DPPM STREAM IV WEEKEND

QM INDIVIDUAL COURSE WORK

18TH August 2021
Instructions:
(i) Do all the questions
(ii) Each of the two questions carries 20 marks
(iii) Handing in is strictly Sunday, 29th August 20212 without fail

COURSE: DPPM/WEEKEND/ STREAM 4 (ONLINE)

MODULE: QUANTITATIVE METHODS (QM)

FACILITATORS: MR OKITE MOSES AND MR KAMPORORO EZERA

DATE OF SUBMISSION: 29th /AUGUST/2021

NAME STUDENT No REG NUMBER

ARINAITWE BALDO KINIGAH 2001406581 20/DPPM/KLA/WKD/437

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Question One: @ 2 marks plus 2marks for clarity of
work

(a) Explain the uses of Quantitative methods to organizations.

According to Verma, G., & Sharma, K. (2017), quantitative techniques are scientific methods or
techniques used by the business world for problem solving and decision-making. The following
are the uses of quantitative methods to organizations
 Creates solutions for various organizational problems. With increasing competition and scare
resources, how managers can increase the profits of the organization are some examples of
problems faced in today’s business. Quantitative techniques help in the field of production,
marketing, finance and other activities of business. It is answer to such type of problems:
How to employ man and machine? How much time customers wait for a service? Can
business deliver goods on time?
 Selection of an appropriate strategy. Every organization is having a motive to increase its
market share from its competitors by observing the strategies of the others. So, the approach
comes handy in this situation where organizations can minimize cost or maximize profit.
 Quantitative methods are base for scientific analysis. Quantitative techniques enforce
disciplined thinking about organizational problems. Quantitative techniques replace
subjective and intuitive approach with analytical and objective approach
 Quantitative methods are useful in allocation of resources. They help in the proper allocation
of resources which save time and cost of the businessman. PERT and CPM is first tool for
proper allocation of resources to each and every activity in a proper manner within an
organization. These techniques ensure organizations completion of projects with in time and
with limited resources.
 Quantitative methods are useful to organizations in decision making. Decision making is an
essential part of management process. Thus, the decision maker in the present business must
understand the scientific methodology of making decisions. In real life, some decision-
making situations are simple while others are not. The decision is a multidimensional
response which includes production, cost quality, price of the product etc. The quantitative
techniques help in decision making process in the way that identify the factors which
influence the decisions and quantify them.

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(b) Discuss the relevance of probabilistic sampling techniques that researchers use in
gathering data
What constitutes an appropriate sample depends upon the research question(s), the research
objectives, the researcher’s understanding of the phenomenon under study and practical
constraints (Palys & Atchison, 2014). These considerations will influence whether the researcher
chooses to employ probabilistic or non-probabilistic sampling techniques. 

 The relevance of probabilistic sampling techniques is that, it is employed to generate a

formal or statistically representative sample. This technique is utilized when the researcher
has a well-defined population to draw a sample from, as is often the case in quantitative
research. This fact enables the researcher to generalize back to the broader population (Palys
& Atchison, 2014).
 As highlighted above, probabilistic sampling refers to sampling techniques for which a
person’s (or event’s) likelihood of being selected for membership in the sample is known.
The reason is that, in most cases, researchers who use probability sampling techniques are
aiming to identify a representative sample from which to collect data.
 A representative sample is one that resembles the population from which it was drawn in all
the ways that are important for the research being conducted. If, for example, you wish to be
able to say something about differences between He and She-goats at the end of your study,
you must make sure that your sample doesn’t contain only She goats. There must be
representativeness. If your population varies in some way that is important to your study,
your sample should contain the same sort of variation.

(c) The following data represents the monthly oncome (Shs ‘000) of 100 randomly selected
town dwellers after implementing of Emyooga project in Yumbe municipality. Before
implementation of the program in the municipality, those in charge of the program had
carried out a baseline survey and established that, on average, the monthly income was
UGX 27,000/= per month.

24 24 15 19 37 53 31 46 23 32
16 33 24 10 44 31 42 21 21 29
41 24 38 29 21 37 30 12 32 42
16 14 24 30 52 13 48 27 51 22
29 29 23 45 28 45 21 44 32 18
23 23 16 24 47 23 15 13 45 29
22 34 32 29 22 43 15 32 25 33

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 17 21 21 23 35 37 18 36 43 46
27 20 22 39 29 44 39 23 26 36
23 19 22 40 12 28 54 38 21 14

Required:
(i) With clear justification, suggest the data collection methods that could have been used to
collect the data in the table above

In my opinion, interviews and questionnaire surveys were the data collection methods used to
collect the data in town dwellers after implementing of Emyooga project in Yumbe municipality.
By examining the sample size, Members from different Emyoga groups were sampled and han
ded with questionnaires with questions relating to their monthly income. In addition, the leaders
of Emyoga were also interviewed and also asked for information relating to incomes of their
members.

(ii) Using the data in the table above construct a frequency distribution table with uniform
class intervals

Option 1: Frequency Table for Monthly Income (Shs ‘000) Using Class Interval of 10

CLASS TALLY Freq (F) CF X FX X2 FX2

10-19 ///// ///// ///// /// 18 18 14.5 261 210.25 3784.5
///// ///// ///// ///// ///// ///// ///// 24010.0
20-29 ///// 40 58 24.5 980 600.25
30-39 ///// ///// ///// ///// // 22 80 34.5 759 1190.25 26185.5
40-49 ///// ///// ///// / 16 96 44.5 712 1980.25 31684.0
50-59 //// 4 100 55.5 222 3080.25 12321.0
    ∑F=100     ∑Fx=2934   ∑Fx2=97985

Option 2: Frequency Table of Monthly Income (Shs ‘000) Using Class Interval of 5

CLASS TALLY Freq (F) CF X FX X2 FX2

10-14 ///// /// 7 7 12 84 144 1008.0
15-19 ///// ///// / 11 18 17 187 289 3179.0
20-24 ///// ///// ///// ///// ///// // 27 45 22 594 484 13068.0
25-29 ///// ///// /// 13 58 27 351 729 9477.0
30-34 //// 12 70 32 384 1024 12288.0
35-39 ///// ///// 10 80 37 370 1369 13690.0
40-44 ///// //// 9 89 42 378 1764 15876.0
45-49 ///// // 7 96 47 329 2209 15463.0
50-54 //// 4 100 52 208 2704 10816.0

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     ∑F=100     ∑Fx=2885   ∑Fx2=94865.0

The two tables above give slightly differing values of ∑Fx when two different class intervals of
10 and 5 are used. This indicates they will give two different values of Mean but with a slight
difference in value.
For Clarity:
∑ Fx
Option 1: Mean = = 2937/100= 29.37
∑F

∑ Fx
Option 2: Mean = = 2885/100= 28.85
∑F

The difference between the two is 29.37-28.85= 0.49

Statistically, however, the smaller the class interval, the higher the accuracy of the result. For this
reason, I will go along with the analysis using the frequency table of class interval =5 (Option 2)

(iii) Using data in the frequency distribution table, determine the mean, median, mode and
interquartile range. Basing on the values you have determined for the averages, describe the
nature of the monthly income distribution and suggest the most appropriate average for this
distribution.

∑ Fx
 Mean = = 2885/100= 28.85
∑F
Therefore, Mean monthly income =28.85x1000= Ush 28,850

N
 Median =Lm+C ( - CFb)/Fm = 19.5+ 5(100/2 -18)/27 = 25.43
2
N
Median =Lm+C ( - CFb)/Fm = 29.5+ 5(100/2 -58)/12 = 26.17
2
Therefore, Median monthly income =26.17x1000= Ush 26,170
D1 (27−11)
 Mode = Lm +C ( ) =19.5 +5( ¿= 22.17
D 1+ D 2 ( 27−13 )+(27−13)
D1 (27−11)
Mode = Lm +C ( ) =19.5 +5( ¿= 22.17 We agree
D 1+ D 2 ( 27−13 )+(27−13)

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 Therefore, Mode monthly income =22.17x1000= Ush 22,170

N
 First Quartile Q1 = Lq1 +C ( −CFbq 1)/¿ Fq1 = 19.5+5(100/4-18)/27 = 20.80
4

N
 Third Quartile Q3 = Lq3 +C ( −CFbq 3)/¿Fq3 =39.5+5(3x100/4-80)/9 = 36.72
4

 Interquartile Range, =Q3-Q1 =36.72-20.80= 15.92

(iv) Discuss the practical relevance of measures of central tendency in Project Planning and
management today

The relevance of measures of central tendency in Project Planning and Management are
discussed here under
 To find representative value: Measures of central tendency or averages give Project
Managers one value for the distribution and this value represents the entire distribution.
In this way averages convert a group of figures into one value.
 To condense data: Collected and classified figures are vast. To condense these figures,
Managers use average. Average converts the whole set of figures into just one figure and
thus helps in condensation.
 To make comparisons: To make comparisons of two or more than two distributions, we
have to find the representative values of these distributions. These representative values
are found with the help of measures of the central tendency.
 Helpful in further statistical analysis; Many techniques of statistical analysis like
Measures of Dispersion, Measures of Skewness, Measures of Correlation, and Index
Numbers are based on measures of central tendency. That is why; measures of central
tendency are also called as measures of the first order.

(v) Determine the standard deviation and coefficient of variation of the incomes. Comment
on the usefulness of these two measures in business management.

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 ∑Fx 2 ( ∑ Fx )2
 Coefficient of Variation =( - = ((94865.0/100) -( 2885/100)2) = 116.33
∑F ∑F

∑ Fx 2 ( ∑ Fx )2
 Standard Deviation = SQRT( - = SQRT ((94865.0/100) -( 2885/100)2)
∑F ∑F
=10.79

  A standard deviation of 10.79 indicates that the data points tend to be very close to the
mean and points are spread out over a small range of values.

(vi) Assuming that the monthly income of the town dwellers is normally distributed, test the
hypothesis at 1% level of significance that the program has worked

(vii) Write a brief report to those in charge of the program.

Question two:

(a) Discuss the applications of index numbers in management

Index number in statistics is the measurement of change in a variable or variables across

a determined period. It will show general relative change and not a directly measurable
figure. An index number is expressed in percentage form (W.E Diwert, 1976). In
management, index numbers are applied in the following ways;
 Wage rate regulation is consistent with the changes in the price level. With the
determination of price levels, wage rates may be revised by managers accordingly.
 Government policies are framed following the index number of prices. This price
stability inherent to fiscal and economic policies is based on index numbers.
 It gives a pointer for regional comparison concerning different economic variables—for
instance, living standards between two regions.
 In Analyzing Markets for Goods and Services: Consumer price index numbers are used
in analyzing markets for particular kinds of goods and services. The weights assigned to
different commodities like food, clothing, fuel, and lighting, house rent, etc., govern the
market for such goods and services

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  In measuring changes in industrial production, index numbers of industrial production
measure increase or decrease in industrial production in a given year as compared to the
base year. We can know from such as index number the actual condition of different
industries, whether production is increasing or decreasing in them, for an industrial index
number measures changes in the quantity of production.

(b) The prices of commodities in a market are as shown below:

Base Year (2015) Current Year (2020)

Commodity pO qO p1 q1
A 10 5 20 2
B 15 4 25 8
C 40 2 60 6
D 25 3 40 4

Using the weighted aggregative index, Compute and comment on:

Table Showing Computation of Index numbers

  Base Year (2015) Current Year (2020)

Commodity pO qO p1 q1 Poqo P1qo Poq1 P1q1
A 10 5 20 2 50 100 20 40
B 15 4 25 8 60 100 120 200
C 40 2 60 6 80 120 240 360
D 25 3 40 4 75 120 100 160
∑Poqo ∑P1qo ∑Poq1 ∑P1q1
265 440 480 760

(i) Laspeyre’s index 2 marks

 Laspeyre’s index is given by

PILA = (∑P1 qo /∑Po Qo ) x 100

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 ( 20 x 5 )+ ( 25 x 4 )+ ( 60 x 2 ) + ( 40 x 3 )
x 100=166
( 10 x 5 ) + ( 15 x 4 ) + ( 40 x 2 )+(25 x 3)
 Laspeyre’s index is affected by fluctuations in quantities of base year, thus giving a
relatively high value of price index

(ii) Paasche’s index 2 marks

 Paasche’s index is given by

PIPa = (∑P1 q1 /∑Po Qn ) x 100

Therefore, reading off values from table and substituting in the

formulae gives
760
x 100=158
480
 Paasche’s index is affected by fluctuations in prices of base year, thus giving a relatively
low value of price index

(iii) Dorbish and Bowley’s index 2 marks

 Dorbish and Bowley’s index is given by

Laspeyre+ Paasche
x 100
2

(¿ 440
265 )+(
760
480
)
x 100
2

¿ 162

 Dorbish and bowley’s index combine effects of Pasche’s and Laspeyer’s and therefore
gives a relatively accurate result of the index

(iv) Fisher’s ideal index

 Fisher’s ideal index is given by 2 marks

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 √ ( Lasperex Pasche ) x 100

¿ (√ 440
265 ) x(
480 )
760
x 100

¿ 162

 Dorbish and bowley’s index combine effects of Pasche’s and Laspeyer’s and therefore
gives a relatively accurate result of the index

(c) If Wesonga earned a salary of UGX 10,000,000 in 2015 and his salary was UGX
13,000,000 in 2020, was he better or worse off in real terms in 2015 using Laspeyre’s
index?
3 marks
 Base year salary 10,000,000 (2015) and current year salary 13,000,000 (2020)
Laspeyer’s index is 166.

The equaivalent of 10,000,000 in 2020 would be 10,000,000*1.66=16,000,000

This therefore mean, by Wesonga earning 13,000,000 in 2020 which is less than
16,000,000 is worse off.
(d) What are the weaknesses of Laspeyre’s index? 4 marls

 The Laspeyres’ price index tends to overstate price increases because, as prices change,

consumers typically alter their purchasing decisions by selecting fewer products with
large price increases while buying more products that show low or no price increases.

END

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 REFERENCES

1. Verma, G., & Sharma, K. (2017). The Role of quantitative techniques in business and
management. Journal of Humanities Insights, 1(01), 24-26.

2. Palys, T. S., & Atchison, C. (2014). Research decisions: Quantitative, qualitative, and mixed
method approaches. Nelson Education.

3. Diewert, W. E. (1976). Exact and superlative index numbers. Journal of econometrics, 4(2), 115-

145.

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