Mb0024 - Statistics Set 1

Master of Business Administration-MBA Semester 1 MB0024 – Statistics for Management Assignment Set- 1 1Q. ABC Branch of XYZ Bank has decided to give 10 Lakh of loan each on long term basis to only two of their customers (accountholders), who are businessmen of the locality. About 20 businessmen had applied for loan in order to develop their business further. In order to reject some of the applications (as the fund was limited), the Bank decided that accountholder who had maintained a minimum balance of 50000 INR would only be considered for the loan. As a result, 10 applications were automatically rejected as they were not satisfying the requirement of minimum balance. Now, the 10 applications remained and it was found that monthly minimum balance in all the cases were more than 50000 INR for the last 12 months. Their account details of monthly minimum balance are given below. Months

Monthly Minimum Balance in INR

Jan, 2008

A/C Holde r1 60000

A/C Holder 2 56000

A/C Holder 3 66000

A/C Holder 4 86000

A/C Holder 5 56000

A/C Holder 6 59000

A/C Holder 7 59000

A/C Holder 8 52000

A/C Holder 9 53000

A/C Holder 10 56000

Feb, 2008

70000

76000

74000

96000

76000

96000

78000

73000

98000

76000

Mar, 2008

55000

110000

112000

190000

110000

120000

115000

112000

113000

120000

Apr, 2008

90000

89000

90000

98000

89000

97000

87000

93000

66000

89000

May, 2008

56000

88000

84000

84000

88000

98000

90000

89000

87000

86000

Jun, 2008

80000

52000

57000

57000

52000

57000

55000

54000

59000

72000

Jul, 2008

82000

58000

96000

66000

58000

56000

86000

55000

98000

98000

Aug, 2008

79000

95000

55000

93000

95000

98000

99000

96000

59000

95000

Sept, 2008

51000

86000

76000

74000

86000

88000

89000

97000

87000

84000

Oct, 2008

95000

90000

95000

99000

90000

99000

95000

99000

95000

90000

Nov, 2008

82000

82000

87000

84000

82000

88000

87000

88000

86000

82000

Dec, 2008

83000

55000

56000

57000

55000

59000

59000

59000

52000

53000

You as an Assistant Branch Manager of the Bank are entrusted the task of selecting two account holders for sanctioning the loans. How you will select the two individuals among the 10 applicants to give the loan using appropriate statistical techniques? Give proper justification for your selection. Ans: Objective of Customer Selection: As per the given scenario, the Bank Loan must be sanctioned to the appropriate Customers. Problem of Customer Selection:

(i) (ii) (iii)

Due to limited funds, minimum two customers out of ten can only be granted with the loan. The customers maintaining a minimum balance of 50000 INR only are eligible for the loan The bank has to check the customer’s credit worthiness.

Calculation of Mean [on the basis of Discreet method] Account Holder 1: Mean = ∑X = 883000 = 73583.33 N 12 Account Holder 2: Mean = ∑X = 937000 = 78083.33 N 12 Account Holder 3: Mean = ∑X = 948000 = 79000.00 N 12 Account Holder 4: Mean = ∑X = 1084000 = 90333.33 N 12 Account Holder 5: Mean = ∑X = 937000 = 78083.33 N 12 Account Holder 6: Mean = ∑X = 1015000 = 84583.33 N 12 Account Holder 7: Mean = ∑X = 999000 = 83250.00 N 12

Account Holder 8: Mean = ∑X = 967000 = 80583.33 N 12 Account Holder 9: Mean = ∑X = 953000 = 79416.67 N 12 Account Holder 10: Mean = ∑X = 1001000 = 83416.67 N 12 Recommendation of Customer Selection: As per the above calculation, Account Holder 4 and Account Holder 6 are selected with regard to sanctioning of Rs.10 lakh loan on long term basis. Conclusion: Hence using appropriate statistical techniques, Account Holder 4 and Account Holder 6 are eligible & are being sanctioned of Rs.10 lakh loan.