Mahatma Education Society’s

Pillai Institute of Management Studies and Research

MMS (2017-19)
SEMESTER-I Examination December 2017
Date: 14/12/17 Max. Marks: 60
Subject: Business Statistics Time: 3 Hrs.

Instructions:
1) Question No.1 is compulsory carrying 20 marks.
2) Answer any 04 questions from Question No.2 to 7 carrying 10 marks each.
3) All the sub-questions of the main question should be attempted together.

Q1. Following are the historical weekly returns of last five years for two stocks of FMCG sector:

Returns (Interval) ADSL ZDTL

0-2 20 18
2-4 35 48
4-6 30 60
6-8 56 32
8-10 43 23
10-12 23 20
12-14 20 18
14-16 14 17
16-18 10 18
18-20 9 6

(i) Which stock is better in terms of average returns over the last five years?
(ii) What rate of return is assumed maximum number of times by the two stocks?
(iii) What is the cut-off point of the top 30 percent of the return data of stock ADSL?
(iv) What percent of the return data is expected to be above 9 for stock ZDTL?
(v) Which stock is relatively more consistent in terms of returns generated over the last five
years?
(vi) Compare the two stocks for symmetry in distribution using Karl-Pearson measure of
skewness.

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(vii) An analyst claims that the stock returns of FMCG sectors are well reflected in market
performance. Justify the claim using the given below sample data.
Market Index 18 10 12 13 11 12 14 14 16 19
Stock Returns 23 20 19 23 23 24 25 20 22 23

(viii) Estimate return on a FMCG stock when market index is 15 with respect to sample data
given in (vii).

Q2. Answer any two.

(1) An organization has two units A and B. An analysis of weekly wages paid to the workers
gains the following results:
Unit A Unit B
No. of workers 1000 650
Average weekly wages Rs. 60 Rs. 90
Variance Rs. 81 Rs. 81
- Which unit pays larger amount as weekly wages?
- In which unit there is greater variability in wage distribution?
- Find the combined average wage and the combined standard deviation of wages for the
whole organization.

(2) It is expected that 75 percent of the students will find this question paper easy. If 10 students
are selected at random, what is the probability that:
- Any 7 of them find the question paper easy
- At most 2 of them don’t find the paper easy
- At least 8 of them find the paper easy
- All of them find the paper easy.

(3) The following are the sales generated by 60 companies in the country
Sales (in lakhs): 0-10 10-20 20-30 30-40 40-50 50-60
No. of companies: 6 8 22 12 7 5
Calculate the range of sales earned by the middle 70 percent of the companies.

Q3. Answer any two.

(1) Team of four students is to be sent to an intercollegiate debate competition. The probability
of forming a team from Group A is 1/4, from Group B is 3/5 and from Group C is 3/20. There
are 55%, 75% and 50% chances of winning the competition when the teams are from A, B and C
respectively. The competition is won by the college. What is the probability that the winning
team is from Group B.

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(2) A market research company wants to find out if age factor has any influence on the usage of
a product, a company is planning to launch next year. Test at 1% level of significance for any
evidence of association between age and product use, using the below given information
obtained from a market experiment.
Usage Age
Below 25 26-28 Over 28 Total
High 6 9 5 20
Medium 18 14 8 40
Low 11 12 17 40
35 35 30 100

(3) Following is the salary distribution of middle level managers. Find the median salary.

Salary (‘000) 22-32 32-42 42-52 52-62 62-72 72-82

No. of managers 30 40 32 28 20 10

Q4. Answer any two.

(1) Following are the scores obtained by 10 candidates in a job screening process for their
communication and subject knowledge. Test for any association between the two categorical
variables using rank correlation.

Comm. Score 60 75 50 75 80 75 40 52 85 55
Sub. Know. Score 70 80 75 85 85 90 84 88 60 65

(2) A student applies for a job in two firms X and Y. The probability of his being selected in firm
X is 0.6 and being rejected at firm Y is 0.3. The probability of at least one of his application
being rejected is 0.4. What is the probability that he will be selected by one of the firms?

(3) Sales personnel for Frenzy Distributors submit weekly reports listing the customer contacts
made during the week. A sample of 65 weekly reports showed a sample mean of 19.5 customer
contacts per week. The sample standard deviation was 5.2. Provide 90% and 95% confidence
intervals for the population mean number of weekly customer contacts for the sales personnel.

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Q5. Answer any two.

(1) The time span of pizza delivery is normally distributed with mean 15 minutes and standard
deviation of 3 minutes. What is the probability that a pizza order will be delivered between 10 to
12 minutes. What should be the time limit if the order has to be made free of cost in case of late
delivery for not more than 5 percent of the orders?

(2) Following data is given regarding price and quantity demanded of a particular commodity:

Price Quantity
Mean 10 90
Standard deviation 3 12
Coefficient of correlation = 0.8
- Calculate regression equation of demand on price.
- Estimate the price to be fixed if the forecasted demand is 120.

(3) From a group of 10 people of which 2 are employed, exactly two are chosen, one at a time,
without replacement. Calculate the probabilities that:
(a) The first person is employed
(b) Both of them are employed
(c) The second person is employed

Q6. Answer any two.

(a) Find Kelly’s coefficient of skewness based on deciles from the following data:

Classes: 0-5 5-10 10-15 15-20 20-25

Frequency: 7 18 25 30 20

(b) Forty percent of the business travellers carry either a cell phone or a laptop. For a sample of
15, compute the probability that at least three of the travellers carry phone or laptop. Also
compute the probability that exactly twelve of them don’t carry a laptop or phone.

(c) There are a number of possible measures of sales performance including how consistent a
sales person is, in meeting established sales goals. The following data represents the percentage
of goal met by each of three salesmen over the last 5 years.

Raman 88 68 89 92 103
Suraj 76 88 90 86 79
Prasad 104 88 118 88 123
Which salesman is more consistent?

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Q7. Answer any two.

(a) The diameter of a steel pipe manufactured at a large factory is expected to be approximately
normally distributed with a mean of 1.30 inches and a standard deviation of 0.04 inch.
- If a random sample of 16 pipes is selected, then what is the probability that randomly
selected pipe will have a diameter between 1.28 and 1.30 inches.
- Determine a 60 percent confidence interval for the mean diameter of the pipes taking
sample mean as 1.30 inches.

(b) A research study conducted gave a compilation of the following responses to 5 questions
being asked to a sample of 100 individuals.

Responses Q1. Q2. Q3 Q4 Q5

A 10 8 22 32 43
B 15 45 12 10 22
C 35 12 16 10 10
D 20 10 30 42 10
E 20 25 20 6 15
Total 100 100 100 100 100

What is the median and mode response of each question?

(c) Explain the general procedure of testing a hypothesis.

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 Mahatma Education Society’s
Pillai Institute of Management Studies and Research
MMS (2015-17)
SEMESTER-I Examination December 2015
Date: / / Max. Marks: 60
Subject: Business Statistics Time: 3 Hrs.

Instructions:
4) Question No.1 is compulsory carrying 20 marks.
5) Answer any 04 questions from Question No.2 to 7 carrying 10 marks each.
6) All the sub-questions of the main question should be attempted together.

Q1. (a) A departmental store gives in service training to its salesman which is followed by a test.
The management is considering whether it should terminate the services of the salesman who did
not do well in the test. The following table gives the test scores, and the sales made by the
salesman.
Test Score: 14 19 24 21 26 22 15 20 19
Sales (in 000’s) 31 36 48 37 50 45 33 41 39

Calculate the correlation between the test scores and sales. Does it indicate that the termination
of services for low test scores is justified? If the firm wants a minimum sales volume of
Rs.30000 from each salesman, what is the minimum test score that will ensure non-termination
of services?

(b) 100 employees randomly selected from a group of 1000 employees enrolled for a training
program were cross-classified by age and their grade points. Accordingly the following data was
compiled.
Grade point Age
Below 25 26-28 Over 28 Total
Upto 3.0 6 9 5 20
3.1 to 3.5 18 14 8 40
3.6 to 4.0 11 12 17 40
35 35 30 100
At 5 % level of significance, test the hypothesis that age and grade points are independent.

Q2. Answer any two.

(a) The average monthly sales for the first 11 months of the year in respect of a certain salesman
were Rs. 12000 but due to his illness during the last month the average sales for the whole year
came down to Rs. 11375. What is the value of the sales in the last month?

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(b) Find Bowley’s coefficient of skewness based on deciles from the following data:

Classes: 0-5 5-10 10-15 15-20 20-25

Frequency: 7 18 25 30 20

(c) An organization has two units A and B. An analysis of weekly wages paid to the workers
gains the following results:
Unit A Unit B
No. of workers 500 670
Average weekly wages Rs. 65 Rs. 72
Standard deviation Rs. 9 Rs. 9
- Which unit pays larger amount as weekly wages?
- In which unit there is greater variability in wage distribution?
- Find the combined average wage and the combined standard deviation of wages for the
whole organization.

Q3. Answer any two.

(a) A normal distribution has a standard deviation of 200 and a mean of 800. Find the area of
standard normal variate in each of the cases.

- X = 900
- For X below 600
- Between X1 = 600 and X2 = 900

(b) Briefly explain:

- Null and Alternative Hypothesis
- Correlation and Regression

(c) Explain the procedure of hypothesis testing.

Q4. Answer any two.

(a) There is 50-50 chance that a contractor’s firm A, will bid for the construction of a multi-
storied building. Another firm, B, submits a bid and the probability is 3/5 that it will get the job,
provided that firm A does not submit a bid. If firm A submits a bid, the probability that firm B
will get the job is only 2/3. What is the probability that firm B will get the job?

(b) Given below is the distribution of the marks obtained by 60 students appearing for an
admission test.

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Classes 0-10 10-20 20-30 30-40 40-50
Frequency 8 10 22 11 9

If the cut off point was 40, find the percentage of students scoring more than 40 marks.

(c) A quality control inspector tested nine samples of each of three designs A, B and C of certain
bearing for a new electrical winch. The following data are the number of hours it took for each
bearing to fail when the winch motor was run continuously at maximum output.
A: 16 16 53 15 31 17 14 30 20
B: 18 27 23 21 22 26 39 17 28
C: 31 16 42 20 18 17 16 15 19

Calculate the mean and median for each group and suggest which design is best and why?

Q5. Answer any two.

(a) In a post office, three clerks are assigned to process incoming mail. The first clerk A
processes 40 percent; the second clerk B processes 35 percent; and the third clerk C processes 25
percent of the mail. The first clerk has an error rate of 0.04, the second clerk has an error rate of
0.06 and the third clerk has an error rate of 0.03. A mail selected at random from a day’s output
is found to have an error. The postmaster wishes to know the probability that it was processed by
clerk A or clerk B or clerk C.

(b) A company has appointed 10 new secretaries out of which 7 are trained. If a particular
executive is to get three secretaries, selected at random, what is the chance that at least one of
them will be untrained?

(c) Wages paid to the 6000 workers employed in a construction company is a normal variate
with mean and standard deviation of Rs. 1200 and Rs. 400 respectively. Estimate
- Percentage of workers getting wages above Rs. 1600.
- Percentage of workers getting wages between Rs. 600 and Rs. 900.
- Percentage of workers getting wages between Rs. 1100 and Rs. 1500.

Q6. Answer any two.

(a) From a survey conducted it was found that 40% of teenage consumers receive their spending
money from part-time jobs. If six teenagers are selected at random, find the probability that at
least four of them will have part-time jobs.

(b) The share prices of a company in Mumbai and Kolkata markets during the last 10 months are
recorded below:

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Month: Jan Feb March April May June July Aug Sept Oct
Mumbai: 105 120 115 118 130 127 109 110 104 112
Kolkata: 108 117 120 130 100 125 125 120 110 135
Calculate standard deviation for both the markets.

(c) A student applies for a job in 2 firms A and B. the probability of his being selected in firm B
is 0.7 and being rejected in firm A is 0.3. What is the probability that he will be rejected in one of
the firms if the probability of at least one of his application being selected is 0.6?

Q7. Answer any two.

(a) Following data is given regarding expenditure on advertising and sales of a particular firm:
Advertisement Exp.(Rs. lakhs) Sales ( Rs. crores)
Mean 10 90
Standard deviation 3 12
Coefficient of correlation = 0.8
- Calculate regression equation of sales on advertisement expenditure.
- Estimate the advertisement expenditure required to attain a sales target of Rs. 120 crores.

(b) In a certain town, there are equal number of males and females. It is known that 20 percent of
the males and 5 percent of the females are unemployed. A research student studying the
employment situation selects an unemployed person at random. What is the probability that the
person selected is (i) male (ii) female

(c) Explain Kurtosis. How it is measured?

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