Question

In two construction companies $A$ and $B$, the average weekly wages in rupees and the standard deviations are as follows:

Company	Average of wages (in Rs)	S.D of wages in (Rs)
$A$	$3450$	$6.21$
$B$	$2850$	$4.56$

Determine which factory has greater variability in individual wages?

Answer 1

$COMPANY$ $A$

${\overline{x}}_A=3450$

${\sigma }_A=6.21$

${CV}_A=\left(\frac{{\sigma }_A}{\overline{x_A}}\right)\times 100$

${CV}_A=0.18$

$COMPANY$ $B$

${\overline{x}}_B=2850$

${\sigma }_B=4.56$

${CV}_B=\left(\frac{{\sigma }_B}{\overline{x_B}}\right)\times 100$

${CV}_B=0.16$

We know variability of a firm depends upon coefficient of variation.

Higher the coefficient of variation, higher the variability.

$\therefore {CV}_A>{CV}_B$

$\therefore$ $Company$ $B$ has greater variability in individual wages