1. (a) Statistics is the backbone of decision-making. Comment. (b) Statistics is as good as the user. Comment. Mb0040 Q1.

(a) Statistics is the backbone of decision-making. Comment. Mar012011 Answer: a. Due to advanced communication network, rapid changes in consumer behavior , varied expectations of variety of consumers and new market openings, modern managers have a difficult task of making quick and Appropriate decisions. Therefore, there is a need for them to depend more upon quantitative techniques like mathematical models, statistics, operations research and econometrics. Decision making is a key part of our day-to-day life. Even when we wish to purchase a television, we like to know the price, quality, durability, and maintainability of various brands and models before buying one. As you can see, in this scenario we are collecting data and making an optimum decision. In other words, we are using Statistics. Again, suppose a company wishes to introduce a new product, it has to collect data on market potential, consumer likings, availability of raw materials, feasibility of producing the product. Hence, data collection is the back-bone of any decision making process. Many organisations find themselves data-rich but poor in drawing information from it. Therefore, it is important to develop the ability to extract meaningful information from raw data to make better decisions. Statistics play an important role in this aspect. Statistics is broadly divided into two main categories. Below Figure illustrates the two categories. The two categories of Statistics are descriptive statistics and inferential statistics. Descriptive Statistics: Descriptive statistics is used to present the general description of data which is summarised quantitatively. This is mostly useful in clinical research, when communicating the results of experiments. Inferential Statistics: Inferential statistics is used to make valid inferences from the data which are helpful in effective decision making for managers or professionals. Statistical methods such as estimation, prediction and hypothesis testing belong to inferential statistics. The researchers make deductions or conclusions from the collected data samples regarding the characteristics of large population from which the samples are taken. So, we can say Statistics is the backbone of decision-making.

(b) Statistics is as good as the user. Comment. ANS

as the hidden relations between variables. All this helps to make decision making much easier. Let us look at each function of Statistics in detail. 1. Statistics simplifies mass data The use of statistical concepts helps in simplification of complex data. Using statistical concepts, the managers can make decisions more easily. The statistical methods help in reducing the complexity of the data and consequently in the understanding of any huge mass of data. 2. Statistics makes comparison easier Without using statistical methods and concepts, collection of data and comparison cannot be done easily. Statistics helps us to compare data collected from different sources. Grand totals, measures of central tendency, measures of dispersion, graphs and diagrams, coefficient of correlation all provide ample scopes for comparison. 3. Statistics brings out trends and tendencies in the data After data is collected, it is easy to analyse the trend and tendencies in the data by using the various concepts of Statistics. 4. Statistics brings out the hidden relations between variables Statistical analysis helps in drawing inferences on data. Statistical analysis brings out the hidden relations between variables. 5. Decision making power becomes easier With the proper application of Statistics and statistical software packages on the collected data, managers can take effective decisions, which can increase the profits in a business. Seeing all these functionality we can say Statistics is as good as the user. Q2. Distinguish between the following with example.(a) Inclusive and Exclusive limits.(b) Continuous and discrete data.(C) Qualitative and Quantitative data(d) Class limits and class intervals.Answer:(a) Class intervals are of two types; exclusive and inclusive. The class interval that does not include upper class limit is called an exclusive type of class interval. The class interval that includes the upper class limit is called an inclusive type of class interval. Example: In above table, the class 0 9 includes the value 9.

Q3. In a management class of 100 students three languages are offered as anadditional subject viz. Hindi, English and Kannada. There are 28 students takingHindi, 26 taking English and 16 taking Kannada. There are 12 students takingboth Hindi and English, 4 taking Hindi and Kannada and 6 that are taking Englishand Kannada. In addition, we know that 2 students are taking all the threelanguages.i) If a student is chosen randomly, what is the probability that he/she is not takingany of these three languages?ii) If a student is chosen randomly, what is the probability that he/ she is takingexactly one language?Answer: a) Our sample space is all the students in the school. There are 100 students, so the size of our sample space is 100.Our event is that a student drawn at random is not taking any language classes. Call this event AP (A) = the number of ways A could happen / the size of the sample space= the number of students taking no language class / 100So we must find the number of

students who are not taking any language class. Let H be the number of students taking Hindi, E be the number of students taking English, and K be the number of students taking Kannada.

Q4. List down various measures of central tendency and explain the difference between them? Answer: Graphical representation is a good way to represent summarised data. However,graphs provide us only an overview and thus may not be used for further analysis.Hence, we use summary statistics like computing averages. to analyse the data. Massdata, which is collected, classified, tabulated and presented systematically, is analysedfurther to bring its size to a single representative figure. This single figure is themeasure which can be found at central part of the range of all values. It is the one whichrepresents the entire data set. Hence, this is called the measure of central tendency.In other words, the tendency of data to cluster around a figure which is in centrallocation is known as central tendency. Measure of central tendency or average of firstorder describes the concentration of large numbers around a particular value. It is asingle value which represents all units.The two most common measures of central tendency are the median and the mean,which can be illustrated with an example. Suppose we draw a sample of five womenand measure their weights. They weigh 100 pounds, 100 pounds, 130 pounds, 140pounds, and 150 pounds. Q5. Define population and sampling unit for selecting a random sample in each of the following cases. A) Hundred voters from a constituency B) Twenty stocks of National Stock Exchange c) Fifty account holders of State Bank of India d) Twenty employees of Tata motors. Answer: Population: The totality of all units or individuals in a survey is called population or universe. If the number of objects in a population is finite then it is called finite population otherwise it is known as infinite

population. The data that describes the characteristics of the population is known as parameter. In the figure below, the total number of eight consumers constitutes the entire population.

Units: In a Statistical survey, the objects on which the characteristics are measured arecalled units or individuals. Sample A sample is a part or subset of the population. By studying the sample, you can predictthe characteristics of the entire population from where the sample is taken. The datathat describes the characteristics of a sample is known as statistic. Q6. What is a confidence interval, and why it is useful? What is a confidencelevel?Answer: In using interval estimates, we are not confined to 1,2 and 3 standard errors; for example, 1.64 standard errors include about 90 percent of the area under the curve; itincludes 0.4495 of the area on either side of the mean in a normal distribution. Similarly,2.58 standard error includes about 99 percent of the area, or 49.51 percent on either side of the mean. This probability indicates how confident we are that the intervalestimate will include the population parameter. A higher probability means moreonfidence. In

estimation, the most commonly used confidence levels are 90 percent, 95percent, and 99 percent, but we are free to apply any confidence level.