NBS

Business Mathematics &

Statistics
Assignment-1

PROBLEM 1:
a.) A storeowner kept a tally of the sizes of suits purchased in her store. Which measure
of central tendency should the storeowner use to describe the average size suit sold?
The storeowner should use Mean as a measure of central tendency to describe the average
size suit sold as mean helps to find out average value of observations and used when the the
data distribution is continuous and symmetrical and data is normally distributed.

b.) A tally was made of the number of times each color of crayon was used by a
kindergarten class. Which measure of central tendency should the teacher use to
determine which color is the favorite color of her class?

Mode should be used as a measure of central tendency by the teacher use to determine
which color is the favorite color of her class because mode is the value that appears most
often in a set of data and would help to determine the maximum trend in a nominal data.

c.) The science test grades are posted. The class did very well. All students taking the
test scored over 75. Unfortunately, 4 students were absent for the test and the
computer listed their scores as 0 until the test is taken. Assuming that no score
repeated more times than the 0's, what measure of central tendency would most
likely give the best representation of this data?

Median would most likely give the best representation of this data because median can be used
as a measure of location when a distribution is skewed, when end-values are not known, or when
one requires reduced importance to be attached to outliers, e.g., because they may be
measurement errors as the computer listed the scores of 4 students absent for the test as 0.

PROBLEM 2:
There are three different basketball teams and each has played five games. You have each
team's score from each of its games.
Game 1

Game 2

Game 3

Game 4

Game 5

Jaguars

67

87

54

99

78

Wolves

85

90

44

80

46

Lions

32

101

65

88

55

1.) Suppose you want to join one of the three basketball teams. You want to join the one
that is doing the best so far. If you rank each team by their mean scores, which team
would you join?
I would join Jaguars If I had to rank each team by their mean scores and choose as their mean
is highest i.e 77 as compared to the mean of Wolves (Mean 69) and Lions (Mean 68.2).
Mean Score of Jaguars = 67+87+54+99+78 = 385
5
Mean Score of Wolves = 85+90+44+80+46 =
5
Mean Score of Lions =

5
345

= 69

32+101+65+88+55 = 341
5

= 77

= 68.2

2.) Instead of using mean scores, you use the median score of each team to make your
decision. Which team do you join?
I would join Wolves If I had to rank each team by their median scores and choose as their
median is highest i.e 80 as compared to the median of Jaguars (Median 78) and Lions (Median
65 )
Median of Jaguars = 54, 67,78,87,99 = Middle most Value = 78
Median of Wolves = 44, 46 , 80, 85, 90 = Middle most Value = 80
Median of Lions =

32, 55, 65,88, 101 = Middle most Value = 65

3.) Pretend you are the coach of the Lions and you were being interviewed about your team for
the local newspaper. Would it be better for you to report your mean score or your median score?
It would better for me to report the mean score as the mean score of Lions is 68.2 which is
higher than and the median score which is 65.

PROBLEM 3:
You have four 10 km segments to your automobile trip. You drive your car:
o
o
o
o

100 km/hr for the first 10 km

110 km/hr for the second 10 km
90 km/hr for the third 10 km
120 km/hr for the fourth 10 km.
What is harmonic mean speed?

Distance
km
10
10
10
10

Velocity
km/hr
100
110
90
120

Time
hr
0.100
0.091
0.111
0.083

40

320

0.385
4

Inserting Values in harmonic mean formula:

PROBLEM 4:
Given the following frequency distribution of first year students of a particular college.
Calculate the Harmonic Mean.
Age (Years)

13

14

15

16

17

Number of
Students

13

Solution:
The table represents group data. Ages would be dealt as variables and number of students would
serve as frequency of grouped data to find H.M.
The given distribution belongs to a grouped data and the variable involved is ages of first year
students. While the number of students Represent frequencies.
Ages (Years)
x

Number of Students
f

1/x

13

0.154

14

0.357

15

13

0.867

16

0.438

17

0.177

Total

=(1/x)=1.993

Putting the data into the formula, we get:

5

H.M = f/ (f/x) =30/1.993= 15.05215years

PROBLEM 5:
Your investment earns 20% during the first year, but then realizes a loss of 10% in year 2,
and another 10% in year 3.
a) Calculate the arithmetic mean for the average rate of return?
b) Calculate the geometric mean rate of return?
c) Which of the two averages is accurate?
a) Arithmetic mean for given data-set = (20% -10% -10%)/3 = 0/3 = 0%
b) G.M. for ungrouped data =
= (1.2*.9*.9) ^ (1/3)
= 0.9905
G.M = 0.990578-1=-0.009422, when converted to %age gives -0.9422%
So for every $100 invested, there would be a loss of 94 cents.
c) G.M. is more accurate since it clearly demonstrates the loss money over the period of 3 years,
which comes out to be 0% by A.M.
PROBLEM 6:
Sales data for drug X for a small drug manufacturer is shown below.
Year

2002

2003

2004

2005

2006

Cases

12500

13250

14310

15741

17630

a) Calculate the percent increase from the previous in sales for years 2003, 2004, 2005 and
2006
b) Using the percentage numbers from above, calculate the arithmetic average percentage
increase.
6

c) Calculate the geometric mean rate of increase using numbers in a)

d) Project sales for the year 2009 using the geometric mean rate of increase calculated in c)
a) Growth percentage has been demonstrated below for each year
13250/12500=1.06; 14310/13250=1.08; 15741/14310=1.10; 17630/15741=1.12
Thus, % increase in 2003 relative to 2002 is 6%, since the growth factor is 1.06. The increase in
%age for other years is 8%, 10% and 12% respectively.
b) A.M. = (6%+8%+10%+12%)/4 = 36%/4 = 9%
c) Taking growth factors from part a) we would get
= (1.06*1.08*1.10*1.12) ^ (1/4) = (1.4104) ^ (1/4) = 1.089772
G.M. = 1.089772 1 = 0.089772, when multiplied by 100 we would get 8.9772%
This shows that sales have been growing at an annual rate of 8.9772% each year.
d) With annual sales growing at rate of 8.9722%, we can project sales for 2009 as follows.
For year 2007 = 1.089772*17630 = 19212
For year 2008= 1.089772*19212 = 20937
For year 2009= 1.089772*20937 = 22817