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Chapter 2
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-1
Chapter Goals
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-2
Organizing and Presenting
Data Graphically
Data in raw form are usually not easy to use
for decision making
Some type of organization is needed
Table
Graph
Techniques reviewed here:
Ordered Array
Stem-and-Leaf Display
Frequency Distributions and Histograms
Bar charts and pie charts
Contingency tables
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-3
Tables and Charts for
Numerical Data
Numerical Data
Frequency Distributions
Ordered Array and
Cumulative Distributions
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-4
The Ordered Array
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-5
The Ordered Array
(continued)
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-6
Stem and Leaf Diagram
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-7
Example
Data in ordered array:
21, 24, 24, 26, 27, 27, 30, 32, 38, 41
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-8
Example
(continued)
Data in ordered array:
21, 24, 24, 26, 27, 27, 30, 32, 38, 41
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-9
Using other stem units
Using the 100’s digit as the stem:
Round off the 10’s digit to form the leaves
Stem Leaf
613 would become 6 1
776 would become 7 8
...
1224 becomes 12 2
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-10
Using other stem units
(continued)
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-12
Why Use Frequency Distributions?
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-13
Class Intervals
and Class Boundaries
If each class grouping has the same width
Determine the width of each interval by
range
Width of interval
number of desired class groupings
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-14
Approximate Number of
Classes
Observations Classes
Less than 50 3-6
50-200 6-9
200-1000 8-12
More than 1000 10-15
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-15
Frequency Distribution Example
24, 35, 17, 21, 24, 37, 26, 46, 58, 30,
32, 13, 12, 38, 41, 43, 44, 27, 53, 27
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-16
Frequency Distribution Example
(continued)
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-17
Frequency Distribution Example
(continued)
Data in ordered array:
12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58
Relative
Class Frequency Frequency Percentage
Total 20
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc.
1.00 100 Chap 2-18
Graphing Numerical Data:
The Histogram
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-19
Histogram Example
Class
Class Midpoint Frequency
10 but less than 20 15 3
20 but less than 30 25 6
30 but less than 40 35 5 His togram : Daily High Te m pe rature
40 but less than 50 45 4
50 but less than 60 55 2 7 6
6 5
5
F req u en cy
4
4 3
3 2
2
(No gaps 1 0 0
between 0
bars)
5 15 25 35 45 55 More
Class Midpoints
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-20
Histograms in Excel
1
Select
Tools/Data Analysis
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-21
Histograms in Excel
(continued)
2
Choose Histogram
(
Input data range and bin
range (bin range is a cell
3 range containing the upper class
boundaries for each class
grouping)
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-23
How Many Class Intervals?
Frequency
2
1.5
Can give a poor indication of how 1
0.5
frequency varies across classes 0
4
8
12
16
20
24
28
32
36
40
44
48
56
60
52
More
Temperature
Frequency
yield a blocky distribution 6
4
can obscure important patterns of 2
variation. 0
0 30 60 More
Temperature
(X axis labels are upper class endpoints)
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-24
Graphing Numerical Data:
The Frequency Polygon
Class
Class Midpoint Frequency
1 but less than 10 5 0
10 but less than 20 15 3
20 but less than 30 25 6
Frequency Polygon: Daily High Temperature
30 but less than 40 35 5
40 but less than 50 45 4 7
50 but less than 60 55 2
6
More than 60 65 0
5
Frequency
4
3
(In a percentage 2
polygon the vertical axis
1
would be defined to
show the percentage of 0
observations per class) 5 15 25 35 45 55 More
Class Midpoints
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-25
Tabulating Numerical Data:
Cumulative Frequency
Data in ordered array:
12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58
Cumulative Cumulative
Class Freq. % Class
Frequency Percentage
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-26
Graphing Cumulative Frequencies:
The Ogive (Cumulative % Polygon)
Lower
class Cumulative
Class boundary Percentage
less than 10 10 0
less than 20 20 15
less than 30 30 45 Ogive: Daily High Temperature
less than 40 40 70
less than 50 50 90 100
Cumulative Percentage
less than 60 60 100
80
60
40
20
0
10 20 30 40 50 60
Class Boundaries (Not Midpoints)
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-27
Scatter Diagrams
33 160 150
38 167 100
42 170
50
50 188
55 195 0
60 200 0 10 20 30 40 50 60 70
Volume per Day
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-29
Scatter Diagrams in Excel
1
Select the chart wizard
2
Select XY(Scatter) option,
then click “Next”
3
When prompted, enter
the data range, desired
legend, and desired
destination to complete
the scatter diagram
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-30
Tables and Charts for Categorical
Data: Univariate Data
Categorical
Data
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-31
The Summary Table
Summarize data by category
Example: Current Investment Portfolio
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-32
Bar and Pie Charts
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-33
Bar Chart Example
Current Investment Portfolio
Investment Amount Percentage
Type (in thousands $) (%)
0 10 20 30 40 50
Amount in $1000's
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-34
Pie Chart Example
Percentages
are rounded to
Bonds the nearest
29% percent
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-35
Pareto Diagram Example
Current Investment Portfolio
45% 100%
40% 90%
% invested in each category
80%
cumulative % invested
35%
70%
30%
(bar graph)
(line graph)
60%
25%
50%
20%
40%
15%
30%
10%
20%
5% 10%
0% 0%
Stocks Bonds Savings CD
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-36
Tabulating and Graphing
Multivariate Categorical Data
Contingency Table for Investment Choices ($1000’s)
Investment Investor A Investor B Investor C Total
Category
Stocks 46.5 55 27.5 129
Bonds 32.0 44 19.0 95
CD 15.5 20 13.5 49
Savings 16.0 28 7.0 51
Total 110.0 147 67.0 324
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-37
Tabulating and Graphing
Multivariate Categorical Data
(continued)
S avings
CD
B onds
S toc k s
0 10 20 30 40 50 60
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-38
Side-by-Side Chart Example
Sales by quarter for three sales territories:
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
East 20.4 27.4 59 20.4
W est 30.6 38.6 34.6 31.6
North 45.9 46.9 45 43.9
60
50
40
East
30 West
North
20
10
0
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-39
Principles of Graphical Excellence
Present data in a way that provides substance,
statistics and design
Communicate complex ideas with clarity,
precision and efficiency
Give the largest number of ideas in the most
efficient manner
Excellence almost always involves several
dimensions
Tells the truth about the data
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-40
“Chart Junk” and “Lie Factor”
1980: $3.10
0
1960 1970 1980 1990
1990: $3.80
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-41
listen
No Relative Basis
300 30%
200 20%
100 10%
0 0%
FR SO JR SR FR SO JR SR
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-42
Compressing Vertical Axis
100 25
0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-43
No Zero Point On Vertical Axis
Bad Presentation
$Good Presentations
Monthly Sales
45
Monthly Sales 42
$ 39
45
36
42
0
39 J F M A M J
or
36 $
J F M A M J 60
40
Graphing the first six months of sales
20
0
J F M A M J
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-44
Chapter Summary
Data in raw form are usually not easy to use for
decision making -- Some type of organization is
needed:
Table Graph
Techniques reviewed in this chapter:
Ordered array and stem-and-leaf display
Frequency distributions and histograms
Polygons and ogives
Scatter diagrams for bivariate data
Bar charts, pie charts, and Pareto diagrams
Contingency tables and side-by-side bar charts
Statistics for Managers Using Microsoft Excel, 4e © 2004 Prentice-Hall, Inc. Chap 2-45