An

Assignment

On

QUANTITATIVE TECHNIQUES AND

BUSINESS STATASTICS
Submitted towards partial fulfillment of the

II semester of MBA/MBL degree course

for the subject

Submitted by: Submitted to:

Priya Bothra Dr. R.N Aggarwal

MBA- MBL(IISem) Faculty In Charge

FACULTY OF MANAGEMENT STUDIES

NATIONAL LAW UNIVERSITY, JODHPUR

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 INDEX
S.N PARTICULARS PAGE-NO.
O
1. Acknowledgment 3

2. Mean deviation 4

3. Assignment 5

4. Transportation 8

5. Baye’s theorm 9

6. Co-relation 10

7. Linear programming 12

8. Replacement 15

9. Binomial distribution 17

10. Sampling 18

11. Queuing Theory 19

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 ACKNOWLEDGEMENT

This project owes its accomplishments to the inputs, help, and assistance received from
various website and various books. A great sense of gratitude is also expressed towards our
guiding faculty, Dr. R.N. Agarwal who very ably guided me in the completion of this
project. The project could not have been completed without his persistent feedback and
knowledge imparted about the subject.

Thanks to the library staff of the National Law University.

In the end I also extend thanks to our classmates who have always helped me whenever I
needed their help.

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MEAN DEVIATION

Q.1 In a Company named “ARIL Ltd.”, at the end of the first month; the salaries are
distributed to the managing officials. Given below are the different ranges of salary in
thousands and the respective number of officials entitled or lying in a particular salary
bracket. Calculate the mean deviation by taking assumed mean.

Class- 0-10 10-20 20-30 30-40 40-50 50-60 60-70 70-80 80-90 90-100
Interval
Frequency 15 18 20 23 27 21 25 16 24 30

SOLUTION:

Class-Interval Frequency Mid- Value D=X-A/C.I. FD Dx =X-X FDx

(C.I.) (F) (X)

0-10 15 5 -4 -60 48.5 727.5

10-20 18 15 -3 -54 38.5 693
20-30 20 25 -2 -40 28.5 570
30-40 23 35 -1 -23 18.5 425.5
40-50 27 45 0 0 8.5 229.5
50-60 21 55 1 21 1.5 31.5
60-70 25 65 2 50 11.5 287.5
70-80 16 75 3 48 21.5 344
80-90 24 85 4 96 31.5 756
90-100 30 95 5 150 41.5 1245

From the above distribution;

F= Number of employees

N= summation of frequency = 219

Class-Interval= Salary Bracket

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D= Deviations From X

A= Assumed mean

∑ FD=188

∑Dx=250

∑FDx=5309.5

Mean

X = A +∑fd/*i

=45 + 188/219 *10

= 45 +8.58=53.3

Mean deviation=

=5309.5/219

=24.24

Coefficient of mean deviation=

=24.24/53.5

=0.45

Conclusion:

Hence, the mean deviation of the salaries of managing officials at ARIL LTD Is Rs.24,240.

ASSIGNMENT
Q.2 In the Rajasthan handlooms Corporation, There are four processes to be carries out
namely- Ginning, Spinning, Weaving, Packaging. For each work, there are five different
types of machines employed MI, M2, M3, M4, M5 which render different volumes of
production units. Make the assignment of each work in such a way that there is maximum
output.

M1 M2 M3 M4 M5
GINNING 40 38 45 50 46

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SPINNING 35 42 37 56 47
WEAVING 49 60 44 58 54
PACKAGING 53 51 52 48 55

SOLUTION:

 The given question is one of the types of maximization assignment problem.

 It requires the addition of a dummy row as the number of jobs to be assigned is not
equal to the number of machines.
 Let ginning, spinning, weaving and packaging be denoted by – G, S, W, P
respectively.

STEP 1- Addition of a dummy row

M1 M2 M3 M4 M5
G 40 38 45 50 46
S 35 42 37 56 47
W 49 60 44 58 54
P 53 51 52 48 55
D.R. 0 0 0 0 0

STEP 2- Selecting the maximum value from the grid and subtracting the rest of the
values of the grid from it…..the maximum value-60

M1 M2 M3 M4 M5
G 20 22 15 10 14
S 25 18 23 4 13
W 11 0 16 2 6
P 7 9 8 12 5
D.R. 60 60 60 60 60

STEP 3- Selecting the minimum element from each row and subtracting it from the rest of
the elements in each row. The minimum elements have been highlighted in the above grid.

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 M1 M2 M3 M4 M5
G 10 12 5 0 4
S 21 14 19 0 9
W 11 0 16 2 6
P 2 4 3 7 0
D.R. 0 0 0 0 0

STEP 4- The same operation is repeated selecting minimum from each column. 0 is the
minimum element in each column. Thereafter, cancelling all the zeroes with minimum
lines.

M1 M2 M3 M4 M5
G 10 12 5 0 4
S 21 14 19 0 9
W 11 0 16 2 6
P 2 4 3 7 0
D.R. 0 0 0 0 0

STEP 5- Selecting the minimum element from the uncovered elements and subtracting it
from the rest of the uncovered elements and adding that minimum element at junction
points. The rest elements remain same. The minimum element is-4

M1 M2 M3 M4 M5
G 6 8 1 0 0
S 17 10 15 0 5
W 11 0 16 6 6
P 2 4 3 11 0
D.R. 0 0 0 4 0

STEP 6- Repeating the same operation

M1 M2 M3 M4 M5
G 5 7 0 0 0
S 16 9 14 0 5
W 11 0 16 7 7
P 1 3 2 11 0

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D.R. 0 0 0 5 1

STEP 7-Assigning the jobs by selecting zeroes starting from the column with minimum
number of zeroes and cancelling all the zeroes parallel to it horizontally.

M1 M2 M3 M4 M5
G 5 7 0 0 0
S 16 9 14 0 0
W 11 0 16 7 7
P 1 3 2 11 0
D.r. 0 0 0 5 1

FINAL SOLUTION:

M1- No job as dummy row won’t be considered

M2- Weaving

M3-Ginning

M4- Spinning

M5- Packaging

TOTAL PRODUCTION

M1- 0

M2- 60 UNITS

M3- 45 UNITS

M4- 56 UNITS

M5- 55 UNITS

TOTAL= 216 UNITS

Hence, total production by use of all four processes and five machines are 216 units.

TRANSPORTATION PROBLEM

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Q3 Mafatlal textiles have three manufacturing units. The monthly demand of warehouses is
being given in the table below. The transportation cost per tonne from different
manufacturing units to meet the demand is given below. Calculate and suggest the optimum
transportation schedule and the minimum transportation costs.

W1 W2 W3 W4 SUPPLY
D1 7 3 8 6 60
D2 4 2 5 10 100
D3 2 6 5 1 40
DEMAND 20 50 50 80 200

SOLUTION

1 2 3 4 SUPPLY P1 P2 P3
A ┘--- ┘20 ┘--- ┘40 60/20/0 3 3 4
B ┘20 ┘30 ┘50 ┘--- 100/70/20/0 2 2 2
C ┘--- ┘--- ┘--- ┘40 40/0 1 -- --
DEMAND 20/0 50/30/0 50/0 80/40/0 200
P1 2 1 0 5

P2 3 1 3 4

P3 3 1 3 4

TOTAL COST = 3 x 20 + 6 x 40 + 4 x 20 + 2 x 30 + 5 x 50 + 1 x 40

= Rs 730

Hence, the above given solution is optimal transportation schedule for the company and it
will satisfy demand of each and every distribution point minimum and the optimum cost of
Rs 730.

BAYE’S THEOREM

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Q4. SHIV industries is a manufacturer of bicycles and tricycles for children’s and for this
they have two different suppliers for wheels of cycle and they are named chawla & co. and
kamal industries .and these wheels are placed in a heap and from the past record it has been
found out that 5% of parts supplied by chawla & co. are defective and 9% from kamal
industries are defective. Wheel is selected from the heap at random and is found to be
defective. What is the probability that it was supplied by chawla & co?

Solution:-

Using the Baye’s Theorem

H1 = Steering supplied by chawala & co. = P (H1) = 1/2

H2 = Steering supplied by kamal industries = P (H2) = 1/2

E = Defective part is found

P( E/ H1) = 5/100

P( E/ H2) = 9/100

P(H1/E) = (P( H1 ) (P E/H1 ) /[ P( H1 ) (P E/H1 ) ] + [ P( H2 ) (P E/H2 ) ]

Hence Substituting bayes theorm

½ * 5/100 / ½ * 5/100 + ½*9/100

P (H1/E) = 0.3571

CONCLUSION:
The probability that the steering wheel would be supplied by chawla and co. is 0.3571.

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CO-RELATION

Q5. Food and Agricultural Association has ordered a probe into the deaths of general public
due to consumption of toxic crops. The following data has been obtained from the Araria
district of Bihar which produces wheat. Calculate Karl Pearson’s coefficient of correlation
between amount of pesticide & wheat crop in a district Araria in year 08-09.

Pesticide
(in ‘000 10 12 15 18 25 35 45 50 55 65
Kg.)
Production
Of Wheat
5 7 13 15 20 21 29 30 36 44
(in metric
ton)

Solution:-

Size of
Size of Deviation
Squaring of item Deviation Square of
item from mean
deviation (production from mean deviation dxdy
(pesticide) X= 33
d²x in metric Y=22 d² y
X Dx
ton) Y

10 -23 529 5 -17 289 391

12 -21 441 7 -15 225 315
15 -18 324 13 -9 81 162
18 -15 225 15 -7 49 105
25 -8 64 20 -2 4 16

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 35 2 4 21 -1 1 -2
45 12 144 29 7 49 84
50 17 289 30 8 64 136
55 22 484 36 14 196 308
65 32 1024 44 22 484 704
∑dxdy=
∑X= 330 0 ∑d²x= 3528 ∑Y= 220 0 ∑d²y= 1442
2219

X-SERIES Y-SERIES

X = ∑X/ N=330/10 =33 Y= ∑Y/N= 220/10 = 22

σx = √∑d²x/N = √3528/10 = 18.78 σy= √∑d²y/N =√1442/10

=12.01

r= ∑dxdy/Nσx.σy = 2219/10∙18.78∙12.01= 0.98

Hence, there is a positive correlation between the pesticides used on wheat crop and death
due to use of pesticides is 0.98.

LINEAR PROGRAMMING PROBLEM

Q6.A Company named Jyoti Bhog Ltd owns two flour mills, A and B, which have different
productions capacities for high, medium, and low grade flour. This company has entered to
supply flour to a firm every week with 12, 8, & 24 quintals of high, medium and low grade

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respectively. It costs the company Rs 1000 and Rs 800 per day to run a mill A & B
respectively. On a day, Mill A produces 6, 2 and 4 quintals of high, medium and low grade
flour respectively; Mill B produces 2, 2 and 12 quintals of high, medium and low flour
respectively. How many days per week should each mill operated in order to meet the
contract order most economically.

SOLUTION:

Let number of days per week Mill A be = x

Let number of days per week Mill B operates be = y

The data can be represented in the following tabular manner

Mill A Mill B
Produce/Mills Requirements
x y

High Grade 6 2 12

Medium Grade 2 2 8

Low Grade 4 12 24

Cost (Rs)/ day 1000.00 800.00

Thus the given data can be given in the table can be expressed in Linear Programming form
in the following way

ZMIN = 1000x + 800y

Subject to

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 6x +2y ≥ 12

2x + 2y ≥ 8

4x + 12y ≥ 24

Condition,

x ≥ 0, y ≥ 0

The inequalities are converted to equalities

6x +2y = 12

X 0 2

Y 6 0

The data can represented in the form of equations of a line in the following manner

2x + 2y = 8

X 0 4

Y 4 0

4x + 12y = 24

X 0 6

Y 2 0

Now, substituting the values of all the above given 3 equations in to graph to find out
feasible area to minimize the c ost of operating both mills owned by company.

Conclusion
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points Co-ordinates Zmin = 1000x +800y
A (6,0) 6000
B (3,1) 3800
C (1,3) 3400
D (0,6) 4800

Thus minimum cost of operating 2 mills is 3400 at point c hence, the company will operate
first mill for 1 day and second mill for 3 days in a week to attain the minimum cost of
operation.

REPLACEMENT:

Q7. In order to project the financial position how much expenses are being incurred by the
company in maintaining its machine and also to find out best period to replace its existing
machine being used in the bottling plant of bislery (mineral water) unit. The following
given below information is ascertained by the accountant of the company.

Maintenance Cost (in Resale Price (in

Year Rs.) Rs.)

1 8000 145000

2 9000 132000

3 10500 122000

4 13000 114000

5 15000 109000

6 20000 90000

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 7 25000 70000

8 30000 50000

In which year should the processing machine be replaced?

Solution:

Costs of owning and operating the machine

T(n)=C-S+
Year (n) Mt ΣMt S C-S ΣMt A(n)=T(n)/ n

14500
1 8000 8000 0 15000 23000 23000

13200
2 9000 17000 0 28000 45000 22500

1050 12200
3 0 27500 0 38000 65500 21833.3

1030 11400
4 0 40500 0 46000 86500 21625

1500 10900
5 0 55500 0 51000 106500 21300

2000
6 0 75500 90000 70000 145500 24250

7 2500 10050 70000 90000 190500 27214.28

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 0 0

3000 13050 11000

8 0 0 50000 0 240500 30062.5

* Mt =Maintenance Cost

ΣMt= Cumulative maintenance cost

S= Resale Price

C=Purchase Price

T (n) = Total Cost for n years

A (n) = Average Cost for n years

From the above table we can conclude that the machine should be replaced at the end of 5 th
year. If it is not replaced at this period of time the average cost per year will start increasing.

BINOMIAL DISTRIBUTION:

Q8. Apple is supplying its macbook to its distributors in India who is located in Bombay
and wants to conduct an enquiry into the inventory of technical support mechanism in all its
branches located throughout India. Each laptop has an 8% probability of not working. 20
laptops were randomly selected for the enquiry:

(a) What is the likelihood that 5 will be broken? (b) What is the likelihood that they
will all work?

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Solution:-

An item can either be defective or not defective. Thus, there are only two outcomes. The
probability (p) of a defective item being produced is 0.08.

p=0.08

q=1-p =1- 0.08= 0.92

n=20

n
a) Probability of 5 broken laptops [ p(5)] r

20
5 (.08)5 (.92)15

= .0145

20
b) Probability of all laptops working [p(0)]= 5 (.08)0 (.92)20

= .1887

Hence, the probability of five laptop being defective out of randomly selected 20 laptop is

0.0145 and the all being in working condition is 0.1887.

SAMPLING:

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 Q9. In order to admit students to its Help Underprivileged Children education program,
shiksha high school has conducted a survey of household income of its 3000 students. How
large a sample size should be taken in order to estimate the mean annual earning within plus
and minus Rs. 1000 and at 95% confidence level? The standard deviation of annual
earnings is known to be Rs. 3000.

Solution:

As desired upper and lower limit is Rs. 1000 i.e. we want to estimate the annual earnings
within plus and minus Rs.1000.

As the confidence level is 95% value of is 1.96.

Where is Standard Error

is standard deviation i.e. 3000

Therefore, the desired sample size is about 35.

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QUEUING THEORY:

Q10. In order to decide the number of breaks to be given to employees according to

Taylor’s fatigue study model, Perfect Footwear Company’s Jaipur outlet has found the
following data: That on an average 20 customer arrive in an hour and their service rate is 23
customers per hour. Find out the average time the employees are free on a 10 hour working
day. And also find the expected number of customers at the outlet.

Solution:

Service rate (μ) = 23/ hr

Arrival Rate (λ) = 20/ hr

Where is utilization parameter

The average time the employees are free on a 10 hr day

1.30 hrs

Expected number of customers at the outlet

= 6.692

Hence, from the solution we can conclude that average time for which employee remains
free in an hour is 1.30 hr and expected no. of customer arrives at outlet is 7.

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