MODULE WEEK NO.

3-4
Valencia Colleges (Buk.) Inc.
Hagkol, Valencia City, Bukidnon
Tel Nos. 088-828-4632/1338/4023; TeleFax:088-828

University
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Business Administration Department

STAT: Business Statistics
Semester of A.Y. 2021-2022

Introduction

BLESSED DAY!!

Let me share with you:

Jeremiah 33:2-3
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2 “This is what the Lord says, he who made the earth, the Lord who formed it and established
it—the Lord is his name: 3 ‘Call to me and I will answer you and tell you great and
unsearchable things you do not know.’

This chapter may a little bit challenging but I know we can do this as the Lord is with
us!!

God Bless!!

Rationale

This module will focus on Frequency Distribution, how to create distribution table and the
types of frequency distribution: Ungrouped, Group, Relative and Cumulative Frequency
Distribution.

Intended Learning Outcomes

A. Compute Range of the data

B. Form discrete or ungrouped frequency distribution
C. Determine the basic principle in forming grouped frequency distribution
D. Compute and form Relative frequency distribution
E. Compute and form Cumulative frequency distribution

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Discussion

What Is Frequency Distribution?

A frequency distribution is a representation, either in a graphical or tabular format, that

displays the number of observations within a given interval. The interval size depends on
the data being analyzed and the goals of the analyst. The intervals must be mutually
exclusive and exhaustive. Frequency distributions are typically used within a statistical
context. Generally, frequency distribution can be associated with the charting of a normal
distribution.

KEY TAKEAWAYS

• Frequency distribution in statistics is a representation that displays the number of

observations within a given interval.
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• The representation of a frequency distribution can be graphical or tabular so that it

is easier to understand.
• Frequency distributions are particularly useful for normal distributions, which
show the observations of probabilities divided among standard deviations.
• In finance, traders use frequency distributions to take note of price action and
identify trends.

Frequency tells you how often something happened. The frequency of an observation tells
you the number of times the observation occurs in the data. For example, in the following
list of numbers, the frequency of the number 9 is 5 (because it occurs 5 times):
1, 2, 3, 4, 6, 9, 9, 8, 5, 1, 1, 9, 9, 0, 6, 9.

What is a Frequency Distribution Table?

Tables can show either categorical variables (sometimes called qualitative variables)
or quantitative variables (sometimes called numeric variables). You can think of categorical
variables as categories (like eye color or brand of dog food) and quantitative variables as
numbers.

Example:

The following table shows what family planning methods were used by teens in Kweneng,
West Botswana. The left column shows the categorical variable (Method) and the right
column is the frequency — the number of teens using that particular method (image
courtesy of KSU).
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A frequency distribution table showing categorical variables

Frequency distribution tables give you a snapshot of the data to allow you to find patterns.
A quick look at the above frequency distribution table tells you the majority of teens don’t
use any birth control at all.
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How to make a Frequency Distribution Table: Examples

Example 1
Tally marks are often used to make a frequency distribution table. For example, let’s say
you survey a number of households and find out how many pets they own. The results are
3, 0, 1, 4, 4, 1, 2, 0, 2, 2, 0, 2, 0, 1, 3, 1, 2, 1, 1, 3. Looking at that string of numbers boggles the
eye; a frequency distribution table will make the data easier to understand.

Steps
To make the frequency distribution table, first write the categories in one column (number
of pets):

Next, tally the numbers in each category (from the results above). For example, the number
zero appears four times in the list, so put four tally marks “||||”:

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Finally, count up the tally marks and write the frequency in the final column. The frequency
is just the total. You have four tally marks for “0”, so put 4 in the last column:
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How to Draw a Frequency Distribution Table (Slightly More Complicated

Example)

A frequency distribution table is one way you can organize data so that it makes more
sense. For example, let’s say you have a list of IQ scores for a gifted classroom in a
particular elementary school. The IQ scores are: 118, 123, 124, 125, 127, 128, 129, 130, 130,
133, 136, 138, 141, 142, 149, 150, 154. That list doesn’t tell you much about anything. You
could draw a frequency distribution table, which will give a better picture of your data
than a simple list.

How to Draw a Frequency Distribution Table: Steps.

Part 1: Choosing Classes

Step 1: Figure out how many classes (categories) you need. There are no hard rules about
how many classes to pick, but there are a couple of general guidelines:
• Pick between 5 and 20 classes. For the list of IQs above, we picked 5 classes.
• Make sure you have a few items in each category. For example, if you have 20
items, choose 5 classes (4 items per category), not 20 classes (which would give
you only 1 item per category).

Note: There is a more mathematical way to choose classes. The formula is

log(observations)\ log(2). You would round up the answer to the next integer. For example,

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log17\log2 = 4.1 will be rounded up to become 5. (Thank you to Ayman Masry for that tip).

Part 2: Sorting the Data

Step 2: Subtract the minimum data value from the maximum data value. For example, our
IQ list above had a minimum value of 118 and a maximum value of 154, so:
154 – 118 = 36

Step 3: Divide your answer in Step 2 by the number of classes you chose in Step 1.
36 / 5 = 7.2

Step 4: Round the number from Step 3 up to a whole number to get the class width. Rounded
up, 7.2 becomes 8.
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Step 5: Write down your lowest value for your first minimum data value:
The lowest value is 118

Step 6: Add the class width from Step 4 to Step 5 to get the next lower class limit:
118 + 8 = 126

Step 7: Repeat Step 6 for the other minimum data values (in other words, keep on adding
your class width to your minimum data values) until you have created the number of
classes you chose in Step 1. We chose 5 classes, so our 5 minimum data values are:
118
126 (118 + 8)
134 (126 + 8)
142 (134 + 8)
150 (142 + 8)

Step 8: Write down the upper class limits. These are the highest values that can be in the
category, so in most cases you can subtract 1 from the class width and add that to the
minimum data value. For example:
118 + (8 – 1) = 125
118 – 125
126 – 133
134 – 141
142 – 149
150 – 157

3. Finishing the Table Up

Step 9: Add a second column for the number of items in each class, and label the columns
with appropriate headings:

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IQ FREQUENCY
118-125
126-133
134-141
142-149
150-157

Step 10: Count the number of items in each class, and put the total in the second column. The
list of IQ scores are: 118, 123, 124, 125, 127, 128, 129, 130, 130, 133, 136, 138, 141, 142, 149, 150,
154.

IQ FREQUENCY
118-125 4
126-133 6
134-141 3
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142-149 2
150-157 2

Types of Frequency Distribution

There are four types of frequency distribution under statistics which are explained below:

• Ungrouped frequency distribution: It shows the frequency of an item in each

separate data value rather than groups of data values.
• Grouped frequency distribution: In this type, the data is arranged and separated
into groups called class intervals. The frequency of data belonging to each class
interval is noted in a frequency distribution table. The grouped frequency table
shows the distribution of frequencies in class intervals.
• Relative frequency distribution: It tells the proportion of the total number of
observations associated with each category.
• Cumulative frequency distribution: It is the sum of the first frequency and all
frequencies below it in a frequency distribution. You have to add a value with the
next value then add the sum with the next value again and so on till the last. The
last cumulative frequency will be the total sum of all frequencies.

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Let us consider the following distribution of marks of 200 students in an examination,

arranged serially in order of their roll numbers

TABLE 3·5. MARKS OF 200 STUDENTS

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The data in the above form is called the raw or disorganized data. In the raw form the data
are so unwieldy and scattered that even after a very careful perusal, the various details
contained in them remain unfollowed and uncomprehensive. The above presentation of the
data in its raw form does not give us any useful information and is rather confusing to the
mind. Our objective will be to express the huge mass of data in a suitable condensed form
which will highlight the significant facts and comparisons and furnish more useful
information without sacrificing any information of interest about the important
characteristics of the distribution.

Discrete or Ungrouped Frequency Distribution. A much better way of the representation of

the data is to express it in the form of a discrete or ungrouped frequency distribution where
we count the number of times each value of the variable (marks in the above illustration)
occurs in the above data. This is facilitated through the technique of Tally Marks or Tally Bars
as explained below:

In the first column we place all the possible values of the variable (marks in the above case).
In the second column a vertical bar (|) called the Tally Mark is put against the number (value
of the variable) whenever it occurs. In the first column we place all the possible values of the
variable (marks in the above case). In the second column a vertical bar (|) called the Tally
Mark is put against the number (value of the variable) whenever it occurs. The Table 3·6
below gives the ungrouped frequency distribution of the data in Table 3·5, along with the
tally marks.

TABLE 3·6. FREQUENCY DISTRIBUTION OF MARKS OF 200 STUDENTS

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BUSINESS STATISTICS

Grouped Frequency Distribution. To arrange a large number of observations or data, we

use grouped frequency distribution table. In this, we form class intervals to tally the
frequency for the data that belongs to that particular class interval.

If the identity of the units (students in our example) about whom a particular information is
collected (marks in the above illustration) is not relevant, nor is the order in which the
observations occur, then the first real step of condensation consists in classifying the data
into different classes (or class intervals) by dividing the entire range of the values of the
variable into a suitable number of groups called classes and then recording the number of
observations in each group (or class). Thus, in the above data of Table 3·6, if we divide the
total range of the values of the variable viz., 78 – 15 = 63 into groups of size 5 each, then we
shall get (63/5) = 13 groups and the distribution of marks is then given by the following
grouped frequency distribution.

TABLE 3·7. DISTRIBUTION OF MARKS OF 200 STUDENTS

The various groups into which the values of the variable are classified are known as classes
or class intervals; the length of the class interval (which is 5 in the above case) is called the
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width or magnitude of the classes. The two values specifying the class are called the class
limits; the larger value is called the upper-class limit and the smaller value is called the
lower-class limit.

Sturge’s Rule

Number of Classes. Although no hard and fast rule exists, a choice about the number of
classes (class intervals) into which a given frequency distribution can be divided primarily
depends upon:
(i) The total frequency (i.e., total number of observations in the distribution),
(ii) The nature of the data i.e., the size or magnitude of the values of the variable,
(iii) The accuracy aimed at, and
(iv) The ease of computation of the various descriptive measures of the frequency
distribution such as mean, variance, etc., for further processing of the data.

A number of rules of the thumb have been proposed for calculating the proper number of
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classes. However, an elegant, though approximate formula seems to be one given by Prof.
Sturges known as Sturges’ rule, according to which
k = 1 + 3·322 log10 N

where k is the number of class intervals (classes) and N is the total frequency i.e., total number
of observations in the data.

Example for the given above with the marks of 200 students

K= 1+3.322 log10 200

= 1+ 3.322 x 2. 3010
= 1+ 7.6440
= 8.6440 ~ 9

So, the number of classes of the 200 students is 9

Size of Class Intervals. Since the size of the class interval is inversely proportional to the
number of classes (class intervals) in a given distribution, from the above discussion it is
obvious that a choice about the size of the class interval will also largely depend on the sound
subjective judgement of the statistician keeping in mind other considerations like N (total
frequency), nature of the data, accuracy of the results and computational ease for further
processing of the data. Here an approximate value of the magnitude (or width) of the class
interval, say, ‘i’ can be obtained by using Sturges’ rule (3.1) which gives:
i= Range = Range_______
Number of classes 1 + 3·322 log10 N

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Another ‘rule of the thumb’ for determining the size of the class interval is that : “The length
of the class interval should not be greater than 1/4th of the estimated population standard
deviation.

Example:
Continuing the given above from the marks of 200 students

i= range/ 1+3.322 x log10 200

= 63/ 1+3.322 x 2.3010
= 63/ 1+ 7.6440
= 63/ 8.6440
= 7.2882 ~7

Hence the table using the Sturge’s Rule:

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Marks Frequency
15-21 14
22-28 15
29- 35 34
36-42 54
43-49 33
50-56 27
57-63 13
64-71 8
72-78 2

RELATIVE FREQUENCY DISTRIBUTION

A relative frequency is the ratio (fraction or proportion) of the number of times a value of
the data occurs in the set of all outcomes to the total number of outcomes. To find the relative
frequencies, divide each frequency by the total number of students in the sample–in this case,
20. Relative frequencies can be written as fractions, percents, or decimals.

Example:

Marks Frequency Relative

Frequency
15-21 14 14/200 or 0.07
22-28 15 15/200 or 0.075
29- 35 34 34/200 or 0.17
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36-42 54 54/ 200 or 0.27
43-49 33 33/200 or 0.165
50-56 27 27/200 or 0.135
57-63 13 13/200 or 0.065
64-71 8 8/200 or 0.04
72-78 2 2/200 or 0.01
Total= 200

Cumulative frequency is the accumulation of the previous relative frequencies. To find the
cumulative relative frequencies, add all the previous relative frequencies to the relative
frequency for the current row, as shown in the table below;

Marks Frequency Relative Frequency Cumulative Frequency

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15-21 14 14/200 or 0.07 0.07

22-28 15 15/200 or 0.075 0.145 (0.07+0.075)
29- 35 34 34/200 or 0.17 0.315 (0.07+0.075+0.17)
36-42 54 54/ 200 or 0.27 0.585 (0.07+0.075+0.17+ 0.27)
43-49 33 33/200 or 0.165 0.75 (0.07+0.075+0.17+ 0.27+0.165)
50-56 27 27/200 or 0.135 0.885 (0.07+0.075+0.17+ 0.27+0.165+ 0.135)
57-63 13 13/200 or 0.065 0.95 (0.07+0.075+0.17+ 0.27+0.165+ 0.135 + 0.065)
64-71 8 8/200 or 0.04 0.99 (0.07+0.075+0.17+ 0.27+0.165+ 0.135 +
0.065+ 0.04)
72-78 2 2/200 or 0.01 1 (0.07+0.075+0.17+ 0.27+0.165+ 0.135 + 0.065+
0.04 + 0.01)
Total= 200

The last entry of the cumulative relative frequency column is one, indicating that one
hundred percent of the data has been accumulated.

NOTE: Because of rounding, the relative frequency column may not always sum to one, and
the last entry in the cumulative relative frequency column may not be one. However, they
each should be close to one.

Exercise

Fifty statistics students were asked how much sleep they get per school night (rounded
to the nearest hour). The results were:

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Amount of sleep per Frequency Relative Frequency Cumulative Relative
school night (hours) Frequency
4 2
5 5
6 7
7 12
8 14
9 7
10 3

Find the Relative Frequency and Cumulative Frequency of the given data above.

Assessment

In a survey, it was found that 64 families bought milk in the following quantities (litres) in a
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particular week.
19 16 22 9 22 12 39 19 14 23 6 24 16 18 7 17 20 25 28 18 10 24 20 21 10 7 18 28 24 20 14 23 25 34
22 5 33 23 26 29 13 36 11 26 11 37 30 13 8 15 22 21 32 21 31 17 16 23 12 9 15 27 17 21

Using Sturges’ rule,

a. Find the range
b. Find the number of classes
c. Find the class width (magnitude)
d. Create a Grouped frequency distribution table.

Resources and Additional Resources

• https://www.cuemath.com/data/frequency-distribution/

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