UNIVERSITY OF ZIMBABWE

BUSINESS STUDIES DEPARTMENT

BUSINESS STATISTICS (BS106)
FINAL EXAMINATION

DATE: JUNE 2013 TIME: 3 HOURS

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INSTRUCTION TO CANDIDATES
1) Answer question One and any other Three of your choice.
2) All question carry equal marks.
3) In all, four questions should be attempted.
4) Start each question on a fresh page.
5) Clearly number your answers part by part.
6) Indicate questions attempted on the space provided, NOT in the examiner’s column.
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QUESTION ONE (COMPULSORY) (25 marks)

1a)

Test surveys of performance involving employees from two large factories yielded the following results on
the times taken to perform a certain task.
Factory Mean time taken (hrs) Standard deviation (hrs)
1 10.8 2.9
2 11.3 4.3
Random samples taken from Factory 1 and d Factory 2 were 32 and 42 workers respectively. Is there any
statistically significant difference between employees for the two factories in terms of performance? Use
the 0.03 level of significance. (10 marks)

1b) What are the fundamental differences between probability and non-probability sampling techniques?
(5 marks)

1c) Office rental agreements contain escalation clauses. For a particular office block in the Central
Business District the escalation rates for 2007; 2008; 2009; 2010; 2011 and 2012 were 16%; 14%; 10%; 22;
5% and 8% respectively. Calculate an appropriate average rate of escalation in the rentals for this office
block over this 6 year period. (5 marks)

1d) An investor has invested in two independent stocks. The chance of stock A making a profit is 70% next
month, and the chance of stock B also making a profit next month is 55%. What is the probability that at
least one option will make a profit next month? (5 marks)

QUESTION TWO (Optional) (25 marks)

2a) In a survey recently conducted among BS106 students, there was a question which asked them about
their grade in BS107. The possible responses were (i) distinction (ii) upper second (iii) lower second (iv)
third (v) fail. How best can this data best be described? Also check whether the principles of inclusion and
exclusion have been adhered to. (5marks)

2b) A random variable X has a mean of 565 with a standard deviation of 206.
(i) Find the probability that X will not be less than 400. (5 marks)
(ii) What is the minimum value that X should assume if 20.05% of the area is to lie below it? (5 marks)

2c) The proportion of UZ students seeking government assistance in terms of tuition fees has been a cause
of concern to the Dean of Students. The proportion among the body of students has been put at 25% to
46%. A 99% confidence level was used to construct this interval estimate. What is the magnitude of the
sampling error associated with this estimate? (5 marks)

2d) Correlations coefficients (r) for five different regression models were summarised in the table below.

Regression model A B C D E
Correlation coefficient (r) -0.54 +0.76 -0.66 +0.85 +0.41

From an explanatory power point of view, which is the best and worst regression model? Justify your
answer. (5 marks)

QUESTION THREE (Optional) (25 marks)

3a) The mean income earned by a random sample of 35 domestic workers in Harare was found to be
pathetically low, $60.00 with a standard deviation of $11.00. Compare and contrast the 93% and 97.5%
confidence intervals of the true mean income for all domestic workers in Harare. (5 marks)

3b) Below is a distribution of randomly selected farmers and their respective production outputs in tonnes.

Classes (Tonnes) 0 to less than 10 10 to less than 20 20 to less than 30 30 to less than 40 40 to less than 50
>Cum freq (farmers) 540 494 422 344 210

(i) Draw a relative frequency histogram and estimate the modal tonnage of output. (5 marks)
(ii) Calculate Pearson’s’ coefficient of skewness (Skp) and comment on it. (10 marks)

3c) During a festive period of 2011, a retailer specialising in bedding, recorded according to size of the bed
sold. The available sets are: single (S); extra long (E); double queen (Q) and king (K). The compiled data
are given below.
Q, K, E, D, D, E, K, D, D, E, K, Q, E, K, K, E, D, D, E, S, S, E, S, S, E

Summarise these data appropriately and comment on it. (5 marks)

QUESTION FOUR (Optional) (25 marks)

4a) What are the fundamental differences between estimation of parameters and hypothesis testing?
(5 marks)

4b) Classify the following examples of data as nominal, ordinal, interval and ratio.
(i) the economic growth rates for Zimbabwe for the last 3 years.
(ii) a supervisors annual performance rating for each of the five workers in his department.
(iii) the brands of cell phones for 10 randomly selected students.
(iv) the temperature recorded in Harare yesterday.
(v) the volume of profits realised by a marketing firm in the last trading year. (5 marks)

4c) A manufacturing company is interested in determining whether there is any significant difference
between the average numbers of units produced per day by two different machine operators. A random
sample of ten daily outputs was selected from each operator and the results are summarised below.

Operator One Operator Two

X1 = 35 X2 = 31
S12 = 17.2 S22 = 19.1
Do the samples provide sufficient evidence at 5% level of significance to conclude that a difference exist
between the mean daily outputs of the two operators? (10 marks)

4d) A machine randomly breaks down. On average, it has been established that, in a month it breaks down
twice. What is the probability of getting a least three break downs in 20 days for any month chose at
random? Assume a month has 30 days. (5 marks)

QUESTION FIVE (Optional) (25 marks)

5a) The following are earnings (in hundreds) of a random sample of employees of a certain company.

350; 370; 460; 510; 610; 720; 290; 330; 520; 730; 650; 580; 470;
390; 300; 280; 310; 420; 620; 400; 550; 620; 250; 510; 290
Group the data taking the smallest value as your lowest lower class boundary. (5 marks)

5b) The following annual data are used to investigate the relationship between expenditure on research and
development (R and D) and the profits of a firm.

R and D ($ 000) 5 3 7 9 2 4 6 8
Profit($ 000) 20 23 15 11 27 21 17 14

i) Find the regression equation for the relationship and explain the coefficients. (5 marks)
ii) Find the coefficient of determination and explain it. (5 marks)

5c) Mupambireyi is keen to establish whether there is any association between the grade obtained in
Business Mathematics (BS107) and the programme being pursued all level one Commerce students. He
took a representative sample and stratified it by grade and programme as shown in the table below.

Grade Programme
HACC HBBS TOURISM
Distinction 20 15 10
Upper Second 17 25 18
Lower second 12 19 25
Third 6 10 28

At 5% level of significance, is there any association between the two categorical variables? (10 marks)

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END OF EXAMINATION GOOD LUCK
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