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Groebner Business Statistics 7 Ch02 PDF
Groebner Business Statistics 7 Ch02 PDF
7th Edition
Chap 2-1
Chapter Goals
After completing this chapter, you should be able to:
Frequency Distributions
What is a Frequency Distribution?
A frequency distribution is a list or a table containing the values of a variable (or a set of ranges within which the data fall) ... and the corresponding frequencies with which each value occurs (or frequencies with which data fall within each range)
Chap 2-3
Chap 2-4
Frequency
44 24 18 16 20 22 26 30 200
Chap 2-5
Relative Frequency
Relative Frequency: What proportion is in each category?
Number of days read
0 1 2 3 4 5
Frequency
44 24 18 16 20 22
Relative Frequency
.22 .12 .09 .08 .10 .11
44 .22 200
22% of the people in the sample report that they read the newspaper 0 days per week
6
7 Total
26
30 200
.13
.15 1.00
Chap 2-6
Example: A manufacturer of insulation randomly selects 20 winter days and records the daily high temperature 24, 35, 17, 21, 24, 37, 26, 46, 58, 30, 32, 13, 12, 38, 41, 43, 44, 27, 53, 27
(Temperature is a continuous variable because it could be measured to any degree of precision desired)
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc. Chap 2-7
Find range: 58 - 12 = 46 Select number of classes: 5 (usually between 5 and 20) Compute class width: 10 (46/5 then round off) Determine class boundaries:10, 20, 30, 40, 50
(Sometimes class midpoints are reported: 15, 25, 35, 45, 55)
Chap 2-8
Class
Frequency
Relative Frequency
10 but under 20 20 but under 30 30 but under 40 40 but under 50 50 but under 60 Total
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
3 6 5 4 2 20
Frequency Histograms
Bars of the appropriate heights can be used to represent the number of observations within each class
Such a graph is called a histogram
Chap 2-10
Histogram Example
Data in ordered array:
12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58
10
Histogram
6
Frequency
5 0
3
0
0
Often answered by trial and error, subject to user judgment The goal is to create a distribution that is neither too "jagged" nor too "blocky Goal is to appropriately show the pattern of variation in the data
Chap 2-12
may yield a very jagged distribution with gaps from empty classes Can give a poor indication of how frequency varies across classes
Temperature
12 10 Frequency
8 6 4 2 0 0 30 60 More Temperature
may compress variation too much and yield a blocky distribution can obscure important patterns of variation.
General Guidelines
Number of Classes
5- 7 6 - 10 7 - 12 10 - 20
Class widths can typically be reduced as the number of observations increases Distributions with numerous observations are more likely to be smooth and have gaps filled since data are plentiful
Chap 2-14
Class Width
The class width is the distance between the lowest possible value and the highest possible value for a frequency class The class width is
W = Largest Value - Smallest Value
Number of Classes
Chap 2-15
Histograms in Excel
1 Select Data Tab 2 Data Analysis
3 Choose Histogram
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc. Chap 2-16
Histograms in Excel
(continued)
Chap 2-17
Ogives
An Ogive is a graph of the cumulative relative frequencies from a relative frequency distribution
Ogives are sometime shown in the same graph as a relative frequency histogram
Chap 2-18
Ogives
(continued) 12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58 Add a cumulative relative frequency column: Frequency Distribution
Class Frequency Relative Frequency
Cumulative Relative Frequency
10 but under 20 20 but under 30 30 but under 40 40 but under 50 50 but under 60 Total
3 6 5 4 2 20
Ogive Example
10
/ Ogive Histogram
Frequency
80 60 40 20 0
100
Ogives in Excel
Excel will show the Ogive graphically if the Cumulative Percentage option is selected in the Histogram dialog box
Chap 2-21
Bar Chart
Pie Charts
Chap 2-22
Bar charts and Pie charts are often used for qualitative (category) data
Height of bar or size of pie slice shows the frequency or percentage for each category
Chap 2-23
0 50 Amount in $1000's
(Note that bar charts can also be displayed with vertical bars)
Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc. Chap 2-24
44
1
2 3 4 5 6
24
18 16 20 22 26
50
40 Freuency 30 20 10
7
Total
30
200
0
0 1 2 5 6 7 Number of 3 days 4 newspaper is read per week
Chap 2-25
Percentage
Savings 15%
CD 14% Stocks 42%
Bonds 29%
Chap 2-26
Investment Category
55 44 20 28 147
129 95 49 51 324
Chap 2-27
Savings
CD
Bonds
Stocks
10
20
30
40
50
60
Investor C
Investor B
Investor A
Chap 2-28
60
50
40 30 20 10 0 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Chap 2-29 Business Statistics: A Decision-Making Approach, 7e 2008 Prentice-Hall, Inc.
METHOD 1. Separate the sorted data series into leading digits (the stem) and the trailing digits (the leaves) 2. List all stems in a column from low to high 3. For each stem, list all associated leaves
Chap 2-30
Example:
Data sorted from low to high:
12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58
12 is shown as 35 is shown as
Chap 2-31
Example:
Data in ordered array:
12, 13, 17, 21, 24, 24, 26, 27, 28, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58
1 2 3 4 5
2 3 7 1 4 4 6 7 8 0 2 5 7 8 1 3 4 6 3 8
Chap 2-32
Leaf
6 7 12
1 8 2
Chap 2-33
one variable is measured on the vertical axis and the other variable is measured on the horizontal axis
Chap 2-34
198419861988199019921994199619982000200220042006
Year
Chap 2-35
140
50
0 0 10 20 30 40 50 60 70
55
60
195
200
Chap 2-36
Types of Relationships
Linear Relationships
Y
Chap 2-37
Types of Relationships
(continued)
Curvilinear Relationships
Y
Chap 2-38
Types of Relationships
(continued)
No Relationship
Y
Chap 2-39
Chapter Summary
Data in raw form are usually not easy to use for decision making -- Some type of organization is needed:
Table
Graph
Techniques reviewed in this chapter: Frequency Distributions, Histograms, and Ogives Bar Charts and Pie Charts Stem and Leaf Diagrams Line Charts and Scatter Diagrams
Chap 2-40