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Chapter 2: Types, Sources and Collection of Data

Case 2.1 The objective of this case is to present a questionnaire relating to live environment, for discussion relating to issues encompassing a questionnaire. There is no straightforward or unique answer to this case. The participants may be asked to offer suggestions regarding defining of objectives, comprehensiveness , clarity and unambiguity of questions and the options therein. As an illustration, a modified version of the questionnaire is given below.

Questionnaire for Consumers
What is your gender ? □ Male □ Female

What is your age ? □ Under 18 yrs □ 18-21yrs □ 21-50yrs □ 50+ yrs

Are you employed ? □ Yes □ No

What is your annual household income ? □ ≤ 2 lakhs □ 2-5 lakhs □ 5-10 lakhs □ ≥ 10 lakhs _____ Years ______ Months

How long have you owned a cell phone ? Which Cellular Operator do you use ? □ Vodafone □ Reliance □ AirTel

□ BPL

□ Others (please specify):

What type of connection do you use ? □ Prepaid □ postpaid

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What do you normally use the phone for? (You can choose more than one option) □ keeping in touch with friends & family □ Others (please specify): How much on average is your monthly expenditure on the mobile connection ? Rs _________ Whom are the mobile charges paid by ? □ Self □ Company □ Family □ Business □ for emergencies

How many and how much of the following Value Added Services do you utilize ? Kindly tick (√) those applicable Services Not Aware Never Used Used Occasionally SMS Voice Mail Messenger Services Ring tones / Logo Used Frequently

Download Dial-in-Services News & Cricket Updates GPRS Itemised Bill STD/ISD Roaming

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MMS Internet Radio

What are the reasons for not using some services? □ Not Aware □ Too Expensive □ Complicated □ No Utility / Time □ other reasons (kindly specify):___________________________________________ Would you use the above services more frequently if they were cheaper? Yes / No Kindly tick the information services that you would be interested in, □ Movies □ Dating □ Sports □ Auctions □ Stocks □ Jokes □ News □ Weather □ Religious Services

□ TV Listing □ Horoscopes How much do you suggest these services should cost (per min or per message)? □ 50p - Rs 1 □ Rs 1 – Rs 1.50 □ Rs 1.50 – Rs 2 □ > Rs 2 □ Others:

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3 Frequency table could be prepared for each of the two parameters viz. Comparisons could be made by studying these tables. Case 3. The Tables could be • Frequency Table • Cumulative Frequency Table The following charts could be drawn for • Bar charts for ‘Background’ and ‘Specialisation’ ( separately) • Histograms for CGPA.axis For example the multiple bar chart reveals that for maturity periods 1 and 10 years.2 Some salient features could be as follows: • Frequency Table and Histogram for Number of Billionaires according to wealth • Cumulative Frequency Table and Ogives for Number of Billionaires according to wealth • Grouping of Billionaires according to Given Sectors or according to Groups of Sectors and drawing bar chart(s) Case 3.4 Line graph may be drawn by taking maturity periods on the X-axis. ‘Less Than’ and ‘Greater Than’ Ogives for CGPA. The frequency tables will be different for each type of bank and for each year. the expense ratios are minimum for Birla Sun Life Classic Life Premier and for periods 15 to 30 years HDFC Unit Linked Endowment is minimum. Case 3.Chapter 3: Presentation of Data Case 3. Work Experience and Age • Frequency Polygons. . and expense ratios on the Y.1 The Tables may be prepared for CGPA. for each of the two years. and expense ratios on the Yaxis Similarly multiple bar chart may be drawn by taking maturity periods on the X-axis. Work Experience and Age • Pie Charts for ‘Backgrounds’ and ‘ Specialisations’ Students may be asked to suggest other Tables charts and graphs. Line Graphs for each type of banks for the parameters ‘Business per Employee’ and ‘Return on Assets’ comparing figures for 2001-2 and 2005-6 Combine three charts in one showing different types of banks by different colour. business per employee and return on assets. Work Experience and Age by taking appropriate class intervals.

(4.3). It may be noted that even though numerically it can be calculated. The measures which can be easily combined are Arithmetic Mean. and then totaling these products for all banks in a group. 2 and 3 in Economics and 2. Geometric Mean and Standard Deviation ( Variance ) by using the formulas (4. The productivity of an employee is defined as the business per employee. we require the knowledge of total of returns as also total assets. Case 4. Business per Employee can be worked out by dividing total business in the group by total number of employees in the group.23) Case 4.21). and hence average OA cannot be calculated.06. will be same for both the subjects. While total number of employees can be found just by adding number of employees for each bank. it can be measured by the Bowley’s coefficient of skewness defined by the formula ( 4. because two sets of data having different ranks under two criteria will have the same C.. The total assets of each bank are not given. Elementary Statistics Chapter 4. it cannot be worked out for the year 2001-02 because the number of employees in that year is not given. Thus. Similar analysis can be done for Return on Assets. if Nidhi.2 For each group of banks. 1 . We can calculate the Coefficient of Variation of productivity of banks in both the years.V. it will not have any physical significance with in a group however this can be used just for comparison among groups. The measures derived for full data and combined data must be equal. we are given the productivity of employees for each bank in the years 2001-02 and 2005. We can also calculate variability among the groups by measuring variability among average productivity of each of the three groups. within each group of banks.3 The most appropriate measure of variability is the Coefficient of Variation. Explain As regards the extent of skewness. For doing so. then C. C.Chapter 4: Measures of Central Tendency and Dispersion Case 4. It is to be noted that we cannot calculate average percentage just by adding percentages for each bank. It can be defined for all the parameters wherever amounts are indicated. 3 and 1 in Statistics. While average business per employee can be worked out for each group for the year 2005-06 by dividing the total business by total number of employees.V may not be much meaningful for ranks. the total business for all banks in a group can be found by first multiplying Number of Employees by business per Employee for each bank.V.9) and (4. ROA cannot be calculated in the similar way. Jeetendra and Sanjay have ranks 1.xls or using various formulas given in the Chapter.1 All the measures of location and dispersion as also Five Number Summary can be calculated by the template. For example.

discussions could be held in the class to know their ideas. Net worth ($ Billion) 1-5 5-10 10-15 15 .8 The following frequency table shows that the average age in lowest group is about the same as for the highest group. Consistency can be measured by C. median. Madhya Pradesh and Uttar Pradesh are not comparable as these states were divided in two states each. if the data about overall combined ranks is given for countries of each continent like Asia. Coefficient of variation can also be calculated for each period. Case 4. and values compared. and could therefore be excluded from the study. Similarly. Thus.6 C.7 Average earnings per run may be found by dividing the total earnings by total of runs scored.V. range and standard deviation could be calculated for each period(tenure like 1 year).V. Europe. As regards improvement. Rankings of players are derived based on their performance by several authorities like ICC. Caution : The data for states Bihar . and labeled as most valuable players in a tournament.20 Average Age 55. for ranks may not be much useful for the given data.Case 4. which can be worked out by the formula ( 4. then C. etc.5 Mean. The players are also ranked according to their performance.. The above analysis could also be done for each insurance company to study variation among periods for each company. Case 4.22). However. Case 4.4 The coefficient of variation may be calculated for all the four sets of data. The ‘All India’ values may be taken as the mean for calculating C. and disparities among per capita could have been calculated.92 56 60 55 2 . average earning per wicket may be worked out by dividing total earnings by total number of wickets. Case 4.V.V. age does not have any impact on the net –worth of a billionaire. among countries of each continent would give an idea as to in which continent the disparity is more. If the population figures were also given then per capita values could have been calculated.

comparisons could be more meaningful.9 The variability in market capitalisation can be best measured by C.Case 4. Instead of fixing the ranks and arranging the companies according to their ranks. Percentage increase in market capitalization can be calculated and compared for different companies. the sequence of companies could be fixed and their corresponding ranks could be indicated.V. If the prices and earnings per share are given. 3 .

1 The following contingency Table (called Pivot Table in Excel terminology ) can be prepared for the given data. Background Specialisation Finance Marketing Resources System Systems Grand Total Commerce 12 6 Economics 3 2 Engineer 15 1 1 1 18 Information 2 4 1 7 8 Science 3 4 1 Grand Total 20 31 2 2 1 56 18 5 (i) (ii) (iii) (iv) the probability that the student is with commerce background is 18/54 the probability that the student is with commerce background given that he/she has opted for marketing is 6/31 the probability that the student has specialization in Finance given that he/she has engineering background 0/18 = 0 the probability that the student has engineering background as also opted for specialization in Finance 0/56 = 0 Case 5. to answer the questions asked in the case.2 Total number of employees = 100 Experience in Years Level of 16 and Marginal Satisfaction 1 to 5 6 to 15 More Totals Low 10 6 2 18 Medium 14 20 10 44 High 6 16 16 38 Marginal Totals 30 42 28 100 (a) Number of Persons with Low Level of Satisfaction Number of Persons with Medium Level of Satisfaction Number of Persons with High Level of Satisfaction Number of Persons with experience from 1 to 5 years Number of Persons with experience from 6 to 15 years Number of Persons with experience of 16 years and more = 18 = 44 = 38 = 30 = 42 = 28 .1 Chapter 5: Probability Case 5.

3 This case can be solved with the help of the Theory of Expectation discussed in Section 5.12.4 This case can be solved with the help of Bayes’ Theorem.e.2 . The probability that an employee with more than 16 tears of experience is highly satisfied = 16 / 28.4 Thus. Case 5. it is advisable to continue with the old factory.3 P(B3) = 0. The probability that an employee with medium level of satisfaction will have experience from 6 to 15 years = 20 / 44. Probability that market will grow =2/(2+3)=2/5 Probability that market will not grow = 3 / ( 2 + 3 ) = 3 / 5 If he continues with old factory Expected Profit = 3 × 2 /5 + 0. even then.5 P(B2) = 0.5 If he sets up new factory Expected Profit = 5 × 2 / 5 − 1 × 3 / 5 = 1.5 × 2 / 3 = 1. Probability that market will grow =1/(1+2)=1/3 Probability that market will not grow = 2 / ( 1 + 2 ) = 2 / 3 If he continues with old factory Expected Profit = 3 × 1 / 3 + 0. Here: A : B1 : B2 : B3 : Event that the venture is a failure Failure is due to poor management skills Failure is due to lack of financial expertise Failure is due to lack of inadequate marketing efforts Given: P(B1) = 0.2 (i) (ii) (iii) The probability that an employee selected at random will have high level of satisfaction = 38 / 100.00 Thus. Case 5.5 × 3 / 5 = 1. it is advisable to continue with the old factory. If the odds are revised to 2 to 3 i.33 If he sets up new factory Expected Profit = 5 × 1 / 3 − 1 × 2 / 3 = 1.

3 × 1 / 4 0.075 + 0.5 × 1 / 3 + 0.167 0.266 P(B3/A) = P ( B1 ) P( A / B1 ) P( B1 ) P( A / B1 ) + P( B2 ) P( A / B2 ) + P( B3 ) P( A / B3 ) = 0.2 × 1 / 5 0.04 = 0.5 × 1 / 3 + 0.3 × 1 / 4 + 0.3 × 1 / 4 + 0.167 + 0.075 + 0.075 + 0.2 × 1 / 5 0.2 × 1 / 5 0. P(B1/A) is given as: P(B1/A) = P ( B1 ) P ( A / B1 ) P ( B1 ) P ( A / B1 ) + P ( B2 ) P ( A / B2 ) + P ( B3 ) P ( A / B3 ) = = 0.167 + 0.592 P(B2/A) = P ( B1 ) P( A / B1 ) P( B1 ) P( A / B1 ) + P( B2 ) P( A / B2 ) + P( B3 ) P( A / B3 ) = 0.04 = = 0.3 × 1 / 4 + 0.04 0. it is given that P( A/B1) = 1 / 3 P( A/B2) = 1 / 4 P( A/B3) = 1 / 5 What is required is to find out P(B1/A)? As per Baye’s Theorem.5 × 1 / 3 0.075 0.167 + 0.5 × 1 / 3 + 0.04 = = 0.142 .3 Also.2 × 1 / 5 0.

E(x2) = Σ x2 p(x) = 25 ×1/8 + 100 × 1/6 + 225 × 25/144 + 400 × 1/36 + 625 × 1/20 + 900 × 0 = 25/8 + 100/6 + 225 × 25/144 + 400/36 + 625 /20 .42)2 = 49.25+ 2.4 Case 5.67 + 6 + 2 + 1.98 For Reliable Fund: Expected or Mean Rate of Return = Mean of x = E( x ) = Σ x i p ( x i ) = 5 × 1/8 + 10 × 1/6 + 15× 5/12 + 20 × 1/6 + 25 × 1/8 + 30 × 0 = 5/8 + 10 /6 + 75/12 + 20/6 + 25/8 + 0 = 15 Variance of x = E [(x – E(x)]2 = E (x2) – {E(x)}2 Now.42 Variance of x = E [(x – E(x)]2 = E (x2) – {E(x)}2 Now.67+ 90+ 40+ 31.92 Thus. For Progressive Fund: Expected or Mean Rate of Return = Mean of x = E( x ) = Σ x i p ( x i ) = 5 × 1/5 + 10 × 1/6 + 15× 2/5 + 20 × 1/10 + 25 × 1/20 + 1/12 × 30 = 1 + 1.5 = 14.92 – (14.5 This case can be solved with the help of the Theory of Expectation discussed in Section 5. E(x2) = Σ x2 p(x) = 25 ×1/5 + 100 × 1/6 + 225 × 2/5 + 400 × 1/10 + 625 × 1/20 + 900 × 1/12 = 5 + 16. it may be verified that the sum of probabilities for various rates of return for each of the funds is equal to 1. Variance(x) = E (x2) – {E (x)}2 = 257. Before applying the theory.12.25 +75 = 257.

volatility.42 for Reliable Fund).004 P( B1 A) P( B1 ) × P( A / B1 ) = 0.037 = = P( A) ∑ P( Bi ) × P( A / Bi ) 0. which gets increased to 0. and we want to know the cause for this as to whether it was due to the woman suffering from breast cancer or not suffering from breast cancer A : Woman diagnosed positive with Mammogram B1 : Woman suffering from breast cancer B2 : Woman not suffering from breast cancer It is given that P( B2 ) = 0.7 ). we get 0.005 P(A/ B2 ) = 0.1035 It may be noted that the probability of a woman having breast cancer is 0.8 Using Bayes’ Formula ( 5 .5 = 258.33 It may be noted that for the Progressive Fund.005.1 P(A/B1 ) = 0. Case 5. but the risk is also less because of lesser variance i.33 – (15)2 = 33.995 P(B1 ) = 0. not only the expected rate of return is marginally better ( 15 as compared to 14.e.6 This problem relates to Bayes’ Theorem as the event (Diagnosed with Mammogram ) is known . Variance(x) = E (x2) – {E (x)}2 = 258. P(B1 / A) = .33 Thus.037 if the woman’s mammogram indicates positive.

It may be noted that each division may be considered a cluster. then roll no. thus.Chapter 6: Sampling Techniques Note: In sampling. Arts. it would be appropriate to adopt systematic sampling. and note the remainder. Like this. and the average work experience of 50 students could be obtained. Science. Case 6.3 Since the data is arranged in descending order. In fact. Since two of the billionaires are having much more wealth than all others. For calculating the average work experience.1 An estimate of the work experience could be obtained by taking a representative sample of 50 students from the total strength of 500. and note his/her CGPA. These could be as follows: Sex of student – Male(400) or Female(100) Year of study – First(250) or Second year(250) Academic background – Commerce. it might be advisable to exclude these two for calculating the average. Engineering( including IT) Let us assume that there are 5 Divisions in each year. 10 . Average of these ten CGPAS will give an estimate of the average of 56 students. may not be included in the sample.2 For taking a simple random sample of. Divide each number by 56. Then from a the random number table given on page 6. compare this with the average obtained for all the 56 students. We have given only some guidelines. If the remainder is 0. it may be noted that one student has work experience of 104 months. First. from the 56 students. Case 6. therefore. it may be eliminated and only 55 students may be considered for obtaining average work experience. This is one of the ways of in which the answer could be provided in a couple of hours.16. select 10 3-digit numbers in any column. one has to decide on the factors which could have impact on the work experience. also note the CGPAs of nine other students. The students could go to each Division and select 5 students at random taking care of proportion of female students as well as academic background. say 10 students. Select that serial number from the above list of Table. Case 6. 56 may be selected. say alphabetically which is normally available in attendance registers. data bout 25 students from each year could be collected. Now. and one could follow more than one method. it is better to first arrange the students in a random manner. there may not be a unique method. Each division contains male as well as female students. This is an extreme value and may.

Case 6.12. then the number of customers to be contacted for their level of satisfaction should be the same as the percentage for that cash counter. 27th. add up the last digits of those numbers and note the last digit in the sum. Why we may select 3 out of 5 banks from foreign banks is that there is wide variation in ‘Business per Employee’ ratio. every 10th billionaire may be selected. After 13 banks are selected in the sample. 7. each. select. It could happen that the level of satisfaction might vary according to the rush in various periods.6 The actual value of business per employee can be found by adding business for all the banks and divided by the total of employees for all the banks. whose opinion is recorded as they come out from the counter after paying the bill. if numbers 3 or 4 comes. there are 22 Public Sector. we may select first billionaire as 7. the minimum. Case 6. The number of customers. 12. the last digit is 7. we may select sampling interval of 10 i. 11.. Since. 22 Private Sector( Indian) and 5 Private Sector ( foreign banks).5 First of all. first bank( ABN).billionaires are to be selected out of the 100 billionaires. these could be divided in four slots of 3 hrs..m. we may select all the random numbers in the first column of Table.e. This may be taken in account while selecting the time period. To select a billionaire at random from the first 10 billionaires. and so it may be desirable to select.. We may select a sample of size 13 banks – 5 from Public Sector. 10. If the percentages are. select. If numbers 1 or 2 comes. . to 9 p. If the store’s business hours are. third ( Standard). 8. 5 from Private sector( Indian) and 3 from Private Sector (Foreign). 37th. One of the three can be selected by tossing a dice. could be roughly in the proportion of customers in various time slots. say from 9 a. 8. to get the sample estimate of the ‘Business Per employee’. We may use stratified sampling to select banks from each of the three categories. say: 11.m. Selection of 5 banks each from Public and Private sector banks can be done either through Simple Random or Systematic Sampling. 12. 9. and next 9 as 17th. second ( Deutsche ) and if 5 or 6 comes. one could estimate from the past about the percentage of customers coming to different counters.…………. select. the maximum. The average of these 10 billionaires would provide an estimate of the average wealth of the 100 billionaires. and 97th. we may add up their business values and divide by the total number of employees in these 13 banks. and one out of the three others.

2) = P { ( x .09 and 0. one can calculate the s. of BPEs for each category of banks. Multiplying this probability by 100.2 . Case 7.d. (i) P( x > 3.CHAPTER 7: Statistical Distributions Case 7.)/ > ( 3. Incidentally. one cannot find average ROA because we do not know the assets of each bank and so the total assets for all the banks in a category are not known.24 respectively. The standardised variable z for BPE is ( BPE – Mean of BPE) / S.25) (iii) 3.34. Total business of a bank can be obtained by multiplying BPE by the number of employees in that bank. (ii) (2.)/ } = P { z > ). this probability can be found.2 The average BPE can be found by the total business of a category of banks by total number of employees of that category of banks. From the Table T1.4 Case 7. of BPE.d. of CGPAs ( represented by variable x ) are 3.3 The daily rate of returns are as follows : Rate of Return on a Day = ( Price on the Day – Price on the previous Day) / (Price on the previous Day) Date 6-10-2006 Rate of Return ( SENSEX) Rate of Return ( NIFTY) . we get the percentage of students obtaining marks more than as 32.D.93. 3.1 The mean and s. Once the average is found.

Probability of a disc being scrapped with this setting is = P ( x ≤ 9 ) = P ( z ≤ – 2) = 0.5 ≤ x ≤ ( 11. = 1 – 2 x 0. = 5 Probability of a defective disc is = 1 – P ( 9 ≤ x ≤ 11) = 1 – P ( ( 9 – 10 )/0.5 ) = .02 From Table T1.892 Thus. we find the value of z area up to which is 0.18-10-2006 Case 7.9544 = 0.0.4772 = 1. P ( x ≤ ? ) = 0.0228 .02 is 0. the picture tubes could be guaranteed for a period of 6 years. Thus.0. 5) = 1 – P (– 2 ≤ x ≤ 2) .56% of discs will be defective.0062 Thus.0.108 = 5.4 P ( x ≤ 5) = P ( (x – 10) / 2 ) ≤ (( 5 – 10 ) /2) = – 2.5 Let x be the variable representing the diameter.10)/0.d. Initially mean of x is m(say) = 10. 4.05. only 6 out of 1000 picture tubes will be required to be replaced. Case 7.054 = ( x – 10 ) / 2 Therefore. z = – 2. and s.0456 Thus. x = 10 – 4.

Assuming that s. has not changed we want that value of mean so that the probability of spending exceeding 31635 is 5%.d 5.01) Therefore.228% will have to be scrapped. 4.e.1635 i.410.01 From Table T1.000 The cut off value of x z= ((x – 20000 ) / 5000) = 2.5) > (11 – 10.327 ( value of z.645 x 5000 = 23410 Thus.327 Thus. It is desired that maximum probability of scrapping is = 0.2.645 Thus.5) = P ( z > 1.1635 = 10.95 P ( ( x – m1/ 5000) > ( 31635 – m1) / 5000) = 0. mean spending has increased to 23. P ( x > 31635) = 0. the value of z for this area on the left side of standard normal distribution is – 2. m1 = 31635 – 1. Probability of discs to be reworked = P ( x > 11) = P ( (x – 10.673) = 0.5 = .d.327 We can find the mean setting ( m1) assuming to be unknown. m1 = 9 + 1. Case 7.1635 so that 1% of output is scrapped.Thus. x = 20000 + 11635 = 31635 The reasons for more than expected % of customers qualifying for the offer could be either increase in mean or decrease in s.1635) / 0. for area to the right of it = 0.72% discs will have to be reworked. the setting should be at 10.6 Let the variable spending be represented by x with mean 20.95 This implies that (31635 – m1) / 5000) = = 1. .d.1635) / 0. 2.000 and s. It is desired that z = (9 – m1) / 0.0472 Thus.

7 We assume that the waiting time. Thus. if the average time increases then the variation among waiting times has to be reduced.95 This implies that (31635 – 20000) / σ1) = = 1.645 σ = 5 Thus. P ((x – m) / σ) ≤ (( 5 – m) / σ)) = 0. if m = 4. follows normal distribution with mean = 10.d. Such system tends to reduce s. It is due to this reason that in many systems.95 or. For example. 1. Further. However. and persons from this que go to counter whichever is free. of waiting times.645 x σ1 = 11635 or. .21. the system has to be designed in such a way that the above relationship is satisfied. then σ has to 1. say σ1 so that the probability of spending exceeding 31635 is 5%.645 or. it is desired that m and σ should be such that P ( x ≤ 5) = 0. of spending has increased from 5000 to 7295.d. if m= 3. all the counters provide all services.d.645 Thus. Case 7. a single que is formed.Assuming that mean has not changed we want that value of s. P ( x > 31635) = 0. say x. s. σ1 = 7295 Thus. then σ has to be reduced to 0.95 P ( ( x – 20000/σ1) > ( 31635 – 20000) / σ1) = 0. .607. m + 1.95 This implies that (( 5 – m) / σ)) = 1. However.

Finance. Commerce. It is advisable for such studies to take each group of banks and interpret relationships in those groups. one may calculate Pearson’s correlation coefficients between Business per Employee in 2001-02 and Business per Employee in 2005-06.5 One may calculate correlations between various pair of parameters e. Case 8.4 This case is similar to case 8. another Table with four rows one for each area of specialisation viz. Information Technology and Science. Systems and Human Resources.3 Beta of each stock may be calculated by taking the stock’ values and BSE values over the given period . Engineering. . and four columns one for each class interval may be made to calculate coefficient of contingency.2 For each group of banks. CGPAs could be grouped in 4 class intervals.12. Case 8. as illustrated on page 8. Economics.Chapter 8: Simple Correlation and Regression Analysis Case 8.g. Average Working Funds and Net profit Net Profit and Ratio of Fee Income to Total Income Ratio of Net Profit Average to Working Funds and Cost to Income Ratio It may be noted that it is difficult to interpret relationships among various parameters as the banks of varying types concentrating on different types of business.1 One may calculate correlation coefficients between CGPA and Age separately for each background .47 in Section 8. For calculating coefficient of contingency between backgrounds and CGPA. Spearman correlation coefficients may be calculated by using data on ranks in the two years. Thus. the data may be converted into a Two way Table as shown in section 8. Marketing. one will have a Table with five rows for each of the background viz. and four columns for the four class intervals for CGPAs. One may take range of CGPA score on the horizontal side and backgrounds on the vertical side. and Return on Assets in 2001-02 and Assets in 2001-02. Similarly. One could take NSE values instead of BSE values to get another set of betas. Case 8.2. and 2005-06. Case 8.10.

6 The contribution of urban population to average life expectancy is indicated by the coefficient of determination between life expectancy and % of urban population.7 It may be carried on the same lines ass the Case 8. .Case 8.5. Case 8.

00965 Av. Incidentally. and there are several methods to help in this process.(If it is not in the tools menu. Net Profit = – 573. and given in the note below. Immediately.15. one may select tools -> add-ins and select solver option by checking the box before solver) In the template that appears on the screen. all will be found to be insignificant. Note: The data about values of all the variables may be inputted in the template. select the option as “keep solver solution” by pressing “OK”. This is an integral part of EXCEL. However.1 The multiple regression equation may be obtained by using the template ‘Multiple Regression’ and the solver in Excel as indicated in the note above. Thereafter one may chose the option “Solver” under “Tools”.Chapter 9: Multiple Correlation and Regression Analysis Template for ‘Multiple Regression’ may be used for deriving multiple regression equations as per procedure explained in Section 9. The equation may be obtained as follows. and are beyond the scope of this book. Case 9. the coefficients of the regression equation will appear under respective names of variables. and in the resulting template.14 and 9.052 more than a student who does not have the Commerce background. Working Fds.19 of Chapter 9 of the book. then there is the issue of selecting the best regression equation.938 Ratio of . The equation may be obtained as follows. he/she gets 0. one may first unprotect the worksheet for further processing by choosing the option “protect” by typing the password as “protect”. One has also to test for multicollinearity among the independent variables.005 Age + 0.195 – 0. CGPA = 3.2 The multiple regression equation may be obtained by using the template ‘Multiple Regression’ and the solver in Excel as indicated in the note above. It may be mentioned that fitting a multiple regression equation is only a first step in studying the relationship among the dependent and independent variables. Usually sophisticated packages like SPSS can be used to help in such detailed analysis . + 14. As indicated in Section 9.052 Background( 0 or 1) It implies that if a student’s background is Commerce. Case 9.01 + 0. one should choose ”Solve” by pressing “OK”. After inputting the data. if the test of significance for regression equation as a whole or of regression coefficients is carried out using ANOVA . the answer will not come directly. one has to test the significance of the regression as a whole as also of the individual regression coefficients of the independent variables.

Cost to Income + 7.627 Ratio of Fee Income to Total Income Incidentally, if the test of significance for regression equation as a whole is carried out the regression equation is found to be significant. However, individually, only Average Working Funds is found to be significant variable, the other two variables are found to be insignificant. Regression equations may be fitted for Net Profit on one of the above three independent variables, one by one, to ascertain the extent of linear relationship between Net Profit and each of the three independent variables. With dummy Private Sector = 1 and Public Sector = 0, the multiple regression equation fitted is Net Profit = – 573.01 + 0.00965 Av. working Fds. + 14.938 Ratio of Cost to Income + 7.627 Ratio of Fee Income to Total Income + 167.7 Private/ Public Sector Case 9.3 The multiple regression equation may be obtained by using the template ‘Multiple Regression’ and the solver in Excel as indicated in the note above. The equation may be obtained as follows; P/E Ratio = 791.879 – 62.214 Current Ratio +1621.6 Debt Equity Ratio Incidentally, if the test of significance for regression equation as a whole or of regression coefficients is carried out using ANOVA , all will be found to be insignificant.

Case 9.4 The multiple regression equation may be obtained by using the template ‘Multiple Regression’ and the solver in Excel as indicated in the note above. The equation may be obtained as follows; Life Expectancy = 38.14 – 0.0002 GDP + 0.476 School Enrolment + 0.0376 Percentage of Urban Population Incidentally, if the test of significance for regression equation as a whole is carried out using ANOVA , it is found to be insignificant. But among the independent variables, only School Enrolment is found to be significant.

Case 9.5 The multiple regression equation may be obtained by using the template ‘Multiple Regression’ and the solver in Excel as indicated in the note above. The equation may be obtained as follows; CGPA = 3.195 – 0.005 Age + 0.052 Background( 0 or 1)

Incidentally, if the test of significance for regression equation as a whole or of regression coefficients is carried out using ANOVA template, all will be found to be insignificant.

Case 9.6 The multiple regression equation may be obtained by using the template ‘Multiple Regression’ and the solver in Excel as indicated in the note above. The equation giving dependence of SENSEX on RIL and INF may be obtained as follows; SENSEX = 3364.2 + 6.672 RIL + 0.688 INF Incidentally, if the test of significance for regression equation as a whole or of regression coefficients is carried out using ANOVA template, all will be found to be insignificant. The equation giving dependence of NIFTY on RIL and INF may be obtained as follows; NIFTY = 964.3 + 1.930 RIL + 0.198 INF Incidentally, if the test of significance for regression equation as a whole or of regression coefficients is carried out using ANOVA template, all will be found to be insignificant. Case 9.7 The multiple regression equation may be obtained by using the template ‘Multiple Regression’ and the solver in Excel as indicated in the note above. The equation may be obtained as follows; Final Grade Score = – 24.207 – 0.730 Graduate Level Score + 2.226 Entrance Exam. Score For a student with Graduate level Score as 80 and Entrance Level Score as 70, the predicted score for Final Grade is 73. Incidentally, if the test of significance for regression equation as a whole or of regression coefficients is carried out using ANOVA, all are found to be insignificant. *****

Chapter 10: Statistical Inference

Case 10.1 Calculation of correlation can be made through template on ‘Simple Correlation’ given on page 8.60. It can be tested for significance by using ‘t’ test illustrated on page 10.88. If it is significant, it is a significant factor explaining the variation in the CGPA of students. Its squared value indicates the proportion of variance of CGPAs explained by age. The following tests for equality of means(CGPAs) of students with various backgrounds may be carried out by using Formula 10.11 or Template 7 on page 10.103: Mean for Commerce Students = Mean for Mean for Science Students Mean for Commerce Students = Mean for Engineering Students Mean for Commerce Students = Mean for Information technology Students Similar analysis may be carried out for various specilasations. CGPA scores of students with various backgrounds may be grouped in suitable number of class intervals along with the frequencies in each class interval. Assuming normal distribution with the calculated means and standard deviations, expected frequencies may be worked out. Then Chi –Square test for goodness of fit given on page 10.72 may be used to judge goodness of fitting normal distribution. Case 10.2 Simple Correlation coefficients may be calculated as desired, and their significance may be tested by using the ‘t’ test illustrated on page 10.88. If it is significant, use of relationships is justified. Use of normal distribution is justified through the test of goodness of fit, mentioned in the Case 10.1. Case 10.3 The simple correlations between various pairs of the four indicators may be calculated, and tested for significance, as indicated in Case 10.1, above. Case 10.4 This case is similar to the Case 10.3, above.

Case 10.5 Here, the template 11 on page 10.107 for ‘Chi Square Test for Independence’ can be used to test the association between the areas of specialisation and size of pay packages.

above.5. the Template 10 on page 106 for ‘ Chi Square Test for Goodness of Fit’ may be used. the expected preferences are 120 for each colour.Case 10. Case 10.6. Case 10. again the first part of the Case is similar to Cases 10.8 Here. As regards the second part. above. While the observed preferences are given.6 This case is just like the Case 10.5 and 10. . above. the conclusion would not change as the test only assumes three areas of specialisations without any name label.7 The first part of the case is similar to Cases 10.6.5 and 10. on the assumption that there is no preference for any colour. For the second part.

Case 11. The template ‘ TWO WAY’ given on page 11.4 It is a case relating to Two Way ANOVA.3 It is a case relating to Two Way ANOVA with interaction. One factor is the ‘Area’ and the other is ‘Location’. The table will indicate the significant differences among the four indices. The template ‘ONE WAY’ on page 11. The template ‘TWO WAY WITH INTERACTION’ given on page 11. The areas of specialisation may be termed as ‘Treatments’ in ANOVA terminology. if any. One factor is ‘Series’ and the other is ‘Days’.29 may be used to draw conclusions about significant differences among areas and locations as among interactions. Information Technology and Science are given.28 may be used to generate ANOVA Table.2 It is a case relating to Two Way ANOVA. The backgrounds may be termed as ‘Treatments’ in ANOVA terminology.Chapter 11: Analysis of Variance and Design of Experiments Case 11. if any but that is not required in the case. The template ‘ONE WAY’ on page 11.3 in Ch.28 may be used to generate ANOVA Table. Engineering. The template ‘ TWO WAY’ given on page 11.. if any.27 may be used to draw conclusion about significant differences( variation) among CGPAs of students with different areas of specialisations. refer to Illustration 11. (a) Data about CGPAs of students having five different backgrounds viz Commerce. (b) Data about CGPAs of students having four different areas of specialisation viz.11. Marketing. One factor is the ‘Indices’ and the other is ‘Months’. The table will also indicate the significant differences among the ratings on eight days.27 may be used to draw conclusion about significant differences( variation) among CGPAs of students with different backgrounds. Finance.1 It is a case relating to One Way ANOVA. if any. The table will also indicate the significant differences among the four months. Also. The table will indicate the significant differences among the ratings of three series. . Case 11. Economics. Human Resources and Systems are given. Case 11.

The variation could also occur due to interaction between the institute and the field of specialisation. These variations could be either due to specialisation in a field or due to the institute wherein they study.15. we have taken only two students each for each interaction between institute and field of specialisation.3: The data is presented below in a tabular format. Institute Institute Institute A B C Marketing Finance HRD 8 10 10 11 8 7 9 11 11 12 5 6 9 7 9 7 8 5 Here.) 11. These presumptions could be tested by collecting following type of data for a number of students with different specialisations and different institutes. for the sake of simplicity of calculations and illustration.17 – Please replace printed values by values given in red ink.STATISTICS FOR MANAGEMENT ( Some Changes) (Reference: Pages 11. 11. For example it could happen that the marketing specialisation at one institute might fetch better pay package rather than marketing at the other institute.16 7 11.4 Two – Way or Two – Factor ANOVA with Interaction It has been observed that there are variations in the pay packages offered to the MBA students. However. No change in text. the test of hypotheses will be For Institute: H0 : Average pay packages for all the three institutes are equal H1 : Average pay packages for all the three institutes are not equal For Specialisation: H0 : Average pay packages for all the specialisations are equal H1 : Average pay packages for all the three specialisations are not equal For Interaction: H0: Average pay packages for all the nine interactions are equal H1: Average pay packages for all the nine interactions are not equal . Illustration 11.

5 74. a Table is reconstructed by working out marginal totals for Institutes and Specialisations as follows: Institute A Marketing Finance HRD Total 8 10 Institute Institute Total B C 10 11 8 7 54 9 11 11 12 5 6 54 9 7 9 7 8 5 45 54 60 39 153 From the above Table.5 6 6 6 = = Total Sum of Squares (TSS) = = = = = Sum of Squares Between or due to Fields of Specialisation (Row: SSR) Sum of squares due to Institutes Column:SSC = = 39 . First of all. as follows: Correction Factor (CF) = (Sum of All Observations) 2 Total number of Observations (153) 2 18 1300. Incidentally.5 (Sum of Squares of All Observations) – CF 1375 – 1300. we work out the requisite sums of squares for preparing the ANOVA Table. this is an example of two – way or two – factor (Institute and Specialisation) with interaction.Now we present the analysis of data and the resultant ANOVA Table.5 542 542 452 + + − 1300.5 6 6 6 9 542 602 39 2 + + − 1300.

xij is the mean of the observations of ith row and jth column. xi.. j + x. is the mean of the observations in the ith row. These terms can be calculated by first calculating the means of all the interactions as also the means of corresponding rows and columns.(11.5 6 7 Row Mean 9 9 7 Grand Mean 8.5 . Interaction SS (SSI) = 2 × 6 = 12 Sum of Squares due to Error = Total Sum of Squares – SS Due to Specialisation (Row: SSR) (column: SS – SS Due to Interaction – SS due to Institute = TSS – SSR – SSC – SSI = 74.25 2. j is the mean of the observations in the jth column.5 – 9 – 39 – 12 = 14. n is the number of observations for each interaction.25 0 Institute B 0 1 1 Institute C 0.25 0. is the grand mean of all the observations. ) 2 …………. In this example it is equal to 2.. Institute A Marketing Finance HRD Column Mean 9 10 8 9 Institute B 9. x.5 ) as follows.5) where. x. Institute A Marketing Finance HRD 0.5 10.5 6. as given below.33 and then calculating the sum of squares for each interaction by the formula (11.25 1 Total 6 Thus. − x.5 7 9 Institute C 8.SSI = n∑∑ ( xij −xi.

) ) 9 39 12 14.5 3 1.Now.5 2 2 4 9 17 4.61111 2.5 74. we conclude that the while the pay packages among the institutes are significantly different. the ANOVA Table can be prepared as follows.103 1.6331 Reject From the above Table. there is no significant difference among the pay packages for fields of specialisations as also among interactions between the institutes and the fields of specialisations.8621 4.f.f.2565 3.2565 4.7931 12.5 19. MSST÷ MSSE (SS) (d. ANOVA Table Source of Variation Specialisation Institute Interaction Error Total Sum of Degrees of α = 5% Mean Sum of Squares ‘F’= Squares Freedom F(Tabulated Decision (MSS) = SS÷ d. .

4 in Section 12. Infosys. Thus. first of all. Similarly. NIFTY and Dollar. RIL. Case 12.7 to 12.2 This case can be solved just like the above Case 12. as per formulas 12.2.1. and finally carrying out the run test as described in Illustration 12. we can find the daily rate of returns on SENSEX as well as NIFTY.5. Then.6 in Section 12. the ranks for all the four cities have to be converted to be uniformly varying from 1 to 50 in all the four cities.10 in the illustration 12.11.1 in Section 12.3 This Case can be solved by first calculating the daily returns of all the four variables viz. . then calculating medians of respective rate of returns. the rank ‘66’ of Sanjay Nair in Chennai (lowest in Chennai).1 Using the template on “Simple Correlation and Regression Analysis”. the F test. Similarly. Thereafter. Case 12. rank’71’ of Renuka Ramnath in Delhi (second lowest in Delhi) may be converted to 49. may be converted to 50. the rank ‘79’ of Suresh Krishna in Delhi ( lowest rank in Delhi) may be converted to 50. Case 12. one can carry out the test as indicated in Illustration 12. with the help of the template on “Simple Correlation and Regression Analysis”.Chapter 12 : Non – Parametric Tests Case 12.4 As indicated as a hint for the Case. may be carried out.

17 may be used to forecast demand deposits for the months in the year 2007-08. Case 13. we get the following graph: Demand Deposits 4500 4000 3500 3000 2500 Demand Deposits 2000 1500 1000 500 0 0 5 10 15 20 25 30 35 40 The graph indicates seasonality. Doing so. and therefore the template ‘ Trend and Seasonal time Series’ described on page 13.Chapter 13 : Time Series Analysis Case 13.2 Plotting the data over the five years we have the following graph: Returns 100 80 60 40 Returns 20 0 0 -20 5 10 15 20 25 -40 .1 The first step in analysing a time series data is to plot the data.

It may be noted that neither there is some visible trend and nor there is any seasonality. it is difficult to project the trend in the next year.4 Plotting the data over the five years we have the following graph: HPI 205 200 195 190 HPI 185 180 175 170 0 10 20 30 40 50 60 70 . In such a situation. one can use only trend method on the monthly values for the year 2004-05. 2005-06.e. On this basis. and therefore time series analysis can not be used to analyse and forecast.3 Plotting the data over the three years we have the following graph: Web hits 1000 900 800 700 600 500 400 300 200 100 0 0 5 10 15 20 25 30 35 40 Web hits The graph shows that there are different trends during the three years. Case 13. one can project monthly values for the next year i. and determine the trend equation. Case 13. With this equation.

and hence time series analysis template may be used to analyse and forecast.It may be noted that there is secular increasing trend as well as seasonality. .

83 7238.0524 79.048 542.8600 67.940 16.268 330.7751 73.1234 71.62 5309. we may tabulate the cumulative wealth of billionaires starting from the first wealthiest one.27 56414.V.99 10584.1902 65.8476 28.235 427. C.Hinduja Jaiprakash Gaur Uday Kotak Ajay G.Chapter 14: ABC ANALYSIS Case 14.947 579.6885 80.7205 61.98 4923.0762 77.544 554. Subbiah & Family The Kirloskar Family Keshub Mahindra Wealth 125674.7678 44. S.00 64855.7880 57. Services Diversified Diversified Engineering Diversified Cumulative Cumulative Wealth Percentage 125674.1 First.2243 71. From this cumulative value of wealth.3324 69.281 501.73 5815.543 537.2790 68. Name Ratan Tata P.42 Sector Large diversified Hospitality Software Petrochemicals Telecom Large diversified Wind energy Metals Software & hardware Large diversified Auto Pharmaceuticals Auto components Steel Aviation Durables Spirits FMCG Pharmaceuticals FMCG Media Auto Large diversified Construction Banking & Fin.5366 74. Burman Malvindar Singh & Shivinder Singh Adi Godrej Subhash Chandra Brijmohanlal Munjal S. N.30 6706.47 16643.49 7857.04 12455.838 569.689 594.88 6504.P.981 584.0091 75.50 5033. we may note that 7 billionaires ( out of 102 i.836 530.22 34993. These may be clubbed together to form ‘A’ category.905 589.3028 70.683 366. Tanti & Family Promoters Anil Agarwal Shiv Nadar Kumarmangalam Birla Rahul Bajaj Dilip S.182 478.1 209.2929 59.9591 64.76 5423.2926 . may constitute ‘C’ category of billionaires.962 523.75 16698.69 18108.35 35558. These may be clubbed together to form ‘B’ category billionaires.375 445.528 564. Shanghvi Baba Kalyani Savitri Jindal Naresh Goyal (through Tail Winds) V.241 401.98 4506.909 574.98 26139.64 6874.7209 76. Then next 30% ( 30 out of 102) billionaires account for about 25% of wealth.32 4784.3306 49.2820 75.41 5071.21 5560.434 598.825 491.27 5038.7510 78.e.483 462.4110 79. R.105 559.4007 77. Premji Mukesh Ambani Sunil Mittal & Family Anil Ambani Tulsi R.94 5680. Dhoot Vijay Mallya V.0975 53.723 516.12 83739. about 7%) account for about 60% of the wealth.865 509.0735 36.864 548. Oberoi Azim H. Piramal M.9954 72.08 4744. The rest 63% ( 65 out 0f 102) accounting for only 15% wealth.413 274.

90 1789. Birla Sashi Rula Jignesh Shah Yusuf K.155 686. K.8470 84.9495 82.48 2795.48 2534.03 1886. G.74 2085.463 621.073 684.278 80.320 663.1580 87.68 2864.55 2676.94 3000.103 641.997 666.10 2332.861 635.5382 92.28 3143.1576 91.5051 1679.300 614.454 628.79 2796.531 668. Birla Desh Bandhu Gupta & Family Ramesh Chandra & Family Harsh C.580 703.10 1698.38 1918.61 2096.71 2270.257 690. V. Khorakiwala B.78 3097.7059 85.476 675.2662 92. Ramalinga Raju.3536 89.63 2082.5412 87.39 3463. Patni Sushir Mehta The Nilekani Family Kiran Mazumdar-Shaw L.82 1827.8765 91.146 653.44 Software 4186.229 650.3827 83.437 611. Lodha The Patni Family Rajan Raheja P.75 Pharmaceuticals 3862. Rama Raju & Family Venu Srinivasan K.173 644.9098 83.990 625.4361 82.5674 93. Ramasubrahmaneya Rajha Vidya Murkumbi & Narendra Murkumbi Soshil Kumar Jain & Family 4310.2799 94.04 Auto Diversified Diversified Software Pharmaceuticals Software FMCG Construction Diversified Pharmaceuticals Pharmaceuticals Paints Software Power Software Biotech Diversified Diversified Retail Diversified Sugar & engineering Diversified Pharmaceuticals Construction FMCG Construction Auto components Pharmaceuticals Pharmaceuticals Diversified Chemicals Cement Software Diversified Diversified Sugar 603. K.18 Software 3629.69 3533.13 2144.K.4372 91.6664 89.21 2054. Ramaprsad Reddy & Family B.963 699.89 3250.2909 88.8041 93. Jain The Abraham Family Kishore Biyani Associates Harsh Goenka The Sawhney Family B.0523 94.251 607.The Murthy Family Habil F. S.076 697.9161 88.005 638. R.21 3054.9918 92.04 2028.75 2047.0613 93. Parekh R. Mariwala & Family Ajit Gulabchand Arvind Dham Saldanha Family trust P. Hamied & Family The Gopalakrishnan Family Karsanbhai K.2847 90. Anji Reddy & Family The Dani family & the Vakil Family G.891 679.808 658.6551 89.7660 87.705 631. K.99 1888.791 701.604 661.2828 84.269 694.50 2917.0139 89.8124 94.8705 81.011 655.1274 85.9780 90.83 3156.286 692.228 647.188 673.746 677.98 Pharmaceuticals 704.81 2287.71 3527.9543 86.188 696.3144 93.929 618. Bangur B. Patel & Family The Punj Family Gautam Thapar Zydus family Trust K.4317 81.863 671.7163 91.85 3070.3638 86.89 2716.61 1983.83 2324.958 .5890 90.210 688.987 682. K.5427 85.

71 1463.9103 97.80 1403. D. Vinayak Ravi Reddy S.2340 98.006 94.8609 100 Textiles Diversified Engineering Construction Textile Chemicals.5519 98. V.0733 98.7214 99.2182 96.737 719.899 724.5823 97.159 725.056 709. and then we calculate cumulative business of banks starting from the first bank.43 1295.92 1390.6905 95.779 742.73 Real estate 1040.50 1529.296 737. C.774 733.706 741.3943 98.14 1324.145 736.2974 99.69 1303.1197 95.52 1252.92 Diversified 1040.9204 95.665 727.44 1151.2473 97. auto components 1048.154 730.7488 97.00 1253.125 716.28 Textiles 712.8559 99.18 1195.7389 96.5666 96.41 1486.0792 97.526 708.36 1211.3159 95.5819 99.366 731.00 1305.413 738. Krishnan Nair Analjit Singh B.86 1242.R.30 1285. Krishna Reddy K.29 1081.5041 95. Oswal Nusli Wadia Kamlesh Kumar Agarwal Abhijit Rajan & Associates Vijaypat Singhania SanjayDalmia Murali K.00 1097.431 717. Modi Sushil Ansal Pollachi Mahalingam AC Muthiah The Sarin family Dinesh Hinduja.869 744.28 1073. Dhingra & Family D.09 1208.74 Chemicals Construction Sugar Media 706.828 743.47 1260. K.00 1114.969 735.1524 99.21 1246. Raheja & Family Sheth family Narrotam Sekhsaria & Suresh Neotia G.0432 96. P.2 First. Divi & Family K.947 745. we arrange the banks in descending order as per their business.336 721.40 1117.0053 99. Cement Pharmaceuticals Retail Shipping Cement Diversified Paints Textile machinery Hospitality Healthcare Diversified Software Tyres Steel Paper Software Software Cigarettes Construction Sugar. Thapar Jamuna Raghavan Nitin Sandesara K.7062 98. Poddar The Ajmera Family L. Rajendra Hinduja & family 1568.40 1278. Venkattram Reddy & T.8681 96. M.413 726.527 739.3930 96.947 Case 14. S. P.910 745. We may note that only 4 out of 22 ( .800 715.74 1306.4413 99.4151 97.98 1199.624 740.574 732. Khaitan Asha Dinesh Dharaprasad R. Shroff & Family Rupen Patel & family The Saraogi family T.912 729.9112 98.73 Real Estate 1037.040 720.621 722.543 711.7154 94.410 713.44 1175. Jayavarthanavelu Capt. M.Rajendra Hinduja & Family Dinesh Hinduja.

4 192190259.03 99394599.43824 State Bank of India Canara Bank Panjab National Bank Bank of India Bank of Baroda Union Bank of India UCO Bank Central Bank of India Syndicate Bank Indian Overseas Bank Oriental Bank of Com Allahabad Bank Indian Bank Corporation Bank Andhra Bank State Bank of Hyderabad State Bank of Travancore United Bank of India 8576661.27 115323447.1599 63.02 20706542.1 151244173.3 130663299.98 4399026 185892947.4 198474349.02 80185686. Next 6 out of 22 ( 27%) account for about 32% of business.. The rest 12 out of 22 ( i. and these may be termed ‘B’ category banks.65789 93. and may be termed as ‘C’ category banks in term of business parameter.12 6297312 6284090 5667358 5619870.4 24.20629 82.about 18%) conduct about 48% of business.9 224029586.9 219630560. Name of bank Business 59479144.36 59479144.00 8954970.3 74.2 215192746.3 141758803. about 55%) account for only 20 % of business.80586 91.75 5431168.4637 41.72 4437813.4801 48.24 15928848.01752 8532230.1276 54. These may be termed as ‘A’ category banks.5294 59.01 19208913.00 15339852.82882 85.85552 70.94 177360717.1184 66.4 204141707.87 9485370.9 77.00 11095503.8223 33.86 8584911.4 209761578.e.57825 80.19396 87.1 160199144 168784055.49372 .53929 89.

These may be termed as ‘A’ category banks. we arrange the banks in descending order as per the number of their employee and then we calculate cumulative number of employees of banks starting from the first bank.44 3696784 3346839. We may note that only 4 out of 22 ( about 18%) have about 50% of employees. Number of Employees 198774 58047 46893 41808 38737 37241 25421 24624 24510 Cumulative Number of Employees 198774 Bank State Bank of India Punjab National Bank Canara Bank Bank of India Bank of Baroda Central Bank of India Union Bank of India Syndicate Bank UCO Bank Cumulative % of Employees 28.e.1467 55.8631 68.28925 97.3 95.0605 98.Bank of Maharashtra Vijay Bank of India Dena Bank State Bank of Bikaner & Jaipur 4302441.0790 50.8487 256821 303714 345522 384259 421500 446921 471545 496055 37.2734 44.65 228332028. and these may be termed ‘B’ category banks.7688 61.3 First.60327 100 Case 14. Next 6 out of 22 ( 27%) account for about 25 % of employees.4369 71.7 236273086. about 55%) have only 25 % of employees.9940 . The rest 12 out of 22 ( i.36 4244274.1737 64.2 232576302. and may be termed as ‘C’ category banks in term of number of employees.7 239619926.

One is the amount.3148 83.8284 85. the product of the amount and the number of monthly .95054 91. say ‘A’. For defaulting loans. For monitoring at the beginning of a loan.9999 88. and the other is the period or number of installments for which default is reported. For monitoring purpose. One such solution/approach is indicated below.52603 100 Case 14. For example. etc. a senior executive in a Government/Reputed organisation may require less monitoring as compared to a self employed professional/businessman/trader or a junior/middle level employee. ABC analysis may be carried out for each type of loan i. ‘B’ and ‘C’.e. depending on the credibility of such customers in the past. The customers themselves may be classified in three categories.Indian Overseas Bank Indian Bank Allahabad Bank United Bank of India Oriental Bank of Com Bank of Maharashtra Andhra Bank State Bank of Hyderabad State Bank of Bikaner & Jaipur State Bank of Travancore Vijaya Bank Corporation Bank Dena Bank 24178 21302 18742 17319 14962 14052 13169 13108 12089 11642 11494 10754 10156 520233 541535 560277 577596 592558 606610 619779 632887 75.03928 89. there are two parameters of importance.96526 98.60746 656618 668112 678866 689022 95. auto. there may be more than one solution/approach. as also the type of customer.2971 96. home. it may be classified according to the amount.5947 81.4 For this type of situation.5031 78.85295 644976 93.

there are two parameters of importance.e. . and ‘ABC’ analysis may be carried out on this product. The outstanding balance may be monitored daily/weekly for top ‘A’ category of customers. the product of the amount and the number of monthly defaults may be taken. ‘B’ and ‘C’. and weekly/monthly for customers under ‘B’ category. The outstanding balance may be monitored daily/weekly for top ‘A’ category of customers. it may be classified according to the amount. the borrowers may be arranged as per amount sanctioned/utilized. a senior executive in a Government/Reputed organisation may require less monitoring as compared to a self employed professional/businessman/trader or a junior/middle level employee. One such solution/approach is indicated below. auto. and ‘ABC’ analysis may be carried out on this product. ABC analysis may be carried out for each type of loan i.defaults may be taken. and weekly/monthly for customers under ‘B’ category. etc. For monitoring purpose. home. depending on the credibility of such customers in the past. the borrowers may be arranged as per amount sanctioned/utilized. For this type of situation. say ‘A’. as also the type of customer. and ‘ABC’ analysis may be carried out. For monitoring at the beginning of a loan. One is the amount. and ‘ABC’ analysis may be carried out. and the other is the period or number of installments for which default is reported. For example. The customers themselves may be classified in three categories. there may be more than one solution/approach. For loans relating to carry out business/trade activities. For defaulting loans. For loans relating to carry out business/trade activities.

8436 80 Y 60 40 20 0 0 2 4 6 t 8 10 12 14 Quadratic 120 y = -0.762e 0.0453x 100 R 2 = 0.4336x + 56.348 R 2 = 0.466x + 49.1 Line ar 120 y = 3.273 100 R 2 = 0.8592 80 Y 60 40 20 0 0 2 4 6 t 8 10 12 14 : .8237 100 80 Y 60 40 20 0 0 2 4 6 t 8 10 12 14 Expone ntial 120 y = 57.Chapter 15: Forecasting Methods Case: 15.2333x2 + 6.

1697 93.5057 61.05 14.0042 55.689398 1.03 MSE(Best α) 68.5697 90.7705 93.273 R2 = 0.81077 221.74 85.48 13.1033 86.93 74.4042 75.273 X2 -0.8592 y = -0.78 0.780006672 t 1 2 3 4 5 6 7 8 9 10 11 12 13 X 58 62 65 68 72 75 98 84 87 90 93 92 58.9033 94.2333x2 + 6.45 1.15 67.6702 83.00 61.00 15.0698 88.463958 0.466 Const 49.7705 79.363609 0.530275 2.04 Deviation^2 16.2333x2 + 6.12 64.273 13 14 15 16 1 2 3 4 5 6 7 8 9 10 11 12 58 62 65 68 72 75 98 84 87 90 93 92 MSE 6.0702 93.18 92.466x + 49.16 10.21667 21.01349 Black Best α 0.00 58.98 .92 86.2718 66.95 76.2333 Forecasts 93.284072 2.5713 71.15 70.29 92.58858 14.54 570.603 92.50 16.76 89.11 92.468984 11.466x + 49.612392 24.2698 x 6.221532 0.85 23.Black Best equation : Quadratic y = -0.9117 4.

09 0.Quadratic 60 50 40 30 20 10 0 0 2 4 6 t 8 10 12 14 Y y = 0.008x 2 + 0.88 40 38 41 46 42 41 .636 R2 = 0.298435453 t 1 2 3 4 5 6 X Deviation^2 40.3344 Exponential 60 50 40 30 20 10 0 0 2 4 6 t 8 10 12 14 Y y = 39.00 39.0117x R2 = 0.55 37.79 4.444e0.46 0.40 39.3425 Colour Best α 0.63 MSE(best α) 10.88 41.3996x + 39.00 2.00 40.71 41.

8.32715 R 2 = 0. Linear 600000 500000 y = 25065x .13 0.68 41.7 8 9 10 11 12 13 41 47 42 43 42 49 Forecast 41. a closer look at the graph shows that the first four observations one trend.46 1.99.06 42. In fact. In such a case. the next 9 observations follow different trend.49 0.82 42.75 42. and the last 4 observations follow yet another trend. Thus.8427 400000 300000 Y 200000 100000 0 0 -100000 t 2 4 6 8 10 12 14 16 18 .25 Case 15. it is advisable to use this curve itself to project the future values of credit for the year 2007.39 43.58 44.56 41. we observe that the best fitted curve is exponential. it may be more realistic to fit a curve to the last four observations and project the fitted curve to forecast credit for 2007. However.06 0.2 By plotting the graph of the given data.31 31. and fitting varios curves by using the templates on Curve Fitting described on page 13. it provides an excellent fit with R2 as about 0.

12727x + 86960 R 2 = 0.Exponential 600000 500000 y = 44923e 0.6x2 .1368x R 2 = 0.9875 400000 300000 Y 200000 100000 0 0 2 4 6 8 t 10 12 14 16 18 Quadratic 600000 y = 2099.955 500000 400000 300000 Y 200000 100000 0 0 2 4 6 8 t 10 12 14 16 18 .

5 202299.Year 18 Y= 44923e0.21 89027.5 265961.1368x R2 = 0.9 Actual 53805 61689 65240 78662 80482 102310 124937 138548 161038 178999 200133 218839 229523 295562 313065 426892 549057 Y = 26166x2 .9906 X2 x const 26166 -43396 308393 1 2 3 4 5 291163 326265 413699 553465 745563 295562 313065 426892 549057 .5 153876.6 231956.2 459688.3 117044 134202.9875 A b 44923 0.91 102079.86 77645.7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Fore 51508.43396x + 308393 R2 = 0.1368 Forecast 527078.66 59059.4 176434.6 349656 400915.77 67717.1 304950.

3 Linear 350000 y = 46018x + 80295 R2 = 0.9963 300000 250000 200000 Y 150000 100000 50000 0 0 1 2 3 t 4 5 6 .2119x R2 = 0.Case 15.9662 300000 250000 200000 Y 150000 100000 50000 0 0 1 2 3 t 4 5 6 Exponential 350000 y = 110498e 0.

2 324440.5x + 129478 350000 R 2 = 0.2 140365.2x2 + 3861.3 257343.2 1 2 3 4 5 6 7026.2 x 3861.3 326741.8 204298.5 const 129478 .8 207203.2x2 + 3861.2 167003.3 251770.9977 300000 250000 200000 Y 150000 100000 50000 0 0 1 2 3 t 4 5 6 y = 7026.Quadratic y = 7026.5x + 129478 R2 = 0.5 Forecast 405590.9977 x2 Total 139032.7 165305.

27 .143 100 98 96 Y 94 92 90 88 86 0 1 2 3 4 t 5 6 7 8 R 2 = 0.2857x + 89.Case 15.4 Linear 104 102 y = 1.

2716 Quadratic 104 102 100 98 96 Y 94 92 90 88 86 0 1 2 3 4 t 5 6 7 8 y = 0.173e 0.0952x2 + 0.286 R 2 = 0.2744 .Exponential 104 102 100 98 96 Y 94 92 90 88 86 0 1 2 3 4 t 5 6 7 8 y = 89.5238x + 90.0136x R 2 = 0.

289006766 t 1 2 3 4 5 6 7 8 X MSE(best α) 38.64 92.Best α 0.26 11.00 91.59 93.21 13.57 95.43 16.96 138.00 9.28 90 94 88 102 90 96 100 .39 Deviation^2 90.24 93.63 41.16 90.00 90.

following output would be generated.Chapter 16: Decision Theory Case 16. .1 Entering the data in the template “Decision Analysis.xls” (Available on CD) .25 Above are the choices for different criteria. For example.5) may opt for Hotel as the best choice.5 110 -20 375 -65 Maximum 1200 1200 Hotel -710 7 45 53 155 101.5 Hurwicz Hurwicz Laplace Laplace 20 7 Take Away 13. 1 2 3 4 Take Alternatives Away Budget Speciality Hotel States of nature LP. different approaches could be selected. A pessimistic one may opt for Take Away as the best choice.5 12. HI HP . HI Sr no 1 2 3 4 8 20 15 7 -20 92 110 30 -65 10 375 85 -710 -560 405 1200 Maximum MaxiMax Minimum Alpha MaxiMin 0. an optimistic person may select Hotel as the best choice.75 245 101. LI HP . LI LP .25 Speciality 245 Hotel 83. Depending on the priorities of a decision maker. and a balanced person( Alpha =0.

l1 lakhs.2 Sunsoft Information Services is a small IT company based in Mumbai.3 0.(Fixed Copies) Cost) + Sales * Variable Cost 50 Rs. 4 Crores. The variable cost associated with shipping and onsite support. is around Rs. in Lakhs) Sales for the Year Profit = (Sales * ( Number of Cost) . It employs around 50 employees. and also has a big software R&D department. CostCalc which is a cost accounting software. they are not in a stage to ship the software till the end of the year. 2 Crore 80 Rs. 4 Crore Probability of Occurrence 0.Case 16. the probabilities of the approximate sales that Sunsoft expects to make in the year are as follows: Sunsoft’s Expected Profit ( Rs. It also has an annual revenue of Rs. AcctCalc is the market leader in accounting software. The average sale of this software is dependant on the following factors: • • • • Awareness Economic condition in the country Market conditions Competition Based on these factors. This is a unique software and has features to carry out cost accounting in a very easy way. The solutions given by this company are in the domain of accounting as well of Mobile Software. AcctCalc has also been working on a similar project for cost accounting software which could ease the way of cost accounting.4 0. The price of this software is around Rs. It has come up with a new software. 1 Crore 60 Rs. and has a annual turnover of about Rs. 96 Crores. Due to this AcctCalc faces an opportunity cost because the entry of the new product . 22 Crores. It primarily deals with accounting software which is quite popular with Small and Medium Enterprises. The fixed cost which is the cost incurred to make the software has been Rs.3 As regards the competition. l lakh per copy of the software. But due to some internal problems.

stands to lose substantial amount of Rs. . AcctCalc would get Rs. The management at AcctCalc decides that if this is not possible then they can attempt to enter into an agreement with Sunsoft where they can use the superior reach and network of AcctCalc to garner more sales for that company. 15 Crores. The sales increase by 20% in the second year. The following assumptions are to be considered when we solve the problem for Sunsoft • • The sales are can be calculated over two years because this is the shelf life of the product after which competitors will make it unviable to operate in the market The probabilities of the sales in each category remain same. The revenue sharing agreement with AcctCalc envisages that the Product Costcalc would use AcctCalc's brand name. Normally.2 crore Rs. a software like this. 1. 10 crore Probability of Occurrence 0.42 0. Out of the balance of Rs 10 Lakhs per copy of software.28 0.25 0. 8 crore Rs. and would retail for Rs. Sunsoft would get Rs. 5 lakhs and AcctCalc would get Rs.viz. Out of this. 6 crore Rs. Decision Situation by SunSoft: Now. 4 crore Rs.0 crore Rs.12 lakhs. The approximate sales that could be garnered on this basis are as follows: Sunsoft Alliance with AcctCalc: Expected Profit Sales for theYear 80 100 120 140 Profit for AcctCalc Rs.4 crore Profit for Sunsoft Rs. both the above Tables relate to the first year. in the market.4 Crores that it has invested in the startup of the project. Now.5. 1. 0. because of competition.05 Incidentally. AcctCalc Solutions wants to buy out the software CostCalc from the Sunsoft for an amount of Rs. 1. Sunsoft has to decide as to how it can maximize its profits.5 lakhs.. AcctCalc solution. has a shelf life of around 2 years after which competition enters the markets and the product is unable to sustain due to declining operating margins.l lakh for every copy sold as also subsequently in the next year even though the price will come down to ll lakhs.8 crore Rs.

3 EMV= 2.4 0.16 2.2 Probability 0.28 1.2 Following is the table calculating EMV for SunSoft if they market the product themselves in 2nd year.24 0.5 6.3 80 4 0.6 0.52 2.3 EMV= 0. Sales Sales Profit IN 1st in 2nd year year Sunsoft 80 96 4.25 0. Sales Profit Probability 50 1 0.016 .2 2.52 2.4 7.42 0.44 Profit in the 2nd year = sales ×0.28 0.2 2.8 100 120 6 120 144 7.01) Following is the table calculating EMV for 1st year for SunSoft if they have agreement with AcctCalc .3 9.11 – (sales × 0.25 0. Sales Sales IN 1st in 2nd year year 50 60 60 72 80 96 Profit Probability 6 0.88 7.4 2.2 0.What decision Sunsoft should take? Solution There are three options available for the SunSoft namely • Market the product self • Market the product with the agreement with AcctCalc • Sell the product to AcctCalc for Rs 15 Crores Following is the table calculating EMV for SunSoft if they market the product themselves in 1st year. Sale 80 100 120 140 Profit Sunsoft 4 6 8 10 Probability 0.26 Following is the table calculating EMV for 2nd year for SunSoft if they have agreement with AcctCalc .42 0.05 EMV = 1 2.6 1.4 60 2 0.

again this year.156 =12. Last year.1 1000 0. because of the supply of idols in Mumbai by another idol maker Jagdip. made by him.26 + 6. and sell for Rs.156 Note that in the 2nd year the Sunsoft’s profit = (10 × Sales) ÷2 It may be noted that the sales in the 2nd year =1. He makes two types of idols viz.2+7.3 . he was averse to take undue risk. In case Jagdip does not supply idols in Mumbai: Demand for For Big Idols Idols(x1000) Probability 5 0. in case of small idols and 20% in case of big idols. Total expected profit if Sunsoft markets itself = 2. and earns his livelihood for the year from this profession which keeps him busy for about two months in a year. 1500. will reduce by 30%.000. 400. and sell for Rs.1.3 Haridas has specialised in making Lord Ganesh idols which are installed during Ganesh Chaturthi festival. The following Table gives the demand for Ganpati idols under the two conditions. The small ones ( of about 2 feet height) cost him Rs. it is not taken into account in the second year.416 Crores Case 16. based in Pune.44 =9.2×Sales in the 1st year.2 Demand For Small Idols big idols Probability 250 0.05 EMV = nd Profit in the 2 year = (sales ×0.3 10 0. Haridas has predicted 40% probability of the idols being supplied.416 Crores Total Profit if Sunsoft buyout the software to AcctCalc = 15 – 4 = 11 Crores Hence the best choice for SunSoft is to market with the help of agreement with AcctCalc. Haridas had suffered a big loss. It may be also noted that since the fixed cost of the software is taken into consideration in the first year. He came to know that his last year’s competitor was not certain to supply the idols in Mumbai as he has the habit of supplying the idols to different cities in different years. in homes as well at public places. If it is so. He is based in Mumbai. The expected profit for the two years =12. big and small.42 6.0.4 0.09)/2 140 168 8. so this time he wanted to consider the impact of the competition before deciding on the number of idols to be made. Due to this activity being the only source of livelihood.64 Crores Total expected profit if Sunsoft markets with the help of agreement with AcctCalc = 6.05 500 0. the demand for idols. 250.3 20 0. The big ones ( of about 5 feet) cost him Rs. From some knowledgeable sources. by Jagdip.

000.00 -90.000.05 2000 0.000.00 -175.000.05 In case.000.2 0.00 -50.00 -150.3 28 0.000.00 -275.000.000.00 225.00 150.000.00 200 2 400 3 800 4 1200 5 1600 6 2000 37.00 -420. help Mr.00 -100.00 75.00 -525.00 -20.000.000.00 250 2 500 3 1000 4 1500 5 2000 6 2500 100. Small Idols Marginal Profit 150 Marginal Loss 250 Opportunity Loss 0 When Jagdip does not supply 1 Produce Sr no 1 2 3 4 5 6 Probability 0.00 37.000. Jagdip supplies idols in Mumbai: Demand for Big Probability Demand for Probability Idols Small 4 0.000.500.00 25.00 25. following output would be generated.000.500.00 -120.00 225.000.1 1200 0.000.000. Haridas regarding which option he should choose? Entering the data in the template “Decision Analysis.000.00 75.3 0.05 7 0.000.00 37.00 75.00 -220.05 1600 0.xls” (Available on CD) .00 100.00 -425.05 0.05 Demand 200 30.00 150.000.1 0.05 0.3 21 0.2 0.000.500.00 .2 800 0.000.00 175.00 -300.500.00 300.500.00 -25.00 70.000.30 40 50 0.000.00 150.00 -400.05 1500 2000 2500 0.000.000.500.000.00 37.00 -320. before starting his work on the Idols.00 225.00 75.3 200 0.00 -225.000.1 14 0.000.00 150.00 37.000.00 300.000.1 0.000.05 Demand 250 500 1000 1500 2000 2500 Produce Total Expected Profit When Jagdip supplies: 1 Produce Sr no 1 Probability 0.05 Assuming that Haridas knows in advance about Jagdip’s plan of supplying idols in Mumbai.000.3 0.000.000.00 37.00 1000 115.000.500.00 75.3 0.000.000.3 400 0.000.2 35 0.00 375.00 37.000.000.00 -25.

00 -140.2 0.500.000.00 60.000.000.000.000.000.000.500.00 Total Expected Profit Big Idols Marginal Profit Marginal Loss Opportunity Loss 30.500.000.00 2.00 17.500.000.00 -11.00 -8.000.000.000.00 5.00 -20.500.00 2 7 3 14 4 21 5 28 6 35 -1.000.750.000.00 7.00 7.00 10.000.975.00 -20.000.500.00 15.05 0.500.000.000.000.000.00 120.3 0.00 3.00 -15.00 2.00 -10.00 3.500.000.00 14.000.000.00 20.000.000.00 5.000.00 30.05 1 Demand 5 10 20 30 40 50 2.000.00 20.500.000.00 180.3 0.00 10.000.00 -5.500.00 10.000.000.000.00 15.00 10.000.000.00 -5.00 3.00 -26.00 -35.500.3 0.00 80.00 7.00 10.500.00 4 2.000.00 -240.00 800 92.00 2.00 -16.00 2.000.00 2.00 500 1000 0 When Jagdip does not supply 1 Produce Sr no 1 2 3 4 5 6 Probability 0.05 Demand 4 7 14 21 28 35 Produce Total Expected Profit 2.500.000.500.00 30.00 5.00 14.00 10.00 7 2.500.3 0.00 30.000.000.000.000.1 0.00 3.00 -25.000.1 0.00 2.00 -17.00 2.000.00 7.000.000.00 140.00 5 2 10 3 20 4 30 5 40 6 50 Produce Total Expected Profit When Jagdip supplies 1 Produce Sr no 1 2 3 4 5 6 Probability 0.000.000.00 60.00 60.00 2.000.750.00 -8.00 -15.500.150.00 7.00 120.000.00 -340.000.500.00 -12.00 2.00 3.00 0.000.500.05 Produce 400 800 1200 1600 2000 30.000.000.00 80.00 -80.000.1 0.00 -29.00 -7.000.000.250.000.500.00 10.00 2.000.000.00 0.00 -24.00 -10.00 5.00 -17.00 300.00 10.00 180.00 -42.05 0.00 120.500.00 5.250.00 .00 56.00 30.00 -72.00 2.00 60.00 60.000.00 -22.00 -3.3 0.00 -5.000.00 -40.000.00 -3.000.00 -650.2 3 4 5 6 0.00 20.000.000.00 -32.550.000.000.00 120.000.500.000.000.000.00 240.000.000.500.500.000.500.000.00 -180.00 -1.500.000.500.00 180.500.000.00 3.000.00 15.000.00 -22.00 240.000.2 0.00 25.000.00 -14.3 0.00 5.00 10 2.00 20.000.00 -2.2 0.500.

the maximum EMV for Haridas is for 1000 small and 10 Big idols.15 0.700.00 2.00 2.00 1.800.100.900.00 2.00 2.00 1.100.300.500.12 0.16 0.00 1.00 1.700.00 1.00 900.00 2.00 1.100.00 1.00 1.900.200. If Jagdip Supplies.000.300.100.00 2.00 2. is for 800 small and 7 Big idols.900.1 Demand 180 190 200 210 220 230 240 prepare Total Expected Profit 1. following output would be generated.00 1.800.00 200 1.00 2.00 1. His expected profit is 103510/- Case 16.00 180 2 190 3 200 4 210 5 220 6 230 7 240 10 20 1.00 1.00 2.00 2.900.00 1.000.900.00 2.00 1.4 Entering the data in the template “Decision Analysis.00 1.00 2.741.00 1.000.800. If Jagdip does not supply.00 800.00 600.00 2.00 1.858.000.100.00 1.00 2.800.400.300.00 1.14 0.00 1.100.000.600.18 0.871.00 1.00 1.400.00 1.800.900.00 1.800.800.00 1.00 2.00 1. Enter Details Marginal Profit Marginal Loss Opportunity Loss 1 prepare Sr no 1 2 3 4 5 6 7 Probability 0.607.00 2.200.200.800.00 1.00 1.600.00 1.0.000.00 1.xls” (Available on CD) .800.400.00 1.200.500.800.437.00 1.00 1.00 .830.6 Jagdip do not supply 1 0 117750 Make Small 1000 and big 10 117750 0 117750 1 103510 Do not supply Idols 0 0 0 It may be noted from above tables and the decision tree that the maximum EMV for Haridas.00 1.4 Jagdip supplies 1 Supply Idols 0 103510 0 82150 Make Small 800 and Big 7 82150 0 82150 0.15 0.000.200.900.00 2.

000.500.500.000.000.500.500.15 0.500.00 -8.000.500.00 2.000.00 3.00 500.000.000.05 0.500.00 475.00 -2.500.000.00 2.00 0.00 -2.000.00 2.000. It may be added that the above case could also be considered with some amount of opportunity loss for the hostel mess.000.04 0.00 -2.00 2.500.500.00 -9.000.It may be noted from the above table that the maximum EMV is for preparing 200 Meals everyday.00 0.00 -2.00 -13.500.00 -7.500.000.000.000.00 -3.00 -11.00 -925.00 2.00 -500.00 3.000.000.000.00 -8.500.500.00 500.00 2.500.000.00 2.00 -5. .00 -7.500.00 1.00 3.00 500.500.000.00 0.00 -3.500.00 -9.00 -5.00 -6.00 4.00 500.00 0.00 5.000.00 -3.00 -10.00 3.00 4.00 -12.500.00 -8.000.500.00 -4.000.000.00 4.00 3.00 0.00 -7.2 0.500.500.850.000.00 0.00 1.00 2.00 4.500.00 1.05 0.00 500.000.000.000.00 3.00 -1.00 1.00 -10.500.08 0.00 1.00 -6.00 -16.00 -5.000.00 1.000. Case 16.01 1 2 0.500.500.00 3.00 1.00 -14.00 1.00 0.500.00 1.00 1.500.00 0 1 2 3 4 5 6 7 8 9 10 0.000.00 4.000.xls” (Available on CD) .00 25.500.000.00 1.600.00 -11.000.000.000.00 0.000.00 0.00 2.00 0.500.00 -15.00 500.00 -13.450.00 -1. Enter Details Marginal Profit Marginal Loss Opportunity Loss 1 0 Sr no 1 2 3 4 5 6 7 8 9 10 11 Proba 0.11 0.00 1.500.00 500.000.00 -2.500.500.475.500.250.00 500.00 3.000.500.00 -15.00 -5.00 3.00 2.000.000.00 -500.5 Entering the data in the template “Decision Analysis.00 500.00 -5.00 -3.00 2.500.000.00 2.00 -7.000.00 500.000.500.00 0.00 550.00 -18.000.00 2.06 0.00 375.00 2 1 500 2000 3 2 4 3 5 4 6 5 7 6 8 7 9 8 10 9 11 10 It may be noted that the maximum EMV in the above table is for overbooking 2 extra rooms.000.00 -9.00 -4.00 -12.00 1.00 -4.00 1.000.00 -1.500.1 0.00 1. following output would be generated.500.500.00 1.00 -20.00 0.000.000.00 500.00 -10.00 1.000.00 -3.000.00 -6.000.00 2.500.00 1.500.000.00 1.00 2.00 -1.00 -17.15 0.

.com ) Template for ‘Multiple Regression’ may be used for deriving multiple regression equations as per procedure explained in Section 9. After inputting the data.Statistics for Management Hint for Solving Exercises Chapter 9 on Multiple Correlation and Regression Analysis ( Please e-mail any query to the authors : dr_tns@rediffmail. Immediately.(If it is not in the tools menu. Note: The data about values of all the variables may be inputted in the template.19 of Chapter 9 of the book. However. select the option as “keep solver solution” by pressing “OK”. one should choose ”Solve” by pressing “OK”. and given in the note below. one may select tools -> add-ins and select solver option by checking the box before solver) In the template that appears on the screen. and in the resulting template. the coefficients of the regression equation will appear under respective names of variables.com as also to shailarego@gmail. Thereafter one may chose the option “Solver” under “Tools”. This is an integral part of EXCEL. the answer will not come directly. one may first unprotect the worksheet for further processing by choosing the option “protect” by typing the password as “protect”.