1. Describe briefly the questionnaire method of collecting primary data.

State the essentials

of a good questionnaire.

The questionnaire method is one of the most commonly used techniques for collecting primary data
in various research fields, including market research, academic studies, and social surveys. It involves
preparing a structured set of questions that are presented to respondents to gather specific
information. This method is particularly advantageous because it allows researchers to collect data
from a large population efficiently, making it ideal for large-scale studies. It ensures that responses
are standardized, which facilitates easy comparison and analysis.

Questionnaires can be administered through various channels such as face-to-face interviews,

telephone calls, postal mail, and online surveys. Each mode has its own advantages and challenges.
For example, online questionnaires are cost-effective and can reach a wide audience, but they may
suffer from low response rates. Face-to-face interviews, on the other hand, allow for better
interaction and clarification of questions but can be time-consuming and expensive.

The success of a questionnaire largely depends on its design. A well-structured questionnaire should
be clear, concise, and unambiguous, ensuring that respondents fully understand the questions. Each
question should be relevant to the research objectives and arranged logically, moving from general to
specific topics. It is also crucial to use neutral wording to avoid leading respondents toward a
particular answer.

A combination of open-ended and closed-ended questions can be used to gather both quantitative
and qualitative data. Closed-ended questions (such as multiple-choice or Likert scale questions)
provide structured responses that are easy to analyze, whereas open-ended questions allow
respondents to express their thoughts freely, giving deeper insights.

Before deploying the questionnaire, a pilot test should be conducted on a small group of
respondents to identify any unclear or ineffective questions. This helps in refining the questionnaire
to improve clarity and effectiveness. Additionally, assuring confidentiality and anonymity
encourages respondents to provide honest and accurate answers.

A well-designed questionnaire ensures reliable and valid data collection, contributing significantly to
the success of a research study or business analysis.

2. Discuss the importance of measuring variability for managerial decision-making.

Variability in data refers to the degree of dispersion or spread among individual observations. In
managerial decision-making, understanding and measuring variability is crucial because it helps
managers assess risks, predictability, and consistency in business operations. Variability is a key
factor in numerous business functions, including financial planning, quality control, market analysis,
and workforce management.

One of the most significant applications of variability measurement is risk assessment. Businesses
operate in dynamic environments where financial performance, customer demand, and supply chain
logistics fluctuate. High variability in financial performance signals higher uncertainty and risk,
guiding managers in making informed investment and budgeting decisions. For example, a company
with highly fluctuating sales revenue may need a more conservative cash reserve strategy.
In quality control, measuring variability ensures product consistency and reliability. A manufacturer
that produces medical devices, for example, must ensure that its products meet strict quality
standards. If the hardness of a dental bracket varies significantly from the required specification, it
may result in product failure, regulatory non-compliance, and customer dissatisfaction. Statistical
tools such as standard deviation and variance help manufacturers monitor and reduce process
deviations.

In human resource management, variability in employee performance can indicate disparities in skill
levels, training needs, or workload distribution. Managers can use variability analysis to implement
targeted training programs and performance improvement plans.

Market analysis and customer behavior studies also rely on measuring variability. Understanding
how consumer demand fluctuates across different seasons or market segments helps businesses
adjust pricing strategies, inventory levels, and marketing efforts. For example, a retail store may
analyze historical sales data to determine peak shopping periods and optimize its stock accordingly.

Overall, measuring variability provides managers with a deeper understanding of business

performance, helping them make more informed, data-driven decisions that enhance efficiency,
reduce risks, and improve overall outcomes.

3. An investment consultant predicts that the odds against the price of a certain stock will go
up during the next week are 2:1 and the odds in favour of the price remaining the same
are 1:3. What is the probability that the price of the stock will go down during the next
week?

An investment consultant has provided information about the likelihood of changes in the price of a
particular stock during the next week. The odds against the price increasing are 2:1, meaning the
probability of the stock price going up is calculated as:
4. In practice, we find situations where it is not possible to make any probability
assessment. What criterion can be used in decision-making situations where the
probabilities of outcomes are unknown?

In many real-world situations, decision-makers do not have enough information to assign

probabilities to different outcomes. In such cases, alternative decision-making criteria are used to
guide choices under uncertainty.

One commonly used approach is the maximin criterion, which is based on a pessimistic outlook. The
decision-maker considers the worst possible outcome for each option and selects the one that offers
the best result among the worst cases. This strategy is often used in industries where failure can lead
to significant losses, such as financial investments or large-scale manufacturing.

Conversely, the maximax criterion is based on an optimistic perspective. The decision-maker selects
the option with the highest potential payoff, assuming the best-case scenario will occur. This
approach is more suitable for risk-tolerant entrepreneurs or innovative startups willing to take bold
moves.

Another approach is the minimax regret criterion, which focuses on minimizing potential regrets.
The decision-maker evaluates the maximum possible loss for each alternative and selects the option
that minimizes regret. This method is useful in competitive business environments where failing to
choose the right option could result in missed opportunities.

The Laplace criterion is used when no probabilities are available, assuming that all outcomes are
equally likely. The option with the highest expected value is chosen based on this assumption.

The Hurwicz criterion balances optimism and pessimism by assigning a weight to each. The decision-
maker chooses an option based on a mix of the best and worst possible outcomes.

These approaches help managers make informed choices even in uncertain environments where
probability estimates are unavailable.

5. A purchase manager knows that the hardness of castings from any supplier is normally
distributed with a mean of 20.25 and SD of 2.5. He picks up 100 samples of castings
from any supplier who claims that his castings have heavier hardness and finds the mean
hardness as 20.50. Test whether the claim of the supplier is tenable.

The purchase manager wants to verify a supplier's claim that their castings have higher hardness
than the standard mean of 20.25. A sample of 100 castings was tested, yielding a sample mean of
20.50 with a standard deviation of 2.5. A hypothesis test is conducted to determine whether this
difference is statistically significant.

Using a one-sample z-test, we set up the hypotheses as follows:

 Null Hypothesis (H0H_0H0): The mean hardness remains at 20.25 (μ=20.25)

 Alternative Hypothesis (H1H_1H1): The mean hardness is greater than 20.25 (μ>20.25)

The z-score is calculated using the formula:

For a one-tailed test at a 0.05 significance level, the critical z-value is 1.645. Since the calculated z-
score (1.00) is less than 1.645, we fail to reject the null hypothesis. This indicates that there is
insufficient evidence to support the supplier’s claim of significantly higher hardness.