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# MIT School of Business (MITSOB)

## Post Graduate Diploma in Management (PGDM)

33rd Batch
Semester I
Term End Examination
Subject: Statistics & Research Methodology (103)
Total Marks:- 50 Duration: - 2Hrs.
Instructions:
a) This is an open book examination. The text book Statistical tools for Managers by Prof.
(GP.Capt.) D.P. Apte, only can be used.
b) Use of MS Excel is allowed. No other program / software should be used.
c) Write answers with working formulae and numerical work in the answer books.
d) Write the steps used in calculations using MS Excel.
e) All sections are compulsory.
______________________________________________________________________________

## Section A: Solve following case (Marks 20)

Q1. Many Indians suffer from high levels of cholesterol, which can lead to heart attacks. For
those with very high cholesterol levels (over 280), doctors prescribe drugs to reduce the
levels. A pharmaceutical company Shatayu Pharmaceuticals has assigned four teams to
develop drug. Every team was working for production of one drug. After all the teams
completed the given project of drug development, to determine whether any differences
exist in their benefits, the company conducted a clinical trial.
For this clinical trial, a team of investigators selected a total of sixty patients with high
level of cholesterol; exceeding 280. All the selected patients were randomly divided into
four groups and each group was given one drug. The drugs were administered over a 2-
months period and then the reduction in cholesterol was recorded. More the reduction in
the cholesterol level, better is the drug. The observations are as follows.

## Drug 1 Drug 2 Drug 3 Drug 4

23 28 32 35
28 31 35 36
26 25 36 34
29 26 25 30
21 26 26 32
20 28 28 32
25 26 32 35
24 24 31 32
28 23 30 30
26 29 37 35
27 30 35 36
28 27 27 25
25 25 29 38
23 27 31 41
25 23 32 40

Set 1
i What is the average decrease in blood cholesterol level in four groups? What is the
standard deviation?
ii If the company wants to find whether all the four drugs are equally efficient which
statistical tool will you use? Can the pharmaceutical company conclude that all the four
drugs are giving similar benefit? Test at 5% level of significance.
iii Which are the pairs of drugs which can be used as substitutes of each other to get similar
results?
iv Which drug is better than others according to your analysis?

## Section B: Solve any two problems (9 marks each)

Q2. The Business Entrepreneur of Tasty Sub Shop wishes to predict yearly revenue for
potential Tasty Sub restaurant sites. He has collected the data concerning yearly revenue
(y) and population size (x).

Restaurant 1 2 3 4 5 6 7 8 9 10
Population size 21 28 32 37 40 45 50 55 62 65
(Thousands of residents)
Yearly Revenue 527 548 767 722 826 810 1040 1033 1090 1235
(Thousands Rs.)
i) Find the correlation coefficient between the population size and the yearly revenue.
Comment on the basis of correlation coefficient.
ii) Find the regression equation to predict the yearly revenue for the given population
size.
iii) Estimate the yearly revenue if the population size is 38.3 thousand.

Q3. A market research study is conducted to identify whether there exists a difference in pre
exposure and post exposure attitude scores from an advertising study involving 10
respondents. The data for the experiment are given in the following table. Assume that
the differences between the pairs of pre exposure and post exposure scores are normally
distributed. Set up the null and alternative hypothesis to establish that the advertisement
increases the mean attitude score. Use 5% level of significance.

Subject 1 2 3 4 5 6 7 8 9 10
Pre exposure attitude 50 25 30 50 60 80 45 30 65 70
Post exposure attitude 53 27 38 55 61 85 45 31 72 78

Q4. A marketing research firm wishes to compare the prices charged by two supermarket
chains Big Bazar and D-Mart. The research firm is using a standardized one-week
grocery purchase. Ten stores are randomly selected and purchases are made during a
single week. The shopping expenses are given the following table.

Store 1 2 3 4 5 6 7 8 9 10
Big Bazar 1192 1213 1223 1201 1221 1237 1217 1224 1236 1224
D-Mart 1119 1148 1151 1170 1168 1166 1153 1144 1139 1118

Test the hypothesis that mean weekly expenses at each chain is same at 5% level of
significance. Assume equality of population variances.
Section C: Solve any two problems (6 marks each)

Q5. Air Route Traffic Control Center, the busiest in the nation for guiding planes on cross
country routes has recorded the average weekly error as 0.4. Assuming the distribution of
number of errors per week to be Poisson, calculate the probability of
i) No error in a week.
ii) Three errors in a week.

Q6. ICICI bank wants to introduce some incentive for higher balance in saving accounts. A
random sample of 75 saving account holders at a banks branch was studied to estimate
the average monthly saving balance in saving bank account. The sample mean was found
to be Rs. 18,500. The population standard deviation was given to be Rs. 2300. Find 90%,
95% confidence intervals for the population mean.

Q7. The distance between the adjacent defects in woven cloth follows an exponential
distribution with mean of 2 meters. Find the probability that a random pair of adjacent
defects would be
i) Within 3 meters
ii) At least 4 meters apart
Post Graduate Diploma in Management (PGDM)
33rd Batch
Semester I
Term End Examination
Subject: Statistics & Research Methodology (103)
Total Marks:- 50 Duration: - 2Hrs.
Instructions:
a) This is an open book examination. The text book Statistical tools for Managers by Prof.
(GP.Capt.) D.P. Apte, only can be used.
b) Use of MS Excel is allowed. No other program / software should be used.
c) Write answers with working formulae and numerical work in the answer books.
d) Write the steps used in calculations using MS Excel.
e) All sections are compulsory.
______________________________________________________________________________

## Section A: Solve following case (Marks 20)

Q1. Many Indians suffer from diabetes mellitus in which the sugar level in blood increases.
Diabetes mellitus is a cause of many system disorders and doctors prescribe drugs to
reduce the blood sugar levels. A pharmaceutical company Jeevan Pharmaceuticals has
assigned four teams to develop drug for reducing blood sugar level. Every team was
working for production of one drug. After all the teams completed the given project of
drug development, to determine whether any differences exist in their benefits, the
company conducted a clinical trial.
For this clinical trial, a team of investigators selected a total of sixty patients with high
level of blood sugar level. All the selected patients were randomly divided into four
groups and each group was given one drug. The drugs were administered for a month
and then the reduction in blood sugar was recorded. More the reduction in the blood
sugar level, better is the drug. The observations are as follows.

## Drug 1 Drug 2 Drug 3 Drug 4

15 14 17 11
17 19 20 10
17 17 21 12
12 21 25 16
23 24 24 12
15 18 21 10
16 23 18 10
14 24 19 17
16 27 17 10
17 18 23 10
14 19 21 10
12 12 15 12
17 18 16 15
18 16 18 14
15 19 19 17

Set 2
i What is the average decrease in blood sugar level in four groups? What is the standard
deviation?
ii If the company wants to find whether all the four drugs are equally efficient which
statistical tool will you use? Can the pharmaceutical company conclude that all the four
drugs are giving similar benefit? Test at 5% level of significance.
iii Which are the pairs of drugs which can be used as substitutes of each other to get similar
results?
iv Which drug is better than others according to your analysis?

## Section B: Solve any two problems (9 marks each)

Q2. The Business Entrepreneur of Tasty Sub Shop wishes to predict yearly revenue for
potential Tasty Sub restaurant sites. He has collected the data concerning yearly revenue
(y) and The Business Entrepreneur of Tasty Sub Shop wishes to predict yearly revenue
for potential Tasty Sub restaurant sites. He has collected the data concerning yearly
revenue (y) and population size (x).

Restaurant 1 2 3 4 5 6 7 8 9 10
Population size 23 29 33 39 42 46 51 54 64 67
(Thousands of residents)
Yearly Revenue 53 558 777 732 836 820 1050 1043 1095 1245
(Thousands Rs.) 7

i) Find the correlation coefficient between the population size and the yearly revenue.
Comment on the basis of correlation coefficient.
ii) Find the regression equation to predict the yearly revenue for the given population
size.
iii) Estimate the yearly revenue if the population size is 38.3 thousand

Q3. A market research study is conducted to identify whether there exists a difference in pre
exposure and post exposure attitude scores from an advertising study involving 10
respondents. The data for the experiment are given in the following table. Assume that
the differences between the pairs of pre exposure and post exposure scores are normally
distributed. Set up the null and alternative hypothesis to establish that the advertisement
increases the mean attitude score. Use 5% level of significance.
Subject 1 2 3 4 5 6 7 8 9 10
Pre exposure attitude 55 30 35 55 65 85 50 35 70 75
Post exposure attitude 59 35 44 61 67 92 51 36 79 83

Q4. A marketing research firm wishes to compare the prices charged by two supermarket
chains Big Bazar and D-Mart. The research firm is using a standardized one-week
grocery purchase. Ten stores are randomly selected and purchases are made during a
single week. The shopping expenses are given the following table.

Store 1 2 3 4 5 6 7 8 9 10
Big Bazar 1292 3213 1323 1301 1321 1337 1317 1324 1336 1324
D-Mart 1219 1248 1251 1270 1268 1266 1253 1244 1239 1218

Test the hypothesis that mean weekly expenses at each chain is same at 5% level of
significance. Assume equality of population variances.
Section C: Solve any two problems (6 marks each)

Q5. The life of a bulb, manufactured by a company is normally distributed with a mean of
1600 hours and a standard deviation of 30 hours.
i) What percentage of bulbs are having the life less than 1550 hours.
ii) Find the minimum life of a bulb, if its quality is in top 10%.

Q6. ICICI bank wants to introduce some incentive for higher balance in saving accounts. A
random sample 64 saving account holders at a banks branch was studied to estimate the
average monthly saving balance in saving bank account. The sample mean was found to
be Rs. 18,500. The population standard deviation was given to be Rs. 2300. Find 90%,
95% confidence intervals for the population mean.

Q7. The length of time between breakdowns of a machine in a factory follows an exponential
distribution with a mean of 10 days.
i) What is the standard deviation of this distribution?
ii) The machine had a shut down on a day and was set right. What is the probability that
the next breakdown would occur within the next 14 days?
iii) Find the probability that the number of breakdowns in a month would be at most two.
Post Graduate Diploma in Management (PGDM)
33rd Batch
Semester I
Term End Examination
Subject: Statistics & Research Methodology (103)
Total Marks:- 50 Duration: - 2Hrs.
Instructions:
a) This is an open book examination. The text book Statistical tools for Managers by Prof.
(GP.Capt.) D.P. Apte, only can be used.
b) Use of MS Excel is allowed. No other program / software should be used.
c) Write answers with working formulae and numerical work in the answer books.
d) Write the steps used in calculations using MS Excel.
e) All sections are compulsory.
______________________________________________________________________________

## Section A: Solve following case (Marks 20)

Q1. Many Indians females suffer from anemia in which the hemoglobin level in blood
decreases. Anemia is iron deficiency disease which is a cause of many system disorders.
Doctors prescribe drugs containing iron to increase hemoglobin level. A pharmaceutical
company Ayush Pharmaceuticals has assigned four teams to develop drug for
increasing hemoglobin level. Every team was working for production of one drug. After
all the teams completed the given project of drug development, to determine whether any
differences exist in their benefits, the company conducted a clinical trial.
For this clinical trial, a team of investigators selected a total of sixty patients with low
level of hemoglobin. All the selected patients were randomly divided into four groups and
each group was given one drug. The drugs were administered for a month and then the
increase in hemoglobin level was recorded. More the increase in the hemoglobin, better is
the drug. The observations are as follows.

## Drug 1 Drug 2 Drug 3 Drug 4

1.2 1.4 1.4 0.6
0.8 1.3 1.5 0.6
0.9 1.2 1.2 0.7
1 0.9 1.2 0.5
1.2 0.9 1 0.7
1.3 0.8 1 1
0.8 1.1 1 0.7
0.7 1 0.9 0.8
0.6 1.1 0.9 0.7
0.8 1 1.1 0.5
0.6 0.9 1.2 1
0.8 0.7 1.2 1
0.9 1.2 1.4 0.8
1.1 1 1.2 0.6
1 1 1 0.7

Set 3
i What is the average increase in hemoglobin level in four groups? What is the standard
deviation?
v If the company wants to find whether all the four drugs are equally efficient which
statistical tool will you use? Can the pharmaceutical company conclude that all the four
drugs are giving similar benefit? Test at 5% level of significance.
ii Which are the pairs of drugs which can be used as substitutes of each other to get similar
results?
iii Which drug is better than others according to your analysis?

## Section B: Solve any two problems (9 marks each)

Q2. Enterprise Industries produces Fresh, a brand of liquid laundry detergent. In order to
manage its inventory more effectively and make revenue projections, the company want
to predict the demand for Fresh. The company has gathered the monthly data concerning
advertising expenditure on Fresh (x) and demand for Fresh (y), which is shown in the
following table.
Month 1 2 3 4 5 6 7 8 9 10
Advertising expenditure 5.5 6.7 7.2 5.5 7.0 6.5 6.7 5.2 5.3 6
for Fresh (thousand Rs.)
Demand for Fresh 738 851 952 750 933 828 875 787 710 800
(thousands of bottles)
i) Find the correlation coefficient between the advertising expenditure for Fresh and the
Demand for Fresh. Comment on the basis of correlation coefficient.
ii) Find the regression equation to predict the monthly demand for Fresh for the given
iii) Estimate the monthly demand for Fresh if the advertising expenditure is 8 thousand
Rs.

Q3. National Paper Company is producing cardboard boxes using the machine. They want to
test the efficiency of their machine operators in the first shift and in the second shift. The
number of boxes produce per hour in the first and in the second shift by the same
operator are given in the following table. Test the hypothesis that the efficiency of the
operator is more in the first shift. Use 5% level of significance.
Machine operator 1 2 3 4 5 6 7 8 9 10
No. of boxes produced per 50 25 30 50 60 80 45 30 65 70
hour in the first shift
No. of boxes produced per 53 27 38 55 61 85 45 31 72 78
hour in the second shift

Q4. In a packing plant, a machine packs cartons with jars. It is supposes that a new machine
will pack faster on the average than the machine currently used. Test the hypothesis that a
new machine will pack faster on the average than the machine currently used. The results
are shown in the following table.
Packing time on New 45.1 44.3 45.4 46.2 44.8 44.0 44.8 45.8 45.3 45.7
machine (seconds)
Packing time on Old 43.7 46.8 45.5 46.1 47.0 46.6 46.3 46.5 44.7 47.1
machine (seconds)

Do the data provide sufficient evidence to conclude that, on the average, the new machine
packs faster? Perform the required hypothesis at the 5% level of significance.
Section C: Solve any two problems (6 marks each)

Q5. In a certain manufacturing process, 2% of the tools produced turn out to be defective.
Find the probability that in a sample of 100 tools, at least three will be defective,
assuming the distribution of number of defectives to be Poisson.

Q6. The life of a bulb, manufactured by a company is normally distributed with a mean of
1500 hours and a standard deviation of 35 hours.
i) What percentage of bulbs are having the life less than 1750 hours.
ii) Find the minimum life of a bulb, if its quality is in top 20%.

Q7. ICICI bank wants to introduce some incentive for higher balance in saving accounts. A
random sample 64 saving account holders at a banks branch was studied to estimate the
average monthly saving balance in saving bank account. The sample mean was found to
be Rs. 18,500. The population standard deviation was given to be Rs. 2300. Find 90%,
95% confidence intervals for the population mean.
Post Graduate Diploma in Management (PGDM)
33rd Batch
Semester I
Term End Examination
Subject: Statistics & Research Methodology (103)
Total Marks:- 50 Duration: - 2Hrs.
Instructions:
a) This is an open book examination. The text book Statistical tools for Managers by Prof.
(GP.Capt.) D.P. Apte, only can be used.
b) Use of MS Excel is allowed. No other program / software should be used.
c) Write answers with working formulae and numerical work in the answer books.
d) Write the steps used in calculations using MS Excel.
e) All sections are compulsory.
______________________________________________________________________________

## Section A: Solve following case (Marks 20)

Q1. Analgesic drug is a drug which is used to get relief from pain. Various types of
analgesics with various range (mild to strong) are produced by pharmaceutical
companies. Patients require different analgesics depending on the reason. Doctors
prescribe analgesic drugs for various reasons depending on severity of pain. The patients
operated for bone fractures require strong analgesics. A pharmaceutical company Ayush
Pharmaceuticals has assigned four teams to develop analgesic drugs for pain relief.
Every team was working for production of one analgesic. After all the teams completed
the given project of drug development, to determine whether any differences exist in their
benefits, the company conducted a clinical trial.
For this clinical trial, a team of investigators selected a total of sixty patients who are
operated for bone fracture. All the selected patients were randomly divided into four
groups and each group was given one analgesic drug. The drugs were administered on
the second day after surgery when the pain is severe. The number of hours the patient
gets relief from the analgesic was recorded. More the number of hours of relief, better is
the analgesic drug. The observations are as follows.

## Drug 1 Drug 2 Drug 3 Drug 4

6 12 7 6
8 10 7 6
5 11 8 7
9 9 9 7
9 9 8 7
10 8 9 10
8 12 10 7
7 11 10 8
8 10 9 7
10 10 10 6
9 12 8 9
10 10 10 9
9 11 8 8
11 10 9 6
10 8 10 7
Set 4
i What is the average hours of relief in four groups? What is the standard deviation?
ii If the company wants to find whether all the four drugs are equally efficient which
statistical tool will you use? Can the pharmaceutical company conclude that all the four
drugs are giving similar benefit? Test at 5% level of significance.
iii Which are the pairs of drugs which can be used as substitutes of each other to get similar
results?
iv Which drug is better than others according to your analysis?

## Section B: Solve any two problems (9 marks each)

Q2. Enterprise Industries produces Fresh, a brand of liquid laundry detergent. In order to
manage its inventory more effectively and make revenue projections, the company want
to predict the demand for Fresh. The company has gathered the monthly data concerning
advertising expenditure on Fresh (x) and demand for Fresh (y), which is shown in the
following table.

Month 1 2 3 4 5 6 7 8 9 10
Advertising expenditure 6.5 6.7 5.2 5.3 6 6.5 6.3 7.0 6.9 6.8
for Fresh (thousand Rs.)
Demand for Fresh 828 875 787 710 800 790 815 910 889 890
(thousands of bottles)
i) Find the correlation coefficient between the advertising expenditure for Fresh and the
Demand for Fresh. Comment on the basis of correlation coefficient.
ii) Find the regression equation to predict the monthly demand for Fresh for the given
iii) Estimate the monthly demand for Fresh if the advertising expenditure is 8 thousand
Rs.

Q3. National Paper Company is producing cardboard boxes using the machine. They want to
test the efficiency of their machine operators in the first shift and in the second shift. The
number of boxes produce per hour in the first and in the second shift by the same
operator are given in the following table. Test the hypothesis that the efficiency of the
operator is more in the first shift. Use 5% level of significance.

Machine operator 1 2 3 4 5 6 7 8 9 10
No. of boxes produced per hour in 60 35 40 60 70 90 55 40 75 80
the first shift
No. of boxes produced per hour in 63 37 48 65 71 95 55 41 82 88
the second shift

Q4. In a packing plant, a machine packs cartons with jars. It is supposes that a new machine
will pack faster on the average than the machine currently used. Test the hypothesis that a
new machine will pack faster on the average than the machine currently used. The results
are shown in the following table.
Packing time on New machine 42.1 41.3 42.4 43.2 41.8 41.0 41.8 42.8 42.3 42.7
(seconds)
Packing time on Old machine 42.7 43.8 42.5 43.1 44.0 43.6 43.3 43.5 41.7 44.1
(seconds)
Do the data provide sufficient evidence to conclude that, on the average, the new machine packs
faster? Perform the required hypothesis at the 5% level of significance.

## Section C: Solve any two problems (6 marks each)

Q5. Statistical Quality Control and Improvement department in Software Company is monitoring
the number of errors in the software. Suppose the number of errors per 1000 lines of
computer code follows Poisson distribution with a mean of four errors per 1000 lines of
computer code.
i) Find the probability of at least 2 errors per 1000 lines of computer code.
ii) Find the probability that the given 1000 lines of computer code is free from error.

Q6. The yearly health care expenses for a family of four persons are normally distributed with
a mean expense equal to 18000 Rs. and a standard deviation of 3000 Rs. An Insurance
company want to know
i) What is the probability that the yearly healthcare expenses for a family exceeds
25000 Rs.
ii) What is the amount such that the families are having their yearly healthcare expenses
less than that amount with probability 0.33?

Q7. ICICI bank wants to introduce some incentive for higher balance in saving accounts. A
random sample 64 saving account holders at a banks branch was studied to estimate the
average monthly saving balance in saving bank account. The sample mean was found to
be Rs. 18,500. The population standard deviation was given to be Rs. 2300. Find 90%,
95% confidence intervals for the population mean.