MODULE 4

4 MEASURES OF CENTRAL Mean (Arithmetic Mean)

TENDENCY, POSITION AND
VARIABILITY

Numerical Descriptive Measures

Chapter Topics

 Measures of Central Tendency

 Mean, Median, Mode
 Quartile, Percentile, Decile
 Measure of Variation
 Range, Variance and
Standard Deviation,
Coefficient of Variation,
Empirical Rule

Summary Measures Example 1: During a particular summer

month, the eight salespeople in an
appliance store sold the following number
of central air-conditioning units: 8, 8, 5,
14, 8, 11, 16, 11. Considering this month
as the statistical population of interest, the
mean number of units sold is

Measures of Central Tendency

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Weighted Mean Mode

Example 2: In a multiproduct company,

the profit margins for the company’s four
product lines during the past fiscal year
were: line A, 4.2 percent; line B, 5.5
percent; line C, 7.4 percent; and line D,
10.1 percent. Find the weighted mean
profit margin.

Median
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Relationship Between The Mean and 3. For a sample of 15 students at an

The Median elementary-school snack bar, the following
 Symmetrical Distribution: sales amounts arranged in ascending order
mean = median = mode of magnitude are observed: Php10, 10, 25,

 Positively Skewed Distribution: 25, 27, 30, 33, 35, 40, 43, 45, 45, 50, 55,

mean > median 60. a. Determine the mean, median, and

mode for these sales amounts.
 Negatively Skewed Distribution:
mean < median b. How would you describe the
distribution from the standpoint of
REMARK: The latter two relationships are
skewness?
always true, regardless of whether or not
the distribution is unimodal. 4. The average IQ of 10 students in a
mathematics course is 114. If 9 of the
students have IQs of 101, 125, 118, 128,
Learning Task 106, 115, 99, 118, and 109, what must be
the other IQ?
1. The following are scores of 50 high
school students in a 150 – item 5. What is the average for a student who
achievement test in Mathematics. received grades of 85, 76, and 82 on 3 tests
and a 79 on the final examination in a
certain course if the final examination
counts three times as much as each of the 3
tests?

a. Find the mean, median, and mode.

b. What is the shape of the distribution?

2. Find the preferred measure of central

location for the sample whose observations
18, 10, 11, 98, 22, 15, 11, 25, and 17
represent the number of automobiles sold
during this past month by 9 different
automobile agencies. Justify your choice.
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Measures of Non – Central Position Deciles

 Describe or locate the position of

certain noncentral pieces of data
relative to the entire set of data
 Often referred to as fractiles or
quantiles.
 Values below which a specific
fraction or percentage of the
observations in a given set must
fall
Quartiles

Percentile
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Practice Exercise Range

The following data are the hours of

personal cellphone usage for calls during
one week for a sample of 25 persons.

4.1 5.7 1.5 3.4 10.4

3.1 4.2 4.8 5.4 2.0
4.1 3.3 4.1 4.3 8.8
10.8 0.7 2.8 12.1 9.5
7.2 3.9 6.1 4.7 5.7

Variance
Find the following and interpret.

a.) P75 b.) D4 c.) Q1

Arranged Data Values

0.7 3.3 4.1 5.4 8.8

1.5 3.4 4.2 5.7 9.5
2.0 3.9 4.3 5.7 10.4
2.8 4.1 4.7 6.1 10.8
3.1 4.1 4.8 7.2 12.1

Measures of Variation Standard Deviation

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Calculation of the Variance and

Standard Deviation Raw Score Method

 Allows you to determine how

much volatility (risk) you are
assuming in comparison to the
amount of return you can expect
from your investment

 The lower the ratio of standard

deviation to mean return, the better
your risk-return tradeoff
Comparing Standard Deviations
 Risk-Return Trade Off - Higher
risk is associated with greater
probability of higher return and
lower risk with a greater
probability of smaller return.

Comparing Coefficient of Variation

Coefficient of Variation
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Example: Ruben got a final grade of 85 in

Standard Score
both English and Physics. The mean final
 Tells the relative location of a grades of his class in these two courses are
particular raw score with regard to 80 in English and 75 in Physics with
the mean of all the scores in a standard deviations of 12 and 10,
series. respectively. In which subject was his
 Is a transformed raw score. academic performance better in relation to
his class?
 Expressed in terms of standard
deviation units from the mean.

 Has a mean of zero. Empirical Rule (68-95-99.7 rule)

o a positive standard
score indicates that the
transformed raw score
is above or higher than
the mean.

o a negative standard

score shows that the

given raw score is
below or lower than the
mean.
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Empirical Rule - restated

Practice Exercise

1. In preparation for a clearance sale at a

women’s apparel shop, 2000 brochures
were placed in readdressed envelope,
sealed and stamped. This process took an
average of 7 seconds per envelope with a
standard deviation of 1.8 seconds.
Assuming this population of times is
approximately bell-shaped, find the
number of envelopes that took

a) from 5.2 to 8.8 seconds to prepare

b) more than 10.6 seconds to prepare

c) less than 5.2 seconds to prepare


Learning Task
Exercises:
2. Two friends want to take a summer
holiday before going to college in the
autumn. They are looking for somewhere
with plenty of clubs where they can party
all night. Unfortunately they have left it
rather late to book and there are only two
MODULE 4
resorts, Medlena and Bistry, available
within their budget. When they ask about
the ages of the holiday-makers at these
resorts their travel agent says the only
thing he can tell them is that that the mean
age of people going to Medlena is 19
whereas the mean age of visitors to Bistry
is 22. Just as they are about to book
holidays in Medlena because it seems to
attract the sort of young crowd they want
to be with the travel agent says. ‘I’ve got
some more figures, the standard deviation
of the ages of visitors to Medlena is 8 and
the standard deviation of the ages of
visitors to Bistry is 2’. Should they change
their minds on the basis of this new
information, and if so, why?
3. Many national academic achievement
and aptitude tests, such as the SAT, report
standardized test scores with the mean for
the normative group used to establish
scoring standards converted to 500 with a
standard deviation of 100. Suppose that the
distribution of scores for such a test is
known to be approximately normally
distributed. Determine the approximate
percentage of reported scores that would
be
a. between 400 and 600
b. between 500 and 700
c. greater than 700
d. less than 200