Chapter 4 - Descriptive Statistical Measures

CHAPTER 4: DESCRIPTIVE STA
Objective:
- To introduce the numerical measures that provide an effective and efficient way of obtaining m
- Frequency distributions, histograms, and cross- tabulations are tabular and visual tools of desc
Chapter Content
1.Populations and Samples
2.Measures of Location → Mean, Median & Mode
3.Measures of Dispersion → Standard Deviation and Range
4.Measures of Shape → Skewness and Histogram
5.Excel Descriptive Statistics Tool
6.Measures of Association
7.Outliers
8.Statistical Thinking in Business Decision
4.1: Population and Samples

Population: A set of all elements whose characteristics are to be studied.
Sample: A subgroup of the population
Key Statistical concepts
m (mu) = Pupolation mean

s (sigma) = population standard deviation
4.2 Measure of central tendency

* Measure that indicates the centre location of the distribution of a set of data
* Shows the shape and nature of distribution
* Types
Mean (Average): the average of the dataset = average(data range)
Mean of order amount
Mean of delivery lead time
Mean quantity
Median: the middle value in the data set when the observation (data values) are
* the best measure of central tendency for a data set that contains outliers
Median of order amount
Median of delivery lead time
Median of quantity
Mode: data value that occurs most often = MODE.SNGL (data range)
Mode of order amount
Mode of delivery lead time
Mode of quantity
4.3 Measure of dispersion / variation

* describe the variation or spread of the observations around the mean in the data set.
* Types
Range: the difference between the largest and smallest values of a data set. = M
easily influenced by a data set that contain outlier(s.)
only takes into account 2 observation.
Range of order amount
Range of delivery lead time
Range of quantity
Variance: Measure the extent of the dispersion of each data from the mean.
Population Variance: =VAR.P(data range)
Sample Variance: =VAR.S(data range)
Standard Deviation: measures the dispersion of a dataset relative to its mean an

Population standard deviation: STDEV.P(data range)
Sample standard deviation: =STDEV.S(data range)
Normal Distribution
Normal distribution: expresses the distribution of continuous random
4.4 Measures of Shape and Detecting Outliers

4.4.1 Skewness = SKEW(data range)
Measures the degree of skewness of the data
CS is negative, indicating left-skewed distribution

CS is positive, indicating righ-skewed distribution
CS > 1 indicates high degree of skewness
CS between 0.5 and 1 indicates moderate skewness
CS < 0.5 indicates comparatively more symmetry
4.4.2 Kurtosis =KURT(data range)

Measure the degree of peakedness in the distribution curve
to see the peakedness or flatness of the distribution
more concentrated
CK < 3 indicates the data is widely spread around the mean → Platykurtic
widely spread
CK > 3 indicates that the data is more concentrated around the mean → Leptokurtic
CK = 3 indicates comparatively more symmetry → Mesokurtic
Compute and interpret CK and CS for order amount and delivery lead time
4.4.3 Outliers
observation value that lie outside the overall pattern of data.
have the significant effect on the statistical analysis results (mean, standard deviation) → important to id
z-score > 3 → outliers
4.5 Coefficient of Variation
Coefficient of Variation (CV) is the relative measure of dispersion that can be defined as the ratio od SD
Measure the volatilityof risk to return → the smaller the CV, the better the risk-return trade-off = [STEV.
Closing Stock Prices
Date IBM INTC CSCO GE

9/3/2010 $127.58 $18.43 $21.04 $15.39
9/7/2010 $125.95 $18.12 $20.58 $15.44
9/8/2010 $126.08 $17.90 $20.64 $15.70
9/9/2010 $126.36 $18.00 $20.61 $15.91
9/10/2010 $127.99 $17.97 $20.62 $15.98
9/13/2010 $129.61 $18.56 $21.26 $16.25
9/14/2010 $128.85 $18.74 $21.45 $16.16
9/15/2010 $129.43 $18.72 $21.59 $16.34
9/16/2010 $129.67 $18.97 $21.93 $16.23
9/17/2010 $130.19 $18.81 $21.86 $16.29
9/20/2010 $131.79 $18.93 $21.75 $16.55
9/21/2010 $131.98 $19.14 $21.64 $16.52
9/22/2010 $132.57 $19.01 $21.67 $16.50
9/23/2010 $131.67 $18.98 $21.53 $16.14
9/24/2010 $134.11 $19.42 $22.09 $16.66
9/27/2010 $134.65 $19.24 $22.11 $16.43
9/28/2010 $134.89 $19.51 $21.86 $16.44
9/29/2010 $135.48 $19.24 $21.87 $16.36
9/30/2010 $134.14 $19.20 $21.90 $16.25
10/1/2010 $135.64 $19.32 $21.91 $16.36
Mean
Standard Deviation
CV
CV (excel function)
4.6 Adding-in data analysis button to excel
"File" tab → Add-ins → Select "analysis tool-pack" → choose "excel add-ins" → click "Go" → Check an
4.7 Descriptive statistics using excel analysis
Step 1: Excel Ribbon's "Data" tab → "Analysis" Group → "Data Analysis" button
Step 2: Select "descriptive Statistics" → click OK
Step 3: Select the respective data range as the input range → check the bos "labels in first row"
Step 4: Choose the location to display the result of the descriptive statistics
Step 5: Check the box summary statistics

: DESCRIPTIVE STATISTICAL MEASURES
nt way of obtaining meaningful information from data.

d visual tools of descriptive statistics.
nge)
tion (data values) are arranged in an ascending order. = MEDIAN(data range)

contains outliers
data range)
lues of a data set. = MAX(data range) - MIN (data range)
ta from the mean.
Variance of order amount
relative to its mean and calculated as the square root of the variance
Standard Deviation of order amount
n of continuous random variables, known as Gaussioan distribution.

Order Amount delivery Lead time
Skewness
Kurtosis
tion) → important to identify the existence of outliers in the data set
ned as the ratio od SD to the mean: CV = (SD / Mean)*100

urn trade-off = [STEV.S(data range) / AVERAGE (data range)]*100
DJ Industrials
Index IBM INTC
10447.93
10340.69 Mean 130.9315 Mean 18.81
10387.01 Standard Error 0.720800459649949 Standard Error 0.111704827
10415.24 Median 130.93 Median 18.95
10462.77 Mode #N/A Mode #N/A
10544.13 Standard Deviation 3.22351765198076 Standard Deviation 0.499559174
10526.49 Sample Variance 10.3910660526316 Sample Variance 0.249559368
10572.73 Kurtosis -1.25718373309425 Kurtosis -0.740257419
10594.83 Skewness -0.0522098917010264 Skewness -0.614206922
10607.85 Range 9.68999999999998 Range 1.605
10753.62 Minimum 125.95 Minimum 17.9
10761.03 Maximum 135.64 Maximum 19.505
10739.31 Sum 2618.63 Sum 376.2
10662.42 Count 20 Count 20
10860.26
10812.04
10858.14
10835.28
10788.05
10829.68
lick "Go" → Check analysis tool pack and then, click go
els in first row"

DJ Industrials
CSCO GE Index
Mean 21.4958 Mean 16.1951 Mean 10639.975

Standard Error 0.116726 Standard Error 0.0784636 Standard Error 38.44803
Median 21.655 Median 16.27 Median 10635.135
Mode 21.863 Mode 16.25 Mode #N/A
Standard Deviation 0.5220146 Standard Deviation 0.3508999 Standard Deviation 171.94482
Sample Variance 0.2724992 Sample Variance 0.1231307 Sample Variance 29565.019
Kurtosis -0.707976 Kurtosis 0.7536236 Kurtosis -1.34931
Skewness -0.835408 Skewness -1.156558 Skewness -0.251238
Range 1.53 Range 1.268 Range 519.57
Minimum 20.58 Minimum 15.392 Minimum 10340.69
Maximum 22.11 Maximum 16.66 Maximum 10860.26
Sum 429.916 Sum 323.902 Sum 212799.5
Count 20 Count 20 Count 20
DJ Industrials
Index
Purchase Orders Transaction With Lead Time
Order Date Customer Order No. Item Detail Unit Price Quantity
08/06/17 Sound Sdn Bhd 1132 Schottky Rectifier RM 4.15 19,000
08/07/17 Sonic Sdn bhd 1353 Schottky Rectifier RM 4.15 10,000
08/12/17 Super Power Audio 5572 Shielded Cable/meter RM 1.05 25,000
08/20/17 Vorc Coporation 5429 Shielded Cable/meter RM 1.10 17,500
08/25/17 SKS Enterprise 7368 Mini Micro Controller RM 90.00 100
08/25/17 Super Power Audio 6431 Relay SRS RM 2.75 1,200
08/25/17 Vorc Coporation 4422 Decoder IC RM 3.75 4,200
08/27/17 Sound Sdn Bhd 3276 Rocket Switch RM 1.15 5,200
08/27/17 Sound Sdn Bhd 9976 LED Bulb RM 0.75 500
08/28/17 Vorc Coporation 5344 Rocket Switch RM 1.55 4,500
09/01/17 Sonic Sdn bhd 5527 Rear Speaker RM 250.00 400
09/05/17 LED Technologies 4221 Decoder IC RM 3.55 4,500
09/05/17 SKS Enterprise 7368 Mini Micro Controller RM 90.00 150
09/05/17 Sound Sdn Bhd 5176 Shielded Cable/meter RM 0.95 25,000
09/12/17 Sound Sdn Bhd 6431 Relay SRS RM 2.55 1,500
09/15/17 Sound Sdn Bhd 5176 Shielded Cable/meter RM 0.95 17,500
09/20/17 Audio Accessories 9874 PNP Transistor RM 3.75 1,900
09/20/17 Sound Sdn Bhd 9862 PNP Transistor RM 4.05 1,500
09/25/17 LED Technologies 9862 PNP Transistor RM 4.05 1,450
09/25/17 SKS Enterprise 1479 Schottky Rectifier RM 4.10 15,000
09/25/17 Ultra Car Audio 6541 Relay SRS RM 2.55 1,200
10/01/17 Audio Accessories 6543 Relay SRS RM 2.95 1,500
10/01/17 LED Technologies 5235 Shielded Cable/meter RM 1.15 15,500
10/01/17 SKS Enterprise 9489 PNP Transistor RM 3.75 1,750
10/01/17 Super Power Audio 5276 Rocket Switch RM 1.15 5,550
10/05/17 LED Technologies 6599 Relay SRS RM 3.00 1,500
10/05/17 SKS Enterprise 4679 Decoder IC RM 3.50 3,500
10/09/17 SKS Enterprise 5564 Rear Speaker RM 220.00 550
10/10/17 LED Technologies 6599 Relay SRS RM 3.00 950
10/10/17 Ultra Car Audio 7368 Mini Micro Controller RM 100.50 70
10/10/17 Ultra Car Audio 8258 Audio Interface RM 660.50 155
10/10/17 Vorc Coporation 8118 Audio Interface RM 650.00 120
10/16/17 SKS Enterprise 5564 Rear Speaker RM 220.00 500
10/16/17 Sonic Sdn bhd 4334 Decoder IC RM 3.95 4,500
10/16/17 Ultra Car Audio 7368 Pressure Gauge RM 100.50 120
10/20/17 Sonic Sdn bhd 5537 Rear Speaker RM 250.00 500
10/20/17 Ultra Car Audio 7368 Mini Micro Controller RM 100.50 130
10/25/17 SKS Enterprise 5385 Shielded Cable/meter RM 1.00 25,000
10/25/17 Sonic Sdn bhd 5744 HiFi Audio Amplifier RM 180.00 150
10/25/17 Super Power Audio 5799 HiFi Audio Amplifier RM 170.00 155
10/27/17 Vorc Coporation 5787 HiFi Audio Amplifier RM 190.00 150
10/30/17 Sonic Sdn bhd 5744 HiFi Audio Amplifier RM 180.00 150
11/01/17 Super Power Audio 7378 Mini Micro Controller RM 95.00 110
11/01/17 Ultra Car Audio 9087 LED Bulb RM 1.00 555
11/06/17 Super Power Audio 7378 Mini Micro Controller RM 95.00 150
11/07/17 Sound Sdn Bhd 9874 PNP Transistor RM 3.75 1,570
11/15/17 Sonic Sdn bhd 4221 Decoder IC RM 3.55 47,050
11/20/17 Super Power Audio 1479 Schottky Rectifier RM 4.10 15,000
11/20/17 Super Power Audio 1232 Schottky Rectifier RM 4.15 12,500
11/27/17 Vorc Coporation 1232 Schottky Rectifier RM 4.15 17,000
11/27/17 Vorc Coporation 9489 PNP Transistor RM 3.65 1,550
nsaction With Lead Time
Order Amount A/P Terms (Days) Arrival Date Delivery Lead Time
RM 78,850.00 30 08/13/17 7
RM 41,500.00 30 08/14/17 7
RM 26,250.00 30 08/15/17 3
RM 21,525.00 30 08/22/17 7
RM 19,250.00 30 08/31/17 11
RM 23,625.00 30 08/26/17 5
RM 9,000.00 45 08/28/17 3
RM 3,300.00 30 09/04/17 10
RM 15,750.00 30 09/01/17 7
RM 23,625.00 30 09/02/17 7
RM 20,350.00 30 09/05/17 10
RM 5,980.00 30 08/29/17 2
RM 375.00 30 08/31/17 4
RM 6,975.00 30 09/05/17 8
RM 100,000.00 30 09/10/17 9
RM 6,325.00 30 09/06/17 5
RM 16,875.00 30 09/10/17 9
RM 7,052.50 30 09/11/17 8
RM 17,062.50 30 09/11/17 8
RM 64,325.00 30 09/12/17 8
RM 15,975.00 25 09/20/17 15
RM 13,500.00 45 09/09/17 4
RM 37,350.00 30 09/12/17 7
RM 51,875.00 30 09/11/17 6
RM 23,750.00 30 09/12/17 7
RM 8,312.50 30 09/13/17 8
RM 6,325.00 30 09/10/17 3
RM 63,750.00 30 09/15/17 8
RM 15,975.00 25 09/20/17 9
RM 6,325.00 30 09/15/17 4
RM 3,825.00 30 09/20/17 8
RM 18,150.00 30 09/25/17 11
RM 15,975.00 25 09/25/17 10
RM 16,625.00 30 09/22/17 7
RM 7,125.00 15 09/29/17 9
RM 6,562.50 15 09/25/17 5
RM 16,152.50 25 09/25/17 5
RM 6,075.00 25 09/25/17 5
RM 5,872.50 25 10/05/17 10
RM 14,910.00 25 10/07/17 12
RM 61,500.00 45 09/30/17 5
RM 3,060.00 30 10/01/17 6
RM 6,937.50 15 10/05/17 9
RM 6,125.00 30 10/04/17 8
RM 57,400.00 45 10/03/17 6
RM 6,375.00 15 10/05/17 7
RM 60,175.00 30 10/03/17 5
RM 41,000.00 45 10/04/17 5
RM 4,425.00 15 10/10/17 9
RM 17,825.00 25 10/12/17 11
RM 6,562.50 45 10/06/17 5
RM 74,700.00 30 10/08/17 7
RM 6,382.50 30 10/06/17 5
RM 4,262.50 30 10/07/17 6
RM 5,812.50 45 10/08/17 4
RM 4,500.00 25 10/10/17 5
RM 16,330.00 25 10/19/17 14
RM 5,625.00 45 10/11/17 6
RM 12,250.00 45 10/10/17 5
RM 3,437.50 30 10/10/17 5
RM 5,887.50 45 10/12/17 3
RM 121,000.00 45 10/14/17 5
RM 2,850.00 25 10/18/17 8
RM 43,575.00 30 10/17/17 7
RM 7,035.00 30 10/17/17 7
RM 102,377.50 30 10/17/17 7
RM 78,000.00 30 10/21/17 11
RM 70,550.00 30 10/19/17 8
RM 3,952.50 30 10/21/17 9
RM 110,000.00 45 10/20/17 4
RM 17,775.00 30 10/20/17 4
RM 12,060.00 30 10/24/17 8
RM 97,500.00 30 10/26/17 10
RM 125,000.00 30 10/27/17 7
RM 13,065.00 30 10/29/17 9
RM 25,000.00 45 10/30/17 5
RM 27,000.00 30 11/03/17 9
RM 72,625.00 30 11/03/17 9
RM 3,825.00 30 11/02/17 8
RM 26,350.00 30 11/03/17 9
RM 28,500.00 30 11/07/17 11
RM 78,000.00 30 11/04/17 8
RM 3,150.00 25 11/10/17 11
RM 27,000.00 30 11/02/17 3
RM 25,500.00 30 11/07/17 6
RM 10,450.00 30 11/04/17 3
RM 555.00 30 11/03/17 2
RM 112.50 30 11/03/17 2
RM 22,800.00 30 11/10/17 8
RM 14,250.00 30 11/13/17 7
RM 29,750.00 30 11/16/17 10
RM 412.50 30 11/15/17 9
RM 68.75 30 11/13/17 7
RM 20,900.00 30 11/16/17 10
RM 5,887.50 45 11/13/17 6
RM 5,887.50 45 11/15/17 8
RM 5,887.50 25 11/17/17 4
RM 4,125.00 30 11/21/17 6
RM 167,027.50 25 11/20/17 5
RM 61,500.00 45 11/21/17 6
RM 6,460.50 15 11/25/17 5
RM 6,375.00 30 11/23/17 3
RM 61,500.00 45 11/23/17 3
RM 51,875.00 30 11/27/17 7
RM 6,382.50 30 12/02/17 5
RM 70,550.00 30 12/03/17 6
RM 5,657.50 45 12/05/17 8

Chapter 4 - Descriptive Statistical Measures

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Chapter 4 - Descriptive Statistical Measures

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CHAPTER 4: DESCRIPTIVE STA

4.1: Population and Samples

Key Statistical concepts

m (mu) = Pupolation mean

4.2 Measure of central tendency

4.3 Measure of dispersion / variation

Sample Variance: =VAR.S(data range)

Standard Deviation: measures the dispersion of a dataset relative to its mean an

Sample standard deviation: =STDEV.S(data range)

4.4 Measures of Shape and Detecting Outliers

CS is negative, indicating left-skewed distribution

4.4.2 Kurtosis =KURT(data range)

z-score > 3 → outliers

4.5 Coefficient of Variation

Closing Stock Prices

Date IBM INTC CSCO GE

4.6 Adding-in data analysis button to excel

4.7 Descriptive statistics using excel analysis

Step 2: Select "descriptive Statistics" → click OK

Step 5: Check the box summary statistics

nt way of obtaining meaningful information from data.

tion (data values) are arranged in an ascending order. = MEDIAN(data range)

lues of a data set. = MAX(data range) - MIN (data range)

ta from the mean.

Variance of order amount

Standard Deviation of order amount

n of continuous random variables, known as Gaussioan distribution.

tion) → important to identify the existence of outliers in the data set

ned as the ratio od SD to the mean: CV = (SD / Mean)*100

lick "Go" → Check analysis tool pack and then, click go

els in first row"

Mean 21.4958 Mean 16.1951 Mean 10639.975

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