Business Statistics (Session-2)

Dr. S. Doss
NIA
Slide 1
 Session 3 (Part A)
Descriptive Statistics:
Tabular and Graphical Presentations

 Summarizing Qualitative Data

 Summarizing Quantitative Data

Types of Dat a

Data
Data

Numerical
Numerical Categorical
Categorical
(Quantitative)
(Quantitative) (Qualitative)
(Qualitative)

Discrete
Discrete Continuous
Continuous

Slide 2
 Summarizing Qualitative Data

 Frequency Distribution
 Relative Frequency Distribution
 Percent Frequency Distribution
 Bar Graph
 Pie Chart

Slide 3
 Construction of a Frequency
Distribution

Raw data Graph

Question
to be Collect Organize Present Draw
addressed data data data conclusion

Frequency
distribution

Slide 4
 Frequency Distribution

A frequency distribution is a tabular summary of

data showing the frequency (or number) of items
in each of several non-overlapping classes.

The objective is to provide insights about the data

that cannot be quickly obtained by looking only at
the original data.

Slide 5
 Example: Holiday Inn

Guests staying at Holiday Inn were

asked to rate the quality of their
accommodations as being Excellent,
Good, Moderate, Fair, & poor.
The ratings provided by a sample of 20 guests are:
Fair Moderate Good
Good Good Good
Good Fair Fair
Moderate Poor Poor
Good Excellent Good
Moderate Good Moderate
Good Moderate

Slide 6
 Frequency Distribution

Rating Frequency
Poor 2
Fair 3
Moderate 5
Good 9
Excellent 1
Total 20

Slide 7
 Relative Frequency Distribution

The relative frequency of a class is the fraction or

proportion of the total number of data items
belonging to the class.

A relative frequency distribution is a tabular

summary of a set of data showing the relative
frequency for each class.

Slide 8
 Percent Frequency Distribution

The percent frequency of a class is the relative

frequency multiplied by 100.

A percent frequency distribution is a tabular

summary of a set of data showing the percent
frequency for each class.

Slide 9
 Relative Frequency and
Percent Frequency Distributions

Relative Percent
Rating Frequency Frequency
Poor .10 10
Fair .15 15
Moderate .25 25 .10(100) = 10
Good .45 45
Excellent .05 5
Total 1.00 100

1/20 = .05

Slide 10
 Bar Graph

 A bar graph is a graphical device for presenting

qualitative data.
 On one axis (usually the horizontal axis), we specify
the labels that are used for each of the classes.
 A frequency, relative frequency, or percent frequency
scale can be used for the other axis (usually the
vertical axis).
 Using a bar of fixed width drawn above each class
label, we extend the height appropriately.
 The bars are separated to emphasize the fact that each
class is a separate category.

Slide 11
 Bar Graph

Holiday Inn Quality Ratings

10
9
8
7
Frequency

6
5
4
3
2
1
Rating
Poor Fair Moderate Good Excellent

Slide 12
 Pie Chart

 The pie chart is a commonly used graphical device

for presenting relative frequency distributions for
qualitative data.
 First draw a circle; then use the relative
frequencies to subdivide the circle
into sectors that correspond to the
relative frequency for each class.
 Since there are 360 degrees in a circle,
a class with a relative frequency of .25 would
consume .25(360) = 90 degrees of the circle.

Slide 13
 Pie Chart
Holiday Inn Quality
Ratings

Excellent
5%
Poor
10%
Fair
15%
Good
45%
Moderate
25%

Slide 14
 Example: Holiday Inn

 Insights Gained from the Preceding Pie Chart

• One-half of the customers surveyed gave Holiday
a quality rating of “Good” or “excellent”
(looking at the left side of the pie). This might
please the manager.
• For each customer who gave an “excellent” rating,
there were two customers who gave a “poor”
rating (looking at the top of the pie). This should
displease the manager.

Slide 15
 Summarizing Quantitative Data

 Frequency Distribution
 Relative Frequency and Percent Frequency
Distributions
 Dot Plot
 Histogram
 Cumulative Distributions
Num er ic al (Quantitative)
 Ogive Dat a Pr esen t at ion

Numerical
Numerical
Data
Data

Ordered
Ordered Frequency
Frequency
Array
Array Distributions
Distributions

Stem-&-Leaf
Stem-&-Leaf Histo-
Histo-
Display gram Polygon
Polygon Ogive
Ogive
Display gram
Slide 16
 Frequency Distribution Table
Steps

 1- Determine range
 2- Select number of classes
• Usually between 5 and 20 inclusive
 3- Compute class intervals (width)
 4- Determine class boundaries (limits)
 5- Compute class midpoints
 6- Count observations & assign to classes

Slide 17
 Example: Tata Motors: Auto Repair

The manager of Tata Motors

would like to have a better
understanding of the cost
of parts used in the engine
tune-ups performed in the
shop. She examines 50
customer invoices for tune-ups. The costs of parts,
rounded to the nearest dollar, are listed on the next
slide.

Slide 18
 Example: Tata Motors: Auto Repair

 Sample of Parts Cost for 50 Tune-ups

91 78 93 57 75 52 99 80 97 62
71 69 72 89 66 75 79 75 72 76
104 74 62 68 97 105 77 65 80 109
85 97 88 68 83 68 71 69 67 74
62 82 98 101 79 105 79 69 62 73

Slide 19
 Frequency Distribution

 Guidelines for Selecting Number of Classes

• Use between 5 and 20 classes.
• Data sets with a larger number of elements
usually require a larger number of classes.
• Smaller data sets usually require fewer classes

Slide 20
 Frequency Distribution (Continued)

 Guidelines for Selecting Width of Classes

•Use classes of equal width.
•Approximate Class Width =
Largest Data Value  Smallest Data Value
Number of Classes

Slide 21
 Example: Frequency Distribution

For Hudson Auto Repair, if we choose six classes:

Approximate Class Width = (109 - 52)/6 = 9.5  10

Parts Cost ($) Frequency

50-59 2
60-69 13
70-79 16
80-89 7
90-99 7
100-109 5
Total 50

Slide 22
 Solution Using SWStat+
 After putting your data into Excel, then create Data Area:

Slide 23
 Solution Using SWStat (cont.)
 SwStat Statistics Tabulations and Histograms
 Note that here we are using 10 classes—you can use 6 classes if you
would like to do so.

Slide 24
 Solution Using SWStat (cont.)
 Results:

Slide 25
 Relative Frequency and
Percent Frequency Distributions

Parts Relative Percent

Cost ($) Frequency Frequency
50-59 .04 4
60-69 .26 2/50 26 .04(100)
70-79 .32 32
80-89 .14 14
90-99 .14 14
100-109 .10 10
Total 1.00 100

Slide 26
 Relative Frequency and
Percent Frequency Distributions
 Insights Gained from the Percent Frequency
Distribution
• Only 4% of the parts costs are in the $50-59 class.
• 30% of the parts costs are under $70.
• The greatest percentage (32% or almost one-third)
of the parts costs are in the $70-79 class.
• 10% of the parts costs are $100 or more.

Slide 27
 Dot Plot

 One of the simplest graphical summaries of data is a

dot plot.
 A horizontal axis shows the range of data values.
 Then each data value is represented by a dot placed
above the axis.

Slide 28
 Dot Plot

Tune-up Parts Cost

.
. .. . . .
. .. .. .. .. . .
. . . ..... .......... .. . .. . . ... . .. .
50 60 70 80 90 100 110
Cost ($)

Slide 29
 Histogram

 Another common graphical presentation of

quantitative data is a histogram.
 The variable of interest is placed on the horizontal
axis.
 A rectangle is drawn above each class interval with
its height corresponding to the interval’s frequency,
relative frequency, or percent frequency.
 Unlike a bar graph, a histogram has no natural
separation between rectangles of adjacent classes.

Slide 30
 Histogram

Tune-up Parts Cost

18
16
14
12
Frequency

10
8
6
4
2
Parts
5059 6069 7079 8089 9099 100-110 Cost ($)

Slide 31
 Histogram (Continued)

 Symmetric
• Left tail is the mirror image of the right tail
• Example: heights and weights of people
.35
.30
Relative Frequency

.25
.20
.15
.10
.05
0

Slide 32
 Histogram (Continued)

 Moderately Skewed Left

• A longer tail to the left
• Example: exam scores
.35
.30
Relative Frequency

.25
.20
.15
.10
.05
0

Slide 33
 Histogram (Continued)

 Moderately Right Skewed

• A Longer tail to the right
• Example: housing values
.35
.30
Relative Frequency

.25
.20
.15
.10
.05
0

Slide 34
 Histogram (Continued)

 Highly Skewed Right

• A very long tail to the right
• Example: executive salaries
.35
.30
Relative Frequency

.25
.20
.15
.10
.05
0

Slide 35
 Cumulative Distributions

Cumulative frequency distribution  shows the

number of items with values less than or equal to
the upper limit of each class..

Cumulative relative frequency distribution – shows

the proportion of items with values less than or
equal to the upper limit of each class.

Cumulative percent frequency distribution – shows

the percentage of items with values less than or
equal to the upper limit of each class.

Slide 36
 Cumulative Distributions

 Example: Hudson Auto Repair

Cumulative Cumulative
Cumulative Relative Percent
Cost ($) Frequency Frequency Frequency
< 59 2 .04 4
< 69 15 .30 30
< 79 31 2 + 13 .62 15/50 62 .30(100)
< 89 38 .76 76
< 99 45 .90 90
< 109 50 1.00 100

Slide 37
 Ogive

 An ogive is a graph of a cumulative distribution.

 The data values are shown on the horizontal axis.
 Shown on the vertical axis are the:
• cumulative frequencies, or
• cumulative relative frequencies, or
• cumulative percent frequencies
 The frequency (one of the above) of each class is
plotted as a point.
 The plotted points are connected by straight lines.

Slide 38
 Ogive

 Example: Hudson Auto Repair

• Because the class limits for the parts-cost data are
50-59, 60-69, and so on, there appear to be one-unit
gaps from 59 to 60, 69 to 70, and so on.
• These gaps are eliminated by plotting points
halfway between the class limits.
• Thus, 59.5 is used for the 50-59 class, 69.5 is used
for the 60-69 class, and so on.

Slide 39
 Ogive with
Cumulative Percent Frequencies
Tune-up Parts Cost
100
Cumulative Percent Frequency

80

60 (89.5, 76)

40

20
Parts
Cost ($)
50 60 70 80 90 100 110

Slide 40
 Frequency Distribution Table
Another Example

Raw Data: 24, 26, 24, 21, 27, 27, 30, 41, 32, 38

Class Frequency
15 but < 25 3
25 but < 35 5
35 but < 45 2

Slide 41
 Frequency Distribution Table
Example (Continued)
Raw Data: 24, 26, 24, 21, 27, 27, 30, 41, 32, 38

Class Midpoint Frequency

15 but < 25 20 3

25 but < 35 30 5
Width
35 but < 45 40 2

Boundaries (Upper + Lower Boundaries) / 2

Slide 42
 Stated and True (or Real) Class Limits

 True Classes: Are those classes such that the upper true
limit of a class is the same as the lower true limit of the
next class.
 For comparison, the stated class limits and true class
limits are given in the following table—next slide:

Slide 43
 Stated and True (or Real) Class Limits

Stated True
$600-$799 $599.50 up to but not including $799.50
$800-$999 $799.50 up to but not including $999.50

In the first column of the above table the data were rounded
to the nearest dollar. For example, $799.50 was rounded up to
$800 and tailed in the second class. Any amount over $799
but under 799.50 was rounded down to $799 and included in
the first class. Thus, the $600-$799 class actually includes all
data from $599.50 inclusive up to but not including $799.50.

Slide 44
 Relative Frequency &
% Distribution Tables
Example (Continued)
 The relative frequency of a class is obtained by dividing the
class frequency by the total frequency, which in the following
problem = 10.

Relative Frequency Percentage

Distribution Distribution

Class Prop. Class %

15 but < 25 .3 15 but < 25 30.0
25 but < 35 .5 25 but < 35 50.0
35 but < 45 .2 35 but < 45 20.0
Slide 45
 Cumulative Percentage
Distribution Table
Example (Continued)

Raw Data: 24, 26, 24, 21, 27, 27, 30, 41, 32, 38
Percentage
Class Cumulative less than lower
Percentage class boundary

15 but < 25 0.0

Lower 25 but < 35 30.0
class
35 but < 45 80.0 30% + 50%
boundary
45 but < 55 100.0 80% + 20%

Slide 46
End of Session-3, Part A

Slide 47