Exercise Problems

Descriptive Statistics & Charts

1. Classify each of the following as nominal, ordinal, interval, or ratio data.

a. The time required to produce each tire on an assem- bly line
b. The number of quarts of milk a family drinks in a month
c. The ranking of four machines in your plant after they have been designated as
excellent, good, satisfactory, and poor
d. The telephone area code of clients in the United States
e. The age of each of your employees
f. Dollar change in stock price
g. The dollar sales at the local pizza shop each month
h. An employee’s identification number
i. The response time of an emergency unit

2. A packaging process is supposed to fill small boxes of raisins with approximately 50 raisins so
that each box will weigh the same. However, the number of raisins in each box will vary.
Suppose 100 boxes of raisins are randomly sampled, the raisins counted, and the following
data are obtained.

57 51 53 52 50 60 51 51 52 52 44 53 45 57 39 53 58 47 51 48 49 49 44 54 46 52 55 54 47 53 49 52 49
54 57 52 52 53 49 47 51 48 55 53 55 47 53 43 48 46 54 46 51 48 53 56 48 47 49 57 55 53 50 47 57 49
43 58 52 44 46 59 57 47 61 60 49 53 41 48 59 53 45 45 56 40 46 49 50 57 47 52 48 50 45 56 47 47 48
46

Construct a frequency distribution for these data. What does the frequency distribution reveal
about the box fills?

3. The following list shows the top six pharmaceutical companies in the United States and their
sales figures ($ millions) for a recent year. Use this information to construct a pie chart and a
bar graph to represent these six companies and their sales.

4. An airline company uses a central telephone bank and a semiautomated telephone process
to take reservations. It has been receiving an unusually high number of customer complaints
about its reservation system. The company conducted a survey of customers, asking them
 whether they had encountered any of the following problems in making reservations: busy
signal, disconnection, poor connection, too long a wait to talk to someone, could not get
through to an agent, connected with the wrong person. Suppose a survey of 744 complaining
customers resulted in the following frequency tally. Construct a Pareto diagram from this
information to display the various problems encountered in making reservations.

5. Are the advertising dollars spent by a company related to total sales revenue? The following
data represent the advertising dollars and the sales revenues for various companies in a
given industry during a recent year. Construct a scatter plot of the data from the two variables
and discuss the relationship between the two variables.

6. The Whitcomb Company manufactures a metal ring for industrial engines that usually weighs
about 50 ounces. A random sample of 50 of these metal rings produced the following weights
(in ounces). Construct a frequency distribution for these data using eight classes. What can
you observe about the data from the frequency distribution?
7. The following list shows the 15 largest banks in the world by assets according to
EagleTraders.com. Compute the median and the mean assets from this group. Which of
these two measures do you think is most appropriate for summarising these data, and why?
What is the value of Q2? Determine the 63rd percentile for the data. Determine the 29 th
percentile for the data. Calculate the first number summary of the data and draw the box plot
using it.

8. The following lists the number of fatal accidents by scheduled commercial airlines over a 17-
year period according to the Air Transport Association of America. Using these data, compute
the mean, median, and mode. What is the value of the third quartile? Determine P11, P35, P58,
and P67.

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9. Given the survey results of a particular question on the mid-course survey of a course, find
the mean, median and mode of the data. Excel Worksheet Tab: Categorical Data

10. A sample of 12 small accounting firms reveals the following numbers of professionals per
office.
 7, 10, 9, 14, 11, 8, 5, 12, 8, 3, 13, 6

● Determine the mean absolute deviation.

● Determine the variance.

● Determine the standard deviation.

● Determine the interquartile range.

● What is the coefficient of variation for this sample?

11. Some numbers are not normally distributed. If the mean of the numbers is 38 and the
standard deviation is 6, what proportion of values would fall between 26 and 50? What
proportion of values would fall between 14 and 62? Between what two values would 89% of
the values fall?

12. Compare the variability of the following two sets of data by using both the population standard
deviation and the population coefficient of variation.

13. The age of all candidates in Sec A for Global Finance and Global Supply Chain is shown in
Excel Worksheet Tab: Age Comparison. Evaluate the Coefficient of variation between the two
population

14. A research agency administers a demographic survey to 90 telemarketing companies to

determine the size of their operations. When asked to report how many employees now work
in their telemarketing operation, the companies gave responses ranging from 1 to 100. The
agency’s analyst organises the figures into a frequency distribution.

1. Compute the mean, median, and mode for this distribution.

2. Compute the sample standard deviation for these data.
15. The owner of a fast-food restaurant ascertains the ages of a sample of customers. From
these data, the owner constructs the frequency distribution shown. For each class interval of
the frequency distribution, determine the class midpoint, the relative frequency, and the
cumulative frequency.

What does the relative frequency tell the fast-food restaurant owner about customer ages?

16. Financial analysts like to use the standard deviation as a measure of risk for a stock. The
greater the deviation in a stock price over time, the more risky it is to invest in the stock.
However, the average prices of some stocks are considerably higher than the average price
of others, allowing for the potential of a greater standard deviation of price. For example, a
standard deviation of $5.00 on a $10.00 stock is considerably different from a $5.00 standard
deviation on a $40.00 stock. In this situation, a coefficient of variation might provide insight
into risk. Suppose stock X costs an average of $32.00 per share and showed a standard
deviation of $3.45 for the past 60 days. Suppose stock Y costs an average of $84.00 per
share and showed a standard deviation of $5.40 for the past 60 days. Use the coefficient of
variation to determine the variability for each stock.

17. From the analysis of monthly wages paid to employees in two service organisations X and Y,
the following results were obtained

i. Which organisation pays a larger amount as monthly wages?

ii. What is the combined standard deviation of all the wage earners?

18. In Qn 1, if the package process does not meet regulatory requirements if the standard
deviation is greater than 3 raisins, does the current process meet the regulatory
requirements?
19. The U.S. Department of the Interior releases figures on mineral production. The 14 leading
states in nonfuel mineral production in the United States are given in the Tab : Mineral
Production.
a. Compute the Pearsonian coefficient of skewness for these data.
b. Sketch a box-and-whisker plot

20. Runzheimer International publishes data on overseas business travel costs. They report that
the average per diem total for a business traveller in Paris, France, is $349. Suppose the
shape of the distribution of the per diem costs of a business traveller to Paris is unknown, but
that 53% of the per diem figures are between $317 and $381. What is the value of the
standard deviation? The average per diem total for a business traveller in Moscow is $415. If
the shape of the distribution of per diem costs of a business traveller in Moscow is unknown
and if 83% of the per diem costs in Moscow lie between $371 and $459, what is the standard
deviation?
21. A local hotel offers ballroom dancing on Friday nights. A researcher observes the customers
and estimates their ages. Discuss the skewness of the distribution of ages if the mean age is
51, the median age is 54, and the modal age is 59.

22. In an effort to determine whether any correlation exists between the price of stocks of airlines,
an analyst sampled six days of activity of the stock market. Using the following prices of Delta
stock and Southwest stock, compute the coefficient of correlation. Stock prices have been
rounded off to the nearest tenth for ease of computation.