Answer 1.

INTRODUCTION
Nemi Mehta owes a 50-hectare land on which he cultivates Giloy which is a medicinal
plant used for Ayurveda. He wants to know the affect of the advertisement on the sales
and wants to understand the linear relationship between sales and cost of
advertisement. He wants to know if it is worth spending money on advertisement and if
the sales figure shows no relation to advertisement, then he will stop his expenditure on
advertisement.
CONCEPT
Given below are the graphs that represent the linear relationship between the two
variables –
This is the graph showing details of the sales-

Sales (INR 000s)

700

600

500

400

300

200

100

0
0 5 10 15 20 25

This is the graph showing details of advertisement –

Adverstising (tv spots per month )(in INR 000s)

20
18
16
14
12
10
8
6
4
2
0
0 5 10 15 20 25

Advertising (TV spots per month)(in INR,000s)

The below graph shows the relationship between sales and advertisements –

Linear Equation b/w variables

700

600

500

400

300

200

100

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Sales Advertising (TV spots per month)(in INR,000s)

As seen above, the sales and advertisement graphs are moving in the same direction
which shows that there is some linear relation between them. The coefficient of
correlation will depict if there is a negative or positive correlation between the two
variables.

Karl Pearson’s Correlation Coefficient

𝑛(Σ𝑥𝑦)−(Σ𝑥)(Σ𝑦)
R=
√[𝑛Σ𝑥 2 −(Σ𝑥)2 [𝑛Σ𝑦 2 −(Σ𝑦)2]
20(90552.7)−(7969.9)(208)
=
√[20𝑥3417395.23−(7969.9)2 [20𝑥2472−(208)2
1811054−1657739.2
=
√[4828598.59][6176]
153314.8
= 172688.8 = 0.887
 Region Sales (x) Advertisement X2 Y2 xy
code (y)

1 260.3 5 67756.09 25 1301.5

2 286.1 7 81853.21 49 2002.7
3 279.4 6 78064.36 36 1676.4
4 410.8 9 168756.64 81 3697.2
5 438.2 12 192019.24 144 5258.4
6 315.3 8 99414.09 64 2522.4
7 565.1 11 319338.01 121 6216.1
8 570 16 324900 256 9120
9 426.1 13 181561.21 169 5539.3
10 315 7 99225 49 2205
11 403.6 10 162892.96 100 4036
12 220.5 4 48620.25 16 882
13 343.6 9 118060.96 81 3092.4
14 644.6 17 415509.16 289 10958.2
15 520.4 19 170816.16 361 9887.6
16 329.5 9 108570.25 81 2965.5
17 426 11 181476 121 4686
18 343.2 8 117786.24 64 2745.6
19 450.4 13 202860.16 169 5855.2
20 421.8 14 177915.24 196 5905.2
Total 7969.9 208 3417395.23 2472 90552.7

Regression analysis
𝑛Σ𝑥𝑦− Σ𝑥Σ𝑦
Bxy = 𝑛ΣY2−(∑𝑦)2

20𝑥90552 – 7969.9𝑥208 1811054−1657739.2 153314.8

= = = = 24.82
20𝑥2472−(208𝑥208) 49440−43264 6176

X on y equation = (x - x̄) = bxy (y - ȳ)

Mean of X = 398.495 Mean of Y = 10.4
x-398.495 = 24.82(y-10.4)
= x-398.495 = 24.82y – 258.128
X = 140.367 + 24.82y
𝑛Σ𝑥𝑦− Σ𝑥Σ𝑦
Similarly, Byx will be calculated by which will come out to be 0.0317
nΣy2−(∑y)2

R = √𝑏𝑥𝑦. 𝑏𝑦𝑥 = 0.03x24.82 = 0.8876

The table given below shows the trends –

 Regional Sales (x) Advertising (y) X = 140.367 +
code 24.82y
1 260.3 5 264.467
2 286.1 7 314.107
3 279.4 6 289.287
4 410.8 9 363.747
5 438.2 12 438.207
6 315.3 8 338.927
7 565.1 11 413.387
8 570 16 537.487
9 426.1 13 463.027
10 315 7 314.107
11 403.6 10 388.567
12 220.5 4 239.647
13 343.6 9 363.747
14 644.6 17 562.307
15 520.4 19 611.947
16 329.5 9 363.747
17 426 11 413.387
18 343.2 8 338.927
19 450.4 13 463.027
20 421.8 14 487.847

Graph given below shows the actual vs predicted sales figures –

Predicted v/s Actual sale graph

700

600

500

400

300

200

100

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Actual sales Trend X= 140.325+24.82Y

Answer 2.
Ag populatio ag populatio ag populatio ag populatio ag populatio
e n e n e n e n e n
1 1958 11 1998 21 2594 31 2844 41 1802
2 1725 12 1916 22 2839 32 2684 42 1751
3 1814 13 2138 23 2935 33 2696 43 1659
4 1768 14 2139 24 3601 34 2781 44 1652
5 1871 15 2096 25 4110 35 2799 45 1806
6 1888 16 2044 26 4089 36 2450 46 1460
7 1768 17 2027 27 3716 37 2142 47 1226
8 1712 18 2065 28 3702 38 2114 48 1225
9 1780 19 2013 29 3084 39 1725 49 1006
10 1862 20 2459 30 3475 40 2218 50 1454
18146 20895 34145 24453 15041

Class Mid- Frequency Cumulative f.x (x- x̄) (x- x̄)2 f.(x- x̄)2
point (f) Frequency
(x) (cf)
1-10 5.5 18146 18146 99803 -19.76 390.4576 7085243.60
11-20 15.5 20895 39041 323872.5 -9.76 95.2576 1990407.55
21-30 25.5 34145 73186 870697.5 0.24 0.0576 1966.75
31-40 35.5 24453 97639 868081.5 10.24 104.8576 2564082.89
41-50 45.5 15041 112680 684365.5 20.24 409.6576 6161659.96
Total 112680 2846820 17803360.75

Σ𝑓𝑥 2846820
Mean = = = 25.26
Σ𝑓 112680
Σ𝑓(𝑥−𝑥 2 ) 17803360.75
Variance = (Σ𝑓)−1
= = 158
112679
Standard deviation = √𝑣𝑎𝑟𝑖𝑎𝑛𝑐𝑒 = 12.569
Given below is the data of histogram
Class interval age
group Mid Value (x) Population (f)
1-10 5 18146
11-20 15 20895
21-30 25 34145
31-40 35 24453
41-50 45 15041
 HISTOGRAM
40000

35000

30000

25000
Population

20000

15000

10000

5000

0
1 to 10 11 to 20 21 to 30 31 to 40 41 to 50
Class interval

Given below is the data for ogive

Class interval age Mid
group Value(X) Population (f) Cum. Frequency
1 to 10 5 18146 18146
11 to 20 15 20895 39041
21 t0 30 25 34145 73186
31 to 40 35 24453 97639
41 to 50 45 15041 112680
Less than ogive

120000

100000

80000

60000

40000

20000

0
0 10 20 30 40 50
Mid value Cumulative frequency
1 to 10 112860
11 to 20 94534
21 t0 30 73639
31 to 40 39494
41 to 50 15041

More than ogive

120000

100000

80000

60000

40000

20000

0
0 1 2 3 4 5 6

Answer 3a.
Year Annual (in mm) Forecast error Error*error
1997 1068.9 0
1998 1070 1068.9 1.1 1.21
1999 568.4 1069.12 500.72 250720.5184
2000 550.6 968.976 418.376 175038.4774
2001 849 885.301 36.3008 1317.748081
2002 637.2 878.041 240.84064 58004.21388
2003 1160.3 829.873 330.427488 109182.3248
2004 1005.8 895.958 109.8419904 12065.26286
2005 1316.4 917.926 398.4735923 158781.2038
2006 1478 997.621 480.3788739 230763.8624
2007 1178.9 1093.7 85.20309908 7259.568094
2008 911.1 1110.74 199.6375207 39855.13968
2009 641.6 1070.81 429.2100166 184221.2383
2010 1088.7 984.968 103.7319867 10760.32507
2011 890.5 1005.71 115.2144106 13274.36041
 2012 714 982.672 268.6715285 72184.39022
2013 1118.6 928.937 189.6627772 35971.96906
2014 705.7 966.87 261.1697782 68209.65306
2015 622.9 914.636 291.7358226 85109.79018
2016 764.9 856.289 91.38865807 8351.886824
2017 1024.4 838.011 186.3890735 34740.88674
Total 4738.47406 1555814.029

For alpha value 0.2

4738.47406
MAD = = 236.92
20
1555814.029
MSE = = 77790.70
20

Year Annual F, error Error x error

1997 1068.9 1068.9 0 0
1998 1070 1068.9 1.1 1.21
1999 568.4 1069.45 501.05 251051.1025
2000 550.6 818.925 268.325 71998.30563
2001 849 684.7625 164.2375 26973.95641
2002 637.2 766.88125 129.68125 16817.2266
2003 1160.3 702.040625 458.259375 210001.6548
2004 1005.8 931.1703125 74.6296875 5569.590256
2005 1316.4 968.4851563 347.9148438 121044.7385
2006 1478 1142.442578 335.5574219 112598.7834
2007 1178.9 1310.221289 131.3212891 17245.28096
2008 911.1 1244.560645 333.4606445 111196.0015
2009 641.6 1077.830322 436.2303223 190296.8941
2010 1088.7 859.7151611 228.9848389 52434.05643
2011 890.5 974.2075806 83.70758057 7006.959044
2012 714 932.3537903 218.3537903 47678.37773
2013 1118.6 823.1768951 295.4231049 87274.81088
2014 705.7 970.8884476 265.1884476 70324.91273
2015 622.9 838.2942238 215.3942238 46394.67164
2016 764.9 730.5971119 34.30288811 1176.688133
2017 1024.4 747.7485559 276.6514441 76536.0215
4799.77365 1523621.243
MAD = 239.98
MSE = 76181.06 (alpha 0.5)

Year Annual F error errorxerror

1997 1068.9 1068.9 0 0
1998 1070 1068.9 1.1 1.21
1999 568.4 1069.78 501.38 251381.9044
2000 550.6 668.676 118.076 13941.94178
2001 849 574.2152 274.7848 75506.68631
2002 637.2 794.04304 156.84304 24599.7392
2003 1160.3 668.568608 491.731392 241799.7619
2004 1005.8 1061.953722 56.1537216 3153.24045
2005 1316.4 1017.030744 299.3692557 89621.95125
2006 1478 1256.526149 221.4738511 49050.66674
2007 1178.9 1433.70523 254.8052298 64925.70512
2008 911.1 1229.861046 318.761046 101608.6044
2009 641.6 974.8522092 333.2522092 111057.0349
2010 1088.7 708.2504418 380.4495582 144741.8663
2011 890.5 1012.610088 122.1100884 14910.87368
2012 714 914.9220177 200.9220177 40369.65719
2013 1118.6 754.1844035 364.4155965 132798.7269
2014 705.7 1045.716881 340.0168807 115611.4792
2015 622.9 773.7033761 150.8033761 22741.65826
2016 764.9 653.0606752 111.8393248 12508.03457
2017 1024.4 742.532135 281.867865 79449.49329
4980.15525 1589780.236

MSE = 79489.01 (For alpha 0.8)

MAD = 249
Answer 3b.
(i) Z score for 70 gallons
z = x - Mean
SD

z = 70 – 65 = 1.25
4
Now, we have to calculate P(x > 70) = P (z > 1.25)
P (x > 70) = 0.5 – P (z = 1.25), from the table we have P (z = 1.25) as 0.3944.
P (x > 70) = 0.1056

(ii) For 60 gallons

z = 60 – 65 = -1.25
4
Now, we have to calculate P (x < 60) = P (z < -1.25)
P (x < 60) = 0.5 – P (z = -1.25), P (x < 60) = 0.1056
(iii) For 55 and 70
z = x – Mean SD

z1 = 55 – 65 z2 = 70 – 65
4 4

z1 = -2.5 z2 = 1.25

P (55 < x < 70) = P (-2.5 < z < 1.25)

P (55 < x < 70) = 0.8882