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SMU

ASSIGNMENT
SEMESTER – 1
MBO025

Statistics For Management

SUBMITTED BY:
SIDHARTH RAMTEKE
MBA
ROLL NO.- 520918813

STATISTICS FOR MANAGEMENT

ASSIGNMENT SET - 1
Case 1
ASSIGNMENTS- MBA Sem-I
MB0024 – Statistics For Management

ABC Branch of XYZ Bank has decided to give 10 Lakh of loan each on long
term basis to only two of their customers (accountholders), who are
businessmen of the locality. About 20 businessmen had applied for loan in
order to develop their business further. In order to reject some of the
applications (as the fund was limited), the Bank decided that
accountholder who had maintained a minimum balance of 50000 INR
would only be considered for the loan. As a result, 10 applications were
automatically rejected as they were not satisfying the requirement of
minimum balance. Now, the 10 applications remained and it was found
that monthly minimum balance in all the cases were more than 50000 INR
for the last 12 months. Their account details of monthly minimum balance
are given below.

Months Monthly Minimum Balance in INR

A/C A/C A/C A/C A/C A/C A/C A/C A/C A/C
Hold Holde Hold Hold Hold Hold Hold Holde Hold Holde
er 1 r2 er 3 er 4 er 5 er 6 er 7 r8 er 9 r 10

Jan, 600 5600 6600 8600 5600 5900 5900 52000 5300 56000
2008
Feb, 00
700 0
7600 0
7400 0
9600 0
7600 0
9600 0
7800 73000 0
9800 76000
2008
Mar, 00
550 0
1100 0
1120 0
1900 0
1100 0
1200 0
1150 11200 0
1130 12000
2008
Apr, 00
900 00
8900 00
9000 00
9800 00
8900 00
9700 00
8700 0
93000 00
6600 0
89000
2008
May, 00
560 0
8800 0
8400 0
8400 0
8800 0
9800 0
9000 89000 0
8700 86000
2008
Jun, 00
800 0
5200 0
5700 0
5700 0
5200 0
5700 0
5500 54000 0
5900 72000
2008
Jul, 00
820 0
5800 0
9600 0
6600 0
5800 0
5600 0
8600 55000 0
9800 98000
2008
Aug, 00
790 0
9500 0
5500 0
9300 0
9500 0
9800 0
9900 96000 0
5900 95000
2008
Sept, 00
510 0
8600 0
7600 0
7400 0
8600 0
8800 0
8900 97000 0
8700 84000
2008
Oct, 00
950 0
9000 0
9500 0
9900 0
9000 0
9900 0
9500 99000 0
9500 90000
2008
Nov, 00
820 0
8200 0
8700 0
8400 0
8200 0
8800 0
8700 88000 0
8600 82000
2008
Dec,20 00
830 0
5500 0
5600 0
5700 0
5500 0
5900 0
5900 59000 0
5200 53000
08
You as an00 0
Assistant 0
Branch 0
Manager 0 the Bank
of 0 are0entrusted the 0
task of
selecting two account holders for sanctioning the loans. How you will
select the two individuals among the 10 applicants to give the loan using
appropriate statistical techniques? Give proper justification for your
selection.
ASSIGNMENTS- MBA Sem-I
MB0024 – Statistics For Management

Answer:-

Months Monthly Minimum Balance in INR

A/C A/C A/C A/C A/C A/C A/C A/C A/C A/C
Hold Hold Hold Hold Hold Hold Hold Hold Hold Hold
er 1 er 2 er 3 er 4 er 5 er 6 er 7 er 8 er 9 er 10

Jan, 600 5600 6600 8600 5600 5900 5900 5200 5300 5600
2008
Feb, 00
700 0
7600 0
7400 0
9600 0
7600 0
9600 0
7800 0
7300 0
9800 0
7600
2008
Mar,20 00
550 0
1100 0
1120 0
1900 0
1100 0
1200 0
1150 0
1120 0
1130 0
1200
08
Apr, 00
900 00
8900 00
9000 00
9800 00
8900 00
9700 00
8700 00
9300 00
6600 00
8900
2008
May,20 00
560 0
8800 0
8400 0
8400 0
8800 0
9800 0
9000 0
8900 0
8700 0
8600
08
Jun, 00
800 0
5200 0
5700 0
5700 0
5200 0
5700 0
5500 0
5400 0
5900 0
7200
2008
Jul, 00
820 0
5800 0
9600 0
6600 0
5800 0
5600 0
8600 0
5500 0
9800 0
9800
2008
Aug, 00
790 0
9500 0
5500 0
9300 0
9500 0
9800 0
9900 0
9600 0
5900 0
9500
2008
Sept,2 00
510 0
8600 0
7600 0
7400 0
8600 0
8800 0
8900 0
9700 0
8700 0
8400
008
Oct, 00
950 0
9000 0
9500 0
9900 0
9000 0
9900 0
9500 0
9900 0
9500 0
9000
2008
Nov, 00
820 0
8200 0
8700 0
8400 0
8200 0
8800 0
8700 0
8800 0
8600 0
8200
2008
Dec, 00
830 0
5500 0
5600 0
5700 0
5500 0
5900 0
5900 0
5900 0
5200 0
5300
2008 00 0 0 0 0 0 0 0 0 0

Avera 73.56 78.06 79 90.33 78.06 84.56 83.25 80.56 79.97 83.47
ge

As an Assistant Branch Manager of the Bank , I will give 10 lakh loan to each. Give
the minimum before of 50,000 would only be consider for one and all the A/C
holders have more than 50,000 as minimum balance. While looking at the
statement, it has been observed that only two A/C holders A/C holder no. 4 and A/C
holder no. 6 have maximum average balance in their A./C, that should eligible for
the loan for Rs. 10 lakh
ASSIGNMENTS- MBA Sem-I
MB0024 – Statistics For Management

Q1. What do you mean by sample survey? What are the different sampling
methods? Briefly describe them.
Answer : Sample is a finite subset of a population drawn from it to estimate the
characteristics of the population. Sampling is a tool which enables us to draw conclusions
about the characteristics of the population.

Survey sampling describes the process of selecting a sample of elements from a target
population in order to conduct a survey.
A survey may refer to many different types or techniques of observation, but in the context
of survey sampling it most often refers to a questionnaire used to measure the
characteristics and/or attitudes of people. The purpose of sampling is to reduce the cost
and/or the amount of work that it would take to survey the entire target population. A
survey that measures the entire target population is called a census.

Sample survey can also be described as the technique used to study about a population
with the help of a sample. Population is the totality all objects about which the study is
proposed. Sample is only a portion of this population, which is selected using certain
statistical principles called sampling designs (this is for guaranteeing that a representative
sample is obtained for the study). Once the sample decided information will be collected
from this sample, which process is called sample survey.

It is incumbent on the researcher to clearly define the target population. There are no strict
rules to follow, and the researcher must rely on logic and judgment. The population is
defined in keeping with the objectives of the study.

Sometimes, the entire population will be sufficiently small, and the researcher can include
the entire population in the study. This type of research is called a census study because
data is gathered on every member of the population.

Usually, the population is too large for the researcher to attempt to survey all of its
members. A small, but carefully chosen sample can be used to represent the population.
The sample reflects the characteristics of the population from which it is drawn.

Sampling methods are classified as either probability or non-probability. In probability


samples, each member of the population has a known non-zero probability of being
selected. Probability methods include random sampling, systematic sampling, and
stratified sampling. In non-probability sampling, members are selected from the
population in some non-random manner. These include convenience sampling,
judgment sampling, quota sampling, and snowball sampling. The advantage of
probability sampling is that sampling error can be calculated. Sampling error is the degree
to which a sample might differ from the population. When inferring to the population,
results are reported plus or minus the sampling error. In non-probability sampling, the
degree to which the sample
differs from the population remains unknown.

Probability Sampling Methods


1. Random sampling is the purest form of probability sampling. Each member of the
population has an equal and known chance of being selected. When there are very large
populations, it is often difficult or impossible to identify every member of the population, so
the pool of available subjects becomes biased.
ASSIGNMENTS- MBA Sem-I
MB0024 – Statistics For Management

2. Systematic sampling is often used instead of random sampling. It is also called an Nth
name selection technique. After the required sample size has been calculated, every Nth
record is selected from a list of population members. As long as the list does not contain
any hidden order, this sampling method is as good as the random sampling method. Its
only advantage over the random sampling technique is simplicity. Systematic sampling is
frequently used to select a specified number of records from a computer file.
3. Stratified sampling is commonly used probability method that is superior to random
sampling because it reduces sampling error. A stratum is a subset of the population that
share at least one common characteristic. Examples of stratums might be males and
females, or managers and non-managers. The researcher first identifies the relevant
stratums and their actual representation in the population. Random sampling is then used to
select a sufficient number of subjects from each stratum. "Sufficient" refers to a sample size
large enough for us to be reasonably confident that the stratum represents the population.
Stratified sampling is often used when one or more of the stratums in the population have a
low incidence relative to the other stratums.

Non Probability Methods

1. Convenience sampling is used in exploratory research where the researcher is


interested in getting an inexpensive approximation of the truth. As the name implies, the
sample is selected because they are convenient. This non-probability method is often used
during preliminary research efforts to get a gross estimate of the results, without incurring
the cost or time required to select a random sample.
2. Judgment sampling is a common non-probability method. The researcher selects the
sample based on judgment. This is usually extension of convenience sampling. For example,
a researcher may decide to draw the entire sample from one "representative" city, even
though the population includes all cities. When using this method, the researcher must be
confident that the chosen sample is truly representative of the entire population.
3. Quota sampling is the non-probability equivalent of stratified sampling. Like stratified
sampling, the researcher first identifies the stratums and their proportions as they are
represented in the population. Then convenience or judgment sampling is used to select the
required number of subjects from each stratum. This differs from stratified sampling, where
the stratums are filled by random sampling.
4. Snowball sampling is a special non-probability method used when the desired sample
characteristic is rare. It may be extremely difficult or cost prohibitive to locate respondents
in these situations. Snowball sampling relies on referrals from initial subjects to generate
additional subjects. While this technique can dramatically lower search costs, it comes at
the expense of introducing bias because the technique itself reduces the likelihood that the
sample will represent a good cross section from the population.
ASSIGNMENTS- MBA Sem-I
MB0024 – Statistics For Management

Q2. What is the different between correlation and regression? What do you
understand by Rank Correlation? When we use rank correlation and when we use
Pearsonian Correlation Coefficient? Fit a linear regression line in the following
data –

X 12 15 18 20 27 34 28 48

Y 123 150 158 170 180 184 176 130

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

Correlation analysis deals with


1) Measuring the relationship between variables.
2) Testing the relationship for its significance.
3) Giving confidence interval for population correlation measure.

Regression
Regression is defined as, “the measure of the average relationship between two or more
variables in terms of the original units of the data.” Correlation analysis attempts to study
the relationship between the two variables x and y. Regression analysis attempts to predict
the average x for a given y. In Regression it is attempted to quantify the dependence of one
variable on the other. The dependence is expressed in the form of the equations.

Different between correlation and regression


Correlation and linear regression are not the same. Consider these differences:

1. Correlation quantifies the degree to which two variables are related. Correlation does not
find a best-fit line (that is regression). You simply are computing a correlation coefficient (r)
that tells you how much one variable tends to change when the other one does.
2. With correlation you don't have to think about cause and effect. You simply quantify how
well two variables relate to each other. With regression, you do have to think about cause
and effect as the regression line is determined as the best way to predict Y from X.
3. With correlation, it doesn't matter which of the two variables you call "X" and which you
call "Y". You'll get the same correlation coefficient if you swap the two. With linear
regression, the decision of which variable you call "X" and which you call "Y" matters a lot,
as you'll get a different best-fit line if you swap the two. The line that best predicts Y from X
is not the same as the line that predicts X from Y.
4. Correlation is almost always used when you measure both variables. It rarely is
appropriate when one variable is something you experimentally manipulate. With linear
regression, the X variable is often something you experimental manipulate (time,
concentration...) and the Y variable is something you measure.
5. The correlation answers the STRENGTH of linear association between paired variables,
say X and Y. On the other hand, the regression tells us the FORM of linear association that
best predicts Y from the values of X.
6. (2a) Correlation is calculated whenever:
* both X and Y is measured in each subject and quantifies how much they are linearly
associated.
ASSIGNMENTS- MBA Sem-I
MB0024 – Statistics For Management

* in particular the Pearson's product moment correlation coefficient is used when the
assumption of both X and Y are sampled from normally-distributed populations are satisfied
* or the Spearman's moment order correlation coefficient is used if the assumption of
normality is not satisfied.
* correlation is not used when the variables are manipulated, for example, in experiments.
(2b) Linear regression is used whenever:
* at least one of the independent variables (Xi's) is to predict the dependent variable Y.
Note: Some of the Xi's are dummy variables, i.e. Xi = 0 or 1, which are used to code some
nominal variables.
* if one manipulates the X variable, e.g. in an experiment.
7. Linear regression are not symmetric in terms of X and Y. That is interchanging X and Y
will give a different regression model (i.e. X in terms of Y) against the original Y in terms of
X.
On the other hand, if you interchange variables X and Y in the calculation of correlation
coefficient you will get the same value of this correlation coefficient.
The "best" linear regression model is obtained by selecting the variables
(X's) with at least strong correlation to Y, i.e. >= 0.80 or <= -0.80
8. The same underlying distribution is assumed for all variables in linear regression. Thus,
linear regression will underestimate the correlation of the independent and dependent when
they (X's and Y) come from different underlying distributions.

Spearman's rank correlation coefficient or Spearman's rho, named after Charles


Spearman and often denoted by the Greek letter ρ (rho) or as rs, is a nonparametric
measure of correlation – that is, it assesses how well an arbitrary monotonic function could
describe the relationship between two variables, without making any other assumptions
about the particular nature of the relationship between the variables. Certain other
measures of correlation are parametric in the sense of being based on possible relationships
of a parameterized form, such as a linear relationship.

In principle, ρ is simply a special case of the Pearson product-moment coefficient in which


two sets of data Xi and Yi are converted to rankings xi and yi before calculating the
coefficient. In practice, however, a simpler procedure is normally used to calculate ρ. The
raw scores are converted to ranks, and the differences di between the ranks of each
observation on the two variables are calculated.
If there are no tied ranks, then ρ is given by:

where:
di = xi − yi = the difference between the ranks of corresponding values Xi and Yi, and
n = the number of values in each data set (same for both sets).
If tied ranks exist, classic Pearson's correlation coefficient between ranks has to be used
instead of this formula.

One has to assign the same rank to each of the equal values. It is an average of their
positions in the ascending order of the values.

Conditions under which P.E can be used.


ASSIGNMENTS- MBA Sem-I
MB0024 – Statistics For Management

1. Samples should be drawn from a normal


population.
2. The value of “r” must be determined from
sample values.
3. Samples must have been selected at random.
X 12 15 18 20 27 34 28 48

Y 123 150 158 170 180 184 176 130

Linear Regression Line for the above data can be


plotted as :

Total Numbers : 8
Slope (b) :0.16701
Y-Intercept (a) : 154.65
Regression Equation : 154.66 + 0.17x

Q3. What do you mean by business forecasting? What are the different methods of
business forecasting? Describe the effectiveness of time-series analysis as a mode
of business forecasting. Describe the method of moving averages.
Answer: Business forecasting refers to the analysis of past and present economic
conditions with the object of drawing inferences about probable future business conditions.
To forecast the future, various data, information and facts concerning to economic condition
of business for past and present are analyzed. The process of forecasting includes the use of
statistical and mathematical methods for long term, short term, medium term or any
specific term.

Following are the main methods of business forecasting:-


1. Business Barometers
Business indices are constructed to study and analyze the business activities on the basis of
which future conditions are predetermined. As business indices are the indicators of future
conditions, so they are also known as “Business Barometers” or “Economic Barometers‟.
With the help of these business barometers the trend of fluctuations in business conditions
are made known and by forecasting a decision can be taken relating to the problem. The
construction of business barometer consists of gross national product, wholesale prices,
consumer prices, industrial production, stock prices, bank deposits etc. These quantities
may be concerted into relatives on a certain base. The relatives so obtained may be
ASSIGNMENTS- MBA Sem-I
MB0024 – Statistics For Management

weighted and their average be computed. The index thus arrived at in the business
barometer.

The business barometers are of three types:


i) Barometers relating to general business activities: it is also known as general index of
business activity which refers to weighted or composite indices of individual index business
activities. With the help of general index of business activity long term trend and cyclical
fluctuations in the „economic activities of a country are measured but in some specific cases
the long term trends can be different from general trends. These types of index help in
formation of country economic policies.
ii) Business barometers for specific business or industry: These barometers are used as the
supplement of general index of business activity and these are constructed to measure the
future variations in a specific business or industry.
iii) Business barometers concerning to individual business firm: This type of barometer is
constructed to measure the expected variations in a specific individual firm of an industry.

2. Time Series Analysis is also used for the purpose of making business forecasting. The
forecasting through time series analysis is possible only when the business data of various
years are available which reflects a definite trend and seasonal variation.

3. Extrapolation is the simplest method of business forecasting. By extrapolation, a


businessman finds out the possible trend of demand of his goods and about their future
price trends also. The accuracy of extrapolation depends on two factors:
i)Knowledge about the fluctuations of the figures, ii) Knowledge about the course of events
relating to the problem under consideration.

4. Regression Analysis
The regression approach offers many valuable contribution to the solution of the forecasting
problem. It is the means by which we select from among the many possible relationships
between variables in a complex economy those which will be useful for forecasting.
Regression relationship may involve one predicted or dependent and one independent
variables simple regression, or it may involve relationships between the variable to be
forecast and several independent variables under multiple regressions. Statistical techniques
to estimate the regression equations are often fairly complex and time-consuming but there
are many computer programs now available that estimate simple and multiple regressions
quickly.

5. Modern Econometric Methods


Econometric techniques, which originated in the eighteenth century, have recently gained in
popularity for forecasting. The term econometrics refers to the application of mathematical
economic theory and statistical procedures to economic data in order to verify economic
theorems. Models take the form of a set of simultaneous equations. The value of the
constants in such equations are supplied by a study of statistical time series,

6. Exponential Smoothing Method This method is regarded as the best method of


business forecasting as compared to other methods. Exponential smoothing is a special kind
of weighted average and is found extremely useful in short-term forecasting of inventories
and sales.

7. Choice of a Method of Forecasting The selection of an appropriate method depends on


many factors – the context of the forecast, the relevance and availability of historical data,
ASSIGNMENTS- MBA Sem-I
MB0024 – Statistics For Management

the degree of accuracy desired, the time period for which forecasts are required, the cost
benefit of the forecast to the company, and the time available for making the analysis.

Effectiveness of Time Series Analysis :


Time series analysis is also used for the purpose of making business forecasting. The
forecasting through time series analysis is possible only when the business data of various
years are available which reflects a definite trend and seasonal variation. By time series
analysis the long term trend, secular trend, seasonal and cyclical variations are ascertained,
analyzed and separated from the data of various years.

Merits:
i) It is an easy method of forecasting.
ii) By this method a comparative study of variations can be made.
iii) Reliable results of forecasting are obtained as this method is based on mathematical
model.

Method of Moving Averages


One of the most simple and popular technical analysis indicators is the moving averages
method. This method is known for its flexibility and user-friendliness. This method
calculates the average price of the currency or stock over a period of time. The term
“moving average” means that the average moves or follows a certain trend. The aim of this
tool is to indicate to the trader if there is a beginning of anynew trend or if there is a signal
of end to the old trend. Traders use this method, as it is relatively easy to understand the
direction of the trends with the help of moving averages.

Moving average method is supposed to be the simplest one, as it helps to understand the
chart patterns in an easier way. Since the currency’s average price is considered, the price’s
volatile movements are evened. This method rules out the daily fluctuation in the prices and
helps the trader to go with the right trend, thus ensuring that the trader trades in his own
good.

We come across different types of moving averages, which are based on the way these
averages are computed. Still, the basis of interpretation of averages is similar across all the
types. The computation of each type set itself different from other in terms of weightage it
lays on the prices of the currencies. Current price trend is always given a higher weightage.
The three basic types of moving averages are viz. simple, linear and exponential.

A simple moving average is the simplest way to calculate the moving price averages. The
historical closing prices over certain time period are added. This sum is divided by the
number of instances used in summation. For example, if the moving average is calculated
for 15 days, the past 15 historical closing prices are summed up and then divided by 15.
This method is effective when the number of prices considered is more, thus enabling the
trader to understand the trend and its future direction more effectively.

A linear moving average is the less used one out of all. But it solves the problem of equal
weightage. The difference between simple average and linear average method is the
weightage that is provided to the position of the prices in the latter. Let’s consider the
above example. In linear average method, the closing price on the 15th day is multiplied by
ASSIGNMENTS- MBA Sem-I
MB0024 – Statistics For Management

15, the 14th day closing price by 14 and so on till the 1st day closing price by 1. These
results are totaled and then divided by 15.

The exponential moving average method shares some similarity with the linear moving
average method. This method lays emphasis on the smoothing factor, there by weighing
recent data with higher points than the previous data. This method is more receptive to any
market news than the simple average method. Hence this makes exponential method more
popular among traders.

Moving averages methods help to identify the correct trends and their respective levels of
resistance.

Q4. What is definition of Statistics? What are the different characteristics of


statistics? What are the different functions of Statistics? What are the limitations
of Statistics?
According to Croxton and Cowden, ‘Statistics is the science of collection, presentation,
analysis and interpretation of numerical data.’ Thus, Statistics contains the tools and
techniques required for the collection, presentation, analysis and interpretation of data. This
definition is precise and comprehensive.

Characteristic of Statistics
a. Statistics Deals with aggregate of facts: Single figure cannot be analyzed.
b. Statistics are affected to a marked extent by multiplicity of causes: The statistics of yield of
paddy is the result of factors such as fertility of soil, amount of rainfall, quality of seed used,
quality and quantity of fertilizer used, etc.
c. Statistics are numerically expressed: Only numerical facts can be statistically analyzed.
Therefore, facts as ‘price decreases with increasing production’ cannot be called statistics.
d. Statistics are enumerated or estimated according to reasonable standards of accuracy:
The facts should be enumerated (collected from the field) or estimated (computed) with
required degree of accuracy. The degree of accuracy differs from purpose to purpose. In
measuring the length of screws, an accuracy upto a millimeter may be required, whereas,
while measuring the heights of students in a class, accuracy upto a centimeter is enough.
e. Statistics are collected in a systematic manner: The facts should be collected according to
planned and scientific methods. Otherwise, they are likely to be wrong and misleading.
f. Statistics are collected for a pre-determined purpose: There must be a definite purpose
for collecting facts. Eg. Movement of wholesale price of a commodity.
g. Statistics are placed in relation to each other: The facts must be placed in such a way
that a comparative and analytical study becomes possible. Thus, only related facts which
are arranged in logical order can be called statistics.

Functions of Statistics
1. It simplifies mass data
2. It makes comparison easier
3. It brings out trends and tendencies in the data
4. It brings out hidden relations between variables.
5. Decision making process becomes easier.

Major limitations of Statistics are:


1. Statistics does not deal with qualitative data. It deals only with quantitative data.
ASSIGNMENTS- MBA Sem-I
MB0024 – Statistics For Management

2. Statistics does not deal with individual fact: Statistical methods can be applied only to
aggregate to facts.
3. Statistical inferences (conclusions) are not exact: Statistical inferences are true only on
an average. They are probabilistic statements.
4. Statistics can be misused and misinterpreted: Increasing misuse of Statistics has led to
increasing distrust in statistics.
5. Common men cannot handle Statistics properly: Only statisticians can handle statistics
properly.

Q5. What are the different stages of planning a statistical survey? Describe the
various methods for collecting data in a statistical survey.

The planning stage consists of the following sequence of activities.


1. Nature of the problem to be investigated should be clearly defined in an un- ambiguous
manner.
2. Objectives of investigation should be stated at the outset. Objectives could be to obtain
certain estimates or to establish a theory or to verify a existing statement to find
relationship between characteristics etc.
3. The scope of investigation has to be made clear. It refers to area to be covered,
identification of units to be studied, nature of characteristics to be observed, accuracy of
measurements, analytical methods, time, cost and other resources required.
4. Whether to use data collected from primary or secondary source should be determined in
advance.
5. The organization of investigation is the final step in the process. It encompasses the
determination of number of investigators required, their training, supervision work needed,
funds required etc.

Collection of primary data can be done by anyone of the following methods.


i. Direct personal observation
ii. Indirect oral interview
iii. Information through agencies
iv. Information through mailed questionnaires
v. Information through schedule filled by investigators

Q6.What are the functions of classification? What are the requisites of a good
classification? What is Table and describe the usefulness of a table in mode of
presentation of data?
The functions of classification are:
a. It reduce the bulk data
b. It simplifies the data and makes the data more comprehensible
c. It facilitates comparison of characteristics
d. It renders the data ready for any statistical analysis
Requisites of good classification are :
i. Unambiguous: It should not lead to any confusion
ii. Exhaustive: every unit should be allotted to one and only one class
ASSIGNMENTS- MBA Sem-I
MB0024 – Statistics For Management

iii. Mutually exclusive: There should not be any overlapping.


iv. Flexibility: It should be capable of being adjusted to changing situation.
v. Suitability: It should be suitable to objectives of survey.
vi. Stability: It should remain stable throughout the investigation
vii. Homogeneity: Similar units are placed in the same class.
viii. Revealing: Should bring out essential features of the collected data.
Table is nothing but logical listing of related data in rows and columns.
b. Objectives of tabulation are:-
i. To simplify complex data
ii. To highlight important characteristics
iii. To present data in minimum space
iv. To facilitate comparison
v. To bring out trends and tendencies
vi. To facilitate further analysis.