Académique Documents
Professionnel Documents
Culture Documents
BUSINESS
STATISTICS
by
AMIR D. ACZEL
&
JAYAVEL SOUNDERPANDIAN
7th edition.
Prepared by Lloyd Jaisingh, Morehead State
University
Chapter 1
1-2
Statistics
Percentiles and Quartiles
Measures of Central Tendency
Measures of Variability
Grouped Data and the Histogram
Skewness and Kurtosis
Relations between the Mean and Standard Deviation
Methods of Displaying Data
Exploratory Data Analysis
Using the Computer
1-3
1 LEARNING OBJECTIVES
After studying this chapter, you should be able to:
Distinguish between qualitative data and quantitative data.
Describe nominal, ordinal, interval, and ratio scales of
measurements.
Describe the difference between population and sample.
Calculate and interpret percentiles and quartiles.
Explain measures of central tendency and how to compute
them.
Create different types of charts that describe data sets.
Use Excel templates to compute various measures and create
charts.
1-4
WHAT IS STATISTICS?
Statistics
1-5
Descriptive Statistics
Collect
Organize
Summarize
Display
Analyze
Inferential Statistics
Predict and forecast
values of population
parameters
Test hypotheses about
values of population
parameters
Make decisions
1-6
Categorical or
Nominal:
Examples are-
Quantitative
Measurable or
Countable:
Examples are-
Color
Temperatures
Gender
Salaries
Nationality
Number
of points
scored on a 100
point exam
1-7
Scales of Measurement
classification, etc.
1-8
1-9
1-10
Population (N)
Sample (n)
1-11
Why Sample?
Census
1-12
1-13
Example 1-2
The magazine Forbes publishes
annually a list of the worlds
wealthiest individuals. For, 2007,
the net worth of the 20 richest
individuals, in $billions, is as
follows: (data is given on the next
slide). Also, the data has been
sorted in magnitude.
1-14
18
18
18
18
19
20
20
20
21
22
22
23
24
26
27
32
33
49
52
56
1-15
1-16
1-17
1-18
1-19
1-20
1-21
(n+1)P/100
Position
Quartiles
(20+1)25/100=5.25
19 + (.25)(1) = 19.25
Median
(20+1)50/100=10.5
22 + (.5)(0) = 22
Third Quartile
(20+1)75/100=15.75
First Quartile
1-22
1-23
of Central Tendency
Measures of Variability
Median
Mode
Mean
Range
Interquartile range
Variance
Standard Deviation
Other summary
measures:
Skewness
Kurtosis
1-24
Mode
Mean
Average
1-25
18
18
18
18
19
20
20
20
21
22
22
23
24
26
27
32
33
49
52
56
Median
50th Percentile
(20+1)50/100=10.5
22 + (.5)(0) = 22
Median
1-26
Mode = 18
The mode is the most frequently occurring value. It
is the value with the highest frequency.
1-27
1-28
1-29
xxii
i i11
Sample Mean
nn
xx
xxii
i i11
18
18
18
19
20
20
20
21
22
22
23
24
26
27
32
33
49
52
56
nn
538
538
26..99
xx
xxi i
26
20
20
i i11
1-30
1-31
Range
Difference
Interquartile
Difference
Range
Variance
Average*of
Standard
Square
Deviation
1-32
1-33
Sample Variance
n
(x )
2 i1
N
( x)
i1
s
2
N
2
i 1
(x x)
i 1
n 1
(
)
x
n
n
x
i 1
i 1
n 1
s s
1-34
xx
18
18
18
18
19
20
20
20
21
22
22
23
24
26
27
32
33
49
52
56
-8.9
-8.9
-8.9
-8.9
-7.9
-6.9
-6.9
-6.9
-5.9
-4.9
-4.9
-3.9
-2.9
-0.9
0.1
5.1
6.1
22.1
25.1
29.1
538
(x x) 2
79.21
79.21
79.21
79.21
62.41
47.61
47.61
47.61
34.81
24.01
24.01
15.21
8.41
0.81
0.01
26.01
37.21
488.41
630.01
846.81
2657.8
x2
324
324
324
324
361
400
400
400
441
484
484
529
576
676
729
1024
1089
2401
2704
3136
17130
s2
(x x)
i 1
n 1
2657.8
(20 1)
2657.8
139.88421
19
n x
n
x 2 i 1
n
i 1
n 1
289444
17130 538 17130
20
20
20 1
19
17130 14472.2 2657.8
139.88421
19
19
s
139.88421 11.82
Sample Variance
1-35
1-36
Sample Variance
1-37
Exhaustive
should be:
Mutually exclusive
1-38
Frequency Distribution
Table
N for population
n for sample
Class
1-39
f(x)/n
f(x)/n
RelativeFrequency
Frequency
Relative
30
30
38
38
50
50
31
31
22
22
13
13
0.163
0.163
0.207
0.207
0.272
0.272
0.168
0.168
0.120
0.120
0.070
0.070
184
184
1.000
1.000
1-40
30
30
68
68
118
118
149
149
171
171
184
184
F(x)/n
F(x)/n
CumulativeRelative
RelativeFrequency
Frequency
Cumulative
0.163
0.163
0.370
0.370
0.641
0.641
0.810
0.810
0.929
0.929
1.000
1.000
Thecumulative
cumulativefrequency
frequencyof
ofeach
eachgroup
groupisisthe
thesum
sumof
ofthe
the
The
frequenciesof
ofthat
thatand
andall
allpreceding
precedinggroups.
groups.
frequencies
1-41
Histogram
A
1-42
50
50
Frequency
Frequency
40
40
38
38
31
31
30
30
30
30
22
22
20
20
13
13
10
10
0
0
0
0
100
100
200
200
300
300
Dollars
Dollars
400
400
500
500
600
600
1-43
30
30
27.1739
27.1739
25
25
20.6522
20.6522
Percent
Percent
20
20
16.8478
16.8478
16.3043
16.3043
15
15
11.9565
11.9565
10
10
7.06522
7.06522
5
5
0
0
0
0
100
100
200
200
300
300
Dollars
Dollars
400
400
500
500
600
600
1-44
Skewed to left
Symmetric or unskewed
Skewed to right
Kurtosis
1-45
Skewness
Skewed to left
1-46
Skewness
Symmetric
1-47
Skewness
Skewed to right
1-48
40
40
35
35
35
35
Frequency
Frequency
30
30
20
20
20
20
15
15
10
10
0
0
15
15
10
10
100
100
10
10
200
200
300
300
400
400
X
X
500
500
600
600
700
700
1-49
Kurtosis
Platykurtic - flat distribution
1-50
Kurtosis
Mesokurtic - not too flat and not too peaked
1-51
Kurtosis
Leptokurtic - peaked distribution
Theorem
Empirical
Rule
1-52
1-53
Chebyshevs Theorem
At
1
of
k 2
least
the elements of any distribution lie
within k standard deviations of the mean
At
least
1
1 3
75%
2
4 4
2
1
1 8
1 2 1 89%
9 9
3
1
1 15
1 2 1
94%
16
16
4
2
Lie
within
3
4
Standard
deviations
of the mean
1-54
Empirical Rule
1 standard deviation
of the mean
Lie
within
2 standard deviations
of the mean
3 standard deviations
of the mean
1-55
Charts
Bar
Graphs
Frequency
Polygons
Ogives
Time
Plots
Foreign
Foreign
20, 20.0%
20, 20.0%
Bonds
Bonds
20, 20.0%
20, 20.0%
Large Cap Value
Large Cap
10, Value
10.0%
10, 10.0%
Small Cap/Mid Cap
Small
Cap/Mid Cap
20, 20.0%
20, 20.0%
Category
Category
Foreign
Foreign
Bonds
Bonds
Small Cap/Mid Cap
Small Cap/Mid Cap
Large Cap Value
Large Cap Value
Large Cap Blend
Large Cap Blend
1-56
Registration (Millions)
Registration (Millions)
125
125
100
100
75
75
50
50
25
25
0
0
2000
2000
2001
2001
2002
2002
2003
2003
Year
Year
2004
2004
2005
2005
2006
2006
1-57
1-58
0.30
0.30
Frequency is
Located in the
middle of the
interval.
Relative Frequency
Relative Frequency
0.25
0.25
0.20
0.20
0.15
0.15
0.10
0.10
0.05
0.05
0.00
0.00
0
0
0
0
8
8
16
16
24
24
32
32
Sales
Sales
40
40
48
48
56
56
1-59
1.0
1.0
0.8
0.8
0.6
0.6
0.4
0.4
0.2
0.2
0.0
0.0
0
0
0
0
10
10
20
20
30
30
Sales
Sales
40
40
50
50
60
60
Variable
Variable
2000
2000
2001
2001
Sales
Sales
115
115
110
110
105
105
100
100
1-60
Jan
Jan
Mar
Mar
May
May
Jul
Jul
Month
Month
Sep
Sep
Nov
Nov
1-61
Stem-and-Leaf Displays
Quick way of listing all observations
Conveys some of the same information as a histogram
Box Plots
Median
Lower and upper quartiles
Maximum and minimum
1-62
11112222335555556677
22 00111111222222334466777777889999
33 001122445577
44 1111225577
55 00223366
66 0022
1-63
Box Plot
Elementsof
ofaaBox
BoxPlot
Plot
Elements
Outlier
Smallest data
point not
below inner
fence
Outer
Fence
Inner
Fence
Q1-1.5(IQR)
Q1-3(IQR)
Q1
Median
Interquartile Range
Q3
Inner
Fence
Q3+1.5(IQR)
Outer
Fence
Q3+3(IQR)
1-64
1-65
1-66
1-67
1-68
1-69
1-70
1-71
1-72
1-73
1-74
1-75
1-76
1-77
Scatter Plots
Scatter Plots are used to identify and report
1-78
Scatter Plots
Scatter plot with
trend line.
This type of
relationship is
known
as a positive
correlation.
Correlation will be
discussed in later
chapters.
1-79
NOTE
MANY OF
OF THE
THE GRAPHS
GRAPHS
MANY
PRESENTED IN
IN THIS
THIS CHAPTER
CHAPTER
PRESENTED
CAN BE
BE
CAN
GENERATED WITH
WITH
GENERATED
MINITAB AS
AS WELL.
WELL.
MINITAB