1

Presentation of data
EHERCISE 2A
The ages of the employees of a company are shown in the following table:
Age (years) Number of employees
15 and under 25 21
25 and under 35 37
35 and under 45 25
45 and under 55 12
55 and under 65 5
Draw a histogram for the above data.
EXERCISE 2B
A company decided to research the price of personal computers on the market. An analysis of
advertisements in the press and specialised computer magezines produced the following information:
Price () Number of personal computers
205 and under 500 5
500 and under 1,000 12
1,000 and under 1,500 15
1,500 and under 2,000 9
2,000 and under 3,000 6
3,000 and under 5,000 3
Draw a histogram of the data.
EXERCISE 2C
The staffs of a company are employed in either production, sales or administration. There are 180
production staff, 75 sales staff and 45 administrative staff.
Construct 2 different, suitable, well-label led diagrams to illustrate these figures.
EXERCISE 2D
Advertising expenditure and sales revenue of XYZ company
Year Advertising expenditure( millions) Sales revenue ( millions)
1 4 86
2 5 93
3 5.5 95
4 6 102
5 7 112
6 8 132
7 10 146
8 12 168

2

9 15 182
10 17 202
EXERCISE 2E
Wealth distribution in the United Kingdom in 1988
Most wealthy (%) Marketable wealth
(%)
Marketable wealth plus occupational and State pension
rights (%)
1 17 10
5 38 24
10 53 36
25 75 60
50 94 83
All 100 100

Note:
The data is given cumulatively, ie the most wealthy 5% includes the most wealthy 1%.
On the same graph draw Lorenz curves for:
Marketable wealth
Marketable wealth plus occupational and State pension rights
Briefly comment about the distribution of wealth in the UK
EHERCISE 2F
The following table shows the value(in thousand) of the sales of a company for 1985 and 1986.

1985 1986
January 29.5 32.2
February 30.6 36.9
March 38.4 42.1
April 42.8 50.5
May 39.3 41.3
June 47.9 45.4
July 48.4 51.7
August 47.6 53.9
September 44.2 48.3
October 39.1 45.2
November 38.4 33.9
December 34.3 38.6
Construct a Z chart to represent the data.


3

Exercise 2F
1986 1986 Moving
data Cumulative data Annul total
January 32.2 32.2 483.2
February 36.9 69.1 489.5
March 42.1 111.2 493.2
April 50.5 161.7 500.9
May 41.3 203.0 502.9
June 45.4 248.4 500.4
July 51.7 300.1 503.7
August 53.9 354.0 510.0
September 48.3 402.3 514.1
October 45.2 447.5 520.2
November 33.9 481.4 515.7
December 38.6 520.0 520.0

Monthly sales commission () of 100 representatives
Range of commission () Number of representatives
under 30 2
30 and under 35 4
35 and under 40 9
40 and under 45 15
45 and under 50 19
50 and under 55 22
55 and under 60 13
60 and under 65 8
65 and under 70 5
70 and over 3
Total 100










4

EXERCISE 3A
The ages of the employees of a company are shown in the following table:
Age (years) Number of employees
15 and under 25 21
25 and under 35 37
35 and under 45 25
45 and under 55 12
55 and under 65 5

Find the mode by both the graphical method and the calculation method. (This data was used in
Exercise 2A.)
(Answer: calculation method = 30.7 years )
EXERCISE 3B
The hourly earnings () of a random sample of 11 employees of a company were found to be as shown
below:
6,9,6,12,8,9,6,7,10,4,11
From the above date find the following measures of location:
median
mode
arithmetic mean
geometric mean.
(Answer: 8, 6, 8, 7.64)
EXERCISE 3C
Using the data of exercise 3B find the:
range
interquartile range
quartile deviation
mean deviation
standard deviation.
(Answers: 8,4,2,2,2,34)EXERCISE 3D
The 1987 profit (or loss) levels of 100 companies in the food industry are shown in the following table:
Profit ( millions) Number of companies

5

Under-4 0
-4 and under 0 7
0 and under 4 21
4 and under 8 35
8 and under 12 24
12 and under 16 9
16 and under 20 4
20 and over 0
(a) Construct a cumulative frequency curve for these figures.
(b) Using your graph, or otherwise, find the values of the median and quartile deviation.
(c) State what the median and quartile deviation measure.
Second Level
(Answers: (b) calculation method 6,514,000;3,286,000)
EXERCISE 3E
Profit of companies
Profit
( million)
Number of companies
under 2 30
2 and under 4 20
4 and under 6 10
6 and under 10 8
10 and under 15 5
(a) Calculate the mean.
Note:
The answer assumes that the lower boundary for the first group is zero.
(Answer: 3,650,000)
EXERCISE 3F
This uses the data of Exercise 3E.
Calculate the standard deviation.
(Answer: 3,270,000)





6

Skewness and coefficient of variation
EXERCISE 4A
This exercise is based on the data of Exercise 3E.
Profit of companies
Profit ( million) Number of companies
Under 2 30
2 and under 4 20
4 and under 6 10
6 and under 10 8
10 and under 15 5
Calculate the mean and the standard deviation. You could use the results of Exercises 3E and
3F,then calculate the coefficient of variation.



(Answers: 3,650,000,3,270,000,89.6%
EXERCISE 4B
This exercise is based on the data of Exercise 3E.
Profit of companies
Profit (million) Number of companies
under 2 30
2 and under 4 20
4 and under 6 10
6 and under 10 8
10 and under 15 5
(a) Draw a histogram to represent this information.
(b) Calculate the mean, median and the standard deviation.
(c) Calculate a measure of skewness.
(d) Comment on your histogram and the results of parts(b) and (c).
(Answers: (b)3,650,000,2,650,000, 3,270,000; (c) 0.917)

7

EXERCISE 4C
This uses the data of Exercise 3D.
The 1987 profit (or loss)levels of 100 companies in the food industry are shown in the following
table:
Profit ( millions) Number of companies
under-4 0
-4 and under 0 7
0 and under 4 21
4 and under 8 35
8 and under 12 24
12 and under 16 9
16 and under 20 4
20 and over 0
(a) Find the values of the median and the quartiles.
(b) Calculate the quartile measure of skewness.
(Answer: (a) results based on calculation method 6,514,000, 3,429,000,10,000,000;
(b) 0.061)














8

Correlation and regression
EXERCISE 5A
A company has a number of branch offices which vary in size and have varying numbers of
employees. The following data shows the number of employees at each branch office and the
annual cost of running the branch office.
Branch office Number of employees Annual cost (1,000
A 11 64
B 6 70
C 16 78
D 9 62
E 25 128
F 14 74
G 8 60
H 19 90
(a) Plot the data on a scatter diagram and comment briefly on your diagram.
Part question Second Level
EXERCISE 5B
This exercise uses the data of Exercise 5A and is a continuation of the question.
A company has a number of branch offices which vary in size and have varying numbers of
employees. The following data show the number of employees at each branch office and the
annual cost of running the branch office.
Branch office Number of employees Annual cost (1,000)
A 11 64
B 6 70
C 16 78
D 9 62
E 25 128
F 14 74
G 8 60
H 19 90
(b) Calculate the least squares regression line, which would enable you to forecast annual cost
for a given number of employees.
(c) Use your regression line to forecast the annual cost of a new office which is about to open
and will have 30 employees. Discuss the likely accuracy of your forecast.

9


EXERCISE 5C
The following data refers to the floor space and the turnover of 10 small companies:
Company Turnover($1,000) Floor space (square metres)
A 85 52
B 150 76
C 128 62
D 160 70
E 70 45
F 290 78
G 180 60
H 118 54
I 175 68
J 136 84
(a) Draw a suitable scatter diagram of the data.
(b)Calculate the product moment correlation coefficient.
EXERCISE 5D
Calculate the coefficient of determination for the data of Exercise 5C.
EXERCISE 5E
(a) Ten applicants for a post were given an aptitude test and an interview. E was placed first on
the aptitude test followed by A,G,J,C,L,B,D,F and H in that order. In the interviews, G was placed
first, followed by E,J,A,B,C,I,H,D and F in that order.
Calculate the value of Spearmans rank correlation coefficient and, without performing a
significance test, interpret the value obtained.
(b) State 2 situations in which Spearmans rank correlation coefficient should be calculated
rather than the product moment correlation coefficient.
EXERCISE 5F
An investigation was conducted by a company on the value of educational and aptitude tests as
assessment methods for recruiting employees. It is the present practice of the company to give recruits
such tests when they apply for posts.
The following data gives the educational and aptitude test scores, together with an assessment score by
the personnel department of their ability one year after joining the company. One is a low score and 20
a high score.


10

Employee Educational test Aptitude test Assessment by
personnel officer
A 9 17 12
B 10 14 14
C 15 12 16
D 14 13 15
E 16 10 17
F 11 15 10
G 12 12 11
H 17 16 18
(a) Rank each set of data.
(b) Calculate 2 appropriate rank correlation coefficients.
(c) Write a brief report on your findings.
EXERCISE 5G
(c) Test whether the correlation coefficient found in Exercise 5C(0.8403) differs significantly from zero,
and:
(d) Comment on your results.














11

Index number
EXERCISE 6A
(a) Give the relative advantages and disadvantages of Laspeyres and Paasche price index
numbers.
(b) The following data shows the quantities and prices of 4 components purchased by a
company in Year 1 and Year 6.
Year 1 Year 6
Component Price() Quantity Price() Quantity
1 5.00 200 8.50 180
2 10.00 150 13.50 120
3 8.00 100 10.00 95
4 12.50 80 15.50 70
(i) Calculate a Laspeyres price index which shows the change in prices between Years 1 and 6.
(ii) Calculate a Paasche quantity index which shows the change in quantities between years 1
and 6.
Briefly comment on your results in parts (i) and (ii).
EXERCISE 6B
(a) Give the relative advantages and disadvantages of Laspeyres and Paasche price index
numbers.
(b) The following data shows the revenue and prices of 4 products (A to D) sold by a company in
Year 1 and Year 4.
Year 1 Year 4
Product Price() Revenue() Price() Revenue()
A 5.00 400 8.00 640
B 8.00 560 14.00 700
C 9.00 450 12.00 360
D 12.00 288 15.00 300
(i) Calculate a Laspeyres price index which shows the change in prices between Years 1 and 4.
(ii) Calculate a Paasche quantity index which shows the change in quantities between Years 1
and 4.

12

(iii) Briefly comment on your results in parts (i) and (ii).
EXERCISE 6C
The following data shows the 5 main groups which make up the components of the index of
retail prices, together with the weights and price relatives:
Group Weights Price relative Jul 1993 (Jan
1987 = 100)
Food and catering 189 136.8
Alcohol and tobacco 113 156.0
Housing and household
expenditure

336

140.5
Personal expenditure 97 127.0
Travel and leisure 265 142.9
Source: Monthly Digest of Statistics
(a) Calculate the index of retail prices for July 1993 with January 1987=100.
(b) Outline the uses of the index of retail prices to a business person.
Part question Third Level

EXERCISE 6D
Use the index obtained in the solution to Exercise 6C (140.9).
The index of retail price for January 1987 with January 974=100 was 394.5.
Calculate the index of retail prices for July 1993 with January 1974=100.
EXERCISE 6E
Use the result of Exercise 6D (555.9).
In July 1979 a person retired with a pension of 5,000 per annum. The pension was index
linked, ie increased at the same rate of increase as the index of retail prices. In July 1979 the
index of retail prices was 229. 1 with January 1974 =100. Calculate the pension of this person in
July 1993.
EXERCISE 6F
The average salary in a company and the index of retail prices is given below.

13

Year Average salary Index of retail prices
() (Jan 1987=100)
1988 18,000 106.9
1989 20,000 115.2
1990 23,00 126.7
(a)Convert the index of retail prices to a series with 1988=100.
(b) Calculate the real salary for each year relative to 1988 prices and comment on your result.
















14

Time series
EXERCISES 7A
(a) Briefly describe the components which make up a time series.
(b) The following data shows the volume of gas (100 millions of thermal units) produced in the
United Kingdom from 1990 to 1992.
Gas production 1990-1992

Year Jan-Mar Apr-Jun Jul-Sep Oct-Dec
1990 66 37 26 62
1991 74 43 24 64
1992 70 37 27 70
Source: Monthly Digest of Statistics
(i) Plot the data on a graph.
EXERCISE 7B
This exercise is a continuation of Exercise 7A.
(a) (ii) Using the data of Exercise 7A, find, by means of a moving average, the trend .
(iii) Plot the trend on the graph found in Exercise 7A.
EXERCISE 7C
This worked example is a continuation of Exercise 7A.
(b) (iv) Using the data of Exercise 7A and your results of Exercise 7B, obtain the seasonal factors
using the additive model.
EXERCISE 7D
This exercise is a continuation of Exercise 7A.
(b) (v) Using the data of Exercise 7A and your results of Exercise 7C, obtain the seasonally
adjusted figures for the 4 quarters of 1992 using the additive model.
EXERCISE 7E
This exercise is a continuation of Exercise 7A.

15

(b) (vi) Using the data of Exercise 7A and your results of Exercise 7C, obtain a forecast for the 4
quartersof 1993 using the additive model. Discuss the likely accuracy of your forecasts.
EXERCISE 7F
(a) Briefly describe the components of a typical time series.
(b) A large shop opens six days a week, Monday to Saturday. The sales for three weeks, in $100,
were recorded as shown below:

Mon Tue Wed Thu Fri Sat
Week 1 142 154 98 128 182 285
Week 2 151 166 102 141 192 302
Week 3 159 172 106 146 199 320
(i) Using a moving average, find the trend and the average daily adjustments.
(ii) Forecast sales for the first two days of Week 4, and briefly discuss the likely accuracy of your
forecast.
EXERCISE 7G
(a) Explain why it is necessary to adjust seasonally time series data.
(b) The following data shows the output of a factory over a 3-week period. The factory works a
5-day week.
Mon Tue Wed Thu Fri
Week 1 86 92 104 98 78
Week 2 90 99 110 102 80
Week 3 93 101 116 110 83
(i) By means of a moving average, find the trend and the average daily variations.
(ii) Seasonally adjust the data for Week 3. What does this show ?




16


Probability
EXERCISE 8A
A company submits tenders for 4 contracts. The probabilities of acceptance are 0.4, 0.6, 0.5 and
0.2 respectively. Assuming that these are independent events, calculate the probability that the
company will:
(i) obtain all 4 contracts, (ii) obtain no contracts, (iii) obtain exactly one contract.
EXERCISE 8B
This is an extra part of Exercise 8A.
(iv) Find the probability that the company will obtain at least one contract.
EXERCISE 8C
A motor insurance company classifies its customers into 4 claims categories: very good (10%), good (30%), average (20%) and
poor (40%). The figures in brackets show the percentage of their customers in each classification. The claims record shows that
the percentage in each classification making at least one claim over the previous year is as follows:
Claims category Percentage making at least one claim
Very good 5%
Good 10%
Average 30%
Poor 60%
Assuming that there is no change in these percentages, find the probability that if a customer is
selected at random:
(i) the customer will make at least one claim next year.
EXERCISE 8D
This is a continuation of Exercise 8C.
Find the probability that if a customer makes at least one claim, the person will come from the
very good classification.
EXERCISE 8E

17

A company planned to recruit 30 administrative staff. The company recruits from 3 categories;
graduates, professionally qualified and those with administrative experience. The company
received 200 applications, some not in any of the categories listed above.
An analysis of the applicants showed that 120 were graduates, 40 had professional
qualifications and 60 had administrative experience. Of the graduates 20 were professionally
qualified, 22 had administrative experience and 5 had professional qualifications and
administrative qualifications (these 5 were counted in the earlier categories). Of those with
administrative experience 18 had professions (these included the 5 mentioned above).