Series 2 Examination 2008

BUSINESS STATISTICS
Level 2 Monday 7 April Subject Code: 2009 Time allowed: 2 hours 30 minutes

INSTRUCTIONS FOR CANDIDATES Answer 4 questions. All questions carry equal marks. There is a list of formulae at the end of the paper. Graph paper is provided within the answer book. Write your answers in blue or black ink/ballpoint. Pencil may be used only for graphs, charts, diagrams, etc. All answers must be correctly numbered but need not be in numerical order. Workings must be shown. Make sure your answers are accurate and neat. You may use a calculator provided the calculator gives no printout, has no word display facilities, is silent and cordless. The provision of batteries and their condition is your responsibility.

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ASE 2009 2 08 1

QUESTION 1 The following table shows the age profile of the workforce of a large retail store. Age of workforce, t (years) 16 t < 20 20 t < 24 24 t < 30 30 t < 40 40 t < 50 50 t < 65 Number of employees 18 28 26 24 20 4

(a) Draw an ogive (cumulative frequency curve) for the above data. (6 marks) (b) Use the ogive to estimate (i) (ii) the median the quartile deviation. (6 marks) (c) Give one advantage and one disadvantage in using the median as a measure of location in this case. (4 marks) (d) Use the ogive to estimate the percentage of workers between 35 and 55 years of age. (4 marks) (e) Calculate the probability that of two randomly chosen workers from the store, one is under 20 years of age and the other is 40 years or over. (5 marks) (Total 25 marks)

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QUESTION 2 The following data shows the dividend yield and the price earnings ratio for a random sample of 8 companies quoted on the London Stock Exchange. Company A B C D E F G H Source: Financial Times 22.10.07 Dividend Yield % 4.2 3.4 1.6 6.8 2.0 2.4 1.2 5.4 Price earnings ratio 10.6 9.2 18.3 16.1 28.1 11.1 21.6 3.0

(a) Plot these data on a scatter diagram. (4 marks) (b) What extra information might be given by the scatter diagram that is not provided by the product moment correlation coefficient? (2 marks) (c) Calculate the product moment correlation coefficient between dividend yield and price earnings ratio and comment on your result. (11 marks) (d) Calculate the coefficient of determination and briefly outline in context what this measures. (4 marks) (e) Explain how you would attempt to forecast the price earnings ratio for another company if you were given the dividend yield. Discuss the likely accuracy of such a forecast. (4 marks) (Total 25 marks)

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QUESTION 3 The following data shows the holiday destinations chosen by customers of a travel agency in 2001 and 2006. Destination Europe North America Australia Other Total 2001 260 375 140 95 870 Number of customers 2006 280 590 370 110 1350

(a) Represent this information by a percentage component bar chart using two bars, one for each of the two years 2001 and 2006. (10 marks) (b) Describe three changes in the travel market as shown by this data. (3 marks) The travel agent plans to undertake a customer survey using a sample of 50 customers taken from the 1350 who used the agency in 2006. (c) Explain how the sample of 50 might be chosen using the following sampling methods (i) (ii) systematic sampling stratified sampling based on the percentage of customers visiting each destination in 2006. (8 marks)

The survey data is to be collected using either a postal questionnaire or direct interviews. (d) Give one advantage and one disadvantage of using each of these methods. (4 marks) (Total 25 marks)

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QUESTION 4 (a) Explain the meaning of the terms independent event and mutually exclusive event, giving a suitable business example of each. (4 marks) A large engineering company uses 3 different component suppliers X, Y, Z. 30% of the components are from supplier X, 25% from supplier Y and the remainder from supplier Z. Of those components delivered from supplier X, 40% arrive on time, 35% one day late and the remainder two days late. For components delivered from supplier Y, 55% arrive one day late, 12% two days late and the remainder on time. Of the deliveries from supplier Z, 20% arrive on time, 75% one day late and the remainder two days late. (b) Use this information to draw a fully labelled tree diagram showing all possible outcomes. (11 marks) (c) Calculate the probability that a component selected at random (i) was supplied by company Y and arrived on time (ii) arrived late. (6 marks) (d) If three components are chosen at random with replacement, what is the probability that only one of the items will have arrived on time? (4 marks) (Total 25 marks)

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QUESTION 5 Seddon plc uses four materials A, B, C, D in the manufacture of a product. The ratio, by weight, of the four materials A, B, C, D needed to produce the product is 4 : 6 : 12 : 1. One kilogram of material D is used in the manufacture of each product. The costs per kilo of these raw materials in the years 2004 2006 were as follows: Raw material A B C D 2004 3.5 1.5 6 8.5 Cost per Kilo () 2005 3.5 1.7 6.8 9.2 2006 5.2 2.1 7.4 10

(a) Calculate weighted materials cost indices for 2005 and 2006 using 2004 as base year. (8 marks) An index of Seddons labour costs over the period, with Jan 2000 = 100 was as follows: Year Labour Cost Index 2004 120 2005 128 2006 137

(b) Convert the labour cost index to a series with 2004 = 100. (2 marks) (c) Compare the change in the labour cost index between 2004 and 2006 with the change in material cost over the same period. (2 marks) The following table shows the monthly value of Seddons sales during 2005 and 2006. Month January February March April May June July August September October November December Sales (000) 2005 32 36 41 42 46 51 52 54 48 45 34 39 Sales (000) 2006 29 31 38 39 43 48 47 44 39 38 29 34

(d) Construct a Z chart to represent the data. (10 marks) (e) Explain what your chart shows. (3 marks) (Total 25 marks)

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QUESTION 6 The following table shows the levels of profit (or loss) of a sample of 180 companies in the UK leisure sector in 2006. Profit ( million) -10 and under -4 -4 and under 0 0 and under 10 10 and under 20 20 and under 35 35 and under 60 Number of Companies 3 4 15 48 70 40

(a) Draw a histogram to represent the data and comment on its shape. (9 marks) (b) Estimate from the histogram the modal profit. (3 marks) (c) Calculate estimates of the mean and standard deviation of the profits shown. (9 marks) A second sample of 400 companies in the leisure sector was taken. The mean profit for this sample was 27.6 million. (d) Find the mean profit of the two samples combined. (4 marks) (Total 25 marks)

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LEVEL 2

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Education Development International plc 2008