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Introduction To Business Statistics Question Paper
Introduction To Business Statistics
Course:Bachelor Of Commerce
Institution: Kenyatta University question papers
Exam Year:2009
UNIVERSITY EXAMINATIONS: 2009/2010
FIRST YEAR STAGE 3 EXAMINATION FOR THE DEGREE OF
BACHELOR OF COMMERCE
CMS 105: INTRODUCTION TO BUSINESS STATISTICS
(SUNDAY CLASS)
DATE: DECEMBER 2009 TIME: 2 HOURS
INSTRUCTIONS: Answer ONE and Any other TWO Questions
QUESTION ONE
a) Explain any four uses of statistics in a business organization. (4 Marks)
b) The following data has been collected with the intention of determining if there should be need
of concern of age great discrepancies among the staff in the Marketing department of a
company. To reach a decision it is required to know the range, mean, and standard deviation of
the collected data below. Compute this parameters.
50, 45, 53, 50, 47, 55, 50, 48, 51, 54, 53.
(5 Marks)
c) The workers of Cucu Farm Limited claim that there has been significant increase in the cost of
living in there locality in the last two years hence they wish to be awarded a pay increase. They
have further provided the management with the following data showing prices and weights of
five important basic commodities. Calculate the aggregate price index and comment on the
workers concern.
2
2007 2009
ITEM Weight Price Price
A 2 20 27
B 2 30 43
C 4 10 15
D 5 15 23
E 3 22 25
(5 Marks)
d) As a member of an organizations top management, you are so frequently involved in decision
making. Outline the five steps of a decision making process. (3 Marks)
e) Consumers have raised concern about the mean lifetime of light tubes produced by your
company. Data collected show that the mean lifetime of 625 light tubes produced by the
company is 1580 hours with standard deviation of 80 hours. The tubes are Marketed on the
strength that their mean lifetime is 1600 hours. At 95% level of confidence, does the
management have reason to worry?
(5 Marks)
f) A husband and wife appear in an interview for two vacancies in the same post, the probability
of husband selection is 6
1 and that of wife selection is 4
1 what is the probability that
i.Both of them will be selected ( 1 Mark)
ii.Only one of them will be selected. ( 2 Marks)
iii.None of them will be selected. ( 2 Marks)
g) Outline three factors highlighting the importance of time series analysis to a business
organization. ( 3 Marks)
QUESTION TWO
a) Differentiate the following terms:
i) Skewness and kurtosis
ii) Type I error and Type II error
iii) Experiment and Event (6 Marks)
3
b) A random sample was taken of 100 candidates who had submitted scripts at a certan
examination. The results obtained were as follows.
Marks Number of Candidates
20-29 3
30-39 9
40-49 20
50-59 34
60-69 25
70-79 7
80-89 2
Determine
i) The mode (4 Marks)
ii) The interquartile range (5 Marks)
iii) Standard deviation (5 Marks)
QUESTION THREE
a) The following data relater to some items used to compute the cost of living index. From the
data and using 2007 as the base year calculate:
i) Laspeyre’s price index
ii) Paasches price index
iii) Fisher’s ideal index number
2007 2008
ITEM Price Quantity Price Quantity
Bread 27 300 35 330
Rice 55 450 70 480
Milk 25 275 30 300
Sugar 63 500 85 475
(15 Marks)
b) Calculate the rank correlation coefficient for the following data of two tests given to
candidates for a job.
4
Test 1 76 83 80 79 65 81
Test 2 80 79 85 60 64 58
(5 Marks)
QUESTION FOUR
a) A businessman has three alternatives open to him each of which can be followed by any of
the possible events. The conditional payoffs (in sh.) for each action is given below
Determine which alternative should the businessman choose, if he adopts the:
i) Maximax criterion (2 Marks)
ii) Maximin (2 Marks)
iii) Hurwicz criterion, his degree of optimism being 0.65 (4 Marks)
iv) Laplace criterion (4 Marks)
b) Compute five year moving average for the following data relating to production
of a commodity and draw the trend and actual graph on same axes.
Year Production (1000 tonnes)
1997 815
1998 885
1999 775
2000 781
2001 841
2002 765
2003 810
Alternative Payoffs conditional events
2004 820
2005 845
2006 780
(8 Marks)
QUESTION FIVE
a) Define the following terms as used in decision theory:
i) Action space
ii) State of nature
iii) Out comes
iv) Pay-off (4 Marks)
b) Calculate the Karl Pearson’s coefficient of correlation for the following set of data.
Supply 15 18 20 24 30 35 40 45
Demand 85 93 95 105 120 130 150 160
(10 Marks)
c) Draw a scatter graph for the following data and comment on the correlation
Age of
husband
31 29 36 26 41 34 43
Age of
wife
26 28 34 21 31 21 39
(6 Marks)
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