STATICS FOR MANAGEMENT

Name RATI BHAN

Roll No. 511022630
Program MBA
Subject STATICS FOR
MANAGEMENT [Set 1]
Code MB040
Learning IICM KINGSWAY CAMP
Centre

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Q.1 Elucidate the functions of statistics.?

Ans. Function of Statistics

Statistics is used for various

purposes. It is used to simplify mass data and to make comparisons
easier. It is also used to bring out trends and tendencies in the data
as well 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.

Hence, visual representation of numerical data helps you to

compare the data with less effort and can make effective decisions. The
graphical curve represented in figure 1.7 and figure 1.8 shows the
profits of CBA Company and ZYX Company respectively, for ten years
from 1998 to 2008. The profits are plotted on the Y-Axis and the timeline
in years on X-Axis. From the graphs, we can compare the profits of two
companies and derive to a conclusion that profits of CBA Company in the
year 2008 are higher than that of ZYX Company. The graphical curve in
case of figure 1.7 shows that the profits for CBA Company are
increasing, whereas the profits curve in figure 1.8 is constant for
ZYX Company from middle of the decade (1998-2008).

3. Statistics brings out trends and tendencies in the data

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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.

Q2. What are the methods of statistical survey? Explain briefly. ?

Ans :-
A Statistical survey is a scientific process of collection and analysis of
numerical data. Statistical surveys are used to collect numerical
information about units in a population. Surveys involve asking questions
to individuals. Surveys of human populations are common in
government, health, social science and marketing sectors.

2.2 Stages of Statistical Survey

Statistical surveys are categorized into two stages – planning and

execution.

STATISTICAL SURVEY

Primary Execution

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Planning a Statistical Survey

The relevance and accuracy of data obtained in a survey depends upon

the care exercised in planning. A properly planned investigation can lead
to best results with least cost and time.

Methods of Statistical Survey

There are several ways of administering a survey, including:

Telephone

• use of interviewers encourages sample persons to respond,

leading to higher response rates.[1]
• interviewers can increase comprehension of questions by
answering respondents' questions.
• fairly cost efficient, depending on local call charge structure
• good for large national (or international) sampling frames
• some potential for interviewer bias (e.g. some people may be more
willing to discuss a sensitive issue with a female interviewer than
with a male one)
• cannot be used for non-audio information (graphics,
demonstrations, taste/smell samples)
• unreliable for consumer surveys in rural areas where telephone
penetration is low[2]
• three types:
o traditional telephone interviews
o computer assisted telephone dialing
o computer assisted telephone interviewing (CATI)

Mail

• the questionnaire may be handed to the respondents or mailed to

them, but in all cases they are returned to the researcher via mail.
• cost is very low, since bulk postage is cheap in most countries
• long time delays, often several months, before the surveys are
returned and statistical analysis can begin
• not suitable for issues that may require clarification
• respondents can answer at their own convenience (allowing them
to break up long surveys; also useful if they need to check records
to answer a question)
• no interviewer bias introduced

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• large amount of information can be obtained: some mail surveys

are as long as 50 pages
• response rates can be improved by using mail panels
o members of the panel have agreed to participate
o panels can be used in longitudinal designs where the same
respondents are surveyed several

Online surveys

• can use web or e-mail

• web is preferred over e-mail because interactive HTML forms can
be used
• often inexpensive to administer
• very fast results
• easy to modify
• response rates can be improved by using Online panels - members
of the panel have agreed to participate
• if not password-protected, easy to manipulate by completing
multiple times to skew results
• data creation, manipulation and reporting can be automated
and/or easily exported into a format which can be read by PSPP,
DAP or other statistical analysis software
• data sets created in real time
• some are incentive based (such as Survey Vault or YouGov)
• may skew sample towards a younger demographic compared with
CATI
• often difficult to determine/control selection probabilities,
hindering quantitative analysis of data
• use in large scale industries.

Personal in-home survey

• respondents are interviewed in person, in their homes (or at the

front door)
• very high cost
• suitable when graphic representations, smells, or demonstrations
are involved
• often suitable for long surveys (but some respondents object to
allowing strangers into their home for extended periods)
• suitable for locations where telephone or mail are not developed
• skilled interviewers can persuade respondents to cooperate,
improving response rates
• potential for interviewer bias

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Personal mall intercept survey

• shoppers at malls are intercepted - they are either interviewed on

the spot, taken to a room and interviewed, or taken to a room and
given a self-administered questionnaire
• socially acceptable - people feel that a mall is a more appropriate
place to do research than their home
• potential for interviewer bias
• fast
• easy to manipulate by completing multiple times to skew results

Q3.Tabulate the following data:

Age: 20-40; 40-60;60-above
Departments: English, Hindi, Political science, History, sociology
Degree level: Graduates, Post graduates; PhD,
Total students in age group and in degree level.
Ans.

Departme Age TOTA

nt 20-40 40-60 60 ABOVE L
G P.G PH.D G P.G PH.D G P.G PH.D
. . . . . .
English
Hindi
Political
Science
History
Sociology
Total

Q4. The data given below is the distribution of employees of a

business according to their efficiency. Find the mean deviation
and coefficient of mean deviation from Mean and Median:

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Efficienc 22 - 26 26 - 30 30 - 34 34 – 38 38 – 42
y Index
Employe 25 35 15 5 2
es

Ans 4 :-
Efficien Freq Mid D = X- FD F [X- CF [X- F [X-
cy . Value 32 28.29] MED] MED]
Index (F) (X) 4
22 – 26 25 24 -2 - 107.25 25 3.82 95.5
50
26 – 30 35 28 -1 - 962.15 60 0.18 6.3
35
30 – 34 15 32 0 0 392.35 75 4.18 62.7
34 – 38 5 36 1 5 105.45 80 8.18 40.9
38 – 42 2 40 2 4 16.58 82 12.18 24.36
- 1583.7 229.76
76 8

Mean deviation:-
_
(X) = A + £FD × I
£F

= 32 + (- 76) × 4
82

= 32 – 3.707

= 28.29
_
(X) = A + £FD × I
£F

Mediation => Nth value = 82 => 41

2 2

Median class is 26 – 30

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Median = 26 + 41 – 25 × 4
35
= 26 + 16 × 4 = 26 + 1.82 = 27.82
35
MD of median = 229.76
82
= 2.80
Coefficient of M.D. :-
_ _
Mean (X) = 19.31 or [MD (X)]
28.29 X
= 0.6825

Median = 2.80
27.82 = 0.10064

Q.5 What is conditional probability? Explain with an example.

Conditional probability is the probability of some event A, given

the occurrence of some other event B. Conditional probability is written
P(A|B), and is read "the (conditional) probability of A, given B" or "the
probability of A under the condition B". When in a random experiment
the event B is known to have occurred, the possible outcomes of the
experiment are reduced to B, and hence the probability of the
occurrence of A is changed from the unconditional probability into the
conditional probability given B.

Joint probability is the probability of two events in conjunction. That is,

it is the probability of both events together. The joint probability of A and
B is written or

Marginal probability is then the unconditional probability P(A) of the

event A; that is, the probability of A, regardless of whether event B did or
did not occur. If B can be thought of as the event of a random variable X
having a given outcome, the marginal probability of A can be obtained
by summing (or integrating, more generally) the joint probabilities over
all outcomes for X. For example, if there are two possible outcomes for X
with corresponding events B and B', this means that
. This is called marginalization.

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In these definitions, note that there need not be a causal or temporal

relation between A and B. A may precede B or vice versa or they may
happen at the same time. A may cause B or vice versa or they may have
no causal relation at all. Notice, however, that causal and temporal
relations are informal notions, not belonging to the probabilistic
framework. They may apply in some examples, depending on the
interpretation given to events.

Conditioning of probabilities, i.e. updating them to take account of

(possibly new) information, may be achieved through Bayes' theorem. In
such conditioning, the probability of A given only initial information I,
P(A|I), is known as the prior probability. The updated conditional
probability of A, given I and the outcome of the event B, is known as the
posterior probability, P(A|B,I).

Introduction

Consider the simple scenario of rolling two fair six-sided dice, labelled
die 1 and die 2. Define the following three events (not assumed to occur
simultaneously):

A: Die 1 lands on 3.

B: Die 2 lands on 1.

C: The dice sum to 8.

The prior probability of each event describes how likely the outcome is
before the dice are rolled, without any knowledge of the roll's outcome.
For example, die 1 is equally likely to fall on each of its 6 sides, so
P(A) = 1/6. Similarly P(B) = 1/6. Likewise, of the 6 × 6 = 36 possible
ways that a pair of dice can land, just 5 result in a sum of 8 (namely 2
and 6, 3 and 5, 4 and 4, 5 and 3, and 6 and 2), so P(C) = 5/36.

Some of these events can both occur at the same time; for example
events A and C can happen at the same time, in the case where die 1
lands on 3 and die 2 lands on 5. This is the only one of the 36 outcomes
where both A and C occur, so its probability is 1/36. The probability of
both A and C occurring is called the joint probability of A and C and is
written , so . On the other hand, if die 2
lands on 1, the dice cannot sum to 8, so .

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Now suppose we roll the dice and cover up die 2, so we can only see die
1, and observe that die 1 landed on 3. Given this partial information, the
probability that the dice sum to 8 is no longer 5/36; instead it is 1/6,
since die 2 must land on 5 to achieve this result. This is called the
conditional probability, because it is the probability of C under the
condition that A is observed, and is written P(C | A), which is read "the
probability of C given A." Similarly, P(C | B) = 0, since if we observe die 2
landed on 1, we already know the dice can't sum to 8, regardless of what
the other die landed on.

On the other hand, if we roll the dice and cover up die 2, and observe die
1, this has no impact on the probability of event B, which only depends
on die 2. We say events A and B are statistically independent or just
independent and in this case

In other words, the probability of B occurring after observing that die 1

landed on 3 is the same as before we observed die 1.

Intersection events and conditional events are related by the formula:

In this example, we have:

As noted above, , so by this formula:

On multiplying across by P(A),

In other words, if two events are independent, their joint probability is

the product of the prior probabilities of each event occurring by itself.

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Definition

Given a probability space (Ω, F, P) and two events A, B ∈ F with P(B) > 0,
the conditional probability of A given B is defined by

If P(B) = 0 then P(A | B) is undefined (see Borel–Kolmogorov paradox for

an explanation). However it is possible to define a conditional probability
with respect to a σ-algebra of such events (such as those arising from a
continuous random variable).

For example, if X and Y are non-degenerate and jointly continuous

random variables with density ƒX,Y(x, y) then, if B has positive measure,

The case where B has zero measure can only be dealt with directly in the
case that B={y0}, representing a single point, in which case

If A has measure zero then the conditional probability is zero. An

indication of why the more general case of zero measure cannot be dealt
with in a similar way can be seen by noting that that the limit, as all δyi
approach zero, of

depends on their relationship as they approach zero. See conditional

expectation for more information.

Q6.The probability that a football player will play Eden garden is

0.6 and on Ambedkar Stadium is 0.4. The probability that he will
get knee injury when playing in Eden is 0.07 and that in

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Ambedkar stadium is 0.04.What is the probability that he would

get a knee injury if he played in Eden.

Ans: - Eaden Garden P (A) = 0.6

Ambedkar Stadium, P (B) = 0.4

After knee injury, P (A/D) = 0.07

(Eaden Garden)

After knee injury, P (B/D) = 0.04

(Ambedkar Stadium)

So, P (D/B) = ____[ P(B) { P(B/D)} ] .

P {P (A/D) + {P (B) P (B/D)}

= 0.4 * 0.04 .
0.6 * 0.07 + 0.4 * 0.04

= 0.016 .
0.042 +0.016

= 2.75

Therefore, the probability that he get a knee injury if he played in Eden

garden is 2.75

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