FREQUENCY DISTRIBUTION

Outline
Frequency distribution, histogram, frequency polygon Relative frequency histogram Cumulative relative frequency graph Stem-and-leaf plots Scatter diagram Pie charts, bar chart, line chart Some special frequency distribution forms

FREQUENCY DISTRIBUTION
Consider the following data that shows days to maturity for 40 short-term investments

70 62 75 57 51

64 38 56 53 31

99 67 71 47 63

55 70 51 50 66

64 60 99 55 85

89 69 68 81 79

87 78 95 80 83

65 39 86 98 70
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FREQUENCY DISTRIBUTION
First, construct a frequency distribution An arrangement or table that groups data into non-overlapping intervals called classes and records the number of observations in each class Approximate number of classes Number of observation Number of classes Less than 50 5-7 50-200 7-9 200-500 9-10 500-1,000 10-11 1,000-5,000 11-13 5,000-50,000 13-17 More than 50,000 17-20

FREQUENCY DISTRIBUTION
Approximate class width is obtained as follows:
Largest value - Smallest value Approximate class width Number of classes

FREQUENCY DISTRIBUTION
Classes and counts for the days-to-maturity data

Days to Maturity

TALLY

Number of Investments

HISTOGRAM 12 10

Frequency

8 6 4 2 0 40 50 60 70 80 90 100
6

Number of Days to Maturity

HISTOGRAM
Classes: Categories for grouping data. Frequency: The number of observations that fall in a class. Frequency distribution: A listing of all classes along with their frequencies. Relative frequency: The ratio of the frequency of a class to the total number of observations. Relative-frequency distribution: A listing of all classes along with their relative frequencies. Lower cutpoint: The smallest value that can go in a class. Upper cutpoint: The smallest value that can go in the next higher class. The upper cutpoint of a class is the same as the lower cutpoint of the next higher class. Midpoint: The middle of a class, obtained by taking the average of its lower and upper cutpoints. Width: The difference between the upper and lower cutpoints of a 7 class.

FREQUENCY POLYGON
A frequency polygon is a graph that displays the data by using lines that connect points plotted for frequencies at the midpoint of classes. The frequencies represent the heights of the midpoints.

FREQUENCY POLYGON
Classes Mid-value Frequency

FREQUENCY POLYGON 12 10

Frequency

8 6 4 2 0 35 45 55 65 75 85 95
10

Number of Days to Maturity

RELATIVE FREQUENCY HISTOGRAM

Frequency histogram: A graph that displays the classes on the horizontal axis and the frequencies of the classes on the vertical axis. The frequency of each class is represented by a vertical bar whose height is equal to the frequency of the class. Relative-frequency histogram: A graph that displays the classes on the horizontal axis and the relative frequencies of the classes on the vertical axis. The relative frequency of each class is represented by a vertical bar whose height is equal to the relative frequency of the class.
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RELATIVE FREQUENCY HISTOGRAM

Class relative frequency is obtained as follows:
Class frequency Class relative frequency Total number of observations

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RELATIVE FREQUENCY HISTOGRAM

Relative-frequency distribution for the days-to-maturity data

Days to Maturity

Relative Frequency

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RELATIVE FREQUENCY HISTOGRAM 30.00%

Relative Frequency

25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 40 50 60 70 80 90 100

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Number of Days to Maturity

OGIVE CUMULATIVE RELATIVE FREQUENCY GRAPH

A cumulative relative frequency graph or ogive is a graph that represents the cumulative frequencies for the classes in a frequency distribution.

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OGIVE CUMULATIVE RELATIVE FREQUENCY GRAPH

Class Frequency Relative Cumulative Frequency Relative Frequency

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OGIVE CUMULATIVE RELATIVE FREQUENCY GRAPH Cumulative Frequency 1.000 0.800 0.725 0.550 0.300 0.200 0.000 0.075 0.100 40 50 60 70 80 90 100
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1.000 0.900

0.600
0.400

Number of Days to Maturity

STEM-AND-LEAF DISPLAY

When summarizing the data by a group frequency distribution, some information is lost. The actual values in the classes are unknown. A stem-and-leaf display offsets this loss of information. The stem is the leading digit. The leaf is the trailing digit.

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STEM-AND-LEAF DISPLAY
Diagrams for days-to-maturity data: (a) stem-and-leaf (b) ordered stem-and-leaf Stem Leaves 3 4 5 6 7 8 9 (a) Stem Leaves 3 4 5 6 7 8 9 (b)
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SCATTTER DIAGRAM
Often, we are interested in two variables. For example, we may want to know the relationship between advertising and sales experience and time required to produce an unit of a product

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SCATTTER DIAGRAM
Scatter diagrams show how two variables are related to one another To draw a scatter diagram, we need a set of two variables Label one variable x and the other y Each pair of values of x and y constitute a point on the graph

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SCATTTER DIAGRAM
In some cases, the value of one variable may depend on the value of the other variable. For example, sales depend on advertising time required to produce an item of a product depend on the number of units produced before In such cases, the first variable is called dependent variable and the second variable is called independent variable. For example, Independent variable Dependent variable Advertising Sales Number of units produced Production time/unit
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SCATTTER DIAGRAM
Usually, independent variable is plotted on the horizontal axis (x axis) and the dependent variable on the vertical axis (y axis) Sometimes, two variables show some relationships positive relationship: two variables move together i.e., one variable increases (or decreases) whenever the other increases (or, decreases). Example: advertising and sales. negative relationship: one variable increases (or, decreases) whenever the other decreases (increases). Example: number of units produced and production time/unit
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SCATTTER DIAGRAM
Relationship between two variables may be linear or non-linear. For example, the relationship between advertising and sales may be linear. the relationship between number of units produced and the production time/unit may be nonlinear.

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SCATTTER DIAGRAM (EXAMPLE)

Advertizing 1,000 of dollars 1 3 5 4 2 5 3 2 Sales 1,000 of dollars 30 40 40 50 35 50 35 25
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SCATTER DIAGRAM 60

Sales

40

20 0 2 Advertising
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SCATTTER DIAGRAM (EXAMPLE)

Number of units produced 10 25 10 250 500 1000 5000 10000 Production time hours/unit 9.22 4.85 3.8 2.44 1.7 1.03 0.6 0.5
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SCATTER DIAGRAM
Production time (hours)/unit

10

0 0 2000 4000 6000 8000 10000 12000

28

Number of units produced

PIE CHART
A pie chart is the most popular graphical method for summarizing quantitative/nominal data A pie chart is a circle is subdivided into a number of slices Each slice represents a category Angle allocated to a slice is proportional to the proportion of times the corresponding category is observed Since the entire circle corresponds to 3600, every 1% of the observations corresponds to 0.01 3600 = 3.60

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PIE CHART (EXAMPLE)

Code of Area 1 2 3 4 5

Number Proportion Angles on a of Graduates of Graduates Pie Chart Accounting 73 Finance 52 General Mgmnt 36 Marketing 64 Other 28

Area

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PIE CHART

5 More 11% 0%

1 29%

4 25%

3 14%

2 21%

1 2 3 4 5 More

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BAR CHART
Bar charts graphically represent the frequency or relative frequency of each category as a bar rising vertically The height of each bar is proportional to the frequency or the relative frequency All the bars must have the same width A space may be left between bars Bar charts may be used for qualitative data or categories that should be presented in a particular order such as years 1995, 1996, 1997, ...

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BAR CHART (EXAMPLE)

Code of Area 1 2 3 4 5 Number of Graduates Accounting 73 Finance 52 General Mgmnt 36 Marketing 64 Other 28 Area

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BAR CHART 80 70 60 50 40 30 20 10 0 1 2 3 Area

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Count of Area

LINE CHART
Line charts are often used when the categories are points in time. Such a chart is called a time-series chart. For example, consider a graph that shows monthly or weekly sales data. Frequency of each category is represented by a point above and then points are joined by straight lines

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LINE CHART (EXAMPLE)

Year 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 Fatal Accidents Number of Passengers Per 1,000 Departures Millions 0.10 21 0.23 27 0.24 28 0.02 29 0.31 32 0.04 36 0.12 38 0.04 42 0.24 42 0.15 48 0.10 53 36 0.04 58

Line Chart

Fatal Accidents Per 1,000 Departures

0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00 1 2 3 4 5 6 7 8 9 10 11 12

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Year

Line Chart

Number of Passengers (Millions)

70 60 50 40 30 20 10 0 1 2 3 4 5 6 7 8 9 10 11 12
38

Year

CHOICE OF A CHART
Pie chart Small / intermediate number of categories Cannot show order of categories Emphasizes relative values e.g., frequencies Bar chart Small / intermediate/large number of categories Can present categories in a particular order, if any Emphasizes relative values e.g., frequencies

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CHOICE OF A CHART
Bar chart Small/intermediate/large number of categories Can present categories in a particular order, if any Emphasizes relative values e.g., frequencies Line chart Small/intermediate/large number of categories Can present categories in a particular order, if any Emphasizes trend, if any

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SYMMETRIC HISTOGRAM 14 12

Frequency

10 8 6 4 2 0 14 15 16 17 18 19 20 21 22 23 24 25 26 Number of Units Sold

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SYMMETRIC HISTOGRAM 12 10

Frequency

8 6 4 2 0 14 15 16 17 18 19 20 21 22 23 24 25 26 Number of Units Sold

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POSITIVELY SKEWED HISTOGRAM 16 14 12 10 8 6 4 2 0 14 15 16 17 18 19 20 21 22 23 24 25 26 Number of Units Sold

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Frequency

NEGATIVELY SKEWED HISTOGRAM 16 14 12 10 8 6 4 2 0 14 15 16 17 18 19 20 21 22 23 24 25 26 Number of Units Sold

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Frequency

BIMODAL HISTOGRAM 8 7 6 5 4 3 2 1 0 14 15 16 17 18 19 20 21 22 23 24 25 26 Number of Units Sold

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Frequency

NORMAL DISTRIBUTION HISTOGRAM 14 12 10 8 6 4 2 0 14 15 16 17 18 19 20 21 22 23 24 25 26 Number of Units Sold

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Frequency

EXPONENTIAL DISTRIBUTION HISTOGRAM 45 40 35 30 25 20 15 10 5 0 14 15 16 17 18 19 20 21 22 23 24 25 26 Number of Units Sold

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Frequency

UNIFORM DISTRIBUTION HISTOGRAM 7 6 5 4 3 2 1 0 14 15 16 17 18 19 20 21 22 23 24 25 26 Number of Units Sold

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Frequency