1

Ch.
Topic Key Concepts
No.
Defining & Collecting Variables (Qualitative/Quantitative), Data sources,
1
Data Sampling methods
Organizing & Analyzing Frequency tables, Histograms, Bar charts, Pie charts,
2
Data Crosstabulation
Mean, Median, Mode, Variance, Std. Dev, Coefficient of
3 Descriptive Statistics
Variation, Box Plot
Classical, Relative Frequency, Subjective Probability,
4 Probability
Conditional, Bayes’ Theorem
Binomial Distribution, Poisson Distribution, Mean & SD of
5 Discrete Distributions
discrete random vars
Properties, Z-scores, Using Z-tables, Standard Normal
6 Normal Distribution
Curve
Sampling distribution of mean & proportion, Central Limit
7 Sampling Distributions
Theorem
CI for population mean (Z & t), CI for proportion, Sample
8 Confidence Intervals
size calculation
Hypothesis Testing (One Null & Alternate Hypothesis, t-test, Z-test, p-value, Type
9
Sample) I/II error
Two Sample Tests & Independent & Paired t-test, Z-test for proportions, F-test,
10
ANOVA One-way ANOVA
Test of Independence, Goodness of Fit, Comparing
11 Chi-Square Tests
Proportions
Simple Linear Scatterplot, Regression Line, Slope & Intercept, R²,
12
Regression Prediction
Linear Programming Objective Function, Constraints, Graphical Method,
13
Basics Feasible Region
Finance, Marketing, Operations problems (formulation
14 LPP Applications
only)
Transportation, Assignment, Transshipment (Formulation
15 Network Models
& Simple cases only)
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Chapter 1: Defining and Collecting Data

No formulas
Focus: Types of variables, sampling methods (random, stratified, cluster, systematic), survey
methods

Chapter 2: Organizing and Analyzing Data

No formulas
Focus: Graphs – bar chart, histogram, pie chart, scatter plot, cross-tabulations

Chapter 3: Numerical Descriptive Measures

Chapter 4: Basic Probability

Chapter 5: Discrete Probability Distributions

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Chapter 6: Normal Distribution

Chapter 7: Sampling Distributions

Chapter 8: Confidence Interval Estimation

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Chapter 9: Fundamentals of Hypothesis Testing

Chapter 10: Two-Sample Tests and ANOVA

Chapter 11: Chi-square Tests

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Chapter 12: Linear Regression

Chapter 13: Linear Programming

Chapter 14: Applications of LPP

• Same as Chapter 13 (used in business context – Finance, Marketing)

Chapter 15: Distribution & Network Planning

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Chapter 1: Defining and Collecting Data

Topics Covered:

• Types of Variables

• Data Sources (Primary vs Secondary)

• Levels of Measurement

• Sampling Methods

Q1. Define the following terms with one example each:

a) Population
b) Sample
c) Parameter
d) Statistic

Answer:

Term Definition Example

Population The entire group being studied All MBA students in India

Sample A subset of the population 200 MBA students from 10 colleges

A numerical summary of the

Parameter Average GPA of all MBA students
population

Average GPA of the 200 sampled

Statistic A numerical summary of a sample
students

Q2. Classify the following variables as Qualitative or Quantitative:

• Employee ID

• Salary

• Department

• Years of Experience
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• Employment Type (Full-time/Part-time)

Answer:

Variable Type

Employee ID Qualitative (Nominal)

Salary Quantitative (Ratio)

Department Qualitative (Nominal)

Years of Experience Quantitative (Ratio)

Employment Type Qualitative (Nominal)

Q3. Classify the following data into Nominal, Ordinal, Interval, and Ratio scales:

a) Education level (High school, Bachelor’s, Master’s)

b) Temperature in Celsius
c) Employee salaries
d) Gender
e) Customer satisfaction rating (Poor to Excellent)

Answer:

Data Scale

a) Education level Ordinal

b) Temperature Interval

c) Salaries Ratio

d) Gender Nominal

e) Satisfaction rating Ordinal

Q4. Differentiate between Primary and Secondary data sources with examples.

Answer:
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Basis Primary Data Secondary Data

Definition Collected first-hand by the researcher Already collected by someone else
Example Surveys, interviews Government reports, journal articles
Cost & Time Expensive and time-consuming Cheaper and faster
Accuracy Usually more relevant and accurate May be outdated or less specific

Q5. Scenario-Based Question on Sampling

Q: A company wants to survey employee satisfaction. They select:

• 10 employees from each department randomly

• The first 50 employees arriving at the office

• Every 5th person from the employee list

Identify the sampling method used in each case.

Answer:

Method Sampling Type

10 per department (random) Stratified Sampling
First 50 arriving Convenience Sampling
Every 5th person Systematic Sampling

Q6. Compare Probability and Non-Probability Sampling.

Answer:

Feature Probability Sampling Non-Probability Sampling

Selection Random & known Non-random & unknown
Bias Less bias High bias risk
Examples Simple random, stratified, systematic Convenience, judgmental
Generalizability High Low
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Chapter 2: Organizing and Analyzing Data

Topics Covered:

• Frequency Distribution

• Graphical Representation

• Cross-tabulation

• Visualizing Categorical and Numerical Data

• Organizing Data in Excel

Q1. Define the following with an example:

a) Frequency Distribution
b) Histogram
c) Bar Chart
d) Cross-tabulation

Answer:

Term Definition Example

Frequency A summary showing the number of No. of students scoring within
Distribution observations in each class 10-mark ranges
A bar-like graph for numerical data
Histogram Distribution of exam scores
where bars touch
A chart with separated bars for Department-wise employee
Bar Chart
categorical data count
A table showing the relationship Gender vs Preferred work
Cross-tabulation
between two categorical variables mode

Q2. Differentiate between histogram and bar chart.

Answer:

Feature Histogram Bar Chart

Data Type Numerical Categorical
Bar Spacing Bars touch each other Bars are separated
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Feature Histogram Bar Chart

X-axis Intervals Categories
Use Visualizing distributions Comparing groups

Q3. Scenario-based Classification

A college surveys 100 students about their study habits and collects:

• No. of study hours per week

• Mode of study (Online/Offline)

• Year of study (1st, 2nd, 3rd, 4th year)

Q: Suggest suitable charts to represent each variable.

Answer:

Variable Suitable Chart

Study hours Histogram or Line chart
Mode of study Bar chart or Pie chart
Year of study Bar chart

Q4. Interpretation Question (5 marks)

You’re given the following frequency table for daily sales:

Sales Range (₹) Frequency

0–1000 5
1001–2000 12
2001–3000 18
3001–4000 10
4001–5000 5
Q:
a) What is the modal class?
b) Sketch a histogram layout.
c) Suggest what this distribution shape might be.
 11

Answer:

a) Modal Class: 2001–3000 (has highest frequency)

b) Histogram → Bars for each range with heights as frequency

c) Shape is likely bell-shaped (normal) or slightly right-skewed

Q5. Cross-tabulation Scenario

Q: The following table shows the number of employees preferring different work shifts by
department.

Department Morning Evening Night

Sales 20 10 5
Marketing 25 5 10
Q: What can you conclude?

Answer:

• Morning shift is most preferred overall

• Marketing prefers morning shift more than other departments

• Night shift is least preferred in both departments

Q6. Short Q: Why is visualizing data important? (2 marks)

Answer:
Visualizing data helps to quickly identify patterns, trends, and outliers, and allows for
better decision-making through graphs like histograms, pie charts, and scatter plots.
 12

Chapter 3: Numerical Descriptive Measures

Topics Covered:

• Measures of Central Tendency: Mean, Median, Mode

• Measures of Dispersion: Range, Variance, Standard Deviation

• Coefficient of Variation

• Skewness & Shape of Distribution

• Use of Excel formulas (optional in EL)

Q1. Define the following with formula and example (5 marks):

a) Mean
b) Median
c) Mode
d) Range
e) Standard Deviation

Answer:

Measure Formula Example

Mean (10+20+30)/3 = 20

For [12, 14, 16] → Median

Median Middle value in sorted data
= 14
Mode Most frequent value In [2, 3, 3, 5], Mode = 3
Range Max – Min 90 – 40 = 50

Std. Dev. For [5,10,15], SD ≈ 5

Q2. Calculate Mean, Median, Mode, and Standard Deviation from this data (5
marks):

Values: 5, 10, 10, 15, 20

Answer:
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• Mean = (5+10+10+15+20)/5 = 60/5 = 12

• Median = Middle value = 10

• Mode = Most frequent = 10

Q3. Explain the concept of Coefficient of Variation (CV) and interpret it.

Answer:

Q4. Interpret Skewness in a Distribution (3 marks):

Q: A dataset has Mean = 70, Median = 60, Mode = 55. What is the shape?

Answer:
Since Mean > Median > Mode → The distribution is positively skewed (right skewed).

Q5. Short Answer: Why is Standard Deviation preferred over Range? (2 marks)

Answer:
Range only considers two values (max & min), while standard deviation considers all
values, making it a more reliable measure of spread.
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Q6. MCQ Converted to Descriptive Style (BITS-style):

Q: Between two machines, A and B:

• A: Mean output = 100 units, SD = 5

• B: Mean output = 100 units, SD = 15

Q: Which machine is more consistent and why?

Answer:
Machine A is more consistent as it has lower SD, meaning its output varies less around the
mean.

Q7. Case-based Analysis (5 marks):

A teacher recorded marks of 5 students: 45, 50, 60, 65, 80.

Q:
a) Calculate Mean, Median
b) Comment on the distribution shape
c) Calculate CV

Answer:

• Mean = 60

• Median = 60

• Since Mean = Median → Symmetric distribution

• SD = approx 13.04

•
 15

Chapter 4: Basic Probability

Topics Covered:

• Basic Rules of Probability

• Addition & Multiplication Rules

• Conditional Probability

• Bayes' Theorem

Q1. Define the following terms with examples (5 marks):

a) Experiment
b) Sample Space
c) Event
d) Mutually Exclusive Events
e) Independent Events

Answer:

Term Definition Example

A process that leads to one of several
Experiment Tossing a coin
outcomes
Sample Space Set of all possible outcomes {Head, Tail}
Event A subset of sample space Getting a Head
Getting odd or even in one
Mutually Exclusive Cannot happen at the same time
die roll
Independent
One does not affect the other Tossing 2 different coins
Events

Q2. Basic Probability Calculation (3 marks)

Q: A bag contains 5 red, 4 blue, and 1 green ball. One ball is picked at random. What is the
probability of:
a) Red ball
b) Not blue
c) Green or red
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Answer:

Total balls = 10
a) P(Red) = 5/10 = 0.5
b) P(Not blue) = 6/10 = 0.6
c) P(Green or Red) = 6/10 = 0.6

Q3. Addition & Multiplication Rules (5 marks)

Q: In a college,

• P(A) = 0.4 (students who take Economics)

• P(B) = 0.3 (students who take Statistics)

• P(A ∩ B) = 0.1 (students who take both)

Find:
a) P(A ∪ B)
b) Are A and B mutually exclusive?
c) P(A|B)

Answer:

Q4. Conditional Probability – Scenario (5 marks)

Q: A box has 3 red, 2 green, and 5 blue pens. One pen is taken out, and without replacing it,
a second pen is drawn.
Find the probability that:
a) Both pens are red
b) First is green, second is blue

Answer:
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Q5. Bayes’ Theorem (5 marks)

Q: A medical test detects a disease correctly 95% of the time. 1% of people have the
disease. If a person tests positive, what is the probability they actually have the disease?
[Hint: Use Bayes’ Theorem]

Answer:

Let D = has disease, T = test positive

Given:

• P(D) = 0.01, P(Not D) = 0.99

• P(T|D) = 0.95 (true positive)

• P(T|Not D) = 0.05 (false positive)

Use Bayes’:

Q6. Short: Why is Bayes’ Theorem useful? (2 marks)

Answer:
Bayes’ theorem allows us to update probabilities based on new information. It is widely
used in medical diagnosis, spam filtering, and decision-making under uncertainty.
 18

Chapter 5: Discrete Probability Distributions

Topics Covered:

• Properties of Discrete Distributions

• Binomial Distribution

• Poisson Distribution

• Calculating Mean, Variance, SD

• Application-based problems

Q1. Binomial Distribution – Moderate (5 marks)

Q: A startup knows that 70% of customers pay their subscription on time. If 10 customers
are selected at random:

a) What is the probability exactly 7 will pay on time?

b) What is the expected number and standard deviation of customers who will pay?

Answer:

Q2. Poisson Distribution – Word Problem (5 marks)

Q: A hospital receives an average of 3 emergency patients per hour. What is the probability
that exactly 5 patients arrive in the next hour?

Answer:
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Q3. Conceptual Differences – Binomial vs Poisson (5 marks)

Q: Compare Binomial and Poisson distributions on the following points:

a) Number of trials
b) Use case
c) Parameters
d) Example

Answer:

Feature Binomial Poisson

Trials Fixed n No fixed n (infinite possible events)

Use # of successes in trials # of events in time/space

Parameters n, p λ (mean rate)

Example Tossing coin 10 times Calls to a call center per hour

Q4. Use Both Distributions – Comparison (5 marks)

Q: In a factory, the probability that a bulb is defective is 0.01. If 100 bulbs are tested:
a) Use Binomial to find probability of exactly 2 defectives
b) Approximate using Poisson

Answer:
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Q5. Mean and SD from a Discrete Distribution Table (5 marks)

X P(X)
0 0.1
1 0.3
2 0.4
3 0.2
Q: Find the mean and standard deviation.

Answer:

Q6. Short: When do we use Poisson approximation to Binomial? (2 marks)

Answer:
When n is large (e.g. > 30) and p is small (e.g. < 0.1), Poisson gives a good approximation to
Binomial:
Use λ = np.
 21

Chapter 6: The Normal Distribution

Topics Covered:

• Properties of Normal Distribution

• Standard Normal Distribution (Z)

• Using Z-tables

• Applications: Probabilities & Reverse Lookup

• Empirical Rule (68–95–99.7)

Q1. Conceptual: What is a normal distribution? What are its key features? (3
marks)

Answer:

A normal distribution is a symmetric, bell-shaped curve defined by its mean (μ) and
standard deviation (σ).

Key Features:

• Mean = Median = Mode

• Symmetrical around the mean

• Total area under the curve = 1

• Approximates many real-world phenomena (e.g., height, test scores)

Q2. Z-score Calculation (3 marks)

Q: A student scored 82 on a test with mean = 70 and SD = 6. What is the Z-score?

Answer:

Interpretation: The score is 2 standard deviations above the mean.

 22

Q3. Probability from Z-table (5 marks)

Q: In a normal distribution with mean = 500 and SD = 100, find the probability that a value is
less than 620.

Answer:

Step 1:

Step 2:

Final Answer: 0.8849 or 88.49%

Q4. Reverse Z: Find the value (5 marks)

Q: In a normal distribution with mean = 60, SD = 10, find the score that separates the top
10%.

Answer:

Step 1:
Top 10% ⇒ Area to the left = 0.90
From Z-table, Z=1.28

Step 2:

Final Answer: 72.8

Q5. Use of Empirical Rule (3 marks)

Q: In a normal distribution with mean = 70 and SD = 5, what percentage of values lie

between 60 and 80?
 23

Answer:

• 60 to 80 = μ ± 2σ → 70 ± 10

• By Empirical Rule, ~95% of values lie in this range

Q6. Scenario Question (5 marks)

Q: The daily demand for a product follows a normal distribution with mean 100 units and
SD 15 units.
What is the probability that demand on a given day is:
a) Less than 90 units
b) More than 130 units

Answer:

Q7. Short: When do we use Normal Approximation to Binomial? (2 marks)

Answer:
Use when n is large and np and nq ≥ 5. Apply continuity correction:
e.g., P(X ≤ x) → P(X ≤ x + 0.5)
 24

Chapter 7: Sampling Distributions

Topics Covered:

• Sampling Distribution of the Mean

• Central Limit Theorem (CLT)

• Standard Error

• Sampling Distribution of a Proportion

• Application of Z-formula with sample statistics

Q1. Concept: What is a sampling distribution? Why is it important? (3 marks)

Answer:

A sampling distribution is the probability distribution of a sample statistic (like mean or

proportion) from all possible samples of a fixed size from a population.

Importance:

• Helps estimate population parameters

• Basis for confidence intervals and hypothesis testing

• Underlies the Central Limit Theorem

Q2. Central Limit Theorem – Concept (3 marks)

Q: State the Central Limit Theorem and explain when it applies.

Answer:

Central Limit Theorem (CLT):

Regardless of the population’s distribution, the sampling distribution of the sample mean
becomes approximately normal as the sample size n ≥ 30.

• Applies to large samples

• Allows use of Z-formula even if population is not normally distributed

 25

Q3. Standard Error of the Mean – Formula & Use (2 marks)

Q: What is Standard Error and how is it calculated?

Answer:

Standard Error (SE) is the standard deviation of the sampling distribution of the mean:

It measures how much the sample mean is expected to vary from the population mean.

Q4. Numerical – Probability with Sampling Mean (5 marks)

Q: A population has mean μ = 100 and standard deviation σ = 20. A sample of size n = 25 is
drawn.

a) What is the probability that the sample mean is less than 95?
b) What is the standard error?

Answer:
 26

Q5. Proportion – Sampling Distribution (5 marks)

Q: In a survey, 60% of people prefer online shopping. A sample of 100 people is selected.
What is the probability that more than 65 people prefer online shopping?

Answer:
 27

Q6. Short: When do we use Z-distribution vs t-distribution? (2 marks)

Answer:

• Use Z-distribution if population standard deviation (σ) is known and n ≥ 30

• Use t-distribution if σ is unknown and/or n < 30

 28

Chapter 8: Confidence Interval Estimation

Topics:

• Confidence Interval (CI) for Mean (σ known and unknown)

• CI for Proportion

• Sample Size Estimation (Mean & Proportion)

Q1. CI for Mean (σ known) – Step-by-Step (5 marks)

A company’s machine produces rods with a mean length of 50 cm and known population
SD = 2 cm. A sample of 36 rods is taken.
Find the 95% confidence interval for the mean.
 29

Final Answer:
The 95% confidence interval is (49.35 cm, 50.65 cm)

Q2. CI for Mean (σ unknown, use t-distribution) (5 marks)

A sample of 25 students has an average height of 165 cm with SD = 5 cm.

Find the 95% confidence interval for the mean height.

Step 1: Use t-formula

Step 2: Data Given

Step 3: Calculate SE

Step 4: Apply CI formula

Final Answer:
(162.94 cm, 167.06 cm)

Q3. CI for Proportion – Step-by-Step (5 marks)

In a survey, 120 out of 200 people preferred product A. Construct a 90% confidence interval
for the proportion.
 30

Step 1: Use Proportion CI formula

Step 2: Data Given

Step 3: Calculate SE

Step 4: Apply CI formula

Final Answer:
(0.5431, 0.6569) → 54.31% to 65.69% prefer product A

Q4. Sample Size (Mean) – Step-by-Step (5 marks)

You want to estimate average delivery time with margin of error ±2 mins, 95% confidence,
population SD = 6 mins.

Step 1: Formula
 31

Step 2: Data Given

Step 3: Apply Formula

Final Answer:
Minimum sample size = 35
 32

Chapter 9: Fundamentals of Hypothesis Testing

Topics Covered:

• Null & Alternate Hypothesis (H₀ & H₁)

• One-sample t-test (σ unknown)

• One-sample Z-test (proportion)

• p-value concept

• One-tailed and two-tailed tests

Q1. One-Sample t-Test – Step-by-Step (5 marks)

A factory claims that its light bulbs last 1000 hours on average. A customer tests 25 bulbs
and finds a sample mean of 980 hours with a sample SD = 50 hours.
At 5% significance, can we reject the claim?

Step 1: State Hypotheses

Step 2: Use t-test Formula

Step 3: Data Given

Step 4: Apply Formula

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Step 5: Decision

Since -2.0 lies within the range (-2.064 to +2.064), fail to reject H₀

Conclusion:
Not enough evidence to reject the claim.

Q2. Z-test for Proportion – Step-by-Step (5 marks)

A company claims 70% of its orders are delivered on time. In a sample of 120 orders, 75
were on time. At 5% significance, test the claim.

Step 1: State Hypotheses

Step 2: Use Z-formula for Proportion

Step 3: Data Given

Step 4: Calculate Z
 34

Step 5: Decision

Since -1.79 is within -1.96 to +1.96, fail to reject H₀

Conclusion:
No significant evidence to reject the company’s claim.

Q3. p-value Concept – Short Answer (2 marks)

Q: What does a p-value represent in hypothesis testing?

Answer:
A p-value tells us the probability of getting the observed result (or more extreme),
assuming the null hypothesis is true.

Q4. One-tailed vs Two-tailed Test – Short (3 marks)

Q: What's the difference between one-tailed and two-tailed hypothesis tests?

Answer:

Type When Used Example

One-tailed Test for greater than / less than

Two-tailed Test for any difference (≠)

Use one-tailed when you're testing in one direction only.

 35

Chapter 10: Two-Sample Tests and ANOVA

Topics Covered:

• Independent two-sample t-test

• Paired sample t-test

• Z-test for two proportions

• F-test for equality of variances

• One-way ANOVA (single factor)

Q1. Independent Two-Sample t-Test – Step-by-Step (5 marks)

Two machines produce items. A sample of 10 items from Machine A has a mean of 50 and
SD = 5. A sample of 12 items from Machine B has a mean of 54 and SD = 6.
Test at 5% significance whether the means are different.

Step 1: State Hypotheses

Step 2: Formula

Step 3: Data Given

Step 4: Calculate
 36

Step 5: Conclusion

t-critical (df ≈ 18, two-tailed, α=0.05) ≈ ±2.101

Since -1.70 is within ±2.101 → Fail to reject H₀

Final Answer: No significant difference between means.

Q2. Paired Sample t-Test – Step-by-Step (5 marks)

A dietitian measures weight before and after a program for 6 clients.

Person Before After

A 72 70

B 68 65

C 75 74

D 80 77

E 78 75

F 70 69

Step 1: Hypotheses

Step 2: Calculate Differences (d = Before – After)

 37

SD of d ≈ 0.75 (you can show squared deviations)

Step 3: Use Paired t-formula

Step 4: Decision

Final Answer: Diet plan is effective.

Q3. Z-Test for Two Proportions – Step-by-Step (5 marks)

Group A: 60 out of 100 like product X

Group B: 70 out of 120 like product X
Test at 5% level if the proportions differ.

Step 1: Hypotheses

Step 2: Use Z-formula

Step 3: Plug in values

 38

Step 4: Conclusion

Z = 0.17 < 1.96 → Fail to reject H₀

Final Answer: No significant difference in proportions.

Q4. One-way ANOVA – Step-by-Step (5 marks)

Test whether the average productivity is the same across 3 departments using one-way
ANOVA.
(Sales: 10,12,11 | Marketing: 15,16,14 | Ops: 8,9,7)

Step 1: Hypotheses

Step 2: Use ANOVA F formula

You'd calculate:

• SST = Total variation

• SSB = Variation between groups

• SSE = Within group variation

Let’s assume calculated F = 15.2

Step 3: Compare F with critical value

39
 40

Chapter 11: Chi-Square Tests

Topics Covered:

• Chi-square test for independence (cross-tab table)

• Chi-square test for goodness of fit

• Degrees of freedom

• Expected values calculation

• Decision rule using χ²-table

Q1. Chi-square Test for Independence – Step-by-Step (5 marks)

Q: A company wants to test if product preference depends on gender. Survey data:

Like Dislike Total

Male 40 10 50

Female 30 20 50

Total 70 30 100

Test at 5% significance level whether preference is independent of gender.

Step 1: Hypotheses

Step 2: Formula

Step 3: Calculate Expected Values (E)

 41

Step 4: Apply χ² Formula

Step 5: Degrees of Freedom (df)

From χ²-table, critical value at df = 1, α = 0.05 → 3.841

Step 6: Conclusion

Since 4.76 > 3.841 → Reject H₀

Final Answer: Preference depends on gender

Q2. Chi-square Test for Goodness of Fit – Step-by-Step (5 marks)

Q: A die is rolled 120 times. Observed frequencies:

Face 1 2 3 4 5 6

Obs 15 18 20 17 25 25

Is the die fair?

 42

Step 1: Hypotheses

Step 2: Expected Frequency

Step 3: Apply χ² Formula

Step 4: Degrees of Freedom

χ²-critical (df=5, α=0.05) ≈ 11.07

Step 5: Conclusion

Since 4.4 < 11.07 → Fail to reject H₀

Final Answer: No evidence that the die is unfair.

Q3. Short: When to Use Chi-square Tests? (2 marks)

 43

Answer:

• Use Chi-square test of independence to check if two categorical variables are related

• Use Goodness of Fit to see if observed distribution matches expected (e.g., dice,
survey)
 44

Chapter 12: Simple Linear Regression

Topics Covered:

• Regression Equation: Y=a+bXY = a + bXY=a+bX

• Interpretation of Slope and Intercept

• Coefficient of Determination (R²)

• Prediction using regression

• Excel outputs (optional in EL)

Q1. Interpret Regression Output – Step-by-Step (5 marks)

A researcher runs a regression to predict Sales (Y) from Advertising (X). The equation is:

Y=50+8XY = 50 + 8XY=50+8X

a) Interpret the slope and intercept

• Intercept (50): When advertising spend is 0, predicted sales = ₹50K

• Slope (8): For every ₹1K increase in advertising, sales increase by ₹8K

b) Predict sales when ad spend is ₹10K

Answer: ₹130K

c) If ad budget increases by ₹5K, how much will sales change?

Change=8×5=40

Answer: ₹40K increase

Q2. Find Regression Line – Step-by-Step (5 marks)

Data for X and Y:

 45

XY

24

35

46

57

Find regression equation Y=a+bX

Step 1: Use formulas

Step 2: Compute values

Final Regression Equation:

Y=2.7+0.8X

Q3. Interpret R² – Conceptual (2 marks)

If R² = 0.81, what does it mean?

Answer:
81% of the variation in Y (Sales) is explained by the variation in X (Advertising). The model
has a strong explanatory power.
 46

Q4. When Not to Use Linear Regression? (2 marks)

Answer:

• When the relationship is not linear

• When there are outliers or non-constant variance

• When X and Y are not correlated

 47

Chapter 13: Introduction to Linear Programming

Topics Covered:

• Linear Programming formulation

• Objective function

• Constraints (inequalities)

• Graphical solution (only for 2 variables)

• Feasible region, corner points, optimal solution

Q1. Formulate an LPP – Step-by-Step (5 marks)

Q: A company makes chairs and tables.

• Each chair gives ₹20 profit and needs 4 hours labor, 3 units wood

• Each table gives ₹30 profit and needs 3 hours labor, 5 units wood

• Max available: 240 hours labor, 300 units wood

Formulate the Linear Programming Problem.

Step 1: Define variables

Let:

• x = number of chairs

• y = number of tables

Step 2: Objective Function (maximize profit)

Maximize Z=20x+30y

Step 3: Constraints

1. Labor: 4x+3y≤240

2. Wood: 3x+5y≤300
 48

3. Non-negativity: x≥0,y≥0

Final Formulation:

Max Z=20x+30y

Subject to:

4x + 3y≤240

3x + 5y≤300

x, y≥0

Q2. Graphical Solution Concept – Step-by-Step (5 marks)

Q: Explain how to solve an LPP graphically.

Answer:

Step 1: Plot constraints on XY plane

Convert each inequality into an equation and draw lines:

• 4x+3y=240

• 3x+5y=300

Step 2: Identify Feasible Region

• Shade the region that satisfies all inequalities

• This region is called the feasible region

Step 3: Find Corner Points

• Find where lines intersect and where they meet axes

• These are corner points of the feasible region

Step 4: Evaluate Objective Function (Z)

• Plug each corner point into Z=20x+30y

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• The point that gives the highest Z is the optimal solution

Final Answer:
Maximum profit is found at the corner point with highest Z.

Q3. What is a feasible solution? What is an optimal solution? (2 marks)

Answer:

• Feasible solution: Any solution that satisfies all constraints

• Optimal solution: The best feasible solution that maximizes or minimizes Z

Q4. What are the assumptions of LPP? (3 marks)

Answer:

1. Linearity: Objective and constraints are linear

2. Additivity: Total resource use is sum of individual uses

3. Divisibility: Variables can take fractional values

4. Non-negativity: No negative values for decision variables

5. Certainty: All coefficients are known and constant

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Chapter 14: Applications of Linear Programming

Topics Covered:

• LPP formulation in various business functions

• Identifying objective function and constraints

• Variables representing decisions

• No graphical/matrix solution — only formulation needed

Q1. Marketing Application – Step-by-Step (5 marks)

Q: A company wants to run ads on TV and social media.

• Each TV ad costs ₹10,000 and reaches 80,000 people

• Each social media ad costs ₹5,000 and reaches 40,000 people

• Max budget: ₹100,000

• At most 8 ads on any medium

• Maximize reach

Step 1: Define Variables

Let:

Step 2: Objective Function (maximize reach)

Step 3: Constraints
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Final Formulation:

Subject to:

Q2. Finance Application – Step-by-Step (5 marks)

Q: An investor wants to invest in bonds and stocks.

• Max ₹1,000,000 available

• Bonds require at least ₹400,000

• Risk tolerance: Max ₹300,000 in stocks

• Bonds give 8% return, stocks give 12%

Formulate an LPP to maximize returns.

Step 1: Define Variables

Let:

• x= amount in bonds

• y= amount in stocks

Step 2: Objective Function (maximize return)

Maximize Z=0.08x+0.12y

Step 3: Constraints

1. Total investment: x+y≤1000000

2. Minimum bonds: x≥400000

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3. Max stocks: y≤300000

4. x, y≥0

Final Formulation:

Subject to:

Q3. Operations Application – Step-by-Step (5 marks)

Q: A bakery makes cakes and muffins.

• Each cake uses 4 eggs, 2 cups flour

• Each muffin uses 2 eggs, 1 cup flour

• Max 100 eggs and 50 cups flour available

• Cake gives ₹40 profit, muffin ₹25

Formulate the LPP to maximize profit.

Step 1: Define Variables

Let:

• x= number of cakes

• y= number of muffins

Step 2: Objective Function

Step 3: Constraints
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Final Formulation:

Subject to:
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Chapter 15: Distribution and Network Planning

Topics Covered:

• Transportation model (cost minimization)

• Assignment model (one-to-one allocation)

• Transshipment (combination of transport stages)

• Formulation only — no solving required in exams

Q1. Transportation Problem – Step-by-Step (5 marks)

Q: A company has 2 warehouses (W1 & W2) and 3 retailers (R1, R2, R3).

• Supplies: W1 = 70 units, W2 = 50 units

• Demands: R1 = 40, R2 = 60, R3 = 20

• Costs (₹ per unit):

R1 R2 R3

W1 4 6 8

W2 5 4 3

Formulate the transportation problem to minimize cost.

Step 1: Define Variables

Let:

Variables:

Step 2: Objective Function (Minimize Cost)

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Step 3: Constraints

Supply Constraints:

Demand Constraints:

Non-negativity:

Final Formulation:
Minimize total cost with constraints matching supply/demand.

Q2. Assignment Problem – Step-by-Step (5 marks)

Q: 4 drivers (A, B, C, D) must be assigned to 4 routes (1, 2, 3, 4).

Costs (₹):

R1 R2 R3 R4

A 9 2 7 8

B 6 4 3 7

C5 8 1 8

D7 6 9 4

Formulate to minimize total cost.

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Step 1: Define Variables

Let:

Step 2: Objective Function

Step 3: Constraints

Final Formulation:
Minimize total cost with 1:1 assignment.

Q3. What is a Transshipment Problem? (2 marks)

Answer:
A transshipment problem involves intermediate points (like hubs or warehouses) where
goods can be sent and received before reaching final destination — a mix of
transportation and network flow.
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Q4. Difference: Transportation vs Assignment (2 marks)

Feature Transportation Assignment

Objective Minimize cost Minimize cost

Quantity Multiple units One-to-one match

Variables Continuous Binary (0 or 1)

Example Shipping goods Allocating jobs

Exam Tip:
You’re almost always asked to formulate only — no need to solve with methods like MODI,
Vogel, etc.
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Chapter-wise Table (Chart) Requirement

Chapter Topic Chart(s) Required Why You Need It

To find area/probability for Z-

Ch 6 Normal Distribution Z-table
scores

Z-table (if using Needed when applying CLT for

Ch 7 Sampling Distributions
standard normal) probability

Ch 8 Confidence Intervals Z-table or t-table Z for known σ; t for unknown σ

Z-table and t- Based on sample type and σ

Ch 9 Hypothesis Testing
table known/unknown

t-table and F- t-test for means; F-test for

Ch 10 Two-Sample Tests & ANOVA
table variance/ANOVA

χ²-table (Chi-square To compare calculated χ² with

Ch 11 Chi-Square Tests
table) critical value

Ch 12 Regression No table needed Only formula-based calculations

Ch 13– LPP, Assignment,

No table needed Purely logic/formulation-based
15 Transportation

Basics (Data, Probability,

Ch 1–5 Usually not needed Direct formula use only
Distributions)

Summary of Must-Have Charts

Chart Needed For

Z-table Chapters 6, 7, 8, 9

t-table Chapters 8, 9, 10

χ²-table Chapter 11

F-table Chapter 10 (ANOVA)

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Z-table:
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Z-table:
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X2 table
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F-table
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Decision Flowchart: Which Chapter to Use Based on Question Type

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