INTRODUCTORY STATISTICS (3-4)

Display & Explore

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1
 LO3-4

Variance and Standard Deviation

VARIANCE The arithmetic mean of the squared deviations

from the mean.

STANDARD DEVIATION The square root of the variance.

3-2
 LO3-4

Computing the Variance

Steps in computing the variance:

Step 1: Find the mean.

Step 2: Find the difference between each observation and the mean, and
square that difference.
Step 3: Sum all the squared differences found in Step 2.
Step 4: Divide the sum of the squared differences by the number of items in
the population.

3-3
 LO3-4

Example – Variance and Standard

Deviation

 
x 19  17  ...  34  10 348
  29
N 12 12

3-4
 LO3-4

Example – Variance and Standard

Deviation Continued

2 
 ( X  ) 2


1,488
 124
N 12

3-5
LO3-4

3-6
 LO3-4

Example – Sample Variance

3-7
 LO3-4

Sample Standard Deviation

where :
s 2 is the sample variance
x is the value of each observation in the sample
x is the mean of the sample
n is the number of observations in the sample

3-8
 Tionesta Ford Lincoln Mercury
Monday Tuesday Wednesday Thursday Friday Saturday
23 33 27 28 39 26
30 32 28 33 35 32
29 25 36 31 32 27
35 32 35 37 36 30

Sheffield Motors Inc.

Monday Tuesday Wednesday Thursday Friday Saturday
31 35 44 36 34 37
30 37 43 31 40 31 On 2 days (out of
32 44 36 34 43 36 24 days) Sheffield
26 38 37 30 42 33 serviced 44
units/day

From the two plots we can see that the number of

vehicles serviced at Sheffield dealership is more
widely dispersed and has a larger mean than at the
Tionesta dealership.

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10
Obs Age
1 79
2 82 Construct and interpret a stem and leaf plot.
3 60
4 47
5 40
6 59 Stem Leaf                 Stem
  Leaf
                         
7 47
3 3 6 5 6 5 2 9
8 57
9 47 4 7 0 7 4 7 0 7 7 2 1 1 6 4 3
10 42 5 9 5 9 7 2 7 4 5 1 2 5 6 6 1 2
11 36 6 6 0 3 8 0 8 6
0
12 63
7 9 7 9 1 0
13 41
14 52 8 2 8 2 0
15 68
16 57 Stem Leaf                      
17 60
3 2 5 5 6 6 9
18 68
19 41 4 0 1 1 2 3 4 6 7 7 7
20 54 5 1 1 2 2 2 4 5 5 6 6 7 7 9
21 55 6 0 0 3 6 8 8
22 51
7 0 1 9
23 52
24 55 8 0 2
25 71
26 35
27 66
28 36
Why using Stem and Leaf Plot?
29 46
30 56
31 44 Not only showing visually the distribution of the data (normal or
32 43
33 56 skewed), but also showing the values of each data. You can calculate
34 35
35 51
from the plots about mean, median, mode and standard deviation.
36 70
37 80
It’s excellent plot when the number of observation is not too big.
38 32
39 52
40 39
11
12
13
Step 1: Organize the data from lowest to largest value
$1,460 $1,471 $1,637 $1,721
$1,758 $1,787 $1,940 $2,038
$2,047 $2,054 $2,097 $2,205
$2,287 $2,311 $2,406

Step 2: Compute the locations and the values

Median: L50 = (15+1)50/100 = 8  Median = $2,038
First Quartile (Q1): L25 = (15+1)25/100 = 4  Q1 = $1,721
Third Quartile (Q3): L75 = (15+1)75/100 = 12  Q3 = $2,205
Notes: If the location is not a whole number use interpolation
Example: L30 = (15+1)30/100 = 4.8
The 30th percentile = $1,721+0.8($1,758-$1,721) = $1,750.60

14
15
16
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obs teller 1 teller 2 teller 3
1 7.9 8.9 4.1
2 8.2 5.6 4.4
3 6.0 7.7 5.1
4 4.7 9.0 3.9
5 4.0 7.9 4.1
6 5.9 7.4 4.3
7 4.7 6.2 4.8
8 5.7 6.4 4.8
9 4.7 1.6 4.6
10 4.2 9.4 3.6
11 3.6 10.0 3.2
12 6.3 8.1 4.4
13 4.1 7.8 4.5
14 5.2 7.8 3.9
15 6.8 6.0 4.5
16 5.7 6.8 4.1
17 6.0 8.2 3.9
18 6.8 5.6 4.7
19 4.1 5.2 3.6
20 5.4 7.5 4.8
21 5.5 7.9 3.1
22 5.1 6.6 4.4
23 5.2 6.9 5.0
24 5.5 8.1 4.6
25 7.1 5.9 4.2
26 3.5 9.3 3.7
27 6.6 9.5 3.5
28 3.6 7.0 3.5
29 4.6 7.3 3.6
30 5.6 11.1 3.8
31 4.4 4.4 3.5
32 4.3 11.0 3.8
33 5.6 5.8 2.8
34 3.5 6.5 4.8
35 5.1 7.5 4.2
36 7.0 6.8 4.5
37 8.0 8.1 4.1
38 3.2  3.3
39 5.2  4.1
40 3.9   
18
19
20
21
0.09,0.13,0.41,0.51,1.12,1.2,1.49,3.5,6.36,7.38,8.92,10.13,12.99,16.40

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24
From the contingency table, we observe the following:
1.From the Total column on the right, 90 of the 180 cars sold had a
profit above the median and half below. From the definition of the
median this is expected.
2.For the Kane dealership 25 out of the 52, or 48 percent, of the cars
sold were sold for a profit more than the median.
3.The percent profits above the median for the other dealerships are
50 percent for Olean, 42 percent for Sheffield, and 60 percent for
Tionesta. 25
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