Answer:

(a) Arithmetic Mean:

The arithmetic mean (or the average, simple mean) is computed by summing all numbers in an
array of numbers (x i) and then dividing by the number of observations (n) in the array.
_
X=

X
N

The mean uses all of the observations, and each observation affects the mean. Even though
the mean is sensitive to extreme values; i.e., extremely large or small data can cause the
mean to be pulled toward the extreme data; it is still the most widely used measure of
location. This is due to
thef a c t t h a t t h e m e a n h a s v a l u a b l e m a t h e m a t i c a l p r o p e r t i e s t h a t m a k e
i t convenient for use with inferential statistical analysis. For example, the sum of the
deviations of the numbers in a set of data from the mean is zero, and the sum of the
squared deviations of the numbers in a set of data from the mean is the minimum value.
(b) Harmonic Mean:
The harmonic mean (H) is another specialized average, which is useful in averaging variables
expressed as rate per unit of time, such as mileage per hour, number of units produced per day.
The harmonic mean (H) of n non-zero numerical values x (i) is: H = n/[ (1/x(i)].
Example:
Suppose 4 machines in a machine shop are used to produce the same part. However, each of the
four machines takes 2.5, 2.0, 1.5, and6.0 minutes to make one part, respectively. What is the
average rate of speed? The harmonic means is: H = 4/[(1/2.5) + (1/2.0) + 1/(1.5) + (1/6.0)] =2.31
minutes. If all machines working for one hour, how many parts will be produced? Since four
machines running for one hour represent 240 minutes of operating time, then: 240 / 2.31 = 104
parts will be produced.
(c) The Geometric Mean:
The geometric mean (G) of n non-negative numerical values is the n th root of the product of the n
values. If some values are very large in magnitude and others are small, then the geometric mean
is a better representative of the data than the simple average. Ina "geometric series", the most
meaningful average is the geometric mean (G).The arithmetic mean is very biased toward the
larger numbers in the series.
Example:
Suppose sales of a certain item increase to 110% in the first year and to 150% of that in the
second year. For simplicity, assume you sold100items initially. Then the number sold in the first
year is 110 and the number sold in the second is 150% x 110 = 165. The arithmetic average of
110% and150%is 130% so that we would incorrectly estimate that the number sold in the first year
is 130 and the number in the second year is 169. The geometric mean of 110% and 150% is
G = (1.65) so that we would correctly estimate that we would sell 100 (G) 2 =165 items in the
second year.

(d) Median:
Median: The median is the middle value in an ordered array of observations. If there is an even
number of observations in the array, the median is the average of the two middle numbers. If there
is an odd number of data in the array, the median is the middle number. The median is often used
to summarize the distribution of an outcome. If the distribution is skewed, the median and the inter
quartile range (IQR) may be better than other measures to indicate where the observed data are
concentrated. Generally, the median provides a better measure of location than the mean when
there are some extremely large or small observations; i.e., when the data are skewed to the right
or to the left. For this reason, median income is used as the measure of location for the U.S.
household income. Note that if the median is less than the mean, the data set is skewed to the
right. If the median is greater than the mean, the data set is skewed to the left. For normal
population, the sample median is distributed normally with m = the mean, and standard error
of the median (p/2) times standard error of the mean. The mean has two distinct
advantages over the median. It is more stable, and one can compute the mean based of two
samples by combining the two means.
(e) Mode:
The mode is the most frequently occurring value in a set of observations. Why use the mode? The
classic example is the shirt/shoe manufacturer who wants to decide what sizes to introduce. Data
may have two modes. In this case, we say the data are bimodal, and sets of observations with
more than two modes are referred to as multimodal. Note that the mode is not a help full measure
of location, because there can be more than one mode or even no mode. When the mean and the
median are known, it is possible to estimate the mode for the unimodel distribution using the other
two averages as follows:
Mode 3(median) - 2(mean)
This estimate is applicable to both grouped and ungrouped data sets.