BMA 2202 STATISTICS 1

1. a) Defining terms as used in business statistics.

Census – Procedure of systematically acquiring and recording information about the members of
a given population.

Primary data- Information collected for the first time by a researcher. It can be collected
through different methods, for instance observation, interviews and experimentation.

Secondary data – This is information collected already but it can be used to solve the problem
at hand. The information sources are journals, internet, textbooks and newspapers.

Discrete variables–These are variables which assume countable values in a given way.

Continuous variables – These are variables which have an infinite number of possible values.

Coefficient of variation – This is the absolute measure of variation for the purpose of
comparison. It is given by dividing the standard deviation with the arithmetic mean and its
expressed as a percentage.

b) Two merits and two demerits of arithmetic mean as a measure of Central Tendency.

Merits of arithmetic mean

It is easy to calculate and simple to follow

It is based on all observations

Demerits of arithmetic mean

It is highly affected by extreme values

It cannot be computed accurately if any item is missing

c) (I) Sketch a graph to illustrate a negative skewed distribution.

Fig.1. Showing negative skewed distribution.

(ii) Two features of negatively skewed distribution

Negative skewness indicates a distribution with an asymmetric tail extending toward more
negative values

The mean is to the left of the peak

d) Four features of a normal distribution

It is unimodal– values mound up only in the center of the curve

The upper and lower quartiles are equidistant from the average.

The area under the curve is equal to one.

It is symmetrical.
e) Relative measure of dispersion – These are pure numbers independent of the units of
measurement and used to compare two or more sets of data values.

f) Distinguish between skewness and kurtosis.

Skewness - is when a distribution is asymmetrical in a statistical distribution in which the curve

appears distorted or skewed either to the left or to the right.

Kurtosis –This is the measure of peakedness or flatness of a distribution

g) Consider the following stem and leaf plot.

12, 16, 19, 20, 22, 26, 28, 28, 28, 29, 31, 33, 37, 40, 56, 57, 59,59, 73, 74, 74, 76, 77, 81, 83

Class 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80-89

Frequency 3 7 3 1 4 0 5 2

C. F 3 10 13 14 18 18 23 25

Class X F FX X² FX²

10-19 14.5 3 43.5 210.25 630.25

20-29 24.5 7 171.5 600.25 4201.75

30-39 34.5 3 103.5 1190.25 3570.75

40-49 44.5 1 44.5 1980.25 1980.25

50-59 54.5 4 218 2970.25 11881

60-69 64.5 0 0 4160.25 0

70-79 74.5 5 372.5 5550.25 27751.25

 80-89 84.5 2 169 7140.25 14280.5

Ex² = 23802 Ex² =

64296.25

I) State the mode and median of the data

Mode = L mode + f1–f0 ×i

2fi - f0 - f2

= 19.5 + 7 – 3 ×10
2(7) – 3 - 3

=19.5 + 4 10
8

= 19.5 + (0.5)10

= 19.5 +5.0
= 24.5

Median = 25 = 12.5,
2
median class = 30 – 39, Lower limit = 29.5

N = 25

CFM= 10

FM = 3

I = 10

Therefore median = 29.5 + 25 - 10 10

2
3

= 29.5 + 12.5 – 10 10
3

= 29.5 + 2.5 10 = 29.5 + (0.83 ×10)

3

= 29.5 + 8.3

= 37.8

ii) Calculate the mean, standard deviation and the variance

Mean = Σfx = 1122.5

Σf 25
 = 44.9

Standard deviation = Σfx ² - Σfx

Σf Σf

= 64296.25 - 1122.5
25 25

= 64296.25 + 1260006.25
25 625

S.D = 555.84

= 23.58

Variance = r² = 23.58²
 = 555.84

iv ) Coefficient of skewness

= Mean – mode
Standard deviation

= 44.9 –24.5 = 0.86

23.58
Comment on the skewness: Positive skewness

h)
Solution.
h) What is the probability that this kind of orange will mature in less than
4.15 years
Normal distribution =
Mean = 4.26 years
Variance = 0.0016 years
r² = 0.0016
Standarddeviation=r = 0.04
Therefore,Z = X – mean
S.D
= 4.15 - 4.26 = - 2.75
0.04
ii) Compute the probability that the maturity period will range between 4.20
years and 4.32 years.

Z = 4.20 – 4.26
0.04
 = - 1.5
Z = 4.32 – 4.26
0.04
= 1.5
iii) What is the probability that this kind of orange will mature in more than
4.38 years.
Z = 4.38 – 4.26
0.04
= +3

iv) Differentiate between the normal curve and the standard normal curve
Normal curve is a distribution determined by two parameters, the mean and the
variance while standard normal curve is a distribution with zero mean and variance
one which is used to construct tables of normal distribution.

I)
Solution
Required:
i. Assist the student to construct a frequency distribution for this data (use a
class width of five(5))
Age 15-19 20-24 25-29 30-34 35-39 40-44 45-49

Frequency 5 3 4 5 3 3 1

Class X F CF FX X² FX ²

15-19 17 5 5 85 289 1445

20-24 22 3 8 66 484 1452

25-29 27 4 12 108 729 2916

30-34 32 5 17 160 1024 5120

35-39 37 3 20 111 1369 4107

40-44 42 3 23 126 1764 5292

45-49 47 1 24 47 2209 2209

Σf=24 Σfx=703 Σx²=7868 Σfx²=22541

ii. Using the frequency distribution in (i) above, calculate the mean, median,
mode and the standard deviation of the data
Mean = Σfx =703
Σf 24
= 29.29

Median = 24.5 + 24 - 8 ×5
2
4

= 24.5 + (12 – 5) ×5
4
= 24.5 + (4)× 5
4

= 24.5 + (1×5)
= 24.5 + 5

= 29.5

Mode =Mode = Lmode + f1 – f0 ×i

 2fi - f0 - f2

29.5 + 5 – 4 × 5
2(5) – 4 – 3

= 29.5 +(⅓)× 5 = 29.5 + (0.33)5

= 29.5 + 1.65

= 31.15

Standard deviation = Σfx ² - Σfx²

Σf Σf

= 22541– 703²
24 24

= 22541–494209
24 24

= 939.21 – 858.001
 = 81. 209

r = 9.01

iii. Compute the coefficient of skewness for the data above and briefly
comment on the value obtained.
Coefficient of skewness = Mean – Mode
S.D
= 29.29 –31.15
9.01
= -0.2064
Comment: The coefficient of skewness is negatively skewed distribution.
iv. Calculate the percentile coefficient of Kurtosis and briefly comment on
the value obtained
C. K = ½(Q3-Q1)
P9o - P1o

Q1= 19.5 + 24 – 5 5
 4
3

= 19.5 + (⅓)5
= 19.5 + 1.67
= 21.17

Q3 = 29.5 + (¾N – 12) 5

5
=29.5 + (18-12)5
5

= 29.5 + (6) × 5
5
= 29.5 + 6 =
C. K = ½(Q3 - Q1)

= ½(35.5 –21.17)

= ½ (14.33)

C. K = 7.165

j) Solutuin
I. Compute the coefficient of variation for each supermarket.

Month FA FB FAX FBX X² Fx²A Fx²B

x
1 65 28 65 28 1 65 28
2 48 33 96 66 4 192 132
3 15 20 45 60 9 135 180
4 28 23 112 92 16 448 368
5 41 69 205 345 25 1025 1725
6 59 45 354 270 36 2124 1620
7 41 53 287 371 49 2009 2597
8 10 15 80 120 64 640 960
9 24 35 216 315 81 1944 2835
10 56 57 560 570 100 5600 5700
11 92 99 1012 1089 121 11132 11979
12 120 136 1440 1632 144 17280 19584
599 613 ΣfAx=4472 ΣfBX=4958 42594 47708

Mean = Σfx = 4472

Σf 599

= 7.47

Standard deviation for supermarket A

r = Standard deviation = Σfx ² - Σfx²

Σf Σf

=
42594–(4472)²
= 599 (599)²
r = 42594 – 19998784 = 71.11 – 55.74
599 358801

= 15.37 = 3.92

r = 3.92

Coefficient of variation of Supermarket A

C. V = Standard deviation × 100%

Mean

= 3.92 × 100%
7.47

= 52.48%

Coefficient of variation for supermarket B

Mean = 4958
613

= 8.09

Standard deviation for supermarket B

r = (ΣfxB)² - (ΣfxB)²
Σf (Σf)²
r = 47708 - (4958)²
613 (613)²

= 77.83 – 65.42

= 12.41

r = 3.52

Coefficient of variation for supermarket B

Standard deviation× 100%

Mean

= 3.52 × 100%
8.09

= 43.51%

II. Indicate for which supermarket the variability of profits is relatively

greater.

The variability of profits is relatively greater in supermarket A because it has

a greater percentage of 52.48% which is greater than the percentage of
Supermarket B which has a coefficient of variation of 43.51%.