Examiner’s Report and

Model Answers for

Business Statistics

THIRD LEVEL
Series 2 (Code 3609) 2001
Malaysia

LCCI Examinations Board MH N T354 9 TNM

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Business Statistics Third Level (Malaysia)
Series 2 2001

How to use this booklet

Examiners’ Reports and Model Answers have been developed by LCCIEB to offer additional
information and guidance to Centres, teachers and candidates as they prepare for LCCIEB
examinations. The contents of this booklet are divided into 5 elements:

(1) General Comments – assessment of overall candidate performance in this examination,

providing general guidance where it applies across the
examination as a whole

(2) Questions – reproduced from the printed examination paper

(3) Model Answers – summary of the main points that the Chief Examiner expected to
see in the answers to each question in the examination paper

(4) Examiner’s Report – constructive analysis of candidate error, areas of weakness and
other comments that apply to each question in the examination
paper

(5) Helpful Hints – where appropriate, additional guidance relating to individual

questions or to examination technique

Teachers and candidates should find this booklet an invaluable teaching tool and an aid to success.

The London Chamber of Commerce and Industry Examinations Board provides Model Answers to
help candidates gain a general understanding of the standard required. The Board accepts that
candidates may offer other answers that could be equally valid.

Note

LCCIEB reserves the right not to produce an Examiner’s Report, either for an examination paper as a
whole or for individual questions, if too few candidates were involved to make an Examiner’s Report
meaningful.

© LCCI CET 2001

All rights reserved; no part of this publication may be reproduced, stored in a retrieval system or
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published, without the prior consent of the Publisher.

Typeset, printed and bound by the London Chamber of Commerce and Industry Examinations Board.

1
2
Business Statistics Third Level (Malaysia)
Series 2 2001
GENERAL COMMENTS

The paper followed the usual format and presented a fair examination of candidates’ knowledge of
Third Level Business Statistics. Most candidates were well prepared and so scored high marks. As
ever, there were a small number of candidates who had clearly not prepared to the Third Level
standard. Candidates who rely on Second Level knowledge only will not pass this Third Level paper.

3
4
Business Statistics Third Level (Malaysia)
Series 2 2001

QUESTION 1

A company which specialises in selling electronic products advertises its goods on a monthly basis in
a series of specialist magazines. The company’s head of marketing believes that monthly sales are
linked to monthly advertising expenditure. The table below contains information relating to monthly
sales and monthly advertising expenditure over a twelve month period:

Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales 120 110 130 120 140 160 160 150 140 180 190 200
(RM 000)
Advertising 6 6 7 5 7 8 8 8 8 9 10 10
Expenditure
(RM 000)

(a) Produce a scatter graph which represents the relationship between monthly sales and monthly
advertising expenditure and comment on the relationship.
(4 marks)

(b) Calculate the product moment correlation coefficient between monthly sales and monthly
advertising expenditure.
(10 marks)

(c) Carry out a suitable test to ascertain whether the correlation coefficient is significantly different
from zero.
(6 marks)

(Total 20 marks)

5
Model Answer to Question 1

(a)

Comment: Positive or linear

(b) Month Sales Advertising

(RM 000) Expenditure
(RM 000)
2 2
x y xy x y
J 6 120 720 36 14,400
F 6 110 660 36 12,100
M 7 130 910 49 16,900
A 5 120 600 25 14,400
M 7 140 980 49 19,600
J 8 160 1,280 64 25,600
J 8 160 1,280 64 25,600
A 8 150 1,200 64 22,500
S 8 140 1,120 64 19,600
O 9 180 1,620 81 32,400
N 10 190 1,900 100 36,100
D 10 200 2,000 100 40,000
92 1,800 14,270 732 279,200

6 CONTINUED ON NEXT PAGE

Model Answer to Question 1 continued

Correlation Coefficient

n ∑ xy – ∑ x ∑ y
r=
 (n ∑ x 2 – ( ∑ x )2 ) (n ∑ y 2 – ( ∑ y )2 ) 
 

12(14,270 ) – (92) (1,800 )

r=
((12(732) – (8,464) (12(279,200) – (3,240,000))

5,640
r=
((320) (110,400))

r = 0.9489

(c) H0: ρ = 0, H1 ρ ≠ 0

Critical t value (10 df, 5% and 1%) = 2.23 and 3.17

r n–2
t=
1 – r2

0.9489 12 – 2
t=
1 – 0.9004

3.0007
t= = 9.508
0.3156

The calculated t value is greater than both critical values.

There is strong evidence to reject H0. The correlation coefficient is significantly different from
zero.

Examiner’s Report on Question 1

A relatively straightforward question on correlation which most candidates attempted and scored well
on. Some marks were lost due to poor presentation of graphs.

HELPFUL HINTS

Ensure that you identify which variable is x and which is y. This will help you to set up your graph
axes correctly.

7
QUESTION 2

A study of sickness absence amongst hospital nursing staff was carried out. A random sample of 200
nurses was taken and the number of days of sickness absence per year was recorded. The grade of
each nurse was also recorded.

Number of days of sickness absence per year

Grade of nurse Less than 5 5 to 15 More than 15
Student 10 30 10
Newly qualified 10 40 50
Experienced 5 25 20

(a) Carry out an appropriate statistical test to investigate whether there is a relationship between the
grade of a nurse and the number of days of sickness absence per year.
(12 marks)

A previous study of sickness absence amongst nurses showed that the percentage of all nurses
taking less than 5 days absence per year was 15, the percentage taking between 5 and 15 days
absence was 50 and the percentage taking more than 15 days absence was 35.

(b) Combining the grades of nurses from part (a), test whether there has been a change in the
distribution of days of sickness absence per year.
(8 marks)

(Total 20 marks)

8
Model Answer to Question 2

(a)
Observed 10 30 10 50
10 40 50 100
5 25 20 50
25 95 80 200

Expected 6.25 23.75 20.00 50.00

12.50 47.50 40.00 100.00
6.25 23.75 20.00 50.00
25.00 95.00 80.00 200.00

Contribution to χ2 2.25 1.644737 5

0.5 1.184211 2.5
0.25 0.065789 0

χ 2 = 13.3947

Null Hypothesis: There is no relationship between the grade of nurse and the number of
days of sickness absence pa
Alternative Hypothesis: There is a relationship between the grade of nurse and the number of
days of sickness absence pa

Significance Level 5% or 1%
Degrees of Freedom (3 – 1) (3 – 1) = 4
Critical χ 2 Value 9.49 or 13.28

Calculated χ 2 Value = 13.3947

The calculated χ 2 value is greater than both critical values, there is strong evidence to reject the
null hypothesis. There does appear to be a strong relationship between the grade of nurse and
the number of days of sickness absence taken each year.

(b) Observed 25 95 80
Expected (% of 200) 30 100 70
2
Contribution to χ 0.8333 0.25 1.4286
2
Calculated χ Value = 2.5119

Null Hypothesis: No change in distribution of days of sickness absence

Alternative Hypothesis: There is a change

Significance Level 5% or 1%
Degrees of Freedom n–1=3–1=2
2
Critical χ Value 5.99 or 9.21

The calculated χ 2 value is less than both critical values, there is no evidence to reject the null
hypothesis. There does not appear to be any change in the distribution of days of sickness
absence since the last study.

9
Examiner’s Report on Question 2

Most candidates scored well on part (a) of this chi squared question. Many seemed confused as to
what was required in part (b). This is a common second part to a chi squared question and candidates
need to be prepared for it.

HELPFUL HINTS

Where the null hypothesis is rejected at 5%, candidates should go on to test at 1%.

Look back at past examination papers to see the different part (b) elements of a chi squared
question.

10
QUESTION 3

(a) Explain the difference between a Laspeyres price index and a Paasche price index. Include in
your answer, an advantage and disadvantage of using one of the methods.
(4 marks)

A manufacturing company regularly holds five items in stock. The company measures material price
inflation by constructing an all items Paasche price index. The table below contains the latest data
regarding the quantity and total cost of materials purchased. Similar information is provided in respect
of 1999.

Material Quantity Total Cost Quantity Total Cost

Purchased 1999 (RM) Purchased 2000 (RM)
1999 (Kg) 2000 (Kg)
A 500 3,500 650 5,200
B 300 4,200 300 4,200
C 100 1,750 120 2,400
D 200 4,500 250 6,250
E 400 4,800 350 4,900

(b) Calculate an all material items Paasche price index for 2000 based upon 1999 and comment on
the result.
(8 marks)

A small retail outlet buys and sells a product on a daily basis.

Daily demand for the product varies according to the following probability distribution.

Daily demand 100 200 250 300

Probability 0.1 0.6 0.2 0.1

(c) Calculate the expected daily demand for the product.

(3 marks)

The product costs RM 2 per unit and sells for RM 4.50 per unit. Any items left unsold at the end of the
day are resold back to the supplier for RM 1.25.

(d) Assuming that the retailer regularly buys in 250 units per day, calculate the expected daily profit.
(5 marks)

(Total 20 marks)

11
Model Answer to Question 3

(a) Difference due to origin of weights

Laspeyres base period weights

Paasche current period weights

Advantages
Laspeyres – less time consuming and less costly
– comparisons can be made between periods
Paasche – more up to date

Disadvantages
Laspeyres – may be out of date
– overstates price inflation
Paasche – more time consuming and costly
– understates price inflation

(b) p1q1 values are given in question (Total cost in 2000)

p0 values need to be calculated using the total cost and quantities given for 1999

Material Unit Price Quantity

p0 q1 p1q1 p0q1
A 7 650 5,200 4,550
B 14 300 4,200 4,200
C 17.5 120 2,400 2,100
D 22.5 250 6,250 5,625
E 12 350 4,900 4,200
22,950 20,675
(8,205,500) (6,550,000)

∑ p1q1
Paasche Price Index = x 100
∑ p0q1

∑ p1q1 22,950
x 100 = x 100 = 111.0 (125.3)
∑ p0q1 20,675

Comments: There has been an 11% increase in overall material costs.

(c) Expected value = ∑ (x.p(x))

Expected daily demand = (100 x 0.1) + (200 x 0.6) + (250 x 0.2) + (300 x 0.1)
= 10 + 120 + 50 + 30
= 210 units

12 CONTINUED ON NEXT PAGE

Model Answer to Question 3 continued

(d)
Daily Demand Prob Conditional Expected
Profit (RM) Profit (RM)
100 0.1 137.50 13.75
200 0.6 462.50 277.50
250 0.2 625.00 125.00
300 0.1 625.00 62.50
478.75

Examiner’s Report on Question 3

The explanation in part (a) was done well by many but very poorly by some. A lack of knowledge was
responsible for the poor explanation in most cases. However, in some cases answers were jumbled
up and it became difficult to interpret what was actually being said. Candidates need to express
themselves more clearly. A table headed Laspeyres and Paasche might help some candidates to
focus their thoughts.

The usual mistake was made of not separating out the price and quantities from the total cost figures
given. This resulted in a substantial loss of marks in part (b).

Parts (c) and (d) involved the use of expectation. Whilst most candidates scored well on part (c),
almost all failed to answer part (d) correctly. The main problem appeared to be that candidates
ignored the uncertain demand when calculating the expected daily profit.

HELPFUL HINTS

The calculation of a Laspeyres or Paasche Index is likely to involve initial separation of prices and
quantities (see past examinations).

13
QUESTION 4

The table below shows the amount spent by a company on energy over the past three and a half
years:

Energy Costs Per Quarter (RM 00s)

Year Quarter 1 Quarter 2 Quarter 3 Quarter 4
Jan - Mar Apr - June July - Sept Oct - Dec
1997 56 70
1998 60 30 50 68
1999 58 32 48 66
2000 56 30 48 64

(a) Plot a graph of the time series data and comment upon the movement within the data.
(4 marks)

(b) Using a suitable model, calculate a four-quarter moving average trend and the quarterly seasonal
variations.
(12 marks)

(c) Using the results from your analysis in part (b), forecast energy costs for the first two quarters of
2001.
(4 marks)

(Total 20 marks)

Model Answer to Question 4

(a)

Comment: Gentle downward trend/seasonal pattern present

14 CONTINUED ON NEXT PAGE

Model Answer to Question 4 continued

(b) Additive model should be used.

Year/Quarter Profit Add in fours Add in twos Trend S. V S. V

Y–T Y/T

1997 1

3 56

4 70
216
1998 1 60 426 53.250 6.750 1.127
210
2 30 418 52.250 –22.250 0.574
208
3 50 414 51.750 –1.750 0.966
206
4 68 414 51.750 16.250 1.314
208
1999 1 58 414 51.750 6.250 1.121
206
2 32 410 51.250 –19.250 0.624
204
3 48 406 50.750 –2.750 0.946
202
4 66 402 50.250 15.750 1.313
200
2000 1 56 400 50.000 6.000 1.120
200
2 30 398 49.750 –19.750 0.603
198
3 48

4 64

Additive
Quarter
Year 1 2 3 4

1998 6.750 –22.250 –1.750 16.250

1999 6.250 –19.250 –2.750 15.750
2000 6.000 –19.750

total 19.000 –61.250 –4.500 32.000

ASV 6.333 –20.417 –2.250 16.000 –0.333

15 CONTINUED ON NEXT PAGE

Model Answer to Question 4 continued

Multiplicative

Quarter
Year 1 2 3 4

1998 1.127 0.574 0.966 1.314

1999 1.121 0.624 0.946 1.313
2000 1.120 0.603

total 3.368 1.801 1.912 2.627

ASV 1.123 0.600 0.956 1.314 3.993

(c) Predicted Trend. Use average change in trend.

49.75 – 53.25
= –0.389
9

Forecast = predicted trend adjusted by average seasonal variation

Additive
2001 1 49.75 + 3(–0.389) + 6.333 = 54.916 (RM5491.6)
2 49.75 + 4(–0.389) + (–20.417) = 27.777 (RM2777.7)

Multiplicative
2001 1 49.75 + 3(–0.389) x 1.123 = 54.559 (RM5455.9)
2 49.75 + 4(–0.389) x 0.6 = 28.916 (RM2891.6)

Examiner’s Report on Question 4

A time series question on which most candidates scored well. The omission of data for the first two
quarters caused some confusion with a number of candidates assuming that these figures were both
zero. This is clearly wrong. Many failed to offer any comment regarding the movement of data.

HELPFUL HINTS

Remember to fully label graphs and diagrams

When stating answers, include appropriate units

16
QUESTION 5

A company has recently introduced a revised remuneration scheme for its manual workers. The
management believe that the revised scheme will increase productivity. A random sample of nine
employees was taken just prior to the introduction of the revised scheme and their productivity was
measured.

A second random sample of nine different employees was taken after the introduction of the new
scheme and again their productivity was measured. Both sets of results are shown in the following
table:

Productivity
(Output per week in units)
Old Scheme Revised Scheme

48 49
48 50
52 54
46 44
40 40
50 52
54 52
58 56
52 54

(a) Briefly explain how you would decide whether to use a paired comparison t test or an
independent t test.
(4 marks)

(b) Carry out an appropriate test to ascertain whether the revised scheme has indeed improved
productivity.
(12 marks)

(c) Calculate a 99% confidence interval for the mean output per week per employee under the
revised remuneration schemes.
(4 marks)

(Total 20 marks)

17
Model Answer to Question 5

(a) Paired comparison t test

indication of pairing (before and after)

eg Before and after training

Independent t test

no evidence of pairing
samples independent
eg Production from two different factories

(b) Workings (b) and (c) (independent t test – no pairing)

Old New
x y x2 y2 ( x – x )2 ( y – y )2

48 49 2,304 2,401 3.160494 1.234568

48 50 2,304 2,500 3.160494 0.012346
52 54 2,704 2,916 4.938272 15.12346
46 44 2,116 1,936 14.2716 37.34568
40 40 1,600 1,600 95.60494 102.2346
50 52 2,500 2,704 0.049383 3.567901
54 52 2,916 2,704 17.82716 3.567901
58 56 3,364 3,136 67.60494 34.67901
52 54 2,704 2,916 4.938272 15.12346
448 451 22,512 22,813 211.5556 212.8889

old
448
mean x= = 49.78
9

new
451
mean y= = 50.11
9

∑( x – x )2 + ∑( y – y )2
Pooled st dev s=
n+m–2

211.5556 + 212.8889
s=
9+9–2

s= 26.5278

s= 26.5278 s = 5.15

18 CONTINUED ON NEXT PAGE

Model Answer to Question 5 continued

Null µx = µy
Alt µx < µy
Sig level 5% 0r 1%
degrees of freedom (n + m – 2) = 9 + 9 – 2 = 16
Critical value t = –2.12 or –2.92

x–y
Calculated value t=
1 1
s +
n m

49.78 – 50.11
t=
 1 1
5.15  + 
9 9

–0.33
t= = –0.1359 alt (-0.1373)
2.4277

The calculated t value is greater than both critical values, there is no evidence to reject the null
hypothesis. The revised scheme does not appear to have improved productivity.

451
(c) mean y= = 50.11
9

∑( y – y )2 212.8889
St dev sd = sd = sd = 5.16
n–1 8

s
Confidence Interval y±t
n

5.16
50.11 ± 3.36
9

50.11 +/ –5.7776

44.33 units to 55.89 units

Examiner’s Report on Question 5

This question was not well done. Most candidates were unable to offer a valid explanation in part (a)
and many chose the wrong test to apply in part (b). At this level candidates are expected to be able to
identify the appropriate test to use for the information given. This type of question is very likely to
appear on future papers.

HELPFUL HINTS

If two samples of individuals are used it is most likely that an independent t test is appropriate.

19
QUESTION 6

Company X employs three salespersons A, B and C. These salespersons visit any new customer
contacts that the company receives. The number of visits made to new customer contacts and the
number of new orders received in the last year, are shown in the table below.
(The new customer contacts are allocated to the salespersons at random and salespersons do not
visit other salesperson’s contacts).

Salesperson Visits Orders

A 400 35
B 200 25
C 400 60

(a) Find the probability that:

(i) a new customer contact is visited by salesperson B

(ii) an order is received following an initial visit by salesperson A

(iii) salesperson C made the initial visit given that no new order was received by any
salesperson.

(9 marks)

The best selling product of Company X is a general high protein animal feed (HPAF) which is sold in
bags with a stated weight of 25 kg. Because of the variability that exists in packaging the product, the
packaging process is set to fill each bag with on average 26.5 kg of the animal feed. (You may
assume that the packaging process follows a normal distribution with a standard deviation of 1.25 kg).

Industry quality regulations require that no more than one in 15 bags contain less than the stated
weight.

(b) Advise the company as to whether they are conforming to industry quality regulations in respect
of the packaging of this product.
(6 marks)

The company has decided to buy a new packaging machine which will reduce the variability relating to
the packaging process. The new packaging process continues to follow a normal distribution but now
with a standard deviation of 400 g.

(c) How much feed on average should each bag now be filled with in order to satisfy the industry
quality regulations?
(5 marks)

(Total 20 marks)

20
Model Answer to Question 6

(a) Tabulate data

A B C Total
Order 35 25 60 120
No Order 365 175 340 880
400 200 400 1,000

200
(i) p(B) = = 0.2
1,000

35
(ii) p(order | A) = = 0.0875
400

340
(iii) p(C | no order) = = 0.3864
880

Tree diagram

order or no order

(0.0875) o 0.4 x 0.0875 = 0.0350

0.4 x 0.9125 = 0.3650

A(0.4) (0.9125) no
o
(0.125) 0.2 x 0.125 = 0.0250
0.2 x 0.875 = 0.1750
B(0.2) (0.875) no

C(0.4) o
(0.15)
0.4 x 0.15 = 0.0600
(0.85) 0.4 x 0.85 = 0.3400
no 1.0000

200
(i) p(B) = = 0.2
1,000

35  .4 x .0875 
(ii) p(order | A) = = 0.0875  
400  .4 

0.34  .4 x .85 
(iii) p(Cno order) = = 0.3864  
0.88  .3650 + .1750 + .3400 

21 CONTINUED ON NEXT PAGE

Model Answer to Question 6 continued

(b) Find probability that a bag contains less than 25 kg.

x – µ 25 – 26.5
Z= = = –1.2
σ 1.25

Z = –1.2 area is 0.885

area of interest = 1 – 0.885 = 0.115

ie p(x < 25 kg) = 0.115

Since this is greater than 1 in 15 (0.067) so it appears that the packaging process does not
conform to industry quality regulations.

(c) Need to find the new mean value.

Industry quality regulations - p(x < 25 kg) = 0.067
area of interest = 0.067
area of tables = 0.933
Using tables Z = –1.5

x–µ 25 – µ
Z= –1.5 =
σ 0.4

µ = 25 + (1.5 x 0.4)

µ = 25.6 kg

Examiner’s Report on Question 6

Very few candidates attempted this question. Those who did, scored badly. Part (a) involved the
application of some basic probability rules, and part (b) required the use of the normal distribution.
These areas are fundamental to this paper and candidates must work to ensure that they understand
and can apply them. By ignoring these areas candidates are reducing their chances of success as
they reduce the choice to 5 from 7 questions.

HELPFUL HINTS

Work through the question!

22
QUESTION 7

(a) State four uses of the normal distribution

(4 marks)

A building contractor has been working for 25 days and is part way through a building project. In order
to complete the project he has to start and complete three independent tasks A, B and C which have
to be done in the order ABC. The times taken to complete these tasks follow normal distributions as
detailed below:

Task Mean (days) Standard Deviation

(days)
A 14 2
B 7 3
C 10 1

(b) Find the probability that the time taken to complete task A is:

(i) less than 12 days

(ii) greater than 17 days

(iii) between 12 and 17 days.

(6 marks)

(c) Find the probability of completing tasks A and B in less than a total of 16 days.
(5 marks)

If the project takes longer than 60 days the contractor will incur a penalty payment.

(d) Find the probability that the contractor will have to pay the penalty payment.
(5 marks)

(Total 20 marks)

23
Model Answer to Question 7

(a) Finding probabilities associated with normally distributed variables

Estimation - confidence intervals
Hypothesis testing
Statistical process control - quality control charts

x–µ 12 – 14
(b) (i) Z= Z= = –1
σ 2

area = 0.841

area of interest = 1 – 0.841 = 0.159

p(x < 12 days) = 0.159

17 – 14
(ii) Z= = 1.5
2

area = 0.933

area of interest = 1 – 0.933 = 0.067

p(x > 17 days) = 0.067

(iii) p(12 < x < 17) = 1 – (0.159 + 0.067) = 0.774

(c) mean = 14 + 7 = 21

st dev = 22 + 3 2 = 3.61

16 – 21
= –1.39 (say –1.4)
3.61

area = 0.919

area of interest = 1 – 0.919 = 0.081

p(y < 16 days) = 0.081

(d) mean = 14 + 7 + 10 = 31 days

st dev = 2 2 + 3 2 + 12 = 3.74

If remaining 3 tasks take longer than 35 days then the penalty will need to be paid.

35 – 31
= 1.07 (say 1.1)
3.74

area = 0.864 area of interest = 1 – 0.864 = 0.136

p(paying penalty payment) = 0.136

24
Examiner’s Report on Question 7

Another question on the normal distribution. This time many more candidates attempted the question
and most scored well. There was some confusion shown in dealing with part (d) with many candidates
forgetting that 25 days had already elapsed.

A number of candidates confused the term ‘uses’ with the term ‘features’ in answering part (a).

25
QUESTION 8

A random sample of 50 retail outlets reported their weekly sales figures for the year 2000 for a
particular product. The data has been set out in the following table:

Weekly Demand Number of outlets

(000s units)
0 and less than 5 8
5 and less than 10 11
10 and less than 15 14
15 and less than 20 10
20 and less than 25 7

(a) Using the data above, calculate the mean, the variance, the median and a measure of skewness.
Comment upon what the measure of skewness indicates.
(12 marks)

(b) In year 1999 the proportion of all retail outlets reporting weekly sales of 10,000 units or more was
0.57. Test whether there has been a significant increase in the proportion of outlets reporting
weekly sales in year 2000, of 10,000 units or more.
(8 marks)

(Total 20 marks)

26
Model Answer to Question 8

(a)

x f fx fx2

2.5 8 20.0 50.00

7.5 11 82.5 618.75
12.5 14 175.0 2,187.50
17.5 10 175.0 3,062.50
22.5 7 157.5 3,543.75
50 610.0 9,462.50

∑ fx 610
mean = = 12.2 (12,200 units)
∑f 50

2
∑ fx 2  ∑ fx 
variance var = – 
∑f  ∑f 

94,625
var = – (122)2
50

var = 189.25 – 148.84

var = 40.41 (40,410)

cm  n 
median = lm +  – Fm – 1 
fm  2 

5  50 
= 10 +  – 19 
14  2 

= 12.143 (12,143 units)

3( x – Med) 3(12.2 – 12.143)

Coefficient of = = = 0.027
Skewness sd 6.357

comment: positive skewness

position of mean and median

(b) Proportion of weeks where demand was 10,000 or more = 31/50 = 0.62

null hypothesis Π = 0.57

alt hypothesis Π > 0.57

sig level 5% and 1%

critical values 1.64 and 2.33

p–π 0.62 – 0.57

calc value Z= Z=
π(1 – π) 0.57(1 – 0.57)
n 50

Z = 0.7141

The calculated Z value is less than both critical values.

There is no evidence to reject the null hypothesis. There does not appear to be any difference in
the proportion of outlets when weekly sales were 10,000 units or more.

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Examiner’s Report on Question 8

A relatively simple question which was generally well done. Many candidates stated the standard
deviation as a measure rather than the variance, and most failed to include units in their answers.

In answering part (b), some candidates attempted to test the mean value or included a combination of
mean and proportion in their test.

HELPFUL HINTS

Do not forget to include comments where asked for

Set out your answer in a structured way

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