QUANTITATIVE METHODS FOR MANAGEMENT

(JANUARY-MARCH 2021)

ASSIGNMENT Answer all the questions Max. Marks: 40

Students may use any statistical software to solve the assignment. (Minitab, Excel, SPSS, SAS,R,.)

1. At one of the Management Institutes, a sample of 55 second Year MBA students was
selected, and information gathered relating to their age, background of graduation, work
experience prior to joining MBA, CGPA score at the end of First Year, and area of
specialization. The collected data is given below:

No. CGPA Background Specialisation Work Experience Age (in years)

1 3.24 Commerce Finance 2 23
2 3.14 Commerce Finance 1 21
3 3.72 Commerce Finance 2 23
4 3.06 Commerce Finance 4 21
5 3.14 Commerce Finance 2 22
6 3.14 Commerce Finance 1 23
7 3.06 Commerce Finance 0 22
8 3.17 Commerce Finance 3 21
9 2.97 Commerce Finance 2 22
10 3.14 Commerce Finance 4 23
11 3.69 Commerce Finance 4 24
12 2.85 Commerce Finance 3 25
13 2.92 Commerce Marketing 2 23
14 2.79 Commerce Marketing 3 25
15 3.22 Commerce Marketing 2 22
16 2.87 Commerce Marketing 2 22
17 3.14 Commerce Marketing 1 22
18 3.17 Commerce Marketing 1 23
19 3.22 Economics Finance 3 26
20 2.58 Economics Finance 2 25
21 3.36 Economics Finance 2 22
22 3.17 Economics Marketing 1 21
23 2.59 Economics Marketing 2 24
24 2.97 Engineer Human Resources 8 31
25 2.92 Engineer Marketing 5 23
26 3.03 Engineer Marketing 3 23
27 2.79 Engineer Marketing 2 25
28 2.77 Engineer Marketing 3 23
 29 2.97 Engineer Marketing 3 25
30 3.11 Engineer Marketing 3 27
31 3.33 Engineer Marketing 1 24
32 2.65 Engineer Marketing 2 23
33 3.14 Engineer Marketing 2 24
34 2.97 Engineer Marketing 2 23
35 3.39 Engineer Marketing 2 24
36 3.08 Engineer Marketing 3 23
37 3.3 Engineer Marketing 6 27
38 2.94 Engineer Marketing 3 24
39 3.25 Engineer Marketing 2 23
40 3.14 Engineer Systems 3 23
41 3.36 Engineer System 4 26
42 2.95 Information Finance 2 24
43 2.98 Technology Finance 5 23
44 2.82 Information Marketing 1 24
45 2.98 Information Marketing 5 26
46 3.33 Information Marketing 2 24
47 2.96 Information Marketing 4 27
48 3.67 Information System 2 25
49 3.22 Science Finance 2 25
50 3.14 Science Finance 3 22
51 3.17 Science Finance 4 26
52 3.25 Science Resources 0 21
53 3. 10 Science Marketing 2 22
54 2.85 Science Marketing 3 24
55 3.25 Science Marketing 2 22

a. Present the above data with the help of tables, charts and graphs.

b. Calculate the measures of location and dispersion of CGPA, age and work experience for all
backgrounds and specializations. Combine these measures, wherever possible, for all the
backgrounds and specializations separately. Discuss the findings.

c. Study and comment on correlations between CGPA and age for students of all backgrounds
viz. commerce, science etc.,

d. Summarize your findings and present a managerial report.

Ans a :
The chart is presented below.
 60
55

50

40

30
30

20
20 18 18
15
12
10 6 6 7
5 4
3 2 2 3 3 2 3
1 1 1 1 1 1
0
Commerce Economics Engineer Information Science Technology Grand Total

Finance Human Resources Marketing System Grand Total

Tables.xlsx

b) Measures of location for all backgrounds

Total measures of location

CGP
Measure of location A Workex Age
Mean 3.09 2.6 23.65
Median 3.14 2 23
Mode 3.14 2 23

Measures of location by backgrounds

Commerce CGPA Workex Age

Mean 3.14 2.17 22.61
Median 3.14 2 22.5
Mode 3.14 2 23

Economics CGPA Workex Age

Mean 2.98 2.00 23.60
Median 3.17 2 24
Mode - 2 -

Engineerin
g CGPA Workex Age
Mean 3.06 3.17 24.50
Median 3.055 3 24
Mode 2.97 3 23
 Informatio
n CGPA Workex Age
Mean 3.12 2.67 25.00
Median 2.97 2 24.5
Mode - 2 24

Science CGPA Workex Age

Mean 3.15 2.29 23.14
Median 3.195 2 22
Mode 3.25 2 22

Medians for Backgrounds

30.00

24 24 24.5
25.00 22.5 22
20.00

15.00

10.00

5.00 3.14 3.17 3.06 3 2.97 2 3.2

2 2 2
0.00
Commerce Economics Engineering Information Science

CGPA Work Ex Age

Measures of location for Specialization

Finance CGPA Workex Age

Mean 3.15 2.55 23.15
Median 3.14 2 23
Mode 3.14 2 23

HR CGPA Workex Age

Mean 3.11 4.00 26.00
Median 3.11 4 26
Mode #N/A #N/A #N/A

Marketin
g CGPA Workex Age
Mean 3.02 2.50 23.73
Median 2.98 2 23.5
Mode 3.33 2 23

Systems CGPA Workex Age

Mean 3.39 3.00 24.67
Median 3.36 3 25
 Mode #N/A #N/A #N/A

Median For Sepcialization

30
26
25
25 23 23.5

20

15

10

5 3.14 3.11 4 2.98 3.36 3

2 2
0
Finance HR Marketing Systems

CGPA Work Ex Age

Calculating the major backgrounds and specialization’s measure of location

Engineering and Marketing

E&M CGPA Workex Age

Mean 3.04 2.80 24.07
Median 3.03 3 24
Mode 2.97 2 23

Commerce and Finance

C&F CGPA Workex Age

Mean 3.19 2.33 22.50
Median 3.14 2 22.5
Mode 3.14 2 23

Calculating Measures of Dispersion

Measures of Dispersion CGPA Work Ex Age

std deviation 0.24 1.42 1.87
Range 2.58-3.72 0-8 21-31
Interquartile range 0.27 1 3

Calculating measures of dispersion for backgrounds

 Work
Commerce CGPA Ex Age
std deviation 0.24 1.12 1.16
Range 2.79-3.72 0-4 21-25
Interquartile range 0.18 1.75 1.00

Work
Economics CGPA Ex Age
std deviation 0.33 0.63 1.85
Range 2.58-3.36 1.0-3.0 21-26
Interquartile range 0.63 0.00 3.00

Work
Engineer CGPA Ex Age
std deviation 0.21 1.64 2.06
Range 2.65-3.39 1.0-8.0 23-31
Interquartile range 0.28 1.00 2.00

Information CGPA Work Ex Age

std deviation 0.29 1.37 1.15
Range 2.82-3.67 1.0-5.0 24-27
Interquartile range 0.29 1.50 1.75

Work
Science CGPA Ex Age
std deviation 0.14 1.16 1.73
Range 2.85-3.25 0-4 21-26
Interquartile range 0.10 1.00 2.50
 Standard Deviation of Backgrounds
2.5
2.06
2 1.85
1.73
1.64
1.5 1.37
1.121.16 1.15 1.16
1
0.63
0.5 0.33 0.29
0.24 0.21 0.14
0
Commerce Economics Engineering Information Science

CGPA Work Ex Age

Measures of Dispersion as per the specialization

Work
Finance CGPA Ex Age
std deviation 0.25 1.20 1.56
Range 2.58-3.72 0-5 21-26
Interquartile range 0.18 1.25 2.25

Work
HR CGPA Ex Age
std deviation 0.14 4.00 5.00
Range 2.97-3.25 0-8 21-31
Interquartile range 0.14 4.00 5.00

Marketing CGPA Work Ex Age

std deviation 0.21 1.20 1.53
Range 2.59-3.39 1.0-6.0 21-27
Interquartile range 0.30 1.00 1.00

Work
Systems CGPA Ex Age
std deviation 0.22 0.82 1.25
Range 3.14-3.67 2.0-4.0 23-26
Interquartile range 0.27 1.00 1.50
 Standard Deviation of Specialization
6
5
5
4
4

2 1.56 1.53
1.2 1.2 1.25
1 0.82
0.25 0.14 0.21 0.22
0
Finance HR Marketing Systems

CGPA Work Ex Age

Measures of dispersion for 2 major backgrounds and specialization

Work
Commerce & Finance CGPA Ex Age
std deviation 0.25 1.25 1.19
Range 2.85-3.72 0-4 21-25
Interquartile range 0.13 1.50 1.25

Engineer and
Marketing CGPA Work Ex Age
std deviation 0.21 1.22 1.34
2.65-
Range 3.39 1.0-6.0 23-27
Interquartile range 0.27 1.00 1.50

Ans c)
 Background CGPA Vs Age
3.25 25
24.5 3.2 24.5
3.2 3.17
3.15 3.14 24 24 24
23.5
3.1
3.06 23
3.05
22.5 22.5
3 2.97 22 22
2.95 21.5
2.9 21
2.85 20.5
Commerce Economics Engineering Information Science

CGPA Age

Observations:

I. Marketing has the greatest number of students as specialization and especially from the engineering
background. The job market for engineers who opted for marketing might be higher and hence we see
a rise in that stream. Mostly, can be technical marketing.
II. Marketing as a subject has the highest number of students enrolled. It is also a possibility that the
college is renowned for its marketing branch.
III. Most of the commerce students have opted for Finance as their major as it would be easier for them to
relate.
IV. Technology has got just one student (might be a typo error as can be information technology and fall
under the head of information)
V. HR and Systems as a stream are not popular amongst students.
VI. HR has the min age and the max age in the samples which are 21 and 31 years
VII. Science has the highest CGPA whilst it has the lowest age. Hence can be inferred generally that
Science graduates have the highest acumen for MBA
VIII. HR as a specialization has the least SD for CGPA, however, since the sample of HR is really low,
Marketing is considered for the CGPA and it is 0.21
IX. The age and the workex range for the engineers are really high.

2. Corporate share repurchase programs are often touted as a benefit for shareholders. But
Robert Gabele, director of insider research for First Call/ Thomson Financial, noted that many
of these programs are undertaken solely to acquire stock for a company’s incentive options
for top managers. Across all companies, existing stock options in 1998 represented 6.2 per
cent of all common shares outstanding. The following data show the number of shares
covered by option grants and the number of shares outstanding for 13 companies ( Bloomberg
personal Finance,
January/February 2000)

Shares of option Grants Common shares outstanding

Outstanding ( millions) X (millions) Y
 Adobe Systems 20.3 61.8
Apple Computers 52.7 160.9
Applied materials 109.1 375.4
Autodesk 15.7 58.9
Best Buy 44.2 203.8
Fruit of the Loom 14.2 66.9
ITT Industries 18.0 87.9
Merril Lynch 89.9 365.5
Novell 120.2 335.0
Parametric Technology 78.3 269.3
Reebok International 12.8 56.1
Silicon Graphics 52.6 188.8
Toys “R” Us 54.8 247.6

a. Develop the estimated regression equation that could be used to estimate the number of shares
of option grants outstanding given the number of common shares outstanding.
Ans

a) Y= a+bx
a=(∑y)(∑x²)-(∑x)(∑xy)/n(∑x²)-(∑x)²
b= n(∑xy)-(∑x)(∑y)/n(∑x²)-(∑x)²

Shares of option Common shares

Grants Outstanding outstanding
N   ( millions) X (millions) Y XY X Sqr Y Sqr
1 Adobe Systems 20.30 61.80 1254.54 412.09 3819.24
2 Apple computers 52.70 160.90 8479.43 2777.29 25888.81
11902.8 140925.1
3 Applied materials 109.10 375.40 40956.14 1 6
4 Autodesk 15.70 58.90 924.73 246.49 3469.21
5 Best Buy 44.20 203.80 9007.96 1953.64 41534.44
6 Fruit of the Loom 14.20 66.90 949.98 201.64 4475.61
7 ITT Industries 18.00 87.90 1582.20 324.00 7726.41
133590.2
8 Merril Lynch 89.90 365.50 32858.45 8082.01 5
14448.0 112225.0
9 Novell 120.20 335.00 40267.00 4 0
10 Parametric Technology 78.30 269.30 21086.19 6130.89 72522.49
 11 Reebok International 12.80 56.10 718.08 163.84 3147.21
12 Silicon Graphics 52.60 188.80 9930.88 2766.76 35645.44
13 Toys "R" Us 54.80 247.60 13568.48 3003.04 61305.76
181584.0 52412.5 646275.0
  Sum 682.80 2477.90 6 4 3
a= 27.36
b= 3.108
y=27.36+3.108x
b. Use the estimated regression equation to estimate the number of shares of option grants outstanding
for a company that has 150 million shares of common stock outstanding.

y=27.36+3.108*150
=493.56M

c. Do you believe the estimated regression equation would provide a good prediction of the number of
shares of option grants outstanding? Use r2 to support your answer.

r² = 0.9189=91.89% which goes to state that we can fairly predict the variability of Y(common shares
outstanding) through X(shares of options grants outstanding)
d. What is the value of sample correlation coefficient?

Ans : r = 0.9586 which is a strong positive corelation

Q2.xlsx

3. Olive Construction Company is determining whether it should submit a bit for a new
shopping centre. In the past, Olive’s main competitor, Base Construction Company, has
submitted bids 70% of the time. If Base Construction Company does not bid on a job, the
probability that Olive Construction Company will get the job is 0.50. If the Base Construction
Company bids on a job, the probability that Olive Construction Company will get the job is
0.25.
a. If Olive Construction Company gets the job, what is the probability that Base
Construction Company did not bid?
Ans:

Let’s assume.

A = Base company bids for the job

B = Olive getting the job

So, probability of Base company bidding for the job is 70%

P(A) = 0.7

P(A^)=0.3

P(BǀA^) = 0.5

P(BǀA) = 0.25
P(A^ǀB) = P(B|A^)*P(A^)/(P(B|A)*P(A) + P(B|A^)*P(A^))

= 0.5*0.3/(0.25*0.7 + 0.5*0.3)

= 0.4615

b. What is the probability that Olive Construction Company will get the job?

P(B) = P(B|A)*P(A) + P(B|A^)*P(A^)

= 0.25*0.7 + 0.5*0.3

= 0.325

NB: Bayes theorem is used for the calculation

4. Data indicates that the time to download check$mart’s home page is normally distributed with
mean 7 seconds and standard deviation of 2 seconds.
a. what is the probability that the download time will be more than 9 seconds

Mean = 7
SD = 2
P(X≥9) = P(Z≥ x-X̅ /σ)
= P(Z≥ 9-7/2)
= P(Z≥ 1)
= 1-P(Z<1)
=1-0.8413
= 0.1587
b. what is the probability that the download time will be between 7 and 9 seconds
x=7
Z = 7-7/2 = 0
X=9
Z = 9-7/2= 1
P(7<X<9) = P(X<9) – P(X<7)
= P(Z<1) – P(Z<0)
= 0.8413 – 0.5
= 0.3413
c. what is the probability that the download time is under 7second or over 9 seconds

P(x<7) or P(x>9)
=P(x<7) + P(x>9)
=P(Z<0) + P(Z>1)
=0.5 + 0.16 = 0.66

d. what is the probability that the download time will be between 5 and 9 seconds
x=5
Z = x-μ/σ= 5-7/2=-1

X=9
Z= x-μ/σ
= 9-7/2= 1

P(5<x<9) = P(-1<Z<1)
= P(Z<1) – P(Z<-1)
= 0.8413- 0.1587
= 0.6826
e. what is the probability that the download time is less than 3.5 seconds
X = 3.5
Z = 3.5-7/2 = - 1.75
P(X<3.5) = P(Z<-1.75)
= 0.0401
f. How much time ( in seconds) will elapse before 10% of the download are complete.

P -> 0.1, Corresponding Z score = 1.285

t-7/2 = 1.285
t = 2*1.285+7
= 9.57
g. What are the Upper Limit and Lower limit of X , located symmetrically around the mean,
which include 95% of the download times

For P = 95%
Z = ±1.96

X1 – μ/σ = -1.96
X1 – 7/2 = -1.96
X1 = (-1.96*2) +7
= 3.08

X2 = (1.96*2)+7
= 10.92

Upper Limit = 10.92̴ 11

Lower Limit = 3.08~3

ALL THE BEST