DEPARTMENT OF MANAGEMENT SCIENCE

UNIVERSITY OF NAIROBI
DMS 308: BUSINESS STATISTICS II Continuous Assessment Test 29th May 2017
----------------------------------------------------------------------------------------------------------------
INSTRUCTIONS:
1. Attempt all the questions
2. Neatness and clear working are expected
---------------------------------------------------------------------------------------------------------------------

Question One

a) Assume that you have the privilege of contributing to the development of your county, by being
a statistician in the county’s progressive committee. However, the vetting board would like to
confirm your useful (or lack of it). They ask you to do a brief write up on the role and place of
statistics (and by extension, statistician) in the committee. Prepare a brief statement (your
response) (10 Marks)

b) Statistics can be broadly categorized as “descriptive statistics” or “inferential statistics”.

Similarly, some people categorize statistics as either “parametric statistics” or
“nonparametric statistics”.
Imagine that a non- statistician asks you to assist them understand and differentiate the various
terms. Briefly prepare your response (use of relevant examples to demonstrate your
understanding will me highly rewarded) (15 Marks)

Question Two

a) Differentiate between “Correlation Analysis” and “Regression Analysis” (use appropriate

examples to support your answer. (8 Marks)

b) The organizing team of 4K Club cultural week, in an effort to maximize on the sale of tickets
(during the four day event) has been toying with the idea of charging more for the last two days
of the event. The chairman believes that there are twice as many fans on the last two days than
the first two days. Data from previous tournaments shows the attendance of fans as tabulated
below.
Day 1 2 3 4
No. of Fans 180 240 360 410

Required:
Is there sufficient evidence to support the management’s proposal? (Test at 5%)
(14 marks)

1
Question Three

a) Chi – square tests are divided into three: goodness of fit, test of uniformity and test of
independence. Briefly explain each of these tests (provision of relevant examples will be an
added advantage) (8 Marks)

b) In a recent TV show, a so called expert claimed that the yearly corporate profit for xyz limited
from 1995-1999 could be attributed to the year of focus and the aggregate level of
unemployment. As a statistician, you seek to confirm the allegation, using regression analysis.
Upon data processing, you obtain the following results.

Regression Statistics
Multiple R 0.934168
R Square 0.872669
Adjusted R Square 0.865393
Standard Error 73.91677
Observations 38

df SS MS F Significance F
Regression 2 1310600 655299.9 119.9373 2.17E-16
Residual 35 191229.1 5463.689
Total 37 1501829

Standard Lower Upper

Coefficients Error t Stat P-value 95% 95%
Intercept 97.68 51.97 1.87957 0.07 -7.82361 203.1902
Focus Period 17.86 1.16 15.41505 3.58E-17 15.50923 20.21384
Unemployment -32.26 8.76 -3.68345 0.000772 -50.0358 -14.479

Required:

i. Comment on the sufficiency (or lack of it) of the data. (4 Marks)

ii. Is the resulting model reliable? (Support your answer) (4 Marks)
iii. Comment on the goodness of fit of the data. (4 Marks)
iv. Derive the resulting model and interpret appropriately (4 Marks)
v. Are the model parameters statistically significant? (Explain implications thereof) (4 Marks)
vi. What advice would you provide, on the basis of the output and interpretation made (5 Marks)