Spring 2012

Master of Business Administration- MBA Semester 1

MB0040 – Statistics for Management - 4 Credits

(Book ID: B1129) Assignment Set - 1 (60 Marks)

Note: Each question carries 10 Marks. Answer all the questions.

Q1. What are the functions of Statistics? Distinguish between Primary data and Secondary data.

Ans.

Functions of Statistics

Statistics is used for various purposes. It is used to simplify mass data and to make comparisons easier. It is also used to bring out trends and tendencies in the data as well as the hidden relations between variables. All this helps to make decision making much easier. Let us look at each function of Statistics in detail. 1. Statistics simplifies mass data

The use of statistical concepts helps in simplification of complex data. Using statistical concepts, the managers can make decisions more easily. The statistical methods help in reducing the complexity of the data and consequently in the understanding of any huge mass of data. Example: Fifty people were interviewed to rate a regional movie on the scale of 1 to 10, with number 1 being for the top movie and number 10 being for the worst movie. The table 1a shows the ratings given by 50 customers. Simplify the data? Table 1a The ratings (scale of 1 to 10) for a

Regional movie given by 50 customers

|1 5 7 6 8 7 5 3 4 7 1 2 5 8 7 4 7 4 2 4 9 8 7 2 5 | |4 5 7 9 8 7 8 9 6 7 2 3 2 8 7 6 3 5 7 6 3 9 5 4 8 |

The data in table 1a can be condensed and is presented in table 1b using the statistical concepts such as calculating frequency and frequency distribution to draw conclusions and then frequency table is prepared. In this example, from the bulk data consisting of 50 rating scores, the frequency table was prepared. The frequency table is in condensed and simple form. From the tabled data, we can easily interpret that for the regional movie, most of the customers gave a 7 rating (that is, 11 customers). Only two customers gave a rating of 1 for the regional movie, which means only two out of 50 customers surveyed liked the regional movie the most. Table 1b Frequency table

|Rating |Frequency |Frequency Distribution | |1 |2 |2/50 = 0.04 | |2 |5 |5/50 = 0.10 | |3 |4 |4/50 = 0.08 | |4 |6 |6/50 = 0.12 | |5 |7 |7/50 = 0.14 | |6 |4 |4/50 = 0.08 | |7 |11 |11/50 = 0.22 | |8 |7 |7/50 = 0.14 | |9 |4 |4/50 = 0.08 | |10 |0 |0/50 =0 | |Total |50 |1 |

2. Statistics makes comparison easier

Without using statistical methods and concepts, collection of data and comparison cannot be done easily. Statistics helps us to compare data collected from different sources. Grand totals, measures of central tendency, measures of dispersion, graphs and diagrams, coefficient of correlation all provide ample scopes for comparison. Hence, visual representation of numerical data helps you to compare the data with less effort and can make effective decisions. 3. Statistics brings out trends and tendencies in the data

After data is collected, it is easy to analyse the trend and tendencies in the data by using the various concepts of Statistics. 4. Statistics brings out the hidden relations between variables Statistical analysis...

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