BUSINESS STATISTICS

MEAN , MEDIAN AND MODE

Submitted to:- Mrs. Ruchika FMS Dept. NIFT, Jodhpur

Submitted By:- Ram Deo Bharti MFM 1st SEMESTER NIFT, JODHPUR

MEAN
• Mean is a value obtained by adding together all the observation and by dividing this total by the number of observation. • The mean is the mathematical average of a set of numbers. • The mean is calculated by adding up two or more scores and dividing the total by the number of scores.

M = X1+X2+X3+X4+X5+……+Xn • N • Formula of Mean for ungrouped data= X= Elements. of observation. N= Total no.FORMULA OF MEAN • A. .

Total Observation d.Indirect method for grouped Data A-Mid point of entry of middle class.Size of equal interval. d= X-A c .Frequency N. f.Deviation C.

OBJECTIVE Of MEAN • To get single value that describes the characteristics of whole data. . • To facilitate comparison of point of time or over period of time.

.’ Capable of further algebraic treatment. It is simple for computing. It is unduly affected by the presence of extreme values. It have sampling stability. It is rigidly defined.CHARACTERISTICS OF MEAN • • • • • • • It is for understanding. It is based on all observation.

• It is easy to calculate and simple to understand. • It is capable of being treated mathematically and hence it is widely used in statistical analysis. . • It is based on all observations and it can be regarded as representative of the given data.MERIT OF MEAN • Arithmetic mean rigidly defined by algebric formula.

• It is least affected by the fluctuation of sampling.CONTINUED……… • Arithmetic mean can be computed even if the detailed distribution is not known but some of the observation and number of the observation are known. .

• Arithmetic mean cannot be computed when class intervals have open ends . • It is too much affected by extreme observations and hence it is not adequately represent data consisting of some extreme point.DEMERITS OF MEAN • It can neither be determined by inspection or by graphical location. • Arithmetic mean cannot be computed for qualitative data like data on intelligence honesty and smoking habit etc.

MEDIAN • The median is the measure of central tendency which appears in the middle of an ordered sequence of values. a population. or a probability distribution. • The numerical value separating the higher half of a sample. . from the lower half.

Formula of Median .

f = Frequency of median class. I = Class interval. F = Preceding cumulative frequency of median class. . of elements.FORMULA OF MEDIAN MEDIAN IS ALWAYS IN SIZE OF n+1/2th TERM. L = Lower limit of median class. N = Total no.

hence perpendicular drawn from A cuts X axis at A.5..Less than Curve and more than curve intersects each others at A.GRAPHICAL PRESENTATION OF MEDIAN Axis X represents no of marks obtained by students and Axis Y represents no of students. .. so Median is approx 443.

• It is easy understand and to easy to calculate • It can easy to find out by inspection • Median can be determined even when class intervals have open ends • It is not much affected by extreme observations and also interdependent of range or dispersion of the data • Median can also be located graphically • It is only suitable average when the data are qualitative & it is possible to rank various items according to qualitative characteristics. MERITS OF MEDIAN .

DEMERITS OF MEDIAN • In case of individual observations the process of locations of median requires their arrangement in order of the magnitude which may be cumbersome task • It is being a positional average it is not capable treated algebraically • It not based on the magnitude of all the observations • in comparison to arithmetic mean it much affected by the fluctuations of sampling .

.MODE • The modal value of a set of data is the most frequently occurring value.

In many cases it can be located just by inspection • Like mean or median it is not affected by extreme observations • It can be determined even if distribution has open end classes • It is value around which more concentrations of observations and hence the best representative of data.MERITSOF MODE • It is easy to understand and easy to calculate. .

DEMERITSOF MODE • It is not based on all observations • It is not capable of further mathematical treatment • It is much affected by fluctuations of sampling • It is not suitable when different items of data are unequal importance. .

GRAPHICAL PRESENTATION OF MODE .

.Lakhs) 0-100 100-200 200-300 300-400 400-500 500-600 No. Draw two lines diagonally inside of the modal class bar. which gives us the modal value.Draw a histogram of the given data.Of Shops 15 23 34 25 21 8 • 1. Draw a perpendicular line from the intersection of the two diagonal lines to the X-axis.Profits (in Rs. • 2. • 3.

e. • In asymmetrical distribution the mean. median and mode are equal • i. median and mode depends upon the nature of the distribution. Mean(AM) = Median(M) = Mode(Mo) • . Median and Mode: • The relationship between mean. A distribution may be symmetrical or asymmetrical. MEDIAN AND MODE • Empirical relation between Mean.RELATIONSHIP AMONG MEAN.

• In a highly asymmetrical distribution it is not possible to find a relation ship among the averages.e. But in a moderately asymmetric distribution the difference between the mean and mode is three times the difference between the mean and median. • i. Mean-Mode = 3(Mean-Median) .

Mode = 3 Median – 2 Mean .Mode) 3 Or.Mean-Median = 1 (Mean.

THANKS .

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