Business Statistics

Descriptive Statistics

2003 Prentice-Hall, Inc.

Chap 2-1

Chapter Topics

Organizing Numerical Data

The Ordered Array and Stem-Leaf Display

Tabulating and Graphing Univariate Numerical Data

Frequency Distributions: Tables, Histograms, Polygons

Relative Frequency Distribution

Measures of Central Tendency

Mean, Median, Mode

2003 Prentice-Hall, Inc.

Chap 2-2

Organizing Numerical Data

Numerical Data

Ordered Array

41, 24, 32, 26, 27, 27, 30, 24, 38, 21

Frequency Distributions

21, 24, 24, 26, 27, 27, 30, 32, 38, 41

Stem and Leaf

Display

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4 1

Histograms
Tables

Ogive
Polygons
Chap 2-3

Organizing Numerical Data

(continued)

Data in Raw Form (as collected):

24, 26, 24, 21, 27, 27, 30, 41, 32, 38
Data in Ordered Array from Smallest to Largest:
21, 24, 24, 26, 27, 27, 30, 32, 38, 41
Stem-and-Leaf Display:

2003 Prentice-Hall, Inc.

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Chap 2-4

Summarizing Numerical Data

Numerical Data

Ordered Array

41, 24, 32, 26, 27, 27, 30, 24, 38, 21

Frequency Distributions

21, 24, 24, 26, 27, 27, 30, 32, 38, 41

Stem and Leaf

Display

2003 Prentice-Hall, Inc.

2 144677

3 028
4 1

Histograms
Tables

Ogive
Polygons
Chap 2-5

Tabulating Numerical Data: Frequency

Distributions

Sort Raw Data in Ascending Order

12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58

Find Range: 58 - 12 = 46

Select Number of Classes: 5 (usually between 5 and 15)

Compute Class Interval (width): 10 (46/5 then round up)

Determine Class Boundaries (limits):

Compute Class Midpoints:

Count Observations & Assign to Classes

2003 Prentice-Hall, Inc.

10, 20, 30, 40, 50, 60

15, 25, 35, 45, 55

Chap 2-6

Frequency Distributions, Relative Frequency

Distributions and Percentage Distributions

Data in ordered array:

12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58

Class
10 but under 20
20 but under 30
30 but under 40
40 but under 50
50 but under 60
Total
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Relative
Frequency Frequency Percentage
3
6
5
4
2
20

.15
.30
.25
.20
.10
1

15
30
25
20
10
100
Chap 2-7

Graphing Numerical Data:

The Histogram
Data in ordered array:
12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58

Frequency

Histogram
7
6
5
4
3
2
1
0

6
5
3
2
0
5

Class Boundaries
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No Gaps
Between
Bars

0
15

25

35

45

Class Midpoints

55

More

Chap 2-8

Graphing Numerical Data:

The Frequency Polygon
Data in ordered array:
12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58
Frequency
7
6
5
4
3
2
1
0
5
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15

25

35

45

Class Midpoints

55

More
Chap 2-9

Measures of Central Tendency or Averages

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Chap 2-10

Summary Measures
Summary Measures

Central Tendency
Mean

Quartile

Variation

Range

Coefficient of
Variation

Mode
Median

Variance
Standard Deviation
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Chap 2-11

Measures of Central Tendency

Central Tendency

Median

Mean
n

X
i 1

Mode

n
N

X
i 1

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Chap 2-12

Mean (Arithmetic Mean) for

Ungrouped Data

Mean (Arithmetic Mean) of Data Values

Sample mean

Sample Size

X
i 1

Population mean
N

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X
i 1

X1 X 2

Xn

Population Size

X1 X 2

XN
Chap 2-13

Mean (Arithmetic Mean)

(continued)

The Most Common Measure of Central

Tendency
Affected by Extreme Values (Outliers)

0 1 2 3 4 5 6 7 8 9 10

Mean = 5

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0 1 2 3 4 5 6 7 8 9 10 12 14

Mean = 6

Chap 2-14

Arithmetic Mean for Grouped Data

A.M = fiXi
fi
Both for discrete and continuous
frequency distributions

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Chap 2-15

Median for Ungrouped Data

Robust Measure of Central Tendency

Not Affected by Extreme Values

0 1 2 3 4 5 6 7 8 9 10

Median = 5

0 1 2 3 4 5 6 7 8 9 10 12 14

Median = 5

In an Ordered Array, the Median is the

Middle Number

If n or N is odd, the median is the middle number

If n or N is even, the median is the average of the
2 middle numbers

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Chap 2-16

Median for Grouped Data

(Continuous Frequency Distribution)
Median = L1 + C.I (m c )
f
Where L1 is the lower class boundary of MC
C.I is the class interval of MC
f is the frequency of MC
m is the location of median
c is the cumulative frequency of class preceding
MC
MC is the median class

2003 Prentice-Hall, Inc.

Chap 2-17

Mode for Ungrouped Data

A Measure of Central Tendency

Value that Occurs Most Often
Not Affected by Extreme Values
There May Not be a Mode
There May be Several Modes
Used for Either Numerical or Categorical Data

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Mode = 9
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0 1 2 3 4 5 6

No Mode
Chap 2-18

Mode for Grouped Data

In a discrete frequency table Mode is the

observation with the highest frequency
In a continuous frequency table it is worked
out using the following interpolation formula

Mode

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L1

(fm f1)
(fm-f1-f2)

C.I

Chap 2-19

Mode for Grouped Data

Where L1 is the lower boundary of model class

fm is the frequency of MC
f1 is the frequency of the class preceding the
MC
f2 is the frequency of the class following the MC
C.I is the class interval of the MC
MC is the modal class

2003 Prentice-Hall, Inc.

Chap 2-20

Chapter Summary

Organized Numerical Data

The Ordered Array and Stem-Leaf Display

Tabulated and Graphed Univariate Numerical

Data

Frequency Distributions: Tables, Histograms,

Polygon
Relative Frequency Distribution

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Chap 2-21

Chapter Summary

Described Measures of Central Tendency

Mean, Median, Mode

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Chap 2-22