Last updated at Dec. 12, 2016 by Teachoo
Example 13 Two plants A and B of a factory show following results about the number of workers and the wages paid to them. In which plant, A or B is there greater variability in individual wages? To compare the variation, we have to calculate coefficient of variation Coefficient of variation(C.V.) = 𝑺𝒕𝒂𝒏𝒅𝒂𝒓𝒅 𝑫𝒆𝒗𝒊𝒂𝒕𝒊𝒐𝒏𝑀𝑒𝑎𝑛 × 100 Since, Average monthly wages are same (mean are equal) , we compare standard deviation of the distribution Variance in plant A = 81 Standard deviation in plant A = 𝑉𝑎𝑟𝑖𝑎𝑛𝑐𝑒 = 81 = 92 = 9 Variance in plant B = 100 Standard deviation in plant B = 𝑉𝑎𝑟𝑖𝑎𝑛𝑐𝑒 = 100 = 102 = 10 Since the average monthly wages in both the plants is same, i.e., Rs.2500, Therefore, the plant with greater standard deviation will have more variability. Thus, the plant B has greater variability in the individual wages.
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