?
These questions may be applied to the output oI any activity within the quality management system oI an
organization.
It should be noted that ISO 9001 requires organizations to achieve QS eIIectiveness through quality assurance
and continual improvement activities. QS eIIiciency is desirable, but not currently required by ISO 9001. ISO
9004 provides guidelines that consider both the eIIectiveness and eIIiciency oI the QS.
Quality improvement actions may include:
easuring and analyzing situations
stablishing improvement objectives
Searching Ior possible solutions
valuating these solutions
Implementing the selected solution
easuring, veriIying, and analyzing results
ormalizing the changes



Q. b) What are the limitations of a quality control charts?
The quality control chart is based on the research oI VilleIredo Pareto. He Iound that approximately 80 percent oI
all wealth oI Italian cities he researched was held by only 20 percent oI the Iamilies. The Pareto principle has been
Iound to apply in other areas, Irom economics to quality control. Pareto charts have several disadvantages,
however.
asy to ake but DiIIicult to Troubleshoot
O Based on the Pareto principle, any process improvement should Iocus on the 20 percent oI issues that cause
the majority oI problems in order to have the greatest impact. However, one oI the disadvantages oI Pareto
charts is that they provide no insight on the root causes. or example, a Pareto chart will demonstrate that
halI oI all problems occur in shipping and receiving. ailure odes IIect Analysis, Statistical Process
ontrol charts, run charts and cause-and-eIIect charts are needed to determine the most basic reasons that
the major issues identiIied by the Pareto chart are occurring.

ultiple Pareto harts ay Be eeded
O Pareto charts can show where the major problems are occurring. However, one chart may not be enough. To
trace the cause Ior the errors to its source, lower levels oI Pareto charts may be needed. II mistakes are
occurring in shipping and receiving, Iurther analysis and more charts are needed to show that the biggest
contributor is in order-taking or label-printing. Another disadvantage oI Pareto charts is that as more are
created with Iiner detail, it is also possible to lose sight oI these causes in comparison to each other. The top
20 percent oI root causes in a Pareto analysis two to three layers down Irom the original Pareto chart must
also be compared to each other so that the targeted Iix will have the greatest impact.
Qualitative Data versus Quantitative Data
O Pareto charts can only show qualitative data that can be observed. It merely shows the Irequency oI an
attribute or measurement. One disadvantage oI generating Pareto charts is that they cannot be used to
calculate the average oI the data, its variability or changes in the measured attribute over time. It cannot be
used to calculate the mean, the standard deviation or other statistics needed to translate data collected Irom a
sample and estimate the state oI the real-world population. Without quantitative data and the statistics
calculated Irom that data, it isn't possible to mathematically test the values. Qualitative statistics are needed
to whether or not a process can stay within a speciIication limit. While a Pareto chart may show which
problem is the greatest, it cannot be used to calculate how bad the problem is or how Iar changes would
bring a process back into speciIication.
Q6. a) Suggest a more suitable average in each of the following cases:
(i) Average size oI ready-made garments.
(ii) Average marks oI a student.

Answer:
Average size of readymade garments: Arithmetic mean will be used because it is continuous and additive in
nature.
Average marks of a student: Arithmetic mean will be used because the data re in the interval and the distribution
is symmetrical.






Q.6b)
Answer:
State the nature oI symmetry in the Iollowing cases:
When median is greater than mean, the series is said to have negative skewness. The Iollowing characteristics can
be seen
O ode ~ edian ~ ean
O The leIt tail oI the curve is longer than the right tail, when the data are plotted through a histogram, or a
Irequency polygon.
O The Iormula oI skewness and its coeIIicients give negative Iigures.
When mean is greater than median, the series is said to have positive skewness.the Iollowing characteristics can be
seen
O ean ~ edian ~ ode

O The right tail oI the curve is longer than its leIt tail, when the data are poltted through a histogram, or a
polygon.
O The Iormula oI skewness and its coeIIicients give positive Iigures.
The Iollowing example would show the above distributions and their respective characteristics:

Value (X) Positively Skewed egatively Skewed
X X
10 5 50 5 5 50 5
20 15 300 20 7 140 12
30 13 390 33 9 270 21
40 11 440 44 11 440 32
50 9 450 53 13 650 45
60 7 420 60 15 900 60
70 5 350 65 5 350 65
Total 65 2400 - 65 2800 -

ean 2400/65 37 ean 2800/65 43
edian(651)/233th edian 33th item 50
Item 30