UNIVERSITY OF ZIMBABWE

BUSINESS STUDIES DEPARTMENT

2ND SEMESTER EXAMINATION – MAY/JUNE 2007
BS106 – BUSINESS STATISTICS

TIME ALLOWED: 3 HOURS

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INSTRUCTIONS TO CANDIDATES
1) Answer any FOUR questions
2) Start each question on a fresh page
3) All questions carry equal marks
4) Indicate attempted questions on the first page of your answer sheet
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QUESTION ONE

1a) A training manager wants to know if there is any link between the hours spent by a
particular category of employee in training and their productivity n the job. A sample of
10 employees was randomly selected and the following data extracted:

Employee Productivity (units per day) Hours in Training

1 45 16
2 70 36
3 44 20
4 56 38
5 60 40
6 48 30
7 75 35
8 60 22
9 63 40
10 38 24

i) Draw a scatter diagram and comment on the nature of association. (2 marks)

ii) Propose and ideal regression model and find its coefficients or constants
(5 marks)
iii) Super-impose your regression model in the scatter diagram in (a) (2 marks)
iv) Interpret your regression constants in relation to the two variables. (2 marks)
v) What is the anticipated productivity if 22 hours of raining have been devoted?
(2 marks)
vi) Calculate the co-efficient of determination and interpret it. (4 marks)
vii) Explain the difference between regression and correlation analysis. (3 marks)

1b) Define a stratified random sample and give a practical business example where such
a sample can be used. (5 marks)

QUESTION TWO

2a) With the aid of examples, differentiate the classical approach from the relative
 approach in probability. (5 marks)

2b) A set of final examination grades in Business Statistics course was found to be
normally distributed wit a mean of 73 and a standard deviation of 8.
(i) what is the probability of getting a grade of 91 or less? (3 marks)
(ii) what percentage of students scored between 65 and 89? (3 marks)
(iii) only 5% of the students taking the test scored higher than what grade?
(3 marks)
2c) Based on past experience, 10% of the accounts of a large wholesale company
are incorrect. If a random sample of five accounts is selected, what is the
probability that:
(i) at least two will be incorrect? (3 marks)
(ii) exactly three will be correct? (2 marks)

2d) The following table shows the 2 500 employees of a large company classified
according to sex and opinion on a proposal to emphasise the benefits rather than
wages pending wage negotiations.
Sex OPINION Total
Favour Neutral Opposed
Male 900 150 450 1 500
Female 300 100 600 1 000
Total 1 200 250 1 050 2 500

Given that an employee is selected at random, find the following probabilities.

(i) Pr [ male or opposed] (2 marks)
(ii) Pr [ female/neutral] (2 marks)
(iii) Pr [ neither in favour nor opposed] (2 marks)

QUESTION THREE

3a) What are the advantages and disadvantages of using pie charts as graphical displays
of data? (5 marks)

3b) Below is a profit and loss distribution of a given industry.

Profit and Loss (in millions) Number of companies

- 20 to under – 10 3
- 10 to under 0 5
0 to under 10 10
10 to under 20 10
20 to under 30 8
30 to under 40 4
Calculate the following summary measures
(i) mean (2 marks)
(ii) median (2 marks)
(iii) mode (3 marks)
(iv) variance (3 marks)
(v) Pearson’s coefficient of skewness and comment on it. (2 marks)

3c) Using the distribution in (b), draw the ogive curves ad approximate the median value.
(5 marks)
3d) Calculate the geometric mean of the following inflation rates:
 4%; 5%; 3% and 4% (3 marks)

QUESTION FOUR

4a) What are the similarities and differences, if any, between confidence interval and
hypothesis testing? (5 marks)

4b) A personnel director of large corporation wishes to study the absenteeism among
clerical staff during the year. A random sample of 25 clerks was taken and their number
of absenteeism was found to be 9.7 days with a standard deviation of 4.0 days.
(i) Construct a 90% and 95% confidence intervals of the average number of days
for which the clerical staff were absent from work. Comment o the changes n
the interval. (5 marks)
(ii) If the sample size was to be increased to 35, what would be the effect on the
intervals if the same confidence levels were to be used? Show your working.
(5 marks)
4c) The manager of a paint supply store wants to determine whether the amount of paint
contained in 1-gallon cans purchased from a nationally kwon manufacturer actually
averages 1 gallon. It is known from the manufacturer’s specification that the
standard deviation of the amount of paint is equal to 0.02 gallons. A random sample of
50 cans is selected, and the mean amount of paint per gallon can is found to be 0.995
gallon. At 5% level of significance is there evidence that the mean amount is different
from 1.0 gallon? (10 marks)

QUESTION FIVE

5a) With the aid of diagrams, explain the four components of times series. (5 marks)

5b An insurance company wants to know if the average speed at which men drive cars is
higher than that of women drivers. The company took random sample of 27 cars
driven by men on a high way and found he mean speed as 102km/hr with a standard
deviation of 3.3km/hr. Another sample of 18 cars driven by women n the same high
way gave a mean of 97.5 km/hr with a standard deviation of 3.75km/hr. Construct a
93.5% confidence interval of the difference in the mean travelling speeds between
men and women. Interpret the limits. (5 marks)

5c) The Dean of Students at the UZ believes that at least 60% of the male students do not
have residential accommodation on campus. To check the validity of this claim, a
random sample of 100 male students was taken and it turned out that 70% of them,
in deed, did not have accommodation. At 5% level of significance, test whether the
sample evidence validates the Dean’s belief. (10 marks)

5d) Present the data given below using a stem and leaf. (5 marks)

50 64 55 70 80 63 65 76 59 97
56 98 66 77 87 78 76 66 67 95
89 50 71 59 60 77 55 82 57 99

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