MEKANA INTERNATIONAL HIGHER SECONDARY SCHOOL

MAYILADUTHURAI
CHAPTER 6
APPLICATION ANSWERS
12th Standard
Business Maths

1) Define random variable.

Answer : A random variable is a real valued function defined on a sample space S and taking values in
(-∞, ∞) or whose possible values are numerical outcomes of a random experiment.
2) Explain what are the types of random variable?
Answer : Random variables are classified into two types namely discrete and continuous random
variables.
3) Define discrete random variable.
Answer : Discrete random variable : A variable which can assume finite number of possible values is
called a discrete random variable.
4) What do you understand by continuous random variable?
Answer : Continuous random variable : A random variable X which can take on any value in the
interval is called continuous random value.
5) Describe what is meant by a random variable.
Answer : A random variable is a function whose domain in the set of possible outcomes and whose
range is the subset of the set of real numbers.
6) Distinguish between discrete and continuous random variable.
Discrete random variable Continuous random variable
Finite number of
1 possible values Takes any value in the interval
P(xi)≥ 0∀𝑖, F(x) ≥ 0∀x and
2 𝑛
∑ p(x )=1 ° ∫ 𝑓(𝑥)𝑑𝑥 = 1
𝑖=1 i
7) Explain the distribution function of a random variable.
Answer : The discrete cumulative distribution function or distribution function of a real valued
discrete random variable X takes the countable number of points x1,x2, ....
with corresponding probabilities p(x1)p(x2) ..... and the distribution function is defined by
Fx(X)=P(Xx) for all x∈ 𝑅
ie. Fx(X)= ∑ xi x p(xi )
8) Explain the terms
(i) probability mass function,
(ii) probability density function and
(iii) probability distribution function.
Answer : (i) Probability mass function:
PX(x)=p(x)
={p(x=xi)=pi=p(xi)if x=xi, i=1,2,...n
0 if x≠xi
𝑛
Here p(xi)≥0∀i∑ p(x )=1
𝑖=1 i
P (t1 ≤ X ≤ t2) = ° ∫ 𝑓(𝑥)𝑑𝑥 = 1
Here f(x) ≥0∀x and °∫ 𝑓(𝑥)𝑑𝑥 = 1
iii) Probability distribution function:
FX(x)=P(X≤x)for all x ∈R.
9) What are the properties of (i) discrete random variable and (ii) continuous random variable?
Answer : For discrete random variable:
𝑛
p(xi)≥0∀i and ∑ 𝑖 = 1 p(x i ) = 1and X takes only infinite number of values
 For Continuous random variable:
f(X)≥0∀x and °∫ 𝑓(𝑥)𝑑𝑥 = 1 and X takes infinite number of values in the interval.

10) State the properties of distribution function.

Answer : 1) 0≤F(x)≤1, -∞< x< 0
2) F(-∞)=0 and F(∞)=1
3) is a non-decreasing function, F(a) ≤F(b) for a< b
4) lim F(x+h)=F(x), since F(x) is continuous from the right
h→0

5) F'(x)=f(x)≥0
6) P(a≤x≤b)=F(b)-F(a)
11) What are the properties of Mathematical expectation?
Answer : (i) E(a) = a where a is a constant
(ii) E(aX) = a. E(X)
(iii) E(aX + b) =a E(X) + b
(iv) If X ≥ 0, then E(X) ≥ 0
(v) V(a) = 0
(vi) V (aX + b) = a2 V(X).
12) What do you understand by Mathematical expectation?
Answer : E(X) is an 'average' of the values that the random variable takes on.
i.e E(X) is the mean of X, which is denoted by μx.
13) How do you define variance in terms of Mathematical expectation?
Answer : Var (X) = E(X2) - [E(X)]2 where
E(X 2 ) = {∑ x 2p(x) for discrete random variable
x2P (x)dxfor continuous random variable
−∞
14) Define Mathematical expectation in terms of discrete random variable.
Answer : Let X be a discrete random variable with probability mass function p(x), then its expected
value is defined by E(X)=∑ x x. p(x)
15) State the definition of Mathematical expectation using continuous random variable.
Answer : If X is a continuous random variable and f(x) is the value of its probability density function
at x, then the expected value of X is
E(X)= °∫ 𝑥, (𝑥)𝑑𝑥
CHAPTER 7 APPLICATION ANSWERS
12th Standard
Business Maths
1) Define Binomial distribution.
Answer : A random variable X is said to follow binomial distribution with parameter n and p, if it assumes
only non-negative value and its probability mass function is given by
P(X=x)=P(x) =q=1-p={n C x P x q n−x , x = 0, 1, 2, . . . n; 0,otherwise
2) Define Bernoulli trials.
Answer : A random experiment whose outcomes are of two types namely success S and failure P, occurring
with probabilities p and q is called a Bernoulli trial.
3) Derive the mean and variance of binomial distribution.
Answer : The mean of the binomial distribution
𝑛 𝑛
n
Ex = ∑ x. p(x) = ∑ ( ) 𝑝 𝑧 𝑞𝑛−𝑧
x
𝑥=0 𝑥=0
n
=p. ∑𝑛𝑥=0 x ( ) 𝑝 𝑥−1 𝑞 𝑛−𝑥
x
[Take p common]
 𝑛
n n−1
=p. ∑ x. p ( x ) ( x−1 ) 𝑝 𝑥−1 𝑞𝑛−𝑥
𝑥=1

𝑛
n − 1 𝑥−1 𝑛−𝑥
=np. ∑ ( )𝑝 𝑞
𝑥=1 x−1
=np(q+p)n-1 [using binomial theorem]
(x+a)n = xn + nC1 xn-1 a1 +…+an
=np(1) n-1 [p+q=1]
=np
Mean = E(x) =np ……(1)
𝑛
n
Now, E(X2)= ∑ 𝑥 2 ( ) 𝑝 𝑥 𝑞𝑛−𝑥
𝑥=0 x
𝑛 n 𝑥 𝑛−𝑥
= ∑𝑥=0{x(x − 1) + x} ( ) 𝑝 𝑞
x
𝑛 n 𝑥 𝑛−𝑥 n
=∑𝑥=0{x(x − 1). ( ) 𝑝 𝑞 + ∑x. ( ) 𝑝 𝑥 𝑞𝑛−𝑥
x x
n) n
n( x n − 2
=∑𝑛𝑥=2 x(x − 1) x(x−1) ( ) 𝑝 𝑥−2 𝑞𝑛−𝑥 + ∑x ( ) 𝑝 𝑥 𝑞𝑛−𝑥
n − 2z x
n − 2 𝑥−2 𝑛−𝑥
=n(n-1) 𝑝 2 (q+p) { ( )𝑝 𝑞 }+np (using(1))
n−2
=n(n-1)𝑝 2 (q+p)𝑛−2 + np
[using binomial theory]
=n(n-1) 𝑝 2 + 𝑛𝑝 … . . (2)
Variance (E(X2)-[E(X)]2
=n(n-1)p2+np-(np)2
[From (1) & (2)]
=n2 p2 – np2 + np – n2 p2
=np(1-p)=npq [p+q=1 q=1-p]
Mean = np and variance = npq
4) Write down the conditions for which the binomial distribution can be used.
Answer : The binomial distribution can be used under the following conditions.
i. The number of trials en' is finite,
ii. The trials are independent of each other.
iii. The probability of success 'p' is constant for each trial.
iv. In every trial there are only two possible outcomes namely success or failure.
5) Mention the properties of binomial distribution.
Answer : (i) Binomial distribution is symmetrical if p = q = 0.5. It is skew symmetric if p≠q. It is
positively skewed if p < 0.5 and it is negatively skewed if p > 0.5.
(ii) For binomial distribution, variance is less than mean.
Variance = npq = (np)q < np < mean.
6) Define Poisson distribution.
Answer : A random variable X is said to follow a Poisson distribution with parameter λ if it assumes
only non-negative values and it probability mass function is given by
𝑒𝑧
P(x)=P(X=x)={ , x=0, 1, 2……, X>0
𝑥!
0, otherwise

7) Write any 2 examples for Poisson distribution.

Answer : (i) Number of lightnings per second. (ii) Number of printing mistakes per page in a textbook.
8) Write the conditions for which the poisson distribution is a limiting case of binomial distribution.
Answer : Poisson distribution is a limiting case of binomial distribution under the following conditions.
i. n, the number of trials is indefinitely large ie., n⟶∞.
ii. p, the constant probability of success in each trial is very small ie., p ⟶0.
iii. np = λ is finite.
9) Derive the mean and variance of poisson distribution.

Answer : Mean E(X) = ∑𝑥=0 x. p(x, )

𝑒 − , 2
=∑ x.
𝑥=0 𝑥!

Taking out  from the numerator and x from the denominator

 x−1
We get, E(X) =  e− . x. ∑ (x−1)!

x−1
=. e− ∑
𝑥=1 (x−1)!
2
=. e− (1+ + +…)
2!
=. e° = (1)=
 E(X)= 

E(X 2 )= ∑𝑥=0 p (𝑥, )
 𝑒 − 𝑥
=∑𝑥=0 x2. 𝑥!
 𝑒 − 𝑥
= ∑𝑥=0 (𝑥(𝑥−1)+𝑥) 𝑥!
[x(x-1)+x=x2-x+x=x2]
= ∑ 𝑒− 𝑥
𝑥=0 (𝑥(𝑥−1). + ∑
𝑥! 𝑥.𝑒− 𝑥
𝑥=0 ( 𝑥!

Taking 2 from the numerator and x(x-1) from the denominator we get,

2 𝑒 − 𝑥−2
E(X 2 )= ∑ (x)(x − 1). +E(X)
𝑥=0 x(x−1) (𝑥−2)!

𝑥−2
=2 . 𝑒 − ∑ (𝑥−2)!
+  [E(X)= ]
𝑥=0
2
=2 . 𝑒 − e +  [ e = 1 +  + + ⋯]
2!

= 2 + 
V(X)=E(X2)-[E(X)]2 = 2 +  − 2 =
Mean = Varience=
10) Mention the properties of poisson distribution.
Answer : Poisson distribution is the only distribution in which the mean and variance are equal.
11) Define Normal distribution.
Answer : A random variable X is said to follow a normal distribution with parameters mean μ and
variance σ2, if its probability density function is given by
1 −1 𝑥−μ 2
F(x:μ,σ)= σ√2𝜋exp { 2 ( ) }
σ

12) Define standard normal variate

Answer : A random variable Z= X−μ follows the standard normal distribution is called the standard
σ
normal variate with mean 0 and standard deviation 1. i.e. Z~ N(0,1).
 13) Write down the conditions in which the Normal distribution is a limiting case of binomial
distribution.
Answer : Normal distribution is a limiting case of Binomial distribution under the following
conditions.
(i) n, the number of trials is infinitely large i.e. n→∞
(ii) Neither p(or q) is very small.
14) Write down any five chief characteristics of Normal probability curve.
Answer : (i) The curve is bell shaped and symmetrical about the line x = μ.
(ii) Mean, median and mode of the distribution coincide.
(lii) X-axis is an asymptote to the curve.
(iv) The points of inflexion of the curve are x=μ±σ.
(v) The curve is unimodal.

CHAPTER 8 APPLICATION ANSWERS

12th Standard
Business Maths
1) What is population?
Answer : The group of individuals considered under study is called as population.
2) What is sample?
Answer : A selection of a group of individuals from a population in such a way that it represents the population is called as sample.
3) What is statistic?
Answer : Any statistical measure computed from sample is known as statistic.
4) Define parameter
Answer : The statistical constants of the population like mean (μ), variance (σ2) are referred as population parameters.
5) What is sampling distribution of a statistic?
Answer : It is the frequency distribution which is formed with various values of a statistic computed from different samples of the
same size drawn from the same population.
6) What is standard error?
Answer : The standard deviation of the sampling distribution of a statistic is known as its Standard Error.
7) Explain in detail about simple random sampling with a suitable example.
Answer : In this technique the samples are selected in such a way that each and every unit in the population has an equal and
independent chance of being selected as a sample.
Simple random sampling without replacement is followed. The following two methods are generally used.
(a) Lottery method: This is the most popular and simplest method when the population is finite. In this method, all the items of the
population are numbered on separate slips of paper of same size, shape and colour. They are folded and placed in a container and
shuffled thoroughly. Then the required numbers of slips are selected.
(B) Table of Random number: The random number table has been so constructed that each of the digits 0,1,2, ... ,9 will appear
approximately with the same frequency and independently of each other.
The various random number tables available are
a. L.H.C. Tippet random number series
b. Fisher and Yates random number series
c. Kendall and Smith random number series
d. Rand Corporation random number series.
8) Example: Tippett's table of random numbers is 20 items out of 6000. Here we consider row wise selection of random numbers.
Following steps are involved:
a) The population is divided into different classes so that each stratum will consist of more or less homogeneous elements. The strata
are so designed that they do not overlap each other.
b) After the population is stratified, a sample is drawn at random from each stratum using Lottery Method or Table of Random
Number Method.
Example:
From the following data, select 68 random samples from the population of heterogeneous group with size of 500 through stratified
 random sampling, considering the following categories as strata.
Categoryl: Lower income class -39%
Category2: Middle income class - 38%
Category3: Upper income class- 23%

solution:

Stratum Homogenous Percentage from population Number of people in each strata Random Samples
group
39
Category 1 Lower income 39 × 500 = 195 195 × 68 =
class 100
26.5 ∼ 26
500
38
Category 2 Middle income 38 × 500 = 190 190 × 68 =
class 100
26.5 ∼ 26
500
23
Category 3 Upper income 23 × 500 = 115 115 × 68 =
100
class 15.6 ∼ 16
500
Total 100 500 68

9) Explain in detail about systematic random sampling with example.

Answer : In systematic sampling, randomly select the first sample from the first k units. Then every kth member, starting with the first selected sample, is
included in the sample.
Procedure for selection of samples by systematic sampling method.

(I) If we want to select a sample of 10 students from a class of 100 students, then k

Thus, sampling interval = 10 denotes that for every 10 samples one sample has to be selected.
(II) If the selected first random sample is 5, then the rest of the samples are automatically selected as 5, 15, 25, 35, 45, 55, 65, 75,
85, 95.[ k=10]
10) Explain in detail about sampling error.
Answer : Errors, which arise in the normal course of investigation or enumeration on account of chance, are called sampling errors.
Sampling Errors arise due to the following reasons:
a) Faulty selection of the sample instead of correct sample by defective sampling technique.
b) The investigator substitutes a convenient sample if the original sample is not available while investigation.
c) In area surveys, while dealing with border lines it depends upon the investigator whether to include them in the sample or not. This
is known as Faulty demarcation of sampling units.
11) Explain in detail about non-sampling error.
Answer : The errors that arise due to human factors which always vary from one investigator to another in selecting, estimating or
using measuring instruments are called Non-Sampling errors.
It may arise in the following ways:
a) Due to negligence and carelessness of the part of either investigator or respondents.
b) Due to lack of trained and qualified investigators.
2
c) Due to framing of a wrong questionnaire.
.
d) Due to applying wrong statistical measure. T
e) Due to incomplete investigation and sample survey. h
i
12) State any two merits of simple random sampling. s
Answer : 1. This method is economical as it saves time, money and labour. m
e
2. Personal bias is completely eliminated t
13) State any three merits of stratified random sampling. h
2. It is easy to administer, if the population under study is sub-divided. o
d
3. It reduces the time and expenses in dividing the strata into geographical divisions, since the d
government itself had divided the geographical areas. i
s
14) State any two demerits of systematic random sampling. t
Answer : 1. Systematic samples are not random samples. r
i
2. If N is not a multiple of n, then the sampling interval (k) cannot be an integer, thus sample selection becomes difficult.
b
15) State any two merits for systematic random sampling. u
Answer : 1. This method is simple and convenient. t
e
 s the sample more evenly over the entire listed population.
16) Mention two branches of statistical inference?
Answer : The two branches of statistical inference are Estimation and testing of hypotheses
17) What is an estimator?
Answer : An estimator is a sample statistic used to estimate a population parameter.
18) What is an estimate?
Answer : An estimate is a specific observed value of a statistic.
19) What is point estimation?
Answer : An estimate of a population parameter given by a single number is called as point estimation.
20) What is interval estimation?
Answer : Generally, there are situations where point estimation is not desirable and we are interested in finding limits within which the
parameter would be expected to lie is called an interval estimation.
21) What is confidence interval?
Answer : The interval [c1, c2] within which the unknown value of the population parameter is expected to lie is known as Confidence
Interval.
22) What is null hypothesis? Give an example.
Answer : Null hypothesis is the hypothesis which is tested for possible rejection under the assumption that it is true and it is denoted by
H0.
Example: If we want to find the population mean has a specific value μo, then the null hypothesis Ho is Ho is Ho :μ=μ0
23) Define alternative hypothesis.
Answer : Any hypothesis which is complementary to the null hypothesis is called as the alternative hypothesis and it is usually denoted
by H1.
24) Define critical region.
Answer : A region corresponding to a test statistic in the sample space which tends to rejection of Ho is called critical region.
25) Define critical value.
Answer : The value of test statistic which separates the critical region and the acceptance region is called the critical value.
26) Define level of significance
Answer : The probability of type I error is known as level of significance.
27) What is type I error?
Answer : The error of rejecting Ho when it is true is type I error.
28) What is single tailed test.
Answer : When the hypothesis. about the population parameter is rejected only for the value of sample statistic falling into one of the
tails of the sampling distribution, then it is known as one tailed test.
29) Explain the types of sampling.
Answer : The types of sampling are
(i) Non- Random sampling or Non-probability sampling.
Different types of probability sampling are
(i) Simple random sampling
(ii) Stratified random sampling
(iii) Systematic sampling Simple random sampling has
(a) Lottery method and
(b) Table of random number method
30) Write short note on sampling distribution and standard error.
Answer : Sampling distribution of a statistic is the frequency distribution which is formed with various values of a statistic computed
from different samples of the same size drawn from the same population.
Standard Error:
The standard deviation of the sampling distribution of a statistic is known as its Standard Error.
S.No. Statistic Standard Error
1 Sample mean /√𝑛
2 Observed sample proportion √𝑃𝑄/𝑛
3 Sample standard deviation √𝑎 2 /2𝑛
4 Sample variance 𝑎 2 √2/𝑛
5 Sample quartiles 1.36263/ √𝑛
6 Sample median 1.25331/ √𝑛
7 Sample correlation coefficient (1-p2)/ √𝑛
 31) Explain the procedures of testing of hypothesis
Answer : Hypothesis testing is also referred as "Statistical Decision Making".
There are two types of statistical hypothesis
(i) Null hypothesis: which is tested for possible rejection under the assumption that it is true
(ii) Alternative hypothesis which is complementary to the null hypothesis
For example: Ho:μ=μ0
i) H1:μ≠μ0 is know as two tailed alternative test
ii) H1:μ > μ0 and H1:μ< μ0 are known as one tailed alternative
iii) H1:μ > μ0 is said to be right tailed test where the critical region lies entirely on the right tail of the normal curve.
iv) H1:μ< μ0 is said to the left tailed test where the critical region lies entirely on the left tail of the normal curve.
32) Explain in detail about the test of significance for single mean.
Answer : Let xi, (i=1,2,3 ... n) is a ran dom sample of size n from a normal population with mean μ and variance σ2, then the
σ2
sample mean is distributed normally with mean μ and variance
n
X−μ
Thus for large samples, the standardn normal variate corresponding to X̄ is: Z = σ ~N(0, 1)
√𝑛
X−μ
Under the null hypothesis, that the sample has been drawn from a population with mean μ and variance σ2, the test statistic is Z = σ
√𝑛

CHAPTER 9 APPLICATION ANSWERS

12th Standard
Business Maths

1) Define Time series.

Answer : When quantitative data are arranged in the order of their occurrence, the resulting series is
called the time series.
2) What is the need for studying time series?
Answer : Time series has an important objective to identify the variations and try to eliminate the
variations and also helps us to estimate or predict
the future values.
3) State the uses of time series.
Answer : (i) It helps in the analysis of the past behavior
(ii) It helps in.forecasting and for future plans
(iii) It helps in the evaluation of current achievements
(iv) It helps in making comparative studies between one time period and others.
4) Mention the components of the time series.

(ii) Seasonal variations

(iii) Cyclic variations
(iv) Irregular variations
5) Define secular trend.
Answer : The tendency of time series to increase or decrease or stagnates during a long period of time is
secular trend.
6) Write a brief note on seasonal variations
Answer : Tendency movements are due to nature, which repeat themselves periodically in every seasons.
These variations repeat themselves in less than one year time. It is measured in an interval of time.
Seasonal variations may be influenced by natural force, social customs and traditions.
7) Explain cyclic variations.
Answer : Cyclic variations are not necessarily uniformly periodic in nature. This mayor may not
follow exactly similar patterns after equal intervals of time.
Generally, one cyclic period ranges from 7 to 9 years and there is no hard and fast rule in the fixation of
years for a cyclic period.
8) Discuss about irregular variation
Answer : Irregular variations do not have particular pattern and there is no regular period of time of
their occurrences. Normally they are short terms variations but its occurrence sometimes has its effect
so intense that they may give rise to new cyclic or other movements of variations.
For example floods, wars, earthquakes, Tsunami, strikes, lockouts etc.
9) Define seasonal index.
Answer : Seasonal index is a measure of how a particular season compares with the average season.
10) Explain the method of fitting a straight line.
Answer : The line of least fit is a line from which the sum of the deviations of various points is zero.
This is the best method for obtaining the trend values.
(i) The straight line trend is represented by
Y = a + b X ............. (1)
where Y is the actual value and X is time
(ii) The constants 'a' and 'b' are estimated by solving the following two normal Equations
∑ Y=na+b∑ X
∑ XY = a∑ X + b ∑ X2 where n is the number of years given in the data.

(iii) By substituting the values of 'a' and 'b' in the trend equation (1), we get the line of best fit.
11) State the two normal equations used in fitting a straight line.
Answer : The two normal equations are
∑ Y=na+b∑ X
∑ XY = a ∑ X + b ∑ X2 where n is the number of years given in the data.

12) State the different methods of measuring trend.

Answer : The different methods of measurements of trends are
(iv) Free hand or graphic method
(v) Method of semi averages
(vi) Method of moving averages
(vii)Method ofleast squares
13) Define Index Number
Answer : An index number is a statistical measure of fluctuations in a variable arranged in the form of
a series arid using a base period for making
comparisons.
14) State the uses of Index Number.
Answer : (i) It is an important tool for the formulating decision and management policies
(ii) It helps in studying the trends and tendencies
(iii) It determines the inflation and deflation in an economy
15) Mention the classification of Index Number.
Answer : Index number can be classified as follows
(viii) Price index number
(ix) Quantity index number
(x) Cost of living index number
16) Define Laspeyre’s price index number.
Answer : Laspeyres price index number measures the general changes in the retail or wholesale price
level of a particular or group of commodities.
Laspeyres price index number
L ∑ p1q0
P01 = ∑ p1q0 × 100
17) Explain Paasche’s price index number.
Answer : In Paasche's price index number, the quantity of the current year is used as weight.
Paasche's price index number.
∑ 𝑝1 𝑞1
Pp01 = ∑ 𝑝 x 100
1 𝑞0

18) Write note on Fisher’s price index number

Answer : Fisher's price index number is the geometric mean between Laspeyre's and Paasche's price
index number −−−−−

∑p q
∑ p1 1 q
Fisher's price index number = √ ∑ 1p00q×
0 ∑ p0q1 × 100

19) State the test of adequacy of index number.

Answer : The test of adequacy of index numbers are
(xi) Time reversal test
(xii) Factor reversal test
20) Define Time Reversal Test.
Answer : This test maintains time consistency by working both forward and backward with respect to
time. −−−−−−−−−−−−
∑ p1q0
L √ ∑ p1 q1
P01 = ∑ p0q0 × ∑ p0 q1;

−−−−−−−−−−−−
F √ ∑ p0q0
∑ p0 q0
P01 = ×
∑ p1q1 ∑ p1q0

F F
P01 = P01 = 1
21) Explain Factor Reversal Test.
Answer : The product of price index number and quantity index number from the base year to the
current year should be equal to the true value ratio.
Factor reversal test is given by
∑ p1 q1
P01 × Q01 = ∑ p0q0
−−−−−−−−−−
∑ p q ×∑ p q
whrere P01 = √ ∑ p1 0q0 0×∑ 1p01q1and
−−−−−−−−−−
Q 01 √ = ∑ q1q0×∑ q1p1

∑ p0 q0 ×∑ p0 q1
22) Define true value ratio.
Answer : True value ratio is the ratio between the total value of current period and total.
23) Discuss about Cost of Living Index Number.
Answer : Cost of living index number is constructed to tudy the effect of changes in the price of
goods and services of consumers for a current period
as compared with base period.
The C.L.I can be constructed by the following method
 ∑P1 q0
(i) C.L.I = x 100
∑P0 q0
(Aggregate expenditure method)
∑PV P
(ii) C.L. I = ∑V where P = P1 x 100 and V = ∑P0 q0 (Family budget method)
0
24) Define Family Budget Method.
Answer : In this method, the weights are calculated by multiplying prices and quantity of the base year.
∑PV
Cost of living index number = where
∑V
P1
P= x 100 is the price relative and V = ∑P0 q0 is the value relative
P0
25) State the uses of Cost of Living Index Number.
Answer : (i) It indicates whether the real wages of workers are rising or falling for a given time.
(ii) It is used by the administrators for regulating dearness allowance or grant of bonus to the workers.
26) Define Statistical Quality Control.
Answer : The main purpose of statistical quality control is to device statistical techniques which
would help in elimination of assignable causes and bring the production process under control
27) Mention the types of causes for variation in a production process.
Answer : There are two causes of variation which affects the quality of the product namely
(xiii) Chance causes (or) Random causes
(xiv) Assignable causes.
28) Define Chance Cause.
Answer : The minor causes which do not affect the quality of the products to an extent are called as
Chance causes or Random causes.
29) Define Assignable Cause.
Answer : The assignable causes may occur in at any stage of the process, right from the arrival of the
raw materials to the final delivery of the product.
30) What do you mean by product control?
Answer : Product control means that controlling the quality of the product by critical examination
through sampling inspection plans. Product control aims at a certain quality level to be guaranteed to
the customers.
31) What do you mean by process control?
Answer : In Process Control the proportion of defective items in the production process is to be
minimized and it is achieved through the technique of control charts.
32) Define a control chart.
Answer : The statistical tool applied in process control is the control chart. Control charts are the
devices to describe the patterns of variation.
33) Name the control charts for variables.
Answer : The control charts of variables are
¯ ¯¯
Charts for mean (X )
Charts for Range (R)
34) Define mean chart.
Answer : The mean chart is to show the quality averages of the samples taken from the given process
35) Define R Chart.
Answer : The R chart is to show the variability or dispersion of the samples taken from the given
process.
36) What are the uses of statistical quality control?
Answer : It is a powerful technique used to diagnose the lack of quality in any of the raw materials,
process, machines etc.
It is essential that the end products should possess the qualities that the consumer expects from the
manufacturer.
37) Write the control limits for the mean chart.
Answer : The control limits for mean chart in two different cases are
 Case (i) when and SD are given Case (ii) when and SD are not given

(i) UCL = X+X3 (i) UCL = X+X𝐴2 R
√𝑛
(ii) CL = X (ii) CL = X
3
(iii) LCL = X − (i) LCL = X−A2 R
√𝑛
38) Write the control limits for the R chart.

Case (i) when SD are given Case (ii) when SD are not given
¯¯ ¯ ¯¯ ¯
(i) UCL = R + 3σR (i) UCL = D4 R
¯¯ ¯ ¯¯ ¯
(ii) CL = R (ii) CL = R
¯ ¯
¯¯
(iii) LCL = R − 3σR ¯¯
(iii) LCL = D3 R

1) What is transportation problem?

Answer : A transportation problem is to determine the amount to be transported from each origin to
each destinations such that the total transportation cost is minimized.
2) Write mathematical form of transportation problem.
Answer : The objective function is
m n
minimize Z = Σ Σ Cij xij subject to the constraints

i=1 j=1
n
Σ x ij = ai , i = 1, 2, ......... m (Supply constraints)
j=1
m
Σ x ij = bj , j = 1, 2, ..........n (demand constraints)
i=1

xij ≥, 0 for all i, j (non-negative restrictions)

3) What is feasible solution and non degenerate solution in transportation problem?
Answer : A feasible solution to a transportation problem is a set of non negative values xij (i = 1,2, m,
j = 1, 2, ........ n) that satisfies the constraints.
If a basic feasible solution to a transportation problem contains exactly m+n-l allocations. in
independent positions, it is called a non degenerate basic feasible solution.
4) What do you mean by balanced transportation problem?
Answer : If the total supply = total demand, then the given problem is a balanced transportation
problem.
5) What is the Assignment problem?
Answer : To assign the different jobs to the different machines (one job per machine) to minimize the
overall cost is known as assignment problem.
6) Give mathematical form of assignment problem.
Answer : The mathematical form of assignment problem is
n n
minimize Z = Σ Σ Cij xij subject to the
i=1 j=1
n
Constraints Σ x ij = 1, j = 1, 2,......... n
i=1
n

Σ x ij = 1, i = 1, 2, .........n
j=1

xij = 0 or 1 for all i, j

7) What is the difference between Assignment Problem and Transportation Problem?
Answer : The assignment problem is a special case of transportation problem where the number of
sources and destinations are equal. Here, jobs represent sources and machines represent destinations
.
Prepared by : K. JAGADHABASEELAN (M.Sc., M.Ed., M.Phil.,)
Department of Mathematics