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Question
A company has two departments with 42 and 60 employees respectively. Their average weekly wages are Rs. 750 and Rs. 400. The standard deviations are 8 and 10 respectively. Which department has a larger variability in wages?
Solution
Let n1 = 42, n2 = 60, `bar("x"_1)` = 750, `bar("x"_2` = 400, σ1 = 8, σ2 = 10
C.V. (1) = `100xxsigma_1/bar("x"_1)=100xx8/750` = 1.07%
C.V. (2) = `100xxsigma_2/bar("x"_2)=100xx10/400` = 2.5%
Since, C.V. (1) < C.V. (2)
∴ second department is less consistent.
∴ second department has larger variability in wages.
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