PGDM (2019-21) Term-I

END-TERM EXAMINATION
Business Statistics
Time: 2 Hours Maximum Marks: 40
Weightage: 40%

INSTRUCTIONS:
1. All questions are compulsory. Read the questions carefully and provide precise point-
wise answers.
2. Students are not allowed to keep or refer to any textbooks, references, notes or any
other reading material during the examination.
3. Use of Scientific / General Calculators is allowed during examination.
4. In case, any point is not clear about any question, you may make assumptions but do
write the assumptions you are making and also the rationale. Questions based on
distribution can be solved either manually or by using appropriate tables.

1. The Marketing manager of a large supermarket chain has the business objective of
using shelf space most efficiently. Toward that goal, she would like to use shelf space
to predict the sales of a specialty pet food. Collected data from a random sample of
10 equality stores are given below.

Store 1 2 3 4 5 6 7 8 9 10

Shelf Space (Sq.Ft) 5 5 5 10 10 10 15 15 15 20

Weekly Sales ($) 160 220 140 190 240 260 230 270 280 260
a) Fit a regression equation and predict the weekly sales of pet food for stores with 8
sq.ft of shelf space for pet food. ( 8 Marks)

b) Find the Coefficient of determination (R2) and interpret. ( 4 Marks)

2. Tool workers are subject to work-related injuries. One disorder, caused by strains to
the hands and wrists, is called carpal tunnel syndrome. It strikes as many as 23,000
workers per year. The U.S. Labor Department estimates that the average cost of this
disorder to employers and insurers is approximately $30,000 per injured worker.
Suppose these costs are normally distributed, with a standard deviation of $9,000.

a. What proportion of the costs are between $15,000 and $45,000? (3 Marks)

b. What proportion of the costs are greater than $50,000? (2 Marks)

c. Suppose the standard deviation is unknown, but 90.82% of the costs are more than
$7,000.What would be the value of the standard deviation? (3 Marks)

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3. A candy company fills a 20-ounce package of Halloween candy with individually
wrapped pieces of candy. The number of pieces of candy per package varies because
the package is sold by weight. The company wants to estimate the number of pieces
per package. Inspectors randomly sample 120 packages of this candy and count the
number of pieces in each package. They find that the sample mean number of pieces
is 18.72. Assuming a population standard deviation of .8735. Construct a 99%
confidence interval to estimate the mean number of pieces per package for the
population.
(5 Marks)

4. Suppose a Realtor is interested in comparing the asking prices of midrange homes in

Peoria, Illinois, and Evansville, Indiana. The Realtor conducts a small telephone
survey in the two cities, asking the prices of midrange homes. A random sample of 21
listings in Peoria resulted in a sample average price of $116,900, with a sample
standard deviation of $2,300. A random sample of 26 listings in Evansville resulted in
a sample average price of $114,000, with a sample standard deviation of $1,750. The
Realtor assumes prices of midrange homes are normally distributed.
Test whether there is any difference in the mean prices of midrange homes of the two
cities with 10% level of significance.
(10 Marks)

5. A Gallup survey found that 65% of all financial consumers were very satisfied with
their primary financial institution. Suppose that 20 financial consumers are sampled
and if the Gallup survey result still holds true today, what is the probability that
exactly 13 are very satisfied with their primary financial institution? ( 5 Marks)

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t-table

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Standard Normal Table

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Binomial Table:

Binomial Probability Distribution n Cr pr q n r . This table shows the probability of r successes in n

independent trials, each with probability of success p.