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Dean's Office Official Model Question Paper

MGT 202 · Business Statistics

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Programme
BBS
Academic year
First Year
Paper type
Official Model Question
Sitting
Dean's Office Blueprint
Full marks
100
Duration
180 minutes

Tribhuvan University

Faculty of Management

Office of the Dean

Official Model Question Paper / Dean's Office Blueprint

Course: MGT 202 · Business Statistics

Level: Bachelor of Business Studies (BBS) · First Year

Full Marks: 100

Time: 3 hrs.

Candidates are required to give their answers in their own words as far as practicable. The figures in the margin indicate full marks.

Group 'A'

Brief Answer Questions. Attempt ALL questions.

[10 × 2 = 20]
  1. If the mean of two samples of sizes 40 and 60 are 25 and 35 respectively, calculate the combined mean of the entire group.

    [2]
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    Solution:

    We are given:

    • N1=40,Xˉ1=25N_1 = 40, \quad \bar{X}_1 = 25
    • N2=60,Xˉ2=35N_2 = 60, \quad \bar{X}_2 = 35

    The formula for the combined arithmetic mean (Xˉ12\bar{X}_{12}) is:

    Xˉ12=N1Xˉ1+N2Xˉ2N1+N2\bar{X}_{12} = \frac{N_1 \bar{X}_1 + N_2 \bar{X}_2}{N_1 + N_2}

    Substituting the given values:

    Xˉ12=(40×25)+(60×35)40+60=1,000+2,100100=3,100100=31\bar{X}_{12} = \frac{(40 \times 25) + (60 \times 35)}{40 + 60} = \frac{1{,}000 + 2{,}100}{100} = \frac{3{,}100}{100} = \mathbf{31}

    Thus, the combined mean of the combined group is 31.

  2. If the standard deviation of a dataset XX is 6, find the standard deviation and variance of Y=3X+15Y = 3X + 15.

    [2]
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    Solution:

    Let Y=aX+bY = aX + b, where a=3a = 3 and b=15b = 15. Given: σX=6\sigma_X = 6.

    By the properties of standard deviation under linear transformation:

    • Standard deviation is independent of change of origin (bb), but dependent on change of scale (a|a|):

      σY=aσX=3×6=18\sigma_Y = |a| \cdot \sigma_X = |3| \times 6 = \mathbf{18}

    • Variance is the square of standard deviation:

      Var(Y)=σY2=182=324\text{Var}(Y) = \sigma_Y^2 = 18^2 = \mathbf{324}

    Thus, σY=18\sigma_Y = \mathbf{18} and Var(Y)=324\text{Var}(Y) = \mathbf{324}.

  3. In a moderately asymmetrical distribution, the lower quartile Q1=24Q_1 = 24, median Md=30M_d = 30, and upper quartile Q3=40Q_3 = 40. Compute Bowley’s coefficient of skewness and comment on its direction.

    [2]
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    Solution:

    Given:

    • Q1=24,Md=30,Q3=40Q_1 = 24, \quad M_d = 30, \quad Q_3 = 40

    Bowley’s coefficient of skewness (SbS_b) is given by:

    Sb=Q3+Q12MdQ3Q1S_b = \frac{Q_3 + Q_1 - 2M_d}{Q_3 - Q_1}

    Substituting the values:

    Sb=40+242(30)4024=646016=416=+0.25S_b = \frac{40 + 24 - 2(30)}{40 - 24} = \frac{64 - 60}{16} = \frac{4}{16} = \mathbf{+0.25}

    Interpretation: Since Sb=+0.25>0S_b = +0.25 > 0, the distribution is positively skewed (skewed to the right).

  4. The two regression coefficients between variables XX and YY are byx=0.8b_{yx} = -0.8 and bxy=0.45b_{xy} = -0.45. Find the correlation coefficient between XX and YY.

    [2]
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    Solution:

    Given:

    • byx=0.8b_{yx} = -0.8
    • bxy=0.45b_{xy} = -0.45

    The correlation coefficient (rr) is the geometric mean of the two regression coefficients, carrying their common sign:

    r=±byx×bxyr = \pm \sqrt{b_{yx} \times b_{xy}}

    Since both regression coefficients are negative, rr must also be negative:

    r=(0.8)×(0.45)=0.36=0.60r = -\sqrt{(-0.8) \times (-0.45)} = -\sqrt{0.36} = \mathbf{-0.60}

    Thus, the correlation coefficient between XX and YY is 0.60-0.60 (moderate negative correlation).

  5. Define Fisher’s Ideal Index number and state why it is called an ‘ideal’ index.

    [2]
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    Answer:

    Fisher’s Ideal Index Number is the geometric mean of Laspeyres’ index (LL) and Paasche’s index (PP):

    P01F=L×P=p1q0p0q0×p1q1p0q1×100P_{01}^F = \sqrt{L \times P} = \sqrt{\frac{\sum p_1 q_0}{\sum p_0 q_0} \times \frac{\sum p_1 q_1}{\sum p_0 q_1}} \times 100

    Why it is called ‘Ideal’:

    1. Geometric Mean: It utilizes the geometric mean, which is mathematically the most suitable average for ratios and index numbers.
    2. Dual Weighting: It incorporates both base year quantities (q0q_0) and current year quantities (q1q_1), avoiding the upward bias of Laspeyres and downward bias of Paasche.
    3. Fulfills Consistency Tests: It satisfies both the Time Reversal Test (P01×P10=1P_{01} \times P_{10} = 1) and the Factor Reversal Test (P01×Q01=V01P_{01} \times Q_{01} = V_{01}).
  6. Define Kurtosis and differentiate between Leptokurtic, Mesokurtic, and Platykurtic distributions using the measure β2\beta_2.

    [2]
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    Answer:

    Kurtosis refers to the degree of peakedness or flatness of a unimodal frequency distribution relative to a normal distribution.

    Based on Pearson’s coefficient of kurtosis β2=μ4μ22\beta_2 = \frac{\mu_4}{\mu_2^2}:

    1. Leptokurtic (β2>3\beta_2 > 3 or γ2>0\gamma_2 > 0): A distribution that is more peaked with fatter tails than the normal curve.
    2. Mesokurtic (β2=3\beta_2 = 3 or γ2=0\gamma_2 = 0): A distribution having normal peakedness (identical to the standard Gaussian/normal distribution).
    3. Platykurtic (β2<3\beta_2 < 3 or γ2<0\gamma_2 < 0): A distribution that is flatter-topped with thinner tails than the normal curve.
  7. A card is drawn from a well-shuffled pack of 52 playing cards. What is the probability that it is either a King or a Heart?

    [2]
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    Solution:

    Total number of exhaustive outcomes in a standard deck: n(S)=52n(S) = 52.

    • Let AA be the event of drawing a King: n(A)=4    P(A)=452n(A) = 4 \implies P(A) = \frac{4}{52}.
    • Let BB be the event of drawing a Heart: n(B)=13    P(B)=1352n(B) = 13 \implies P(B) = \frac{13}{52}.
    • Event (AB)(A \cap B) is drawing the King of Hearts: n(AB)=1    P(AB)=152n(A \cap B) = 1 \implies P(A \cap B) = \frac{1}{52}.

    By the Addition Theorem of Probability:

    P(AB)=P(A)+P(B)P(AB)P(A \cup B) = P(A) + P(B) - P(A \cap B)
    P(AB)=452+1352152=1652=4130.3077P(A \cup B) = \frac{4}{52} + \frac{13}{52} - \frac{1}{52} = \frac{16}{52} = \frac{\mathbf{4}}{\mathbf{13}} \approx \mathbf{0.3077}

    The probability of drawing a King or a Heart is 413\frac{4}{13}.

  8. List the four fundamental components of a time series.

    [2]
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    Answer:

    A business and economic time series comprises four classical components:

    1. Secular Trend (TT): The long-term, smooth, and persistent underlying direction (growth or decline) over an extended period.
    2. Seasonal Variations (SS): Periodic, repetitive fluctuations that occur within a single year at regular intervals (e.g., quarterly, monthly, festive peaks).
    3. Cyclical Fluctuations (CC): Wave-like oscillatory movements recurring over multi-year cycles, commonly linked to macroeconomic business cycles (prosperity, recession, depression, recovery).
    4. Irregular or Random Fluctuations (II): Unpredictable, unsystematic residual variations resulting from extraordinary events (e.g., natural disasters, wars, strikes, pandemics).
  9. State the key characteristics of a standard Normal Distribution curve.

    [2]
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    Answer:

    Key characteristics of the Normal Probability Distribution:

    1. Bell-shaped and Symmetrical: The curve is perfectly symmetrical around the mean (μ\mu), with Skewness = 0.
    2. Equality of Averages: The Mean, Median, and Mode coincide at the center: Mean=Median=Mode=μ\text{Mean} = \text{Median} = \text{Mode} = \mu.
    3. Asymptotic Tails: The curve approaches the horizontal axis asymptotically on both sides, extending to ±\pm \infty without touching the axis.
    4. Total Area: The total area under the normal curve is equal to 1 (or 100%), with 50% lying on either side of μ\mu.
    5. Empirical Rule: Approximately 68.27% of data falls within μ±1σ\mu \pm 1\sigma, 95.45% within μ±2σ\mu \pm 2\sigma, and 99.73% within μ±3σ\mu \pm 3\sigma.
  10. What is the difference between Primary Data and Secondary Data?

    [2]
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    Answer:

    Parameter Primary Data Secondary Data
    Origin Collected firsthand by the investigator for the specific purpose of the study. Gathered previously by external agencies or persons for other purposes.
    Originality Original in character; raw, unprocessed data. Lacks original character; processed, published, or tabulated data.
    Cost & Time Highly expensive and time-consuming (field surveys, interviews). Economical and swiftly accessible (journals, government records, websites).
    Reliability Highly relevant and specific to current research objectives. Requires careful verification for bias, accuracy, and temporal relevance.

Group 'B'

Descriptive Answer Questions. Attempt any FIVE questions.

[5 × 10 = 50]
  1. From the following frequency distribution of daily wages earned by workers in a manufacturing plant, calculate Karl Pearson’s coefficient of skewness and interpret the result:

    Daily Wages (Rs.) 100-120 120-140 140-160 160-180 180-200 200-220 220-240
    No. of Workers (ff) 7 14 18 25 16 12 8
    [10]
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    Solution:

    To compute Karl Pearson’s coefficient of skewness:

    Sk=XˉMoσS_k = \frac{\bar{X} - M_o}{\sigma}

    Let assumed mean A=170A = 170, common class interval h=20h = 20. Let d=mAh=m17020d' = \frac{m - A}{h} = \frac{m - 170}{20}.

    Calculation Table:

    Class Interval Mid-point (mm) Frequency (ff) d=m17020d' = \frac{m-170}{20} fdf d' f(d)2f (d')^2
    100–120 110 7 3-3 21-21 63
    120–140 130 14 2-2 28-28 56
    140–160 150 18 1-1 18-18 18
    160–180 170 25 00 0 0
    180–200 190 16 +1+1 +16+16 16
    200–220 210 12 +2+2 +24+24 48
    220–240 230 8 +3+3 +24+24 72
    Total N=100N = 100 fd=3\sum f d' = -3 f(d)2=273\sum f (d')^2 = 273

    Step 1: Calculation of Arithmetic Mean (Xˉ\bar{X})

    Xˉ=A+(fdN)×h=170+(3100)×20=1700.6=169.40 Rs.\bar{X} = A + \left(\frac{\sum f d'}{N}\right) \times h = 170 + \left(\frac{-3}{100}\right) \times 20 = 170 - 0.6 = \mathbf{169.40 \text{ Rs.}}

    Step 2: Calculation of Mode (MoM_o)

    The maximum frequency is f1=25f_1 = 25, corresponding to the modal class 160–180. Here:

    • Lower limit L=160L = 160
    • Frequency of modal class f1=25f_1 = 25
    • Pre-modal frequency f0=18f_0 = 18
    • Post-modal frequency f2=16f_2 = 16
    • Class width h=20h = 20Mo=L+f1f02f1f0f2×hM_o = L + \frac{f_1 - f_0}{2f_1 - f_0 - f_2} \times h$
      Mo=160+25182(25)1816×20=160+75034×20=160+14016=160+8.75=168.75 Rs.M_o = 160 + \frac{25 - 18}{2(25) - 18 - 16} \times 20 = 160 + \frac{7}{50 - 34} \times 20 = 160 + \frac{140}{16} = 160 + 8.75 = \mathbf{168.75 \text{ Rs.}}

    Step 3: Calculation of Standard Deviation (σ\sigma)

    σ=h×f(d)2N(fdN)2\sigma = h \times \sqrt{\frac{\sum f (d')^2}{N} - \left(\frac{\sum f d'}{N}\right)^2}
    σ=20×273100(3100)2=20×2.730.0009=20×2.7291=20×1.6520=33.04 Rs.\sigma = 20 \times \sqrt{\frac{273}{100} - \left(\frac{-3}{100}\right)^2} = 20 \times \sqrt{2.73 - 0.0009} = 20 \times \sqrt{2.7291} = 20 \times 1.6520 = \mathbf{33.04 \text{ Rs.}}

    Step 4: Karl Pearson’s Coefficient of Skewness (SkS_k)

    Sk=XˉMoσ=169.40168.7533.04=0.6533.04+0.0197S_k = \frac{\bar{X} - M_o}{\sigma} = \frac{169.40 - 168.75}{33.04} = \frac{0.65}{33.04} \approx \mathbf{+0.0197}

    Interpretation: The coefficient of skewness is +0.02+0.02, indicating that the wage distribution is very slightly positively skewed (almost symmetrical), with a minor concentration of frequencies toward the lower wage brackets and an extremely mild tail extending toward higher wages.

  2. The following data shows the Advertising Expenditure (in Lakh Rs.) and Sales Volume (in Crore Rs.) of a consumer goods company for 6 consecutive years:

    Year 1 2 3 4 5 6
    Adv. Expenditure (XX) 10 12 15 18 20 25
    Sales Volume (YY) 24 28 32 40 45 53

    a) Compute Karl Pearson’s correlation coefficient between Advertising Expenditure and Sales. b) Obtain the regression equation of Sales (YY) on Advertising Expenditure (XX). c) Estimate the expected sales volume if the advertising budget is increased to Rs. 30 Lakh.

    [10]
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    Solution:

    Let XX = Advertising Expenditure (Lakh Rs.) and YY = Sales Volume (Crore Rs.). Number of observations n=6n = 6.

    Calculation Table:

    Year XX YY X2X^2 Y2Y^2 XYXY
    1 10 24 100 576 240
    2 12 28 144 784 336
    3 15 32 225 1024 480
    4 18 40 324 1600 720
    5 20 45 400 2025 900
    6 25 53 625 2809 1325
    Total X=100\sum X = 100 Y=222\sum Y = 222 X2=1818\sum X^2 = 1818 Y2=8818\sum Y^2 = 8818 XY=4001\sum XY = 4001

    Part (a): Karl Pearson’s Correlation Coefficient (rr)

    r=nXY(X)(Y)[nX2(X)2][nY2(Y)2]r = \frac{n \sum XY - (\sum X)(\sum Y)}{\sqrt{\left[n \sum X^2 - (\sum X)^2\right] \left[n \sum Y^2 - (\sum Y)^2\right]}}

    Numerator:

    nXY(X)(Y)=6(4001)(100)(222)=24,00622,200=1,806n \sum XY - (\sum X)(\sum Y) = 6(4001) - (100)(222) = 24{,}006 - 22{,}200 = 1{,}806

    Denominator:

    nX2(X)2=6(1818)(100)2=10,90810,000=908n \sum X^2 - (\sum X)^2 = 6(1818) - (100)^2 = 10{,}908 - 10{,}000 = 908
    nY2(Y)2=6(8818)(222)2=52,90849,284=3,624n \sum Y^2 - (\sum Y)^2 = 6(8818) - (222)^2 = 52{,}908 - 49{,}284 = 3{,}624
    908×3624=3,290,5921,814.00\sqrt{908 \times 3624} = \sqrt{3{,}290{,}592} \approx 1{,}814.00

    r=1,8061,814.00+0.9956r = \frac{1{,}806}{1{,}814.00} \approx \mathbf{+0.9956}

    Interpretation: There exists a very high degree of positive linear correlation (r0.996r \approx 0.996) between advertising expenditure and sales volume.


    Part (b): Regression Equation of YY on XX

    The regression line of YY on XX is:

    YYˉ=byx(XXˉ)Y - \bar{Y} = b_{yx} (X - \bar{X})

    Where:

    Xˉ=Xn=1006=16.67\bar{X} = \frac{\sum X}{n} = \frac{100}{6} = 16.67
    Yˉ=Yn=2226=37.00\bar{Y} = \frac{\sum Y}{n} = \frac{222}{6} = 37.00
    byx=nXY(X)(Y)nX2(X)2=1,8069081.989b_{yx} = \frac{n \sum XY - (\sum X)(\sum Y)}{n \sum X^2 - (\sum X)^2} = \frac{1{,}806}{908} \approx \mathbf{1.989}

    Regression equation:

    Y37=1.989(X16.67)Y - 37 = 1.989(X - 16.67)
    Y=1.989X(1.989×16.67)+37=1.989X33.15+37Y = 1.989X - (1.989 \times 16.67) + 37 = 1.989X - 33.15 + 37
    Y=3.85+1.989X\mathbf{Y = 3.85 + 1.989X}


    Part (c): Estimation of Sales for X=30X = 30 Lakh Rs.

    Substituting X=30X = 30 into the regression model:

    Y^=3.85+1.989(30)=3.85+59.67=63.52 Crore Rs.\hat{Y} = 3.85 + 1.989(30) = 3.85 + 59.67 = \mathbf{63.52 \text{ Crore Rs.}}

    The estimated sales volume is Rs. 63.52 Crore.

  3. From the following price and quantity data, compute Fisher’s Ideal Index Number for the year 2080 taking 2075 as base year, and verify that it satisfies the Time Reversal Test:

    Commodity 2075 Price (p0p_0) 2075 Qty (q0q_0) 2080 Price (p1p_1) 2080 Qty (q1q_1)
    A 20 15 30 20
    B 12 20 15 22
    C 15 25 20 24
    D 25 10 35 12
    [10]
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    Solution:

    Calculation Table:

    Comm. p0p_0 q0q_0 p1p_1 q1q_1 p0q0p_0 q_0 p1q0p_1 q_0 p0q1p_0 q_1 p1q1p_1 q_1
    A 20 15 30 20 300 450 400 600
    B 12 20 15 22 240 300 264 330
    C 15 25 20 24 375 500 360 480
    D 25 10 35 12 250 350 300 420
    Total p0q0=1165\sum p_0 q_0 = 1165 p1q0=1600\sum p_1 q_0 = 1600 p0q1=1324\sum p_0 q_1 = 1324 p1q1=1830\sum p_1 q_1 = 1830

    Step 1: Fisher’s Ideal Index Number (P01FP_{01}^F)

    P01F=p1q0p0q0×p1q1p0q1×100P_{01}^F = \sqrt{\frac{\sum p_1 q_0}{\sum p_0 q_0} \times \frac{\sum p_1 q_1}{\sum p_0 q_1}} \times 100
    P01F=16001165×18301324×100P_{01}^F = \sqrt{\frac{1600}{1165} \times \frac{1830}{1324}} \times 100
    P01F=1.37339×1.38217×100=1.89826×100=1.37777×100137.78P_{01}^F = \sqrt{1.37339 \times 1.38217} \times 100 = \sqrt{1.89826} \times 100 = 1.37777 \times 100 \approx \mathbf{137.78}

    Interpretation: The price level of commodities in 2080 increased by 37.78% compared to the base year 2075.


    Step 2: Verification of Time Reversal Test

    The Time Reversal Test requires:

    P01×P10=1P_{01} \times P_{10} = 1

    Here:

    P01=p1q0p0q0×p1q1p0q1=16001165×18301324P_{01} = \sqrt{\frac{\sum p_1 q_0}{\sum p_0 q_0} \times \frac{\sum p_1 q_1}{\sum p_0 q_1}} = \sqrt{\frac{1600}{1165} \times \frac{1830}{1324}}

    Interchanging 0 and 1:

    P10=p0q1p1q1×p0q0p1q0=13241830×11651600P_{10} = \sqrt{\frac{\sum p_0 q_1}{\sum p_1 q_1} \times \frac{\sum p_0 q_0}{\sum p_1 q_0}} = \sqrt{\frac{1324}{1830} \times \frac{1165}{1600}}

    Now:

    P01×P10=(16001165×18301324)×(13241830×11651600)=1=1P_{01} \times P_{10} = \sqrt{\left(\frac{1600}{1165} \times \frac{1830}{1324}\right) \times \left(\frac{1324}{1830} \times \frac{1165}{1600}\right)} = \sqrt{1} = \mathbf{1}

    Since P01×P10=1P_{01} \times P_{10} = 1, Fisher’s Ideal Index satisfies the Time Reversal Test.

  4. Fit a straight-line trend equation by the method of least squares for the annual turnover (in Million Rs.) of an export trading firm from 2074 to 2080, and forecast the turnover for the years 2081 and 2082:

    Year (BS) 2074 2075 2076 2077 2078 2079 2080
    Turnover (YY) 45 52 58 65 70 82 90
    [10]
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    Solution:

    Number of years N=7N = 7 (odd). Let middle year 20772077 be origin (x=Year2077x = \text{Year} - 2077). Straight-line trend equation:

    Y=a+bXY = a + bX

    Since X=0\sum X = 0:

    a=YN,b=XYX2a = \frac{\sum Y}{N}, \quad b = \frac{\sum XY}{\sum X^2}

    Calculation Table:

    Year Turnover (YY) X=Year2077X = \text{Year} - 2077 X2X^2 XYXY Trend Values (Y^\hat{Y})
    2074 45 3-3 9 135-135 66+7.4286(3)=43.7166 + 7.4286(-3) = 43.71
    2075 52 2-2 4 104-104 66+7.4286(2)=51.1466 + 7.4286(-2) = 51.14
    2076 58 1-1 1 58-58 66+7.4286(1)=58.5766 + 7.4286(-1) = 58.57
    2077 65 00 0 0 66+7.4286(0)=66.0066 + 7.4286(0) = 66.00
    2078 70 +1+1 1 +70+70 66+7.4286(1)=73.4366 + 7.4286(1) = 73.43
    2079 82 +2+2 4 +164+164 66+7.4286(2)=80.8666 + 7.4286(2) = 80.86
    2080 90 +3+3 9 +270+270 66+7.4286(3)=88.2966 + 7.4286(3) = 88.29
    Total Y=462\sum Y = 462 X=0\sum X = 0 X2=28\sum X^2 = 28 XY=207\sum XY = 207

    Step 1: Compute Parameters aa and bba=4627=66.00a = \frac{462}{7} = \mathbf{66.00}$

    b=207287.4286b = \frac{207}{28} \approx \mathbf{7.4286}

    Straight-Line Trend Equation:

    Y=66.00+7.43X(Origin: 2077, X unit = 1 year)\mathbf{Y = 66.00 + 7.43 X} \quad (\text{Origin: 2077, } X \text{ unit = 1 year})


    Step 2: Forecast for 2081 and 2082

    • For Year 2081: X=20812077=+4X = 2081 - 2077 = +4Y^2081=66.00+7.4286(4)=66.00+29.71=95.71 Million Rs.\hat{Y}_{2081} = 66.00 + 7.4286(4) = 66.00 + 29.71 = \mathbf{95.71 \text{ Million Rs.}}$

    • For Year 2082: X=20822077=+5X = 2082 - 2077 = +5Y^2082=66.00+7.4286(5)=66.00+37.14=103.14 Million Rs.\hat{Y}_{2082} = 66.00 + 7.4286(5) = 66.00 + 37.14 = \mathbf{103.14 \text{ Million Rs.}}$

    The projected turnovers are Rs. 95.71 Million for 2081 and Rs. 103.14 Million for 2082.

  5. A manufacturing company produces electronic components using three automated assembly machines M1,M2,M_1, M_2, and M3M_3. Machine M1M_1 produces 30%, M2M_2 produces 45%, and M3M_3 produces 25% of the total output. Historical data indicates that 2% of items produced by M1M_1, 3% of items produced by M2M_2, and 4% of items produced by M3M_3 are defective.

    a) What is the probability that a randomly chosen component from the warehouse is defective? b) If a randomly chosen component is found to be defective, what is the probability that it was produced by Machine M2M_2?

    [10]
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    Solution:

    Let E1,E2,E3E_1, E_2, E_3 denote the events that a component is manufactured by Machine M1,M2,M_1, M_2, and M3M_3 respectively. Let DD denote the event that a component is defective.

    Given prior probabilities:

    • P(E1)=0.30P(E_1) = 0.30
    • P(E2)=0.45P(E_2) = 0.45
    • P(E3)=0.25P(E_3) = 0.25

    Given conditional probabilities of defectiveness:

    • P(DE1)=0.02P(D|E_1) = 0.02
    • P(DE2)=0.03P(D|E_2) = 0.03
    • P(DE3)=0.04P(D|E_3) = 0.04

    Part (a): Total Probability of a Defective Component P(D)P(D)

    By the Theorem of Total Probability:

    P(D)=P(E1)P(DE1)+P(E2)P(DE2)+P(E3)P(DE3)P(D) = P(E_1)P(D|E_1) + P(E_2)P(D|E_2) + P(E_3)P(D|E_3)
    P(D)=(0.30×0.02)+(0.45×0.03)+(0.25×0.04)P(D) = (0.30 \times 0.02) + (0.45 \times 0.03) + (0.25 \times 0.04)
    P(D)=0.0060+0.0135+0.0100=0.0295(or 2.95%)P(D) = 0.0060 + 0.0135 + 0.0100 = \mathbf{0.0295} \quad (\text{or } \mathbf{2.95\%})

    The probability that a randomly selected component is defective is 0.0295 (2.95%).


    Part (b): Posterior Probability P(E2D)P(E_2|D) using Bayes’ Theorem

    By Bayes’ Theorem:

    P(E2D)=P(E2)P(DE2)P(D)P(E_2|D) = \frac{P(E_2) \cdot P(D|E_2)}{P(D)}
    P(E2D)=0.45×0.030.0295=0.01350.0295=1352950.4576(or 45.76%)P(E_2|D) = \frac{0.45 \times 0.03}{0.0295} = \frac{0.0135}{0.0295} = \frac{135}{295} \approx \mathbf{0.4576} \quad (\text{or } \mathbf{45.76\%})

    Given that the component is defective, the probability that it was manufactured by Machine M2M_2 is 0.4576 (45.76%).

  6. An assessment of two sales teams, Team Alpha and Team Beta, yielded the following statistical summary for monthly sales revenue (in Lakh Rs.):

    Parameter Team Alpha Team Beta
    Number of Sales Personnel (NN) 50 60
    Mean Monthly Sales (Xˉ\bar{X}) 120 115
    Standard Deviation (σ\sigma) 15 18

    a) Which sales team generates greater total monthly sales revenue? b) Which sales team exhibits greater consistency (uniformity) in sales performance?

    [10]
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    Solution:

    Given:

    • Team Alpha: N1=50,Xˉ1=120,σ1=15N_1 = 50, \quad \bar{X}_1 = 120, \quad \sigma_1 = 15
    • Team Beta: N2=60,Xˉ2=115,σ2=18N_2 = 60, \quad \bar{X}_2 = 115, \quad \sigma_2 = 18

    Part (a): Comparison of Total Monthly Sales Revenue

    Total Sales=N×Xˉ\text{Total Sales} = N \times \bar{X}
    • Team Alpha: 50×120=6,000 Lakh Rs.50 \times 120 = \mathbf{6{,}000 \text{ Lakh Rs.}} (Rs. 60 Crore)
    • Team Beta: 60×115=6,900 Lakh Rs.60 \times 115 = \mathbf{6{,}900 \text{ Lakh Rs.}} (Rs. 69 Crore)

    Conclusion: Team Beta generates greater total monthly sales revenue (Rs. 6,900 Lakh vs Rs. 6,000 Lakh).


    Part (b): Comparison of Consistency (Coefficient of Variation)

    Consistency/uniformity is measured by the Coefficient of Variation (CVCV):

    CV=σXˉ×100%CV = \frac{\sigma}{\bar{X}} \times 100\%

    • For Team Alpha:

      CV1=15120×100%=0.125×100%=12.50%CV_1 = \frac{15}{120} \times 100\% = 0.125 \times 100\% = \mathbf{12.50\%}

    • For Team Beta:

      CV2=18115×100%=0.15652×100%=15.65%CV_2 = \frac{18}{115} \times 100\% = 0.15652 \times 100\% = \mathbf{15.65\%}

    Interpretation: A lower CVCV indicates greater consistency and less relative variability. Since CV1(12.50%)<CV2(15.65%)CV_1 (12.50\%) < CV_2 (15.65\%), Team Alpha exhibits greater consistency and uniformity in sales performance compared to Team Beta.

Group 'C'

Analytical / Comprehensive Answer Questions. Attempt any TWO questions.

[2 × 15 = 30]
  1. The examination scores of 1,000 students in a nationwide business management scholarship test are found to be normally distributed with a mean score (μ\mu) of 65 marks and a standard deviation (σ\sigma) of 12 marks.

    a) What percentage of students scored above 80 marks? b) How many students scored between 50 and 75 marks? c) What is the minimum score required to qualify for the top 5% merit scholarship awards?

    [15]
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    Solution:

    Let XX denote the scholarship test scores. XN(μ=65,σ=12)X \sim N(\mu = 65, \sigma = 12), Total students N=1,000N = 1{,}000. Standard normal variate: Z=Xμσ=X6512Z = \frac{X - \mu}{\sigma} = \frac{X - 65}{12}.


    Part (a): Percentage of students scoring above 80 marks (X>80X > 80)

    For X=80X = 80:

    Z=806512=1512=+1.25Z = \frac{80 - 65}{12} = \frac{15}{12} = +1.25

    P(X>80)=P(Z>1.25)=0.5P(0<Z<1.25)P(X > 80) = P(Z > 1.25) = 0.5 - P(0 < Z < 1.25)

    From standard normal area tables, area between Z=0Z = 0 and Z=1.25Z = 1.25 is 0.39440.3944.

    P(Z>1.25)=0.50000.3944=0.1056(or 10.56%)P(Z > 1.25) = 0.5000 - 0.3944 = \mathbf{0.1056} \quad (\text{or } \mathbf{10.56\%})

    Result: 10.56% of students scored above 80 marks (approximately 106 students).


    Part (b): Number of students scoring between 50 and 75 marks (50X7550 \le X \le 75)

    • For X1=50X_1 = 50:
      Z1=506512=1512=1.25Z_1 = \frac{50 - 65}{12} = \frac{-15}{12} = -1.25
    • For X2=75X_2 = 75:
      Z2=756512=1012=+0.833+0.83Z_2 = \frac{75 - 65}{12} = \frac{10}{12} = +0.833 \approx +0.83
    P(50X75)=P(1.25Z0.83)=P(1.25Z0)+P(0Z0.83)P(50 \le X \le 75) = P(-1.25 \le Z \le 0.83) = P(-1.25 \le Z \le 0) + P(0 \le Z \le 0.83)

    From normal tables:

    • Area for Z=1.25Z = 1.25 is 0.39440.3944
    • Area for Z=0.83Z = 0.83 is 0.29670.2967P(50X75)=0.3944+0.2967=0.6911P(50 \le X \le 75) = 0.3944 + 0.2967 = \mathbf{0.6911}$

    Expected Number of Students:

    Number=N×P(50X75)=1,000×0.6911691 students\text{Number} = N \times P(50 \le X \le 75) = 1{,}000 \times 0.6911 \approx \mathbf{691 \text{ students}}

    Approximately 691 students scored between 50 and 75 marks.


    Part (c): Minimum score for Top 5% Merit Scholarship

    Top 5% implies area in the right tail is 0.050.05. Therefore, area between Z=0Z = 0 and critical value ZcZ_c is:

    Area=0.50000.0500=0.4500\text{Area} = 0.5000 - 0.0500 = 0.4500

    From standard normal tables, the ZZ-value corresponding to an area of 0.45000.4500 is:

    Zc=+1.645Z_c = +1.645

    Using the transformation X=μ+ZσX = \mu + Z \sigma:

    Xc=65+(1.645×12)=65+19.74=84.74 marksX_c = 65 + (1.645 \times 12) = 65 + 19.74 = \mathbf{84.74 \text{ marks}}

    Result: A candidate must score a minimum of 84.74 marks (or at least 85 marks) to qualify for the top 5% merit scholarship awards.

  2. The following table presents the weekly output (in units) and total production costs (in Thousand Rs.) of 8 manufacturing shifts:

    Shift 1 2 3 4 5 6 7 8
    Output Units (XX) 20 30 40 50 60 70 80 90
    Total Cost (YY) 100 120 150 180 200 240 260 310

    a) Obtain both regression equations: YY on XX and XX on YY. b) Compute the coefficient of determination (r2r^2) and explain its business significance. c) Estimate the total cost if output is 110 units, and estimate the expected output if total production budget is restricted to Rs. 220 Thousand.

    [15]
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    Solution:

    Let XX = Output units and YY = Total Cost (Thousand Rs.). n=8n = 8.

    Calculation Table:

    Shift XX YY X2X^2 Y2Y^2 XYXY
    1 20 100 400 10000 2000
    2 30 120 900 14400 3600
    3 40 150 1600 22500 6000
    4 50 180 2500 32400 9000
    5 60 200 3600 40000 12000
    6 70 240 4900 57600 16800
    7 80 260 6400 67600 20800
    8 90 310 8100 96100 27900
    Total X=440\sum X = 440 Y=1560\sum Y = 1560 X2=28400\sum X^2 = 28400 Y2=340600\sum Y^2 = 340600 XY=98100\sum XY = 98100

    Step 1: Means and Regression Coefficients

    Xˉ=Xn=4408=55.00\bar{X} = \frac{\sum X}{n} = \frac{440}{8} = 55.00
    Yˉ=Yn=15608=195.00\bar{Y} = \frac{\sum Y}{n} = \frac{1560}{8} = 195.00
    byx=nXY(X)(Y)nX2(X)2=8(98100)(440)(1560)8(28400)(440)2b_{yx} = \frac{n \sum XY - (\sum X)(\sum Y)}{n \sum X^2 - (\sum X)^2} = \frac{8(98100) - (440)(1560)}{8(28400) - (440)^2}
    byx=784,800686,400227,200193,600=98,40033,6002.9286b_{yx} = \frac{784{,}800 - 686{,}400}{227{,}200 - 193{,}600} = \frac{98{,}400}{33{,}600} \approx \mathbf{2.9286}
    bxy=nXY(X)(Y)nY2(Y)2=98,4008(340600)(1560)2=98,4002,724,8002,433,600=98,400291,2000.3379b_{xy} = \frac{n \sum XY - (\sum X)(\sum Y)}{n \sum Y^2 - (\sum Y)^2} = \frac{98{,}400}{8(340600) - (1560)^2} = \frac{98{,}400}{2{,}724{,}800 - 2{,}433{,}600} = \frac{98{,}400}{291{,}200} \approx \mathbf{0.3379}

    Step 2: Part (a) Regression Equations

    • Regression Equation of YY on XX:

      YYˉ=byx(XXˉ)    Y195=2.9286(X55)Y - \bar{Y} = b_{yx}(X - \bar{X}) \implies Y - 195 = 2.9286(X - 55)
      Y=2.9286X161.07+195    Y=33.93+2.9286XY = 2.9286X - 161.07 + 195 \implies \mathbf{Y = 33.93 + 2.9286 X}

    • Regression Equation of XX on YY:

      XXˉ=bxy(YYˉ)    X55=0.3379(Y195)X - \bar{X} = b_{xy}(Y - \bar{Y}) \implies X - 55 = 0.3379(Y - 195)
      X=0.3379Y65.89+55    X=10.89+0.3379YX = 0.3379Y - 65.89 + 55 \implies \mathbf{X = -10.89 + 0.3379 Y}


    Step 3: Part (b) Coefficient of Determination (r2r^2)

    r2=byx×bxy=2.9286×0.33790.9896(or 98.96%)r^2 = b_{yx} \times b_{xy} = 2.9286 \times 0.3379 \approx \mathbf{0.9896} \quad (\text{or } \mathbf{98.96\%})

    Significance: r2=0.9896r^2 = 0.9896 signifies that 98.96% of the total variation in production costs is explained by variations in output volume, indicating an exceptionally robust, near-perfect predictive fit. Only 1.04% of variation is attributable to random unexplained factors.


    Step 4: Part (c) Predictions

    1. Cost for Output X=110X = 110 units:

      Y^=33.93+2.9286(110)=33.93+322.15=356.08 Thousand Rs.\hat{Y} = 33.93 + 2.9286(110) = 33.93 + 322.15 = \mathbf{356.08 \text{ Thousand Rs.}}

    2. Output for Budget Y=220Y = 220 Thousand Rs.:

      X^=10.89+0.3379(220)=10.89+74.34=63.4563 units\hat{X} = -10.89 + 0.3379(220) = -10.89 + 74.34 = \mathbf{63.45 \approx 63 \text{ units}}

  3. The following table gives the frequency distribution of weekly overtime hours worked by 100 technicians in two engineering workshops, Plant A and Plant B:

    Overtime Hours 0–10 10–20 20–30 30–40 40–50 50–60
    Plant A Technicians (fAf_A) 12 18 35 20 10 5
    Plant B Technicians (fBf_B) 8 15 28 26 15 8

    a) Determine which plant has a higher average overtime workload. b) Which plant exhibits greater variability (dispersion) in overtime distribution? c) Calculate the combined standard deviation of overtime hours across both plants.

    [15]
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    Solution:

    Let mid-point mm:

    • 0–10: m=5m = 5
    • 10–20: m=15m = 15
    • 20–30: m=25m = 25
    • 30–40: m=35m = 35
    • 40–50: m=45m = 45
    • 50–60: m=55m = 55

    Let assumed mean A=25A = 25, step length h=10h = 10. d=m2510d' = \frac{m - 25}{10}.

    Calculation Table:

    Class mm dd' fAf_A fAdf_A d' fA(d)2f_A (d')^2 fBf_B fBdf_B d' fB(d)2f_B (d')^2
    0–10 5 2-2 12 24-24 48 8 16-16 32
    10–20 15 1-1 18 18-18 18 15 15-15 15
    20–30 25 00 35 0 0 28 0 0
    30–40 35 +1+1 20 +20+20 20 26 +26+26 26
    40–50 45 +2+2 10 +20+20 40 15 +30+30 60
    50–60 55 +3+3 5 +15+15 45 8 +24+24 72
    Total NA=100N_A = 100 fAd=13\sum f_A d' = 13 fA(d)2=171\sum f_A (d')^2 = 171 NB=100N_B = 100 fBd=49\sum f_B d' = 49 fB(d)2=205\sum f_B (d')^2 = 205

    Step 1: Mean and Standard Deviation for Plant A

    XˉA=A+(fAdNA)×h=25+(13100)×10=25+1.3=26.30 hours\bar{X}_A = A + \left(\frac{\sum f_A d'}{N_A}\right) \times h = 25 + \left(\frac{13}{100}\right) \times 10 = 25 + 1.3 = \mathbf{26.30 \text{ hours}}
    σA=h×fA(d)2NA(fAdNA)2=10×171100(0.13)2\sigma_A = h \times \sqrt{\frac{\sum f_A (d')^2}{N_A} - \left(\frac{\sum f_A d'}{N_A}\right)^2} = 10 \times \sqrt{\frac{171}{100} - (0.13)^2}
    σA=10×1.710.0169=10×1.6931=10×1.3012=13.01 hours\sigma_A = 10 \times \sqrt{1.71 - 0.0169} = 10 \times \sqrt{1.6931} = 10 \times 1.3012 = \mathbf{13.01 \text{ hours}}
    CVA=σAXˉA×100%=13.0126.30×100%=49.47%CV_A = \frac{\sigma_A}{\bar{X}_A} \times 100\% = \frac{13.01}{26.30} \times 100\% = \mathbf{49.47\%}

    Step 2: Mean and Standard Deviation for Plant B

    XˉB=A+(fBdNB)×h=25+(49100)×10=25+4.9=29.90 hours\bar{X}_B = A + \left(\frac{\sum f_B d'}{N_B}\right) \times h = 25 + \left(\frac{49}{100}\right) \times 10 = 25 + 4.9 = \mathbf{29.90 \text{ hours}}
    σB=h×fB(d)2NB(fBdNB)2=10×205100(0.49)2\sigma_B = h \times \sqrt{\frac{\sum f_B (d')^2}{N_B} - \left(\frac{\sum f_B d'}{N_B}\right)^2} = 10 \times \sqrt{\frac{205}{100} - (0.49)^2}
    σB=10×2.050.2401=10×1.8099=10×1.3453=13.45 hours\sigma_B = 10 \times \sqrt{2.05 - 0.2401} = 10 \times \sqrt{1.8099} = 10 \times 1.3453 = \mathbf{13.45 \text{ hours}}
    CVB=σBXˉB×100%=13.4529.90×100%=44.98%CV_B = \frac{\sigma_B}{\bar{X}_B} \times 100\% = \frac{13.45}{29.90} \times 100\% = \mathbf{44.98\%}

    Step 3: Evaluations

    • Part (a): Higher Average Overtime: Since XˉB(29.90 hrs)>XˉA(26.30 hrs)\bar{X}_B (29.90 \text{ hrs}) > \bar{X}_A (26.30 \text{ hrs}), Plant B has a higher average overtime workload.
    • Part (b): Greater Variability: Since CVA(49.47%)>CVB(44.98%)CV_A (49.47\%) > CV_B (44.98\%), Plant A exhibits greater relative variability (less uniformity) in its overtime distribution.

    Step 4: Part (c) Combined Standard Deviation (σ12\sigma_{12})

    Combined Mean:

    Xˉ12=NAXˉA+NBXˉBNA+NB=(100×26.30)+(100×29.90)200=5,620200=28.10 hours\bar{X}_{12} = \frac{N_A \bar{X}_A + N_B \bar{X}_B}{N_A + N_B} = \frac{(100 \times 26.30) + (100 \times 29.90)}{200} = \frac{5{,}620}{200} = \mathbf{28.10 \text{ hours}}

    Deviations:

    • d1=XˉAXˉ12=26.3028.10=1.80    d12=3.24d_1 = \bar{X}_A - \bar{X}_{12} = 26.30 - 28.10 = -1.80 \implies d_1^2 = 3.24
    • d2=XˉBXˉ12=29.9028.10=+1.80    d22=3.24d_2 = \bar{X}_B - \bar{X}_{12} = 29.90 - 28.10 = +1.80 \implies d_2^2 = 3.24

    Combined Variance (σ122\sigma_{12}^2):

    σ122=NA(σA2+d12)+NB(σB2+d22)NA+NB\sigma_{12}^2 = \frac{N_A (\sigma_A^2 + d_1^2) + N_B (\sigma_B^2 + d_2^2)}{N_A + N_B}
    σA2=(13.01)2=169.26    σA2+d12=169.26+3.24=172.50\sigma_A^2 = (13.01)^2 = 169.26 \implies \sigma_A^2 + d_1^2 = 169.26 + 3.24 = 172.50
    σB2=(13.45)2=180.90    σB2+d22=180.90+3.24=184.14\sigma_B^2 = (13.45)^2 = 180.90 \implies \sigma_B^2 + d_2^2 = 180.90 + 3.24 = 184.14

    σ122=100(172.50)+100(184.14)200=17,250+18,414200=35,664200=178.32\sigma_{12}^2 = \frac{100(172.50) + 100(184.14)}{200} = \frac{17{,}250 + 18{,}414}{200} = \frac{35{,}664}{200} = 178.32
    σ12=178.3213.35 hours\sigma_{12} = \sqrt{178.32} \approx \mathbf{13.35 \text{ hours}}

    The combined standard deviation across both plants is 13.35 hours.