STATISTICS FOR MANAGEMENT

Presentation

By

Prof. (Dr.) T. Muthukumar, M.Sc; MCA; MBA; PhD.

Professor & Associate Dean(Academic)
XIME-Bangalore
CHI-SQUARE DISTRIBUTION

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CHI-SQUARE DISTRIBUTION

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CHI-SQUARE DISTRIBUTION
4.Calculate the degree of freedom using the formula
v=n-1 or v=(r-1)(c-1)
5. Calculate the table value ψ^2 (v, 0.05)
6. Calculated value is < table value, then hypothesis
Ho is accepted.
7. Calculated value is > table value, then hypothesis
Ho is rejected.
• Ex.1: A personnel manager is interested us trying
the determine whether absenteeism is greater on
one day of the week than on another. His records
for the past years shows the sample

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CHI-SQUARE DISTRIBUTION
• Days of week : Mon Tue Wed Thur Fri
• No. of Abscenities: 66 57 54 48 75
• Test whether absentees is uniformly distributed.

 Ans: Let the H0: Absence is uniformly distributed

over the week.
• Applying ψ^2 test, On the basis of this hypothesis
we should expect 60 days is = E =
(66+57+54+48+75) / 5 = 300 / 5 = 60

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CHI-SQUARE DISTRIBUTION
 ---------------------------------------------------------------------
O E O–E (O – E)^2 ((O – E)^2)/E
---------------------------------------------------------------------
66 60 6 36 0.60
57 60 -3 9 0.15
54 60 -6 36 0.60
48 60 -12 144 2.40
75 60 15 225 3.75
-----------------------------------------------------------------------
300 7.50
-----------------------------------------------------------------------
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CHI-SQUARE DISTRIBUTION

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CHI-SQUARE DISTRIBUTION
 Ex.2: Given below is the contingency table
for production is three shifts and the
number of defective good turn out. Find the
value of ‘C’. Is it possible that the number
defective goods depends on the shifts run by
them, No. of shifts

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CHI-SQUARE DISTRIBUTION
• ---------------------------------------------------------------
Shift I week II week III week Total
---------------------------------------------------------------
I 15 5 20 40
II 20 10 20 50
III 25 15 20 60
---------------------------------------------------------------
60 30 60 150
---------------------------------------------------------------
 Ans: Let H0 : Defective is good does not depend upon the
shift run by the factory.
• The first Expected value is = E = (40*60)/150 = 16
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CHI-SQUARE DISTRIBUTION
--------------------------------------------------------------------------
O E O–E (O – E)^2 {(O – E)^2/E}
---------------------------------------------------------------------------
• 15 16 -1 1 0.063
• 20 20 0 0 0
• 25 24 1 1 0.042
• 5 8 -3 9 1.125
• 10 10 0 0 0
• 15 12 3 9 0.750
• 20 16 4 16 1.0
• 20 20 0 0 0
• 20 24 -4 16 0.667
• -----------------------------------------------------------------------
• 3.647
• -----------------------------------------------------------------------

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CHI-SQUARE DISTRIBUTION
 D.f = v = (r-1)(c-1) = (3-1)(3-1) = 4
• Therefore, ψ^2 (4, 0.05) = 9.488
• Here, the calculated value of ψ^2 is less than of
table value. Hence, the hypothesis is accepted.
• That is, the number of defective does not depend
on shift run by the factory

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CHI-SQUARE DISTRIBUTION
 Ex.3: The contingency table below summarizes the results obtained in a
study conducted by a research organization, with respect to the
performance of four competing brands of tooth paste among the users
• --------------------------------------------------------------------------
BrandA BrandB BrandC BrandD Total
--------------------------------------------------------------------------
No cavities 9 13 17 11 50
One of five 63 70 85 82 300
More than five 28 37 48 37 150
--------------------------------------------------------------------------
Total 100 120 150 130 500
--------------------------------------------------------------------------

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CHI-SQUARE DISTRIBUTION
 Test the hypothesis that incidence of cavities is independent
of the brand of the tooth paste used. Use level of
significance 1% and 5%.
• Ans: Let H0 : incident of cavities is independent of the
brand of the toothpaste used.
• Here, E11=(50*100)/500=10 E21=(300*100)/500=60

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CHI-SQUARE DISTRIBUTION
 -----------------------------------------------------------------------
O E O–E (O – E)^2 (O – E)^2/E
-----------------------------------------------------------------------
9 10 -1 1 0.100
63 60 3 9 0.150
28 30 -2 4 0.133
13 12 1 1 0.083
70 72 -2 4 0.056
37 36 1 1 0.028
17 15 2 4 0.267

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 85 90 5 25 0.278
48 45 3 9 0.200
11 13 -2 4 0.308
82 78 4 16 0.205
37 39 2 4 0.103
-------------------------------------------------------------------------
1.911
--------------------------------------------------------------------------

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CHI-SQUARE DISTRIBUTION
 Therefore, ψ^2 = 1.911
 D.f = v = (r-1)(c-1) = (3-1)(4-1) = 6
 ψ^2 (6, 0.05) = 12.59
 The calculated value of ψ^2 is less than the table value.
 Our hypothesis holds true. Hence, incidence of cavities is
independent of the brand of the tooth paste used.

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THE F-Test OR The Variance Ratio Test

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 THE F-Test OR The Variance Ratio Test
 F = Larger estimate of variance / Smaller
estimate of variance
 v1 = n1-1, v2 = n2 – 1;
 v1 = degree of freedom for sample having
larger variance
 v2 = degree of freedom for sample having
smaller variance
 The calculated value of F is compared with the
table value for v1 and v2 at 5% or 1% level of
significance. 18
 If calculated value of F is greater than the
table value then the F ratio is considered
significant and the null hypothesis is rejected.
 If calculated value of F is less than the table
value the null hypothesis is accepted and it
inferred that both the samples have come from
the population having same variance.

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 THE F-Test OR The Variance Ratio Test
 Ex-1: Two random samples were drawn from two normal
populations and the values are
 A: 66 67 75 76 82 84 88 90 96
 B: 64 66 74 78 82 85 87 92 93 95 97
 Test whether the two populations have the
same variance at the 5% level of significance.
 Ans: Let us take the hypothesis that the two
populations have the same variance.
 Applying F-Test:
 F = S1^2 / S2^2
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THE F-Test OR The Variance Ratio Test

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THE F-Test OR The Variance Ratio Test

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 THE F-Test OR The Variance Ratio Test
 Ex-2: Two samples are drawn from two
normal population. From the following data
test whether the two samples have the same
variance at 5% level:
 Sample 1: 60 65 71 74 76 82 85 87
 Sample 2: 61 66 67 85 78 63 85 86 88 91

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THE F-Test OR The Variance Ratio Test

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THE F-Test OR The Variance Ratio Test

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 THE F-Test OR The Variance Ratio Test
 Ex-3: The following data present the yields in
quintals of common ten subdivisions of equal area of
two agricultural plots:
 Plot 1: 6.2 5.7 6.5 6.0 6.3 5.8 5.7 6.0 6.0 5.8
 Plot 2: 5.6 5.9 5.6 5.7 5.8 5.7 6.0 5.5 5.7 5.5
 Test Whether two samples taken from two random
populations have the same variance ( 5% point of F
for v1 = 9 and v2 = 9)
 Ans: Let us take the null hypothesis that the samples
come from populations having the same variance.

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THE F-Test OR The Variance Ratio Test

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THE F-Test OR The Variance Ratio Test

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 THE F-Test OR The Variance Ratio Test
 Ex-4: In a sample of 8 observations, the sum of
squared deviations of items from the mean was 84.4.
In another sample of 10 observations, the value was
found to be 102.6. Test whether the difference is
significant at 5% level.
 You are given that at 5% level, critical value of F for
v1 = 7 and v2 = 9 degree of freedom is 3.29 and for
v1 = 8 and v2 = 10 degrees of freedom, its value is
3.07.
 Ans: S1^2 = 12.06
 S2^2 = 11.4 F = 12.06 / 11.4 = 1.06

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Student’s t-Distribution

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 Student’s t-Distribution
 Ex-1: The Manufacturer of a certain make of electrical bulbs
claims that his bulbs have a mean life of 25 months with a
standard deviation of 5 months. A random sample of 6 such bulbs
gave the following values.
 Life of months 24, 26, 30, 20, 20, 18
 Can you regard the producer’s claim to be valid at 1% level of
significance? (Given that table values of the appropriate test
statistics at the said level are 4.032, 3.707 and 3.499 for 5, 6 and 7
degree of freedom respectively).

 Ans: Let us take the hypothesis that there is no significant

difference in the mean life of bulbs in the sample and that of the
population.
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Student’s t-Distribution

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Student’s t-Distribution

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Student’s t-Distribution
 Ex-2: The life time of electric bulbs for a
random sample of 10 from a large
consignment gave the following data:
 Item: 1 2 3 4 5 6 7 8 9 10
 Line in ‘000 hours: 4.2 4.6 3.9 4.1 5.2 3.8 3.9 4.3 4.4 5.6
 Can we accept the hypothesis that the average
life time of bulbs is 4,000 hours.
 Ans: Let us take the hypothesis that there is no
significant difference in the mean life of bulbs
in the sample and that of the population.
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Student’s t-Distribution

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Student’s t-Distribution

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Student’s t-Distribution

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Student’s t-Distribution
 Ex-3: Two types of drugs were used on 5 and 7 patients for
reducing their weight.
 Drug A was imported and drug B indigenous. The decrease
in the weight after using the drugs for six months was as
follows:
 Drug A : 10 12 13 11 14
 Drug B : 8 9 12 14 15 10 9
 Is there a significant difference in the efficacy of the two
drugs? If not, which drug should not buy? (For v = 10, t at
0.05 = 2.223)

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Student’s t-Distribution

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Student’s t-Distribution

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