NAME - RAJAN KUMAR

ROLL NU. – 2214501673

PROGRAMME – BBA

SEMESTER - 3

COURSE NAME- QUANTITATIVE

TECHNIQUES FOR
MANAGEMENT
CODE - DBB2102
 SET-1

Que.1 (a) Describe limitations of Statistics. Also explain how Statistics is useful in accountancy
and auditing.
(b) State the meaning of a questionnaire. What are the precautions necessary in drafting a good
questionnaire State .
Ans. (a) Limitations of statistics: The statistical methods, though, widely used in different areas of
human knowledge, has its own limitations as far as its application is concerned. Some of these
important limitations are as follows:
Statistics does not deal with individual values: Statistical studies are undertaken to study the
characteristics of a group rather than individuals. It only deals with the aggregate values. For
example, the salary of a faculty member in itself is not statistical in nature unless the salaries of
other faculty members are also known.
Statistics do not deal with qualitative characteristics: Statistics only deal with the quantitative
facts. These facts are capable of being represented in the form of numerical figures and therefore,
are also known as numerical facts. These facts can be analyzed and interpreted with the help of
statistical methods. This cannot be used to study such events which cannot be expressed
numerically. For example, intelligence of a person may be compared to some degree by
comparing Iqs or scores in certain tests. However, certain qualitative characteristics such as
honesty, integrity cannot be measured statistically.
Statistical conclusions are not usually true: Since statistics is not an exact science, hence these
conclusions are true only certain conditions. Most of the statistical studies are based on a sample
taken from the population. Under certain circumstances the estimated data are also used. Hence,
the conclusions about a population based on such information are bound to be true only
approximately. Therefore, statistical methods, if not applied in the proper perspective of the
collected data, may lead to false conclusions. They should therefore be handled with utmost care
and by experts only. Statistical interpretation requires a high degree of skill In order to get
meaningful results with the proper collection of data, it requires extensive training to read
statistics in its proper context.
(b) The ‘questionnaire’ is a proforma containing a sequence of questions relevant to a statistical
enquiry. Since the questionnaire is the only medium of communication between the investigator
and the respondents, it must be designed or drafted with utmost care and caution so that all
relevant and essential information for the enquiry may be collected without any difficulty,
ambiguity, and vagueness. Designing a questionnaire, therefore, requires a high degree of skill
and experience on the part of the investigator. The following points should be observed in
drafting the questionnaire:
1) The questionnaire should be as short as possible. Many questions may arise during an
investigation. But if all are included, the questionnaire will become unduly lengthy with the
consequence that the respondents (i.e., persons who are required to answer them) will feel bored
and reluctant to answer all the questions.
2) The individual questions should be simple, unambiguous and precise. Lengthy questions
cause irritation, resulting in careless and inaccurate replies. Complicated questions should be
split up into several smaller parts which can be easily answered by the respondents. Explanations
and definition of some of the terms used in questionnaire must therefore accompany each
proforma.
3) If possible, questions should be so set as to elicit only two possible definite answers ‘yes’ or
‘no’.
4) The units in which the information is to be collected should be clearly and precisely
mentioned in the questionnaire.
5) The arrangement of questions in the proforma should be such as to have an easy and
systematic flow of answers in turn. Questions should not skip back and forth from one topic to
another.
6) After the questionnaire has been devised, it is desirable to try it on a few individuals. The
procedure, which is known as pilot survey, is useful in detecting the shortcomings of the
questionnaire, so that necessary modifications may be made before it is used in the actual
enquiry.
Que.2
(a) The average daily wage of 100 workers in a factory is Rs. 72. The average daily wage of 70
male workers is Rs. 75. Find the average daily wage of female workers.
2.
(b) Write Short note on:
i) Mean Deviation
ii) Coefficient of Mean Deviation
iii) Standard Deviation
iv) Coefficient of Variation
v) Quartile Deviation
Ans. (b) i) Mean deviation: The four measures-Range, Quartile Deviation, Mean Deviation and
Standard deviation, are expressed in the same units as the orginal observations. These are called
absolute measure of variability. So, they can not be used for comparing the variability of two or
more distributions given in different units. In order to meet such situations, the relative measures
of variability have been introduced which are independent of the units of measurement. The
measures are as follows:
i) Coefficient of variation= 100 × 𝑆𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑑𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛 𝑚𝑒𝑎𝑛
ii) Co-efficient of Quartile deviation = 100 × 𝑄𝑢𝑎𝑟𝑡𝑖𝑙𝑒 𝑑𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛 𝑚𝑒𝑑𝑖𝑎𝑛 iii) Coefficient
of mean deviation = 100 × 𝑀𝑒𝑎𝑛 𝑑𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛 𝑚𝑒𝑎𝑛 𝑜𝑟 𝑚𝑒𝑑𝑖𝑎
i) Coefficient of mean deviation: A relative measure of dispersion, comparable across
distributions, that expresses the standard deviation as a percentage of the mean.
Deciles: Fractiles that divide the data into 10 equal parts
Dispersion: The spread of variablility in a set of data.
Fractlie: In a frequency distribution, the location of a value or above a given fraction of the data.
Measure of dispersion: A measure describing how the observations in a data set are scattered or
spread out. Percentiles: Fractiles that divide the data into 100 equal parts.
Standard Deviation: The four measures-Range, Quartile Deviation, Mean Deviation and
Standard deviation, are expressed in the same units as the orginal observations. These are called
absolute measure of variability. So, they can not be used for comparing the variability of two or
more distributions given in different units. In order to meet such situations, the relative measures
of variability have been introduced which are independent of the units of measurement.

Coefficient of Variation: The co-efficient of variation (CV) is a statistical measure of the

relative dispersion of data points in a data series around the mean.

• It represents the ratio of the standard deviation to the mean.

• The CV is useful for comparing the degree of variation from one data series to another,
even if the means are drastically different from one another.
• In finance, the co-efficient of variation allows investors to determine how much
volatility, or risk, is assumed in comparison to the amount of return expected from
investments.
• The lower the ratio of the standard deviation to mean return, the better risk-return
tradeoff.

Quartile Deviation: The Quartile Deviation can be defined mathematically as half of the
difference between the upper and lower quartile. Here, quartile deviation can be represented
as QD; Q 3 denotes the upper quartile and Q 1 indicates the lower quartile. Quartile Deviation is
also known as the Semi Interquartile range.

Que.3
(a) Obtain the correlation coefficient for the data given below:
X: 1 2 3 4 5 6 7 8 9
Y: 9 8 10 12 11 13 14 16 15
(b) What are the uses of Regression Analysis? Give five examples where the use of regression
analysis can beneficially be made.
• Ans. (b) Uses of regression analysis: Describe the relationship between variables
• Estimate the value of one variable using the known values of other variables
• Predict results and shifts in a variable based on its relationship with other variables
• Control the influence of variables while exploring the relationship between variables
• Inform strategic business decisions
Examples:
• . Estimate the effect of an exposure on a given outcome Regression can model linear and
non-linear associations between an exposure (or treatment) and an outcome of interest. ...
• 2. Predict an outcome using known factors ...
• 3. Balance dissimilar groups ...
• 4. Model and replace missing data ...
• 5. Detect unusual records .
SET-2
Que.4 What do you mean by Time Series? Describe the various methods of Secular Trends.
Ans. An arrangement of statistical data in accordance with the time of occurrence or in
chronological order is called a time series. In other words, the observations in numerical form
obtained at regular intervals of time is known as time series. The time frame of the observations
or the recorded data may be taken at an interval of an hour, a day, a week, a month, a year
depending upon the type of event the data refer to. Time series analysis is used to detect patterns
of change in statistical information over regular intervals of time. Then the predictions or
forecastis about the future are made by projecting these patterns. However, the forecasted figure
may or may not tally with the real values. Sometimes forecasted figures can be closer to the
actual and sometimes it can also lead to wrong conclusions.
Secular Trend: In this first type of change, the value of the variable tends to either decrease or
increase over a long period of time. It can be defined as “a consistent long-term change in the
average level of the forecast variable per unit of time”. The steady increase in the population of
India recorded by the census department is an example of secular trend. Table 6.2 shows a
secular trend which is showing an upward trend. Year Population 1970 1980 54,75,69,000
68,73,32,000 1990 2000 84,95,15,000 101,59,23,000
Cyclic Fluctuations: The second type of variation is cyclic fluctuations which are generally
business cycles or the values of the variable under study tend to rise and fall in line with the
fluctuations of the business cycle. The business cycle could be performing very good and rising
to peak the trend line or could also likely to slump, hitting a low point below the trend line. The
time between hitting peaks and falling to low points could be 1 year and it can be as many as 15
to 20 years. Figure 6.1 illustrates a typical pattern but it has to be noted that cyclic movements do
not follow any regular pattern but move in a somewhat unpredictable manner.
Que.5 Define Index Numbers. Describe various test for consistency of Index Numbers.
Ans. Index numbers are a specialized type of average. It measures how much a variable changes
over time. They are designed to measure the relative change in the level of the phenomenon with
respect to time, geographical locations, or some other characteristic. It is an indicator that reflects
the relative changes in the level of certain phenomena in any given period called the current
period with respect to its value in some fixed period called base period selected for comparison.
For example, if we want to measure the relative change in the price level, we would not be able
to do so by using the averages because price of different commodities ise expressed in different
units, such as kilogram, litre, meter etc. In such cases, we require some special types of average
which will enable us to measure changes in the price level. Index numbers are such an average.
TESTS FOR ADEQUACY OF INDEX NUMBER FORMULAE:
1. Unit Test: This test requires that formula should be free of units. Except simple aggregative
index, all others satisfy this test.
2. Time Reversal Test: This test was proposed by Irving Fisher. According to him an index number
should be such that when the base year and current year are interchanged (reversed), the resulting index
number should be the reciprocal of the earlier. Suppose if P01 be the index number for the current period
‘1’ with the base year ‘0’ and let P10 be another index number with the current period ’0’ and base year
‘1’, then the particular index number satisfies time reversal test if P01 × P10 = 1 Time reversal Test is not
satisfied by Laspeyre’s and Paasche’s index number, but it is satisfied by Fisher’s ideal index number.
3. Factor Reversal Test: factor reversal test requires that the product of the index number of price (with
quantities as weights) and the index number of quantity (with price as weights) should indicate net change
in value taking place in between the two periods.
 Circular Test: It is an extension of time reversal test. This test requires that if an index is constructed for
the year ‘a’ on base ‘b’ and for the year ‘b’ based on the year ‘c’, we should get the same.
Que.6

(a) Delineate the principles of sampling methods. Explain sampling and non-sampling errors.
(b) What role does statistical quality control play in maintaining the quality of a product? Describe
the advantages of statistical quality control.
Ans.(a) There are two primary types of sampling methods: probability sampling and non-
probability sampling1.Probability sampling involves random selection, allowing you to make
strong statistical inferences about the whole group1.Non-probability sampling involves non-
random selection based on convenience or other criteria, allowing you to easily collect
data1.There are several methods of sampling2:

• Random Sampling
• Purposive or Deliberate Sampling
• Stratified or Mixed Sampling
• Systematic Sampling
• Quota Sampling
• Difference Between Sampling and Non-Sampling Error
• Sampling error is one which occurs due to unrepresentativeness of the sample selected
for observation. Conversely, non-sampling error is an error arise from human error,
such as error in problem identification, method or procedure used, etc.

An ideal research design seeks to control various types of error, but there are some potential
sources which may affect it. In sampling theory, total error can be defined as the variation
between the mean value of population parameter and the observed mean value obtained in
the research. The total error can be classified into two categories, i.e. sampling error and non-
sampling error.

(b) Statistical quality control is designed to regulate in-process manufacturing and to take
corrective action in such a way that products do conform to the quality standards as they are
produced. For this purpose SQC involves not only setting quality specifications but
evaluating processes and equipment to make necessary improvements therein.

without quality control you, as a producer or purchaser, are in the same position as the man
who bets on a horse race with one exception, the odds are not posted. SQC Will give you the
tools and your materials. It will tell you at what level and with what variation you are
Operating and, more important, it will tell you when your process, tools or materials change
from that level and range of variability- possibly most important of all will be the change in
outlook on your purchases or production and the inspection of both.