BUSINESS RESEARCH METHODS

PROBLEMS FOR ASSIGNMENT

Problem 1:
It may be noted from above that the size of the sample is directly proportional to the variability
in the population and the value of Z for a confidence interval. It varies inversely with the size of
the error. It may also be noted that the size of a sample does not depend upon the size of
population. Below are given some worked out examples for the determination of a sample size.

An economist is interested in estimating the average monthly household expenditure on food

items by the households of a town. Based on past data, it is estimated that the standard deviation
of the population on the monthly expenditure on food item is Rs. 30. With allowable error set at
Rs. 7, estimate the sample size required at a 90 per cent confidence.

Problem 2:
You are given a population with a standard deviation of 8.6. Determine the sample size needed
to estimate the mean of the population within ± 0.5 with a 99 per cent confidence.

Problem 3:
It is desired to estimate the mean life time of a certain kind of vacuum cleaner. Given that the
population standard deviation o = 320 days, how large a sample is needed to be able to assert
with a confidence level of 96 per cent that the mean of the sample will differ from the
population mean by less than 45 days?

Problem 4:
Let us consider a few examples for determining a sample size while estimating the population
proportion.
A market researcher for a consumer electronics company would like to study the television
viewing habits of the residents of a particular, small city. What sample size is needed if he
wishes to be 95 per cent confident of being within ± 0.035 of the true proportion who watch the
evening news on at least three weeknights r no previous estimate is available?

Problem 5:
A manager of a department store would like to study women's spending per year on cosmetics.
He is interested in knowing the population proportion of women who purchase their cosmetics
primarily from his store. If he wants to have a 90 per cent confidence of estimating the true
proportion to be within ± 0.045, what sample size is needed?

Problem 6:
To determine the effectiveness of the advertising campaign for a new Plasma TV, the
management would like to know what percentage of the household is aware of the new brand.
The advertising agency thinks that this figure is as high as 70%. The management would like a
95% confidence interval and a margin of error not greater than plus or minus 2%.
a) What sample should be used for the study?
b) Suppose the management wanted 99% confidence interval with a error of plus or minus 3%,
how would the sample size change?
( Note: For 95% area covered within ±1.96 standard deviations in a normal distribution and for
99% it is ±2.58)
Problem 7:
A consumer electronics company wants to determine the job satisfaction levels of its employees.
For this, they ask a simple question, 'Are you satisfied with your job?' It was estimated that no
more than 30 per cent of the employees would answer yes. What should be the sample size for
this company to estimate the population proportion to ensure a 95 per cent confidence in result,
and to be within 0.04 of the true population proportion?

Problem 8:
On a typing test, a random sample of 36 graduates of a secretarial school averaged 73.6 words
with a standard deviation of 8.10 words per minute. Test an employer’s claim that the school's
graduates average less than 75.0 words per minute using the 5 per cent level of significance.

Problem 9:
It is known from past studies that the monthly average household expenditure on the food
items in a locality is Rs.2,700 with a standard deviation of Rs.160. An economist took a
random sample of 25 households from the locality and found their monthly household
expenditure on food items to be Rs.2,790.0. At 0.01 level of significance, can we conclude
that the average household expenditure on the food items is greater than Rs.2,700?
Problem 10:
A sample of 16 graduating engineering students of a college was taken and the information
was obtained on their starting salary. The mean monthly starting salary was found to be
Rs.30,200 with a standard deviation of Rs.960. The past data on the starting salary has given
a mean value of Rs.30,000. Using a 5 per cent level of significance, can we conclude that the
average starting salary is different from Rs.30,000?
Problem 11:
Prices of share (in ₹) of a company on the different days in a month were found to be 66, 65, 69,
70, 69, 71, 70, 63, 64, and 68. Examine whether the mean price of shares in the month is
different from 65. You may use 10 per cent level of significance.

Problem 12:
The results of a household survey indicated that a sample of 20 households bought an average of 75
litres of milk per month with a standard deviation of 13.0 litres. Test the hypothesis that the value of
the population mean is 70 litres against the alternative that it is more than 70 litres. Use 0.05 level of
significance.

Problem 13:
Past records indicate that a golfer has averaged 82 on a certain course. With a new set of clubs,
he averages 7 over five rounds with a standard deviation of 2.65. Can we conclude that at 0.025
level of significance, the new club has an adverse effect on the performance?
Problem 14:
An officer of the health department claims that 60 per cent of the male population of a village
comprises smokers. A random sample of 50 males showed that 35 of them were smokers. Are
these sample results consistent with the claim of the health officer? Use a level of significance
of 0.05.

Problem 15:
A food processing company wants to know whether the proportion of customers who prefer the
new packaging to the old one is 0.65. What can be concluded at the level of significance a =
0.05 if 74 of the 100 randomly selected customers prefer the new kind of packaging and
alternative hypothesis is p ≠ 0.65.
Problem 16:
Calculate coefficient of correlation from the data given below by the direct method, i.e.,
without taking the deviations of items from actual or assumed mean.

X: 9 8 7 6 5 4 3 2 1
Y: 15 16 14 13 11 12 10 8 9

Problem 17:
The ranking of 10 students in two subjects A and B are as follows:

A B A B
6 3 4 6
5 8 9 10
3 4 7 7
10 9 8 5'
2 1 1 2

Calculate rank correlation coefficient

Problem 18:
Two ladies were asked to rank 7 different types of lipsticks. The ranks given by them are as follows:

Lipsticks : A B C D E F G
Neelu : 2 1 4 3 5 7 6
Neena : 1 3 2 4 5 6 7

Calculate Spearman’s rank correlation coefficient.

Problem 19:
The table below shows the ranks assigned which were assigned to ten artists:
Sl. No. 1 2 3 4 5 6 7 8 9 10
Judge A 5 7 4 1 3 2 9 8 10 6
Judge B 4 8 3 2 7 1 10 6 9 5
Judge C 8 6 2 10 4 1 3 9 5 7
Compute spearman’s rank order correlation coefficient for each pair of ranking and decide:

a) Which of the two judges are most alike in their opinions about these artists?
b) Which two judges are different in their opinions about these artists?
Problem 20:
Ten competitors in a beauty contest are ranked by three judges in the following order :
1st judge : 1 6 5 10 3 2 4 9 7 8
2nd judge : 3 5 8 4 7 10 2 1 6 9
3rd judge : 6 4 9 8 1 2 3 10 5 7
Use the rank correlation coefficient to determine which pair of judges has the nearest approach
to common tastes in beauty

Problem 21:
From the following data obtain the two regression equations:
X 6 2 10 4 8
Y 9 11 5 8 7

Problem 22:
The manufacturer of a certain make of electric bulbs claims that his bulbs has 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 the
table values of the appropriate test statistics at the said level are 4.032, 3.707 and 3.499 for 5, 6
and 7 degrees of freedom respectively.)
Problem 23:
Two brands of LED bulbs are quoted at the same price. A buyer tested a random sample of 100
LED bulbs of each brand and found the following:

Brand Mean life (hrs.) Standard deviation

Brand I 1300 82
Brand II 1248 83
Is there a significant difference in the quality of two brands of LED bulbs 5% level of
significance?

Problem 24:
A random sample of size 16 has 53 as mean. The sum of the squares of the deviations taken
from mean is 135. Can this sample be regarded as taken from the population having 56 as mean?
Obtain 95% and 99% confidence limits of the mean of the population, (for v = 15, t 0.05 = 2.13
for v = 15, t0.01 = 2.95)

Problem 25:
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
Life 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?

Problem 26:
A certain drug is claimed to be effective in curing cold. In an experiment on persons with cold,
half of them were given the drug and half of them were given the 'sugar pills. The patients’
reactions to the treatment are recorded in the following table:
Helped Harmed No effect Total
Drug 150 30 70 250
Sugar Mills 130 40 80 250
Total 280 70 150 500
On the basis of the data can it be concluded that there is a significant difference in the effect
of the drug and sugar pills?

Problem 27:
1,000 students at college level are graded according to their l.Q. and their economic conditions.
Use chi-square test to find out whether there is any association between economic conditions
and the level of I.Q.
Economic I.Q
Conditions High Medium Low Total
Rich 160 300 140 600
Poor 140 100 160 400
Total 300 400 300 1,00
Problem 28: 0
A cigarette company interested in the relation between gender of a person and the type of
cigarettes smoked has collected the following data from a random sample of 150 persons.

Cigarette Male Female Total

A 25 30 55
B 40 15 55
C 30 10 40
Total 95 55 150
Test whether type of cigarette smoked and the gender are independent?

Problem 29:
To assess the significance of possible variation in performance in a certain test between the
convent schools of a city, a common test was given to a number of students taken at random
from the senior fifth class of each of the four schools concerned. The results are given below.
Make an analysis of variance of data.

Schools
A B C D
8 12 18 13
10 11 12 9
12 9 16 12
8 14 6 16
7 4 8 15

Problem 30:
The three samples below have been obtained from normal populations with equal variances. Test
the hypothesis that the sample means are equal:
8 7 12
10 5 9
7 10 13
14 9 12
11 9 14

The table value of Fat 5% level of significance for v1 = 2 and = v2 is 3.88.