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ASSIGNMENT

Name S.AMEER ABBAS

Roll No. 520955311

Course MBA-Semester-1
STATISTICS FOR
Subject
MANAGEMENT
Subject Code MB0024-Set-1
Case 1
ABC Branch of XYZ Bank has decided to give 10 Lakh of loan each on long term
basis to only two of their customers (accountholders), who are businessmen of
the locality. About 20 businessmen had applied for loan in order to develop their
business further. In order to reject some of the applications (as the fund was
limited), the Bank decided that accountholder who had maintained a minimum
balance of 50000 INR would only be considered for the loan. As a result, 10
applications were automatically rejected as they were not satisfying the
requirement of minimum balance. Now, the 10 applications remained and it was
found that monthly minimum balance in all the cases were more than 50000 INR
for the last 12 months. Their account details of monthly minimum balance are
given below.

Mont Monthly Minimum Balance in INR


hs

A/C A/C A/C A/C A/C A/C A/C A/C A/C A/C
Holde Hold Holder Holde Hold Hold Holde Holde Holde Holde
r1 er 2 3 r4 er 5 er 6 r7 r8 r9 r 10
Jan, 60000 5600 66000 86000 5600 5900 59000 52000 53000 56000
2008 0 0 0
Feb, 70000 7600 74000 96000 7600 9600 78000 73000 98000 76000
2008 0 0 0
Mar, 55000 1100 112000 19000 1100 1200 11500 11200 11300 12000
2008 00 0 00 00 0 0 0 0
Apr, 90000 8900 90000 98000 8900 9700 87000 93000 66000 89000
2008 0 0 0
May, 56000 8800 84000 84000 8800 9800 90000 89000 87000 86000
2008 0 0 0
Jun, 80000 5200 57000 57000 5200 5700 55000 54000 59000 72000
2008 0 0 0
Jul, 82000 5800 96000 66000 5800 5600 86000 55000 98000 98000
2008 0 0 0
Aug, 79000 9500 55000 93000 9500 9800 99000 96000 59000 95000
2008 0 0 0
Sept, 51000 8600 76000 74000 8600 8800 89000 97000 87000 84000
2008 0 0 0
Oct, 95000 9000 95000 99000 9000 9900 95000 99000 95000 90000
2008 0 0 0
Nov, 82000 8200 87000 84000 8200 8800 87000 88000 86000 82000
2008 0 0 0
Dec, 83000 5500 56000 57000 5500 5900 59000 59000 52000 53000
2008 0 0 0

You as an Assistant Branch Manager of the Bank are entrusted the task of
selecting two account holders for sanctioning the loans. How you will select the
two individuals among the 10 applicants to give the loan using appropriate
statistical techniques? Give proper justification for your selection.

Ans.

We can take the probabilistic method of estimation of their ability to maintain


average balance and more.

1. Authentic mean of each A/C holder=

Am= ∑x/n

2.Standard dividend of the each monthly balance from the mean

√∑(x-x-)2
η-1

3.Calculate z variable (normal distribution)


For each a/c holders z = required monthly balance – x-
Standard distribution x √n

4.Convert z variable into probabilities and select two a/c holder with the
highest probability
So by these assumptions and justifications ,we can give loan to the a/c
holders with highest probability. They are

1.Customer No. IV with probability of 84


and

2.Customer No. VI with probability of 77


ASSIGNMENT

Name S.AMEER ABBAS

Roll No. 520955311

Course MBA-Semester-1
STATISTICS FOR
Subject
MANAGEMENT
Subject Code MB0024-Set-2
1. What do you mean by sample survey? What are the different
sampling methods? Briefly describe them.

Ans .

Sampling is that part of statistical practice concerned with the


selection of individual observations intended to yield some knowledge about
a population of concern, especially for the purposes of statistical inference.

Each observation measures one or more properties (weight, location,


etc.) of an observable entity enumerated to distinguish objects or individuals.
Survey weights often need to be applied to the data to adjust for the sample
design. Results from probability theory and statistical theory are employed to
guide practice.

Sampling Methods
Sampling methods are classified as either probability or non
probability. In probability samples, each member of the population has a
known non-zero probability of being selected. Probability methods include
random sampling, systematic sampling, and stratified sampling. In non
probability sampling, members are selected from the population in some
nonrandom manner. These include convenience sampling, judgment
sampling, quota sampling, and snowball sampling. The advantage of
probability sampling is that sampling error can be calculated.

Random sampling is the purest form of probability sampling. Each


member of the population has an equal and known chance of being selected.
When there are very large populations, it is often difficult or impossible to
identify every member of the population, so the pool of available subjects
becomes biased.

Systematic sampling is often used instead of random sampling. It is


also called an Nth name selection technique. After the required sample size
has been calculated, every Nth record is selected from a list of population
members. As long as the list does not contain any hidden order, this
sampling method is as good as the random sampling method. Its only
advantage over the random sampling technique is simplicity. Systematic
sampling is frequently used to select a specified number of records from a
computer file.

Stratified sampling is commonly used probability method that is


superior to random sampling because it reduces sampling error. A stratum is
a subset of the population that share at least one common characteristic.
Examples of stratums might be males and females, or managers and non-
managers. The researcher first identifies the relevant stratums and their
actual representation in the population. Random sampling is then used to
select a sufficient number of subjects from each stratum. "Sufficient" refers
to a sample size large enough for us to be reasonably confident that the
stratum represents the population. Stratified sampling is often used when
one or more of the stratums in the population have a low incidence relative
to the other stratums.

Convenience sampling is used in exploratory research where the


researcher is interested in getting an inexpensive approximation of the truth.
As the name implies, the sample is selected because they are convenient.
This non probability method is often used during preliminary research efforts
to get a gross estimate of the results, without incurring the cost or time
required to select a random sample.

Judgment sampling is a common non probability method. The


researcher selects the sample based on judgment. This is usually and
extension of convenience sampling.

Quota sampling is the non probability equivalent of stratified


sampling. Like stratified sampling, the researcher first identifies the stratums
and their proportions as they are represented in the population. Then
convenience or judgment sampling is used to select the required number of
subjects from each stratum. This differs from stratified sampling, where the
stratums are filled by random sampling.

Snowball sampling is a special non probability method used when


the desired sample characteristic is rare. It may be extremely difficult or cost
prohibitive to locate respondents in these situations. Snowball sampling relies
on referrals from initial subjects to generate additional subjects. While this
technique can dramatically lower search costs, it comes at the expense of
introducing bias because the technique itself reduces the likelihood that the
sample will represent a good cross section from the population.

2. What is the different between correlation and regression? What do you


understand by Rank Correlation? When we use rank correlation and when
we use Pearsonian Correlation Coefficient? Fit a linear regression line in
the following data –
X 12 15 18 20 27 34 28 48
Y 123 150 158 170 180 184 176 130
Ans.

In statistics, correlation (often measured as a correlation coefficient,


ρ) indicates the strength and direction of a relationship between two random
variables. The commonest use refers to a linear relationship. In general
statistical usage, correlation or co-relation refers to the departure of two
random variables from independence. In this broad sense there are several
coefficients, measuring the degree of correlation, adapted to the nature of
the data. Correlation refers to the interdependence or co-relationship of
variables

In statistics, regression or regression analysis includes any


techniques for modeling and analyzing several variables, when the focus is
on the relationship between a dependent variable and one or more
independent variables. More specifically, regression analysis helps us
understand how the typical value of the dependent variable changes when
any one of the independent variables is varied, while the other independent
variables are held fixed. Most commonly, regression analysis estimates the
conditional expectation of the dependent variable given the independent
variables — that is, the average value of the dependent variable when the
independent variables are held fixed. Regression is a way of describing how
one variable, the outcome, is numerically related to predictor variables.

Rank correlation is the study of relationships between different


rankings on the same set of items. A rank correlation coefficient
measures the correspondence between two rankings and assesses its
significance. An increasing rank correlation coefficient implies increasing
agreement between rankings. The coefficient is inside the interval [-1,1] and
assumes the value:
• -1 if the disagreement between the two rankings is perfect; one
ranking is the reverse of the other.
• 0 if the rankings are completely independent.
• 1 if the agreement between the two rankings is perfect; the two
rankings are the same.

Pearson correlation coefficient (sometimes referred to as the


PMCC, and typically denoted by r is a measure of the correlation (linear
dependence) between two variables X and Y, giving a value between +1 and
−1 inclusive. It is widely used in the sciences as a measure of the strength of
linear dependence between two variables.

LINEAR REGRESSION — a statistical tool used for forecasting future price.


The concept behind linear regression is to find the best estimate of the trend
given a noisy sample of data points.

3.What do you mean by business forecasting? What are the different


methods of business forecasting? Describe the effectiveness of time-series
analysis as a mode of business forecasting. Describe the method of
moving averages.

Ans.

Business Forecasting involves making the best possible judgment


about some future event. It is no longer reasonable to rely solely on
intuition, or one’s feel for the situation, in projecting sales, inventory needs,
personnel requirements, and other important economic or business variables.

Forecasting is an operational research technique used as a basis for


management planning and decision making. Common types of forecasting
include trend analysis, regression analysis, Delphi technique, time series
analysis, correlation, exponential smoothing, and input-output analysis.
Business forecasting is used by:
Accountants - costs, revenues, tax-planning
Personnel Departments - recruitment of new employees
Financial Experts - interest rates
Production Managers - raw materials needs, inventories
Marketing Managers - sales forecasts for promotions

Different methods of Forecasting:

Subjective Methods
Sales Force Composites
Customer Surveys
Jury of Executive Opinions
Delphi Method

Quantitative Methods
Exponential smoothing family

Time series method

Time series methods use historical data as the basis of estimating


future outcomes. In statistics, signal processing, and many other fields.A
time series is a sequence of data points, measured typically at successive
times, spaced at (often uniform) time intervals. Time series analysis
comprises methods that attempt to understand such time series, often either
to understand the underlying context of the data points (Where did they
come from? What generated them?), or to make forecasts (predictions).
Time series forecasting is the use of a model to forecast future events
based on known past events; to forecast future data points before they are
measured. A standard example in econometrics is the opening price of a
share of stock based on its past performance.

The effectiveness of time series analysis lies in the factor that it is


used to distinguish a problem, firstly from more ordinary data analysis
problems (where there is no natural ordering of the context of individual
observations), and secondly from spatial data analysis where there is a
context that observations (often) relate to geographical locations

Moving Averages

In statistics, a moving average, also called rolling average, rolling


mean or running average, is a type of finite impulse response filter used to
analyze a set of data points by creating a series of averages of different
subsets of the full data set. A moving average is not a single number, but it
is a set of numbers, each of which is the average of the corresponding subset
of a larger set of data points. A moving average may also use unequal
weights for each data value in the subset to emphasize particular values in
the subset. This is the least used technique

A moving average is commonly used with time series data to smooth


out short-term fluctuations and highlight longer-term trends or cycles. The
threshold between short-term and long-term depends on the application, and
the parameters of the moving average will be set accordingly. For example, it
is often used in technical analysis of financial data, like stock prices, returns
or trading volumes. It is also used in economics to examine gross domestic
product, employment or other macroeconomic time series. Mathematically, a
moving average is a type of convolution and so it is also similar to the low-
pass filter used in signal processing. When used with non-time series data, a
moving average simply acts as a generic smoothing operation without any
specific connection to time, although typically some kind of ordering is
implied.

The moving average approach calculates an average of the sample


observations and then employs that average as the forecast for the next
period. The number of sample observations included in the calculation of the
average is specified at the start of this process. The term MOVING average
means that as a new observation becomes available a new average is
calculated by dropping the oldest observation in order to include the newest
one.

Advantages:
1. Data requirements are small.
2. Better than using a simple arithmetic mean because it can be
adjusted to reflect the observable patterns in the data.

Disadvantages:
1. The past n sample observations must be available.
2. Equal weights are given to all past observations and no weight
is given to observations earlier than period t-n+1.

3. Assumes that the data has a stationary distribution (not always true ).

4. What is definition of Statistics? What are the different characteristics of


statistics? What are the different functions of Statistics? What are the
limitations of Statistics?

Ans.

Statistics can be defined as a mathematical science pertaining to the


collection, analysis, interpretation or explanation, and presentation of data,
while others consider it to be a branch of mathematics concerned with
collecting and interpreting data. Statisticians improve the quality of data with
the design of experiments and survey sampling. Statistics also provides tools
for prediction and forecasting using data and statistical models. Statistics is
applicable to a wide variety of academic disciplines, including natural and
social sciences, government, and business.

It is actually a collection of methods for planning experiments,


obtaining data and then organizing, summarizing, presenting, analyzing,
interpreting and drawing conclusions based on data. It can also be termed as
“statistics are the numerical statement of facts capable of analysis and
interpretation and the science of statistics is the study of the principles and
the methods applied in collecting, presenting, analysis and interpreting the
numerical data in any field of inquiry.”

Characteristics of Statistics

Some of its important characteristics are given below:

• Statistics are aggregates of facts.


• Statistics are numerically expressed.
• Statistics are affected to a marked extent by multiplicity of causes.
• Statistics are enumerated or estimated according to a reasonable
standard of accuracy.
• Statistics are collected for a predetermine purpose.
• Statistics are collected in a systemic manner.
• Statistics must be comparable to each other.

Functions of Statistics

Statistics helps in providing a better understanding and exact


description of a phenomenon of nature.

Statistical helps in proper and efficient planning of a statistical inquiry


in any field of study.

Statistical helps in collecting an appropriate quantitative data.


Statistics helps in presenting complex data in a suitable tabular,
diagrammatic and graphic form for an easy and clear comprehension of the
data.

Statistics helps in understanding the nature and pattern of variability


of a phenomenon through quantitative observations.

Statistics helps in drawing valid inference, along with a measure of


their reliability about the population parameters from the sample data.

Important limitations of statistics are:

Statistics laws are true on average. Statistics are aggregates of facts.


So single observation is not a statistics, it deals with groups and aggregates
only.

Statistical methods are best applicable on quantitative data.

Statistical methods cannot be applied to heterogeneous data.

Its sufficient care is not exercised in collecting, analyzing and


interpretation the data, statistical results might be misleading.

Only a person who has an expert knowledge of statistics can handle


statistical data efficiently.

Some errors are possible in statistical decisions. Particularly the


inferential statistics involves certain errors. We do not know whether an error
has been committed or not.

5.What are the different stages of planning a statistical survey? Describe


the various methods for collecting data in a statistical survey.

Ans.

To Plan a statistical survey:

Agencies initiating a new survey or major revision of an existing


survey must develop a written plan that sets forth a justification, including:
goals and objectives; potential users; the decisions the survey is designed to
inform; key survey estimates; the precision required of the estimates (e.g.,
the size of differences that need to be detected); the tabulations and analytic
results that will inform decisions and other uses; related and previous
surveys; steps taken to prevent unnecessary duplication with other sources
of information; when and how frequently users need the data; and the level
of detail needed in tabulations, confidential micro data , and public-use data
files.

Planning is an important prerequisite when designing a new survey or


survey system, or implementing a major revision of an ongoing survey.

Key planning statistical survey activities include the following:

1. A justification for the survey, including the rationale for the survey,
relationship to prior surveys, survey goals and objectives (including priorities
within these goals and objectives), hypotheses to be tested, and definitions
of key variables. Consultations with potential users to identify their
requirements and expectations are also important at this stage of the
planning process.
2. A review of related studies, surveys, and reports of Federal and non-
Federal sources to ensure that part or all of the survey would not
unnecessarily duplicate available data from an existing source, or could not
be more appropriately obtained by adding questions to existing Federal
statistical surveys.
3. A review of all survey data items, the justification for each item, and how
each item can best be measured (e.g., through questionnaires, tests, or
administrative records). Agencies should assemble reasonable evidence that
these items are valid and can be measured both accurately and reliably, or
develop a plan for testing these items to assess their accuracy and reliability.
5. A plan for pre-testing the survey or survey system, if applicable
6. A plan for quality assurance during each phase of the survey process to
permit monitoring and assessing performance during implementation. The
plan should include contingencies to modify the survey procedures if design
parameters appear unlikely to meet expectations (for example, if low
response rates are likely). The plan should also contain general specifications
for an internal project management system that identifies critical activities
and key milestones of the survey that will be monitored, and the time
relationships among them.
7. A plan for evaluating survey procedures, results, and measurement error
8. An analysis plan that identifies analysis issues, objectives, key variables,
minimum substantively significant effect sizes, and proposed statistical tests.
9. An estimate of resources and target completion dates needed for the
survey cycle.
10. A dissemination plan that identifies target audiences, proposed major
information products, and the timing of their release.

Methods for collecting data in a statistical survey:

Statistical Data:
A sequence of observation, made on a set of objects included in the
sample drawn from population is known as statistical data.

(1) Ungrouped Data:


Data which have been arranged in a systematic order are called raw
data or ungrouped data.

(2) Grouped Data:


Data presented in the form of frequency distribution is called grouped
data.

Collection of Data:
The first step in any enquiry (investigation) is collection of data. The
data may be collected for the whole population or for a sample only. It is
mostly collected on sample basis. Collection of data is very difficult job. The
enumerator or investigator is the well trained person who collects the
statistical data. The respondents (information) are the persons whom the
information is collected.

Types of Data:
There are two types (sources) for the collection of data.
(1) Primary Data (2) Secondary Data

(1) Primary Data:


The primary data are the first hand information collected, compiled
and published by organization for some purpose. They are most original data
in character and have not undergone any sort of statistical treatment.
Example: Population census reports are primary data because these are
collected, complied and published by the population census organization.

(2) Secondary Data:


The secondary data are the second hand information which are
already collected by some one (organization) for some purpose and are
available for the present study. The secondary data are not pure in character
and have undergone some treatment at least once.
Example: Economics survey of England is secondary data because these are
collected by more than one organization like Bureau of statistics, Board of
Revenue, the Banks etc…

Methods of Collecting Primary Data:


Primary data are collected by the following methods:

• Personal Investigation: The researcher conducts the survey


him/herself and collects data from it. The data collected in this way is
usually accurate and reliable. This method of collecting data is only
applicable in case of small research projects.

• Through Investigation: Trained investigators are employed to collect


the data. These investigators contact the individuals and fill in
questionnaire after asking the required information. Most of the
organizing implied this method.

• Collection through Questionnaire: The researchers get the data


from local representation or agents that are based upon their own
experience. This method is quick but gives only rough estimate.

• Through Telephone: The researchers get information through


telephone this method is quick and give accurate information

Methods of Collecting Secondary Data:


The secondary data are collected by the following sources:

• Official: e.g. The publications of the Statistical Division, Ministry of


Finance, the Federal Bureaus of Statistics, Ministries of Food,
Agriculture, Industry, Labor etc…

• Semi-Official: e.g. State Bank, Railway Board, Central Cotton


Committee, Boards of Economic Enquiry etc…

• Publication of Trade Associations, Chambers of Commerce etc…

• Technical and Trade Journals and Newspapers.

• Research Organizations such as Universities and other institutions.


6.What are the functions of classification? What are the requisites of a
good classification? What is Table and describe the usefulness of a table in
mode of presentation of data?

Ans.

The process of arranging data into homogenous group or classes


according to some common characteristics present in the data is called
classification. Classification is a process of statistical analysis. For Example:
The process of sorting letters in a post office, the letters are classified
according to the cities and further arranged according to streets

Functions of classification are

a. It reduce the bulk data

b. It simplifies the data and makes the data more comprehensible

c. It facilitates comparison of characteristics

d. It renders the data ready for any statistical analysis

e.

Requisites of a good classification are

i. Unambiguous: It should not lead to any confusion

ii. Exhaustive: every unit should be allotted to one and only one class

iii. Mutually exclusive: There should not be any overlapping

iv. Flexibility: It should be capable of being adjusted to changing situation

v. Suitability: It should be suitable to objectives of survey

vi. Stability: It should be remain stable through out the investigation

vii. Homogeneity: Similar units are essential features of the collected data.
TABLE:

The process of placing classified data into tabular form is known as


tabulation. A table is a symmetric arrangement of statistical data in
rows and columns. Rows are horizontal arrangements whereas columns are
vertical arrangements. It may be simple, double or complex depending upon
the type of classification.

The basic structure of a table is a set of columns and rows that contain
the data and usually contain either a row or column (or both) of headings
that organize the data. A table is generally less effective than a graph
because it only shows the data, whereas the graph shows an interpretation of
the data, which is easier for the audience to understand. When you are
presenting a table, you will need to provide the interpretation of the data for
the audience. One way to make certain cells stand out is to change the
background color of the cell or enhance the text by changing the color or
making it bolder. Column and/or row headings should be bolded to
distinguish them from the data. Most presentation software packages have a
built-in table creation tool that will serve most purposes quite well.

A table works best when:

--It is used to look up individual values


--It is used to compare individual values
--The values must be expressed precisely

Uses of a table in presentation are:


• To simplify complex data

• To highlight important characteristics

• To present data in minimum space

• To facilitate comparison

• To bring out trends and tendencies


• To facilitate further analysis

• A table helps organise information so it is easier to see patterns and


relationships.

• If a variable is continuous the table reveals a lot more information. It


may show the range, interval, and number of readings.

• Tables with multiple variables can provide a lot of information. They


can be read by selecting and controlling factors to search for patterns
in the data.