Sunday, October 30, 2011

Index Number

Introduction
                Index number is an indicator of changes in prices and quantities. It is a specialized average designed to measure the change in a group of related variables over a period of time. It is also an indicator of inflationary or deflationary tendencies.

                Following are the various feature of index number:
1. Measures of relative changes: - Index number measure relative or percentage changes in the variable over time.
2. Quantitative expression: - Index numbers offer a precise measurement of the quantitative change in the concerned variable over time.
 3. Average: - Index number show changes in terms of average.


                Advantages of index number
1.       Measurement of change in the price level or the value of money: - Index number can be used to know the impact of the change in the value of money on different sections of the society.
2.       Knowledge of the change in standard of living: - Index number helps to ascertain the living standards of people. Money income may increase but if index number show a decrease in the value if money. Living standard may even decline.
3.       Adjustment in salaries and allowances: - Cost of living index number is a useful guide to the government and private enterprises to make necessary adjustment in salaries and allowances of the workers.
4.       Useful to business community: - Price index numbers serve as a useful guide to the business community in planning.
5.       Information regarding foreign trade: - Index of exports and imports provides useful information regarding foreign trade.

                Limitation of index number
1. Not completely true: - Index number not fully true. The index number simply indicate arithmetical tendency of the temporal changes in the variable.
2. International comparison is not possible: - Different countries have different bass of index numbers; these do not help international comparisons.
3. Difference of time: - With the passage of time, it is difficult to make comparison of index number. With the changing time man’s habits.
4. Limited use: - Index numbers are prepared with certain specific objective. If they are used for another purpose they may lead to wrong conclusion.
5. Lack of retail price index number: - Most of the index numbers are prepared on the basis of wholesaler prices. But in real life, retail prices are most relevant, but it is difficult to collect retail prices.


Main Problems in the construction of index number
1.       Purpose of index number: - There are various types of index number, constructed with different objectives. Before constructing an index number, one must define the objective.
2.        Selection of base year: - Selection of base year is another problem in the construction of index number. Base year is the reference year. It is the year with which prices of the current year are compared.
3.       Selection of goods and services: - Having defined the objective, the problem is of the selection of goods or services to be included in the index number.
4.       Selection of price: - whether wholesale or retail prices are used is also a problem in construction of index number.
5.       Other problems:-
a) Choice of average (simple or geometric average).
b) Selection of appropriate weights.
c) Selection of appropriate formula (Fisher’s or laspeyres).

Methods for calculation of index number
i) Method of Aggregates
a) Simple Aggregates
b) Weighted Aggregates

ii) Method of Relatives
a) Simple Average of Price Relatives
b) Weighted average of price relatives

iii) Under Weighted Average Method
a) Laspeyre’s Method
b) Paasche’s Method
c) Marshall-Edgeworth Method
d) Fisher’s Ideal Index

Simple and weighted index number.
                Simple and weighted are the two broad categories of index numbers which can be defined as:

Simple index number: - These are the index number in which all items of the series are given equal weighted or importance. It is a simple average of prices of different goods and services,  as in case of simple price index

                Weighted index number: - These are the index number in which different items of the series are given different weight age, depending upon their relative importance. It is not a simple average of prices of different goods and services, as in case of simple price index.

Time reversal and factor reversal test
                Time Reversal Test:-The test is that the formula for calculating the index number should be such that it will give the same ratio between one point of comparison and the other, no matter which of the two is taken as base. Symbolically P01 * P10 = 1

                Factor Reversal Test:-Just as each formula should permit the interchange of the two items without giving inconsistent results so it ought to permit interchanging prices and quantities without giving inconsistent results, i.e. the two results multiply together should give the true value ratio. In other words the change in price multiplied by change in quantity should be equal the total change in value. P01 * Q01 =∑P1Q1 / ∑P0Q0


Cost of living index number (CLI)
                Cost of living index numbers generally represent the average change in prices over a period of time, paid by a consumer for a fixed set of goods and services. It measure the relative changes over time in the cost level require to maintain similar standard of living.
Items contributing to consumer price index are generally:
i)           Food
ii)          Clothing
iii)        Fuel and Lighting
iv)        Housing
v)         Miscellaneous.

                Uses of cost of living index:-
i)           CLI numbers are used for adjustment of dearness allowance to maintain the same standard of living.
ii)          It is used in fixing various economic policies.
iii)        Its helps in measuring purchasing power of money.
iv)        Real wages can be obtained with the help of CLI numbers.

Fixed base method and Chain base method
                Fixed Base Method: - Under this method index number is calculated with a fixed base year. By this method the index number of a given year is not influenced by the variation of prices of any other year.

                Chain Base Method: - Under This method the price of any period or year is related with the price of the immediate previous period or year. It has no relation with the price of fixed based period.

                Use of Chain base index number:-         
i)           Direct comparison between two successive periods is possible through link indices.
ii)          This method is useful when weights are changing rapidly.
iii)        It facilitates introduction in new item replacing old one.

                Disadvantages of Chain base index number:-

i)           This Method involves immense calculation.
ii)          Easy interpretation is lacking.

                Uses and limitations of fixed base index number: - Same as index number (Q.N.2)

Difference between chain base method and fixed base method:-

CHAIN BASE MEHTOD
FIXED BASED MEHTOD
1
No fixed base is there.
Base Period is fixed.
2
Immediately preceding period is taken as base. 
Base period is arbitrarily chosen.
3
Calculation is too long.
Calculation is easy.
4
During Calculation if there is any error then the
Entire calculation is wrong.
This is not so in this method.
5
If data for any period is missing then subsequ-
-ent chain indices cannot be computed.
This problem does not arise here.











Fisher’s index is regarded as ideal index because:-
i)           It considers both base year and current year’s price and quantity.
ii)          It satisfies both time reversal and factor reversal test.
iii)        It is based on Geometric mean which is theoretically considered to be the best average of constructing index number.
iv)        It is free from bias as it considers both current year and base year price and qty.
vii) Prove that fisher’s index satisfies both time reversal test and factor reversal test.

Wednesday, October 26, 2011

Dibrugarh University - Business Communication 2011


1.       a) Explain the basic forms of communication. What are the different levels at which communication takes place?
                                                              Or
(b) Write briefly on any two of the following:
                                (i) Audience analysis
                                (ii) Mathematical model of communication
                                (iii) Grapevine

2.       (a) What are the principal barriers to communication? How can these be overcome?
                                                             Or
(b) Write briefly on any two of the following:
                                (i) SWOT analysis
                                (ii) Group discussion as a part of a selection process
                                (iii) The types of report

3.       (a) What are the basic characteristics of a business letter? Write a note on the various purposes for which a business letter is written.
                                                             Or
(b) Suppose you are working in the marketing division of a cosmetic company. Identify the market segment and draft a sales letter propagating the extra-plus in your latest talcum powder.  

4.    (a) Assume that you are a management trainee in a multinational company dealing with marketing of software. There has been a slight change in the market as a result of which you need to change your strategies. Write a brief report to the Managing Director with regard to the changes that need to be brought about.
                                                           Or
(b) Write briefly on any two of the following:
                (i) The essentials of an effective presentation skill
                (ii) Use of visual aids in oral presentation
                (iii) The intercultural factors affecting interaction at international level

            5.       (a) The following advertisement for jobs appeared in a local daily:
            Looking for Sales Manager
                                Eligibility:
                                Age – 25 to 35 years
                                Education – Commerce graduate
                                Experience – 2 years
                                Vehicle ownership – Compulsory (2/4 wheelers)
                                Opportunity:
                                Attractive salary with incentives + high career growth contribution
                                Apply with resume and expected salary to –
                                                ING Life India
                                                1st Floor, Ganpaty Enclave
                                                Near Bora Service Station
                                                G. S. Road, Guwahati – 7.
                                                                Or
(b) Write briefly on any two of the following:
                              (i) The modern technological aids used for communication
                              (ii) Proxemics
                                       (iii) Listening as an important component of the communication process.

Dibrugarh University - Business Communication 2010


1.       (a) Explain what you understand by the term ‘Communication’. Briefly describe the process of communication.
                                                                      Or
(b) Write briefly on any two of the following:
                (i) The first model of communication
                (ii) The goals of communication
                (iii) The importance of feedback

2.       (a) What are the types of business communication? How can there be better communication in an organization?
                                                                     Or
(b) Write briefly on any two of the following:
                (i) Importance of group discussion in recruitment process
                (ii) Individual and group presentations
                (iii) Features of grapevine communication.

3.       (a) What is a sales letter? What are the advantages of sending a sales letter?
                                                                    Or
(b) Write briefly on any two of the following:
                (i) The purpose for sending circulars
                (ii) Use of memo
                (iii) The stages and nature of collection letter for nonpayment

4.       (a) The Directors of Polar Refrigeration Company are concerned about slump in sales of their popular product ‘Supercool’ in Tinsukia district. A subcommittee has been formed to present a report on the declining sales. Present a report based on your investigation.
                                                                   Or
(b) Write briefly on any two of the following:
                (i) The role of attitude in making an effective presentation
                (ii) Differences between sales and training presentation
                (iii) Guidelines for survey

5.       (a)    Write briefly on any two of the following:
(i)      Kinesics
(ii)    Para language
(iii)   Modern forms of communicating
                                                                  Or
(b) A leading company invites applications from highly motive persons to market its personal computers and accessories. Job requirements are a Commerce Degree and at least two years experience in similar position. Candidates with at least diploma in marketing management and good communication skills would be preferred. Apply with resume and expected salary to The Personnel Manager
M/s Microchips International
Post Box No.: 51
GPO, Chennai – 600 001.

Dibrugarh University - Business Communication 2009


1. a) “Communication is an essential for a business concern as blood and breathing is for life.” Do you agree?Explain.
                                                                                            Or                          
b) Write short notes on the following (any two):                                                                                                                         
                i) David Berlo’s model and Shannon and Weaver model
                ii) Essentials of effective communication
                iii) SWOT analysis

2. a) What are the principal barriers to management communication? Suggest some measures for improvement of These barriers.                                                                                                                                                                                        
                                                                                         Or
b) Answer any two of the following:                                                           
           i) State the purpose and place (sequence) of the following elements in a report:  Executive summary- Introduction – Recommendations/Suggestions – Acknowledgements
           ii) Distinguish between an oral and a written communication.
           iii) Write the differences between an individual presentation and a group presentation.

3. a) How does business writing differ from other writings? Discuss the importance of writing skill. How can these Skill is improved?                                                                                                                                                                                     
                                                                                       Or
b) For your new business complex Messrs Ganapati Traders, you ordered some valuable furniture from Messrs  Ethnic Furniture, Mumbai. However, the furniture got damaged in transit causing you heavy loss on account Of bad packing. As the proprietor of Ganapati Traders, write a letter claiming immediate compensation from The business firm.

4. a) The Head Office of HDFC Bank Limited, New Delhi is not satisfied with the working of one of its branches, Meham Branch, District Rohtak, Haryana and has asked the Branch Manager of this bank to state the reasons behind slow work progress. Imagine you are the branch Manager and prepare a report on your findings and recommendations.                                   
                                                                                       Or
b) Write short notes on the follwing:                                                                                                                                                  
                i) principles of oral communications
                ii) Characteristics of a good speech

5. a) “Ashoka Contribution corporation, Mohali, requires marketing managers. Candidates should possess engineering degree in computer science with working experience and expertise. Preference will be given toe MBA degree holders specializing in Marketing Management. Attractive salary with all perks enjoyed by the executives, training facilities available for career advancement. Apply within fifteen days to the Managing Director, Ashoka Contribution Corporation, Phase VI, Mohali.”
         Write a solicited letter in response to the above advertisement published in The Times of India, dated 19th February, 2009, along with a resume in the proper format stating your personal details.                                                                                 
                                                                                          Or
b) Write briefly on the following (any two):                                                                                                                                        
                i) Internet – its uses and barriers in its way
                ii) Types and significance of body language
                iii) Basic points of effective listening.

Dibrugarh University - Business Communication 2008


1.       a) Define communication. Give the reasons for the growing importance of communication.
                                                                   Or
b) Write what you understand by the following (any two):                                                                                                          
i)        Audience-centered approach
ii)       Downward communication
iii)     Feedback

2.       a) List some barriers to effective communication.
                                                               Or
b) How can the following help in developing effective communication skills? (any two):
i)        Group discussion
ii)       Mock interview
iii)     Seminar

3.       a) What are the stages in writing a business letter? What are the essential qualities of a good business letter?
                                                               Or
b) Imagine you are a Marketing Manager working for Progressive Educational Publishing House, New Delhi. Your firm has recently published a book entitled ‘Accountancy – Theory and Practice’. Write a letter to the Head of the Department of Accountancy of the college Dibrugarh University highlighting the features of the book.

4.        a) The Human Resource Manager of Ashok Cement Plant had been asked by the Managing Director of the plant to prepare a report on the causes behind a recent incident of labour unrest. Imagine you are the HR Manager and Prepare a report based on your findings and recommendations.
                                                              Or
b) What are the factors to be kept in mind while making an oral presentation? What qualities should a successful sales person possess?                                                                                                                                                                                                             

5.       a) “A large multinational company requires sales executive. Candidates should possess MBA or equivalent degree with at least two years experience. Age should not exceed 28 years. Attractive salary and benefits commensurate with ability offered. Bright prospects for right candidates. Apply within two weeks to P.O. Box No. 5230, New Delhi.”
          Write an application in response to the above advertisement which has appeared in ‘Eastern Times’ dated 21st February, 2008. Also, attach a resume in the proper format incorporating your personal details, etc.
                                                         Or
b) Write briefly on (any two):                                                                                                                                                    
i)        Preparations for an interview
ii)       Fax and e-mail
iii)     Importance of effective listening

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