BUSINESS MATHEMATICS AND

STATISTICS PROJECT ON

‘Measures of central tendency’

NAME OF THE STUDENT : Bhakta Prasad nayak

c.h.s.e. roll no. :

Registration no. :

Name of the college : saraswati junior vidya mandir

Neelakantha nagar, brahmapur

Examination : a.h.s.e. 2017-18

Teacher in charge:

Mr. Srikant Sahu

Signature of the student Signature of the internal examiner

Date of submission signature of the external examiner

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 CERTIFICATE

This is to certify that Mr. Bhakta Prasad Nayak bearing Roll

number of +2 2 nd Year Commerce has successfully completed
the project report on matrix as per the guidelines of class XII of H.S.
examination conducted by C.H.S.E., Odisha. It is further certifying that
this project is the individual and bonafide work of the candidate.

Date of submission:

Name of subject teacher: Mr. Srikant Sahu

Teacher’s signature:

School stamp

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 ACKNOWLEDGMENT

Inspiration and hard work always play a key role in the success of
any venture. At the level of practice, it is often difficult to get knowledge
without guidance. “Project is like a bridge between theory and practice.”
With this will I felt pleasure to undertake this project.

I am deeply indebted to Mr. Srikant Sahu for his

valuable contribution during the academic session & guidance in
preparation of this project report.

I would like to express my gratitude towards my parents for their

co-operation and encouragement which helped me in the completion of
this project. I would also like to thanks our respected principal Mr. S.
Mohan Rao for his support towards student in every situation.

Finally, I would like to thanks my esteemed friends and the

almighty God who have been a source of strength and confidence for me
in this Endeavour.

Place : Name : Bhakta Prasad Nayak

Date : Signature :

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 CONTENT

CHAPTER TITLE PAGE

NUMBER NUMBER

1 Introduction to central tendency 5

2 Measures of central tendency 5-7

3 Characteristics of good average 8-9

4 Calculation of mean 9-12

5 Calculation of median 13-15

6 Calculation mode 16-21

7 Conclusion 22

8 Bibliography 23

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INTRODUCTION

CENTRAL TENDENCY
In statistics, a central tendency (or measure of central tendency) is a central or typical
value for a probability distribution. It may also be called a center or location of the distribution.
Colloquially, measures of central tendency are often called averages. The term central
tendency dates from the late 1920s.

The most common measures of central tendency are the arithmetic mean, the median and
the mode. A central tendency can be calculated for either a finite set of values or for a theoretical
distribution, such as the normal distribution. Occasionally authors use central tendency to denote
"the tendency of quantitative data to cluster around some central value."

The central tendency of a distribution is typically contrasted with

its dispersion or variability; dispersion and central tendency are the often characterized
properties of distributions. Analysts may judge whether data has a strong or a weak central
tendency based on its dispersion.

MEASURES OF CENTRAL TENDENCY

While others might stifle a yawn at the mere word, Six Sigma practitioners who have
passed the Lean Six Sigma Green Belt course knows that without statistics, no Six Sigma project
will succeed. Statistics is simply part of the data-driven Six Sigma approach. At the Six Sigma
Green Belt level, we need to have the basic understanding of many statistical methods. Six
Sigma Black Belts and Green Belts typically use a statistical program such as MINITAB to
perform calculations. However, it is always good to understand the underlying principles of a
measure, such as the measures of central tendency, instead of just conjuring the results at a click
of a button without knowing exactly what you are calculating. Statistical tools are used in the
Measure and Analyze phases of the DMAIC process, as you will learn from a reputable free
Lean Six Sigma courses. The most basic statistics that a Six Sigma practitioner will look at are
measures of central tendency. Measures of central tendency are one of the first things that Six
Sigma teams look at after collecting data.

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MEASURES OF CENTRAL TENDENCY

What are measures of central tendency?  Measures of central tendency represent a single

value that attempts to describe a set of data by identifying the central position within that set of
data. As such, measures of central tendency are sometimes called measures of central location. In
other words, it is a measure that tells us where the middle of a set of data is. The mean, which is
often called the average, is the most well-known of the measures of central tendency. However,
there are other measures of central tendency, such as the median and the mode. The mean,
median and mode are all valid measures of central tendency.

MEAN

The mean, which is also known as the average, is the most popular and well known of the
measures of central tendency. It can be used with both discrete and continuous data, although it
is used more often with continuous data. The mean is equal to the sum of all the values in the
data set divided by the number of values in the data set. Therefore, the formula for the mean
would be read: sum of the observations divided by number of observations.

MEDIAN

Of the measures of central tendency, it is the median that is also known as the positional
average. Positional averages are based on the position of the given observation in a series,
arranged in an ascending or descending order. The median is that value which divides the group
into two equal parts, one part comprising all values greater, and the other, all values less than
median. In other words, the median of a sequence of numbers is the value that lies in the middle
of the sequence when sorted from smallest to largest or vice versa. The median is an example of
one of the measures of central tendency.

MODE

The mode refers to that value in a distribution which occurs most frequently. It is an

actual value, which has the highest concentration of items in and around it. Please have a look at
two examples in the figure below. In the first illustration, the most frequently occurring value is
5. That is why the mode will be 5. In the second illustration, the values of 7 and 10 occurred 3
times in a data set. Therefore, the mode will be 7 and 10.
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 In statistics, nothing works without a formula. Therefore, you need to have a formula for
everything you do in Statistics. Of course, all measures of central tendency can easily be
calculated in software solutions such as MS Excel, but it’s good to know how to calculate these
measures of central tendency by hand.

PROCEDURE OF CALCULATION

How to Calculate the Mean?

In this article, we’ll look at some examples to describe each of the measures of central
tendency. Let’s look at some examples of the mean in the figure below. The numbers ranging
from 1 to 8 have been summed and the sum has been divided by the number of observations,
which is 8. Hence, the answer is 4.5. The average or mean is 4.5.

In the second example, the waiting time in the hospital has been impacting turnaround
time for basic blood analysis. The data for turnaround time was collected for 10 such tests on a
given day to calculate the average turnaround time. The unit of measurement for data collection
was minutes. To calculate the mean, we summed the turnaround time for ten blood analysis tests
and then; the sum was divided by the number of observations to arrive at the average turnaround
time for basic blood analysis. The answer here is 61.3 minutes. This is an example of the most
well known of the measures of central tendency.

How to Calculate the Median?

The formula for calculating the median is read as: ‘n’ plus 1 divided by 2. The median
will be the value lying at the position; which has been suggested by the solution to the formula.
Have a look at the two examples below. The numbers ranging from 1 to 8 have been counted
according to the formula. The answer is 4.5. The median is not 4.5. The value that lies at the
4.5th position is the median value. The question is: how will you calculate the value which lies at
the 4.5th position? The formula to do this would be 4th value plus half of the 5th value minus 4th
value.

For the second example, let’s use the same example that we used for calculating the
average. The data for turnaround time was organized in ascending order. To calculate the
median, we will have to count the number of data points and compose the formula. The answer

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 here is 5.5. The value that lies at the 5.5th position is the median value. Hence, the
median is 61 minutes.

CHARACTERISTICS OF A GOOD AVERAGE

1. It should be rigidly defined. If an average is left to the estimation of an observer and if it
is not a definite and fixed value it cannot be representative of a series. The bias of the
investigator in such cases would considerably affect the value of the average.
2. It should be based on all the observations of the series. If some of the items of the series
are not taken into account in its Calculation the average cannot be said to be a
representative one. As we shall see later on there are some averages which do not take
into account all the values of a group and to this extent they are not satisfactory averages.
3. It should be capable of further algebraic treatment. If an average dose not possesses this
quality, its use is bound to be very limited. It will not be possible to calculate, say, the
combined average of two or more series from their individual averages; further it will not
be possible to study the average relationship of various parts of a variable if it
is expressed as the sum of two or more variables. Many other similar studies would not
be possible if the average is not capable of further algebraic treatment.
4. It should be easy to calculate and simple to follow. If the calculation of the average
involves tedious mathematical processes it will not be readily understood and its use will
be confined only to a limited number of persons. It can never be a
popular average. As such, one of the qualities of a good average is that it should not be
too abstract or mathematical and there should be no difficulty in its calculation.
5. It should not be affected by fluctuations of sampling. If two independent sample studies
are made in any particular field, the averages thus obtained, should not materially differ
from each other. No doubt, when two separate enquires are made, there is bound to be a
difference, in the average values calculated but in some cases this difference would be
grate while in some case comparatively less.
6. One more thing to be remembered about averages is that the items whose average is
being calculated should form a homogenous group. It is absurd to talk about the average
of a man's height and his weight. If the data from which an average is being calculated
are not homogeneous, misleading conclusions are likely to be drawn. To find out the
average production of cotton cloth per mill, if big and small mills are not separated the

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 average would be unrepresentative. Similarly, to study wage level in cotton mill industry
of India, separate averages should be calculated for the male and female workers.

Average Formula

In working with an average, there is one central formula that is used to answer questions
pertaining to an average. This formula can be manipulated in many different ways, enabling test
writers to create different iterations on mean problems.

The following is the formal mathematical formula for the arithmetic mean (a fancy name for the
average).

A = average (or arithmetic mean)

n = the number of terms (e.g., the number of items or numbers being averaged)
x1 = the value of each individual item in the list of numbers being averaged

How to Calculate Arithmetic Mean (A.M) in discrete Series?

Discrete series means where frequencies of a variable are given but the variable is
without class intervals.

Here the mean can be found by Three Methods.

(i) Direct Method:

Here each frequency is multiplied by the variable, taking the total and dividing total by
total number of frequencies, we get X.

Symbolically,

X = ∑fx/N

Where f = frequency,

X = the value of the variable

And N = the sum of frequency or N = ∑f

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Example 1. Calculate A.M. from the following data

Solution:

(ii) Short Cut Method:

Here Assumed Mean is taken and taking deviations of variable from it. We obtain X by
using the following formula.

Where A = Assumed Mean

dx = (X-A);

f = frequency ∑f or N = Total number of terms,

(Note :-This formula is often used when the variables are large in size or infractions and direct
formula is not easy to use.)

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Example 2. Calculate the Arithmetic Mean using short-cut method:

Solu
tion: How to calculate arithmetic mean in continuous series:

Example:- calculate mean from the following series given as under.

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 Overtime hour worked by 100 employees in a year are given below. Calculate overtime
hour worked per employee.

Overtime hour: 0-10 10-20 20-30 30-40 40-50

No. of employee: 10 22 30 20 18

Solution: short-cut method

Overtime (Hrs.) No. of employee Mid-point D = (m - F×d

(m) A)
(X) (f)

-2
0-10 10 5 -20 -200 -20

10-20 22 15 -10 -220 -1 -10

20-30 30 25 0 0 0 0

30-40 20 35 10 200 1 10

40-50 18 45 20 360 2 20

N = 100
=1
4

Let assumed mean = 25

hours

Step-Deviation method:

hour

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CALCULATION OF MEDIAN

Median is defined as the middle value of a set of observation after these observation are
arranged either is increasing order or in decreasing order. Thus, it refers to the value which lies at
the middle position of the series. Therefore, median is termed as positional average. The place of
median in a series is such that half of the observations are smaller and half are larger than this
value.

CALCULATION OF MEDIAN:

1. Individual series:

Calculate median from the following data:

30 35 28 16 18 26 10 12 15 22

Solution:

Arranging the given observation in ascending order we get

10 12 15 16 18 22 26 28 30 35

Here N=10

Median = item = = item

2. Discrete series:

Example:- from the following data calculate the value of median

X: 5 10 15 20 25 30 60 40 45 50 55 35

F: 3 7 10 15 18 25 7 35 20 12 8 40

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 Solution: calculation of median

X F CF

5 3 3

10 7 10

15 10 20

20 15 35

25 18 53

30 25 78

35 40 118

40 35 153

45 20 173

50 12 185

55 8 193

60 7 200

N=200

Median= item

Looking at CF column we will find that no CF is equals to 100.5. so, the next higher

= 118. The value of the variable (X) corresponding to CF 118 is 35. Thus, median=35

3. Calculation of median in continuous series:

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 Calculate median from the following data:

Wages 10-20 20-30 30-40 40-50 50-60 60-70

No.of 7 18 25 30 20 10
person

Solution:

Calculation of median:

C.I. F CF

10-20 7 7

20-30 18 25

30-40 25 50

40-50 30 80

50-60 20 100

60-70 10 110

N=110

Median= th item = th item.

Looking at CF column we will find that the class corresponding to CF = 80 is (40-50).

Thus, media lies in that class.

To find that the exact value of median we have to apply the following formula:

. Here N/2 = 55 , CF=30, i=10, L=40

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 =

CALCULATION OF MODE

Mode is that in a series which occurs maximum number of times. In otherworld’s, mode
represents the value which most frequently occurs in a set of observations.

A manufacturer of ready garments is interested to know the size of the garment that fits most
people rather than then mean size of the garments. Similarly a shoe maker is interested to know
the size that fits majority. Like-wise a cigarette company wants to know the preference of a
particular brand of cigarette. In all these cases, mode provides the correct answer rather than
mean and median.

CALCULATION OF MODE

Individual series:

The value which is repeated maximum number of times is the modal value.

Example: 1

The marks secured by 10 students (out of 50) are; 22,25,22,35,35,40,42 and 35.find the modal
mark

Solution:

In the above given series, the modal mark is 35 as it maximum number of times (4time)

Example: 2

Daily wages of 8 workers in rupees are given below find the modal wage.

100 120 150 125 128 160 170 175

Solution:

Since all items occur only once, here mode is ill-defined and cannot be calculated in the above
process. However, it can be computed indirectly through median and mean by applying the
formula;

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Mode (Z) = 3 Median – 2 mean.

Here, median = item =128 +0.5 (150-128) =139

2. Discrete series

A. By inspection:

The value of the variable whose frequency is maximum is called mode in discrete
frequency distribution series. As such mode can be determined by inspection.

Example 3

Calculate mode from the following data set

Size of the item (x): 30 35 40 45 50 55 60

Frequency (f) 12 15 17 18 32 16 10

Solution:

Here, the maximum frequency is 32. So the size of the item corresponding to it is 50.

So, mode 50.

B. By Grouping method:

We have seen that in discrete series mode can be determined by the inspection.
Therefore, an error of judgment may occur if;

i. The difference between the maximum frequency and the frequency preceding or
succeeding it is very small.
ii. A series has two or more same maximum frequencies.(A series having two , three and
more same maximum frequency is called a bi-modal, trimodal and multi-modal series
respectively.)

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iii. Where the maximum frequency occurs either in the beginning or at the end of the
series. In the above situations modal can be determined by preparing grouping table
and analysis table.

ANALYSIS TABLE:

Example: 4

Calculate mode from the following data set

Marks:

10 20 30 40 50 60 70 80 90 100

No. of students:

2 5 8 9 12 14 14 15 11 13

Solution:

Here the maximum frequency is 15 but the difference between this and the
frequencies on either side of it is very small. Therefore, mistake may arise if we take
80 as the modal value.

Thus, we have to prepare the grouping table and analysis table to assess the correct
modal value.

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 Grouping table

Marks Grouping in two’s Grouping in three’s

2
10 7

20 5 13 15

30 8 17 22 29

40 9 21

50 12 26 35 40

60 14 28 43

70 14 29 39

80 15 26 40

90 11 24
100 13

Analysis Table

10 20 30 40 50 60 70 80 90 100

1 1

2 1 1

3 1 1

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 4 1 1 1

5 1 1 1

6 1 1 1

total 1 3 5 4 1

3. CONTINUOUS SERIES

Calculation of mode from the following given data

Wages 10-20 20-30 30-40 40-50 50-60 60-70 70-80

No.of 7 18 25 30 20 10 12
person

GROUPING TABLE:

class F1 F2 F3 F4 F5 F6

10-20 7 25

20-30 18 43 50 73

30-40 25 55 75

40-50 30 50

50-60 20 30 60 42

60-70 10 22

70-80 12

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ANALYSIS TABLE:

class 10-20 20-30 30-40 40-50 50-60 60-70 70-80

F1 1

F2 1 1

F3 1 1

F4 1 1 1

F5 1 1 1

F6 1 1 1

total 1 3 6 3 1

Here the class 40-50 is having more frequency that is 5 so we will take the 40-50 class for
calculating mode.

So, here L=40 F1=30 F0=25 F2=20 I=10

F 1−F 0
Mode ¿ L+ ×i
2 F 1−F 0−F 2

30−25
¿ 40+ ×10=¿ 36.67
2 ×30−25−20

Thus, here mode value is 36.67

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Conclusion
A measure of central tendency is a measure that tells us where the middle of a
bunch of data lies.
    The three most common measures of central tendency are the mean, the
median, and the mode.
         Mean: Mean is the most common measure of central tendency. It is simply
the sum of the numbers divided by the number of numbers in a set of data. This is
also known as average.
       Median: Median is the number present in the middle when the numbers in a
set of data are arranged in ascending or descending order. If the number of
numbers in a data set is even, then the median is the mean of the two middle
numbers.      
    Mode: Mode is the value that occurs most frequently in a set of data.

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 BIBLIOGRAPHY

 WWW.Google.com
 www.wikipedia measures of central tendency
 Business mathematics and statistics text book
 Text book of application statistics

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