Indian Institute of Management Bangalore

PGP 2003-05
Introduction to Statistical Methods: QMM 101

Final Exam Name:___________________
Time: 3 hours
Max Points: 40 Roll No.:_________________
Section:__________
This is an open-book and open-note test.
However, sharing of material is NOT permitted.

I nstructions: Do not seek any clarifications. Provide appropriate arguments and show
calculation in support of your final answer. Answer all questions in the space
provided. Do not attach any additional sheets, use the back pages, if necessary.


I. Rajaram, the Manager (Training) of NS Automobiles is trying to evaluate the effectiveness
of different training methods. He has selected 3 sets of new recruits randomly and assigned
each set to a different training programme. After completion of the training, the productivity of
the workers is measured in terms of the time required to manufacture a particular component
by each of the trainees. The summary of the results is given below: (10 marks)

Training
Programme
(Sample)
Number (n) Mean Standard deviation
A 25 250 42
B 40 265 35
C 20 305 40

1. Is there a significant difference between the variances corresponding to
samples A and B (i.e., between
2
A
and
2
B
)? (use appropriate value)
(2 marks)







2. Is there a significant difference between the means of samples A and B (i.e.,
between
A
and
B
)? Use = 0.05 (3 marks)



















3. Carry out an ANOVA to test if there are significant differences between the
means of the three training programmes. (Fill the Table given below):
(3 marks)
State the null hypothesis and the alternate hypothesis:



Sl. No. Source df Sum of Squares Mean Squares F




Conclusion:







4. What is the conclusion based on the answers for 2 and 3 above? (2 marks)
II. The Chief General Manager, HRD of NS Software Systems is trying to identify various factors
that influence the salary levels of employees in the industry. He has collected a sample of
employees across the industry from various companies and carried out a regression analysis.
The SPSS output that he obtained is reproduced below. Unfortunately a new computer virus
called PGP Version 03 has blanked out some of the numbers. Fill in the missing values as
required and answer the questions following the output. (14 marks)

Regression

Variables Entered/Removed
Model Variables Entered Variables
Removed
Method
1 . Stepwise (Criteria: Probability-of-F-to-enter <=
.050, Probability-of-F-to-remove >= .100).
2 Previous Experience
(months)
. Stepwise (Criteria: Probability-of-F-to-enter <=
.050, Probability-of-F-to-remove >= .100).
3 Months since Hire . Stepwise (Criteria: Probability-of-F-to-enter <=
.050, Probability-of-F-to-remove >= .100).
4 Educational Level (years) . Stepwise (Criteria: Probability-of-F-to-enter <=
.050, Probability-of-F-to-remove >= .100).
a Dependent Variable: Present Salary

Model Summary
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .775
2
3
4 .900
a Predictors: (Constant), Starting Salary
b Predictors: (Constant), Starting Salary, Previous Experience (months)
c Predictors: (Constant), Starting Salary, Previous Experience (months), Months since Hire
d Predictors: (Constant), Starting Salary, Previous Experience (months), Months since Hire,
Educational Level (years)
ANOVA
Model Sum of Squares df Mean Square F Sig.
1 Regression .000
Residual
Total 137916.495
2 Regression .000
Residual
Total 137916.495
3 Regression .000
Residual
Total
4 Regression .000
Residual
Total 473
a Predictors: (Constant), Starting Salary
b Predictors: (Constant), Starting Salary, Previous Experience (months)
c Predictors: (Constant), Starting Salary, Previous Experience (months), Months since Hire
d Predictors: (Constant), Starting Salary, Previous Experience (months), Months since Hire,
Educational Level (years)
e Dependent Variable: Present Salary

Coefficients
Unstandardized
Coefficients
Standardized
Coefficients
t Sig.
Model B Std. Error Beta
1 (Constant) 1.928 .889 2.170 .031
Starting Salary 1.909 .047 .880 40.276 .000
2 (Constant) 3.851 .901 4.276 .000
Starting Salary 1.923 .045 .886 42.283 .000
Previous Experience
(months)
-2.244E-02 .003 -.137 -6.558 .000
3 (Constant) -10.267 2.960 -3.469 .001
Starting Salary 1.927 .044 .888 43.435 .000
Previous Experience
(months)
-2.251E-02 .003 -.138 -6.742 .000
Months since Hire .173 .035 .102 4.995 .000
4 (Constant) -16.150 3.255 -4.961 .000
Starting Salary 1.768 .059 .815 30.111 .000
Previous Experience
(months)
-1.730E-02 .004 -.106 -4.904 .000
Months since Hire .161 .034 .095 4.715 .000
Educational Level (years) .670 .113
a Dependent Variable: Present Salary

Excluded Variables
Beta In t Sig. Partial
Correlation
Collinearit
y Statistics
Model Tolerance
1 Educational Level (years) .172 6.356 .000 .281 .599
Months since Hire .102 4.750 .000 .214 1.000
Previous Experience (months) -.137 -6.558 .000 -.289 .998
2 Educational Level (years) .124 4.363 .000 .197 .520
Months since Hire .102 4.995 .000 .225 1.000
3 Educational Level (years) .113 1.96 .184 .516
a Predictors in the Model: (Constant), Starting Salary
b Predictors in the Model: (Constant), Starting Salary, Previous Experience (months)
c Predictors in the Model: (Constant), Starting Salary, Previous Experience (months), Months
since Hire
d Dependent Variable: Present Salary

1. What is the correlation coefficient between the two variables Starting Salary
and Present Salary (1 mark)






2. What are the degrees of freedom for residual in Model 1? (1 mark)



3. What percentage of the total variation of the dependent variable is explained
by the independent variables in Model 4? (1 mark)





4. What is the residual sum of squares in Model 4? (2 mark)





5. What is the F-value in the ANOVA Table for Model 4? (2 marks)






6. What is the Sig value with respect to the variable Educational Level (years)
in Model 4? (2 marks)






7. What is the standard error of the coefficient with respect to the variable
Educational Level (years) in Model 4? (2 marks)





8. What are the degrees of freedom for regression in Model 4? (1 mark)




9. In Model 4, what does the coefficient -1.730E-02 (with respect to the variable
Previous Experience (months)) indicate? (1 mark)





10. Calculate a 95 percent confidence interval for the slope with respect to the
variable Starting Salary in Model 4. (1 mark)
III. Prof. AK Rao is trying to determine if the grades are influenced by the academic
background of the students. He has divided the 200 students in his class into three
groups based on their basic degree viz. Tech, Science and Others. He had given only
three grades namely, A, B and C. When he studied the distribution of the students
based on grades and academic background, he noticed certain interesting patterns. He
also calculated the relative frequencies, which he used as a proxy for probabilities.
Fill the table based on the patterns given below the table. (5 marks)

Grade
Academic Background
Tech (T) Science (S) Others (O) Total
A
B
C
Total


1. B & O mutually Exclusive
2. Tech constituted 50%
3. P(AT)=P(O)
4. P(S|A)=P(T)
5. One-fourth of the Tech received an A Grade
6. 35% of the students received A grade
7. P(A)=P( C)=P(B|T)

Test whether the grades are independent of the academic background.
IV. Consider the following data from a sample of observations regarding occurrence of
sixes in a one day cricket match. The master statistician thinks that the number of sixes
follows a Poisson distribution with a mean of 3. (5 marks)

Number of sixes Observed Frequency Poisson Prob at =3
0 5 0.0498
1 13 0.1494
2 23 0.2240
3 19 0.2240
4 16 0.1680
5 7 0.1008
6 6 0.0504
7 5 0.0216
>= 8 6 0.0119

1. Do the K-S test at 5% significance. Is the master statisticians guess correct?
Clearly state the Null and alternate hypotheses and the conclusion from the test.










2. Do the chi square test at 10% significance to test whether or not the mean equals
3. Clearly state the Null and alternate hypotheses and the conclusion from the test.













3. Which of the conclusions do you accept and why?


V. The sensex index either goes down or up every day compared to the previous day.
The following pattern was observed over 20 days where a + indicates an increase and a
indicates a decrease, and 0 indicates that the index was the same as the previous days.
(6 marks)

Days 1-4, 6-8, 12, 15-19, 24-25 had a +. Other days up to day 25 had a -.

1. Does this indicate a random sequence of pluses and minuses?
















2. Does the sample data support the hypothesis that the probability of an increase
equals 0.5? Choose a 5% significance level.



















3. A financial analyst ranked the increases. Odd numbered days on which there was
an increase got odd ranks. Even numbered days got even ranks. Do a ranks test to
test the hypothesis that the average rank on odd and even days is the same (among
days with an increase in the sensex value).