STATICTICS

AND
MEASURES OF CENTRAL TENDENCY
STATICTICS
The word statistics refers to quantitative information
or to a method of dealing with quantitative
information.

The methods by which statistical data are analyzed

are called STATISTICAL METHODS.

STATISTICAL METHODS are applicable to a very large

number of fields-
economics,sociology,antropology,business,agricultur
e,psychology,medicines,education.
FUNCTIONS OF
STATISTICS
It presents facts in a definite form
It simplifies mass of figures
It facilitates comparison
It helps in formulating and testing hypothesis
It helps in prediction
It helps in the formulation of suitable policies
CHARTING DATA
Most appropriate way to represent the data is
through
charts.

Pictorial representation helps in quick

understanding of the data.

A chart can take the shape of either a

diagram or a graph.
A pie chart is a circular representation of
data when a circle is divided into sectors
with areas equal to the corresponding
component. These sectors are called slices
and represent the percentage breakdown of
the corresponding components.
BAR-CHART
A bar chart is a graphical device
used in depicting data that have
been summarized as frequency,
relative frequency, or percentage
frequency
The statistical meaning of histogram is that it is graph that
represent the class frequencies in frequency distribution by
vertical adjacent rectangle

Example: The following is a list of prices (in dollars) of birthday

cards
found in various drug stores:

1.45 2.20 0.75 1.23 1.25 1.25 3.09 1.99 2.00

0.78 1.32 2.25 3.15 3.85 0.52 0.99 1.38
1.75 1.22 1.75

we Make a frequency distribution table for this data.

We omit the units (dollars) while calculating. The values go from
0.52 to 3.85 , which is roughly 0.50 to 4.00 . We can divide this
into 7 intervals of equal length: 0.50 - 0.99 , 1.00 - 1.49 , 1.50 -
1.99 , 2.00 - 2.49 , 2.50 - 2.99 , 3.00 - 3.49 , and 3.50 - 3.99 . Then
we can count the number of data points which fall into each
interval--for example, 4 points fall into the first interval: 0.75,
0.78, 0.55, and 0.99--and make a frequency distribution table:
Intervals in (dollars) frequency
0.50- 0.99 4
1.00- 1.49 7
1.50 -1.99 3

2.00 -2.49 3
2.50 -2.99 0
3.00 -3.49 2

3.50 -3.99 1
Total 20
Making a Histogram Using a Frequency
Distribution Table
A histogram is a bar graph which shows frequency
distribution.
To make a histogram, follow these steps:
1.On the vertical axis, place frequencies. Label this
axis "Frequency".
2.On the horizontal axis, place the lower value of
each interval. Label this axis with the type of data
shown (price of birthday cards, etc.)
3.Draw a bar extending from the lower value of each
interval to the lower value of the next interval. The
height of each bar should be equal to the frequency
of its corresponding interval.
Example: Make a histogram showing the frequency distribution of
the price of birthday cards.
Histogram
A frequency polygon is a graph of frequency
distribution. It is particularly effective in comparing
two or more frequency distribution.
There are two way in which a frequency polygon
may be constructed:
1. we may draw histogram of the given data and
then join by straight lines the mid-point of the
upper horizontal side of each rectangle with the
adjacent rectangle.
2. anther method of constructing frequency
polygon is to take the mid-points of the various
class-intervals and then plot the frequency
corresponding to each point and to join all these
points by straight lines.
# Draw an ogive and determine the no.
of companies getting profits between
Rs. 45 crore and Rs. 75 crore.
OGIVE

75
PARETO CHART
 It is a special type of vertical bar chart in which the
categorized responses are plotted in the descending
rank order of their frequencies and combined with a
cumulative polygon on the same graph.

 The main focus of the Pareto chart is to separate the

“vital few” from the “trivial many.”
Case: A departmental store conducted a customer satisfaction
survey of 455 frequent customers . The survey group prepared
a questionnaire that was divided in two parts: satisfaction
reasons and dissatisfaction reasons. Departmental store has
decided to focus on the reasons of dissatisfaction to improve its
quality of service. The following observations regarding
categories of dissatisfaction were made:
Sl. No. Dissatisfaction reasons No. of customers

1 Poor product range 125

2 Lack of staffs 40
3 Late Home delivery 65
4 Parking 30
5 Missing price tags 75
6 No card payment service 120
Total 455
Pareto chart of the case of department
store
STEM AND LEAF PLOT
 Stem-and-leaf plot can be constructed by separating the digits of
each number into two groups, one as a stem and the other as a
leaf.
 This plot is mainly used for examining the shape and spread of
data.
 After separating the data, the left-most digit is termed as the stem
and is the higher valued digit. The right-most digit is termed as the
leaf and is the lower valued digit.
State of auto manufacturing
According to data released by the Automotive News Data Center, General MotorsCorporation is number one in the
world in total
vehicle sales of cars and light trucks. FordMotor Company is number two followed by Toyota Motor Corporation
and
Volkswagen,respectively. Between 1999 and 2000, while General Motors maintained its number oneposition, it
sold nearly
200,000 fewer cars worldwide. During this same period, Ford Motorincreased sales by more than 200,000. The
greatest
percentage growth from 1999 to 2000was for PSA Peugeot-Citroen, which increased sales by 14.2%. The global
sales figures
Company 1999 2000 % change
forthe top 10 auto manufacturers of cars and light trucks for both 1999 and 2000 follow.Suppose you are a
businessGeneral
analyst for
motors 8786000 8591327 -2.2
one of these companies. Your manager asks you toprepare a brief report showing the state of car and light truck
sales in the
Fordcompare
world. You areto motorsyour company's
7148000 position with7350495
other firms. 2.8
Toyota motors 5359000 5703446 6.4
volkswagen 4860203 5161188 6.2
daimlerchrysler 4864500 4749000 2.4

Psa peugeot- 2519600 2877900 14.2

citroen
fiat 2521000 2646500 5.0
Hyundai motor 2600862 2634560 1.3
Nissan motor 2567878 2629044 2.4
Honda motor 2395000 2540000 6.1
Q.:Suppose DaimlerChrysler randomly samples 40 dealerships and discovers that
the following data tell how many car and light trucks were sold at these dealerships
last month. How can you summarize these data in a report?
34 58 40 49 49 57 44 57 69 45 64 31 47 30 44 44 51 65 60 65
61 62 68 43 66 63 44 34 57 44 67 61 47 67 52 34 58 59 45
33

SOLUTION:

A stem and leaf plot of these data would appear as follows.

FREQUENCY Stem & Leaf
6.00 3. 0 1 3 4 4 4
15.00 4. 0 3 4 4 4 4 4 5 5 7 7 9 9
10.00 5. 1 2 7 7 7 8 8 9
13.00 6. 0 I I 2 3 4 55 6 7 7 8 9
 
SCATTER PLOT
 The scatter plot is a graphical presentation of the
relationship between two numerical variables.
 It generally shows the nature of the relationship
between two variables.
 The application of a scatter plot is very common
in regression, multiple regressions, correlation,
etc.
Q. How might you graphically depict the 1999 data against the 2000 data?

Company 1999 2000 % change

General motors 8786000 8591327 -2.2

Ford motors 7148000 7350495 2.8

Toyota motors 5359000 5703446 6.4
volkswagen 4860203 5161188 6.2
daimlerchrysler 4864500 4749000 2.4

Psa peugeot- 2519600 2877900 14.2

citroen
fiat 2521000 2646500 5.0
Hyundai motor 2600862 2634560 1.3
Nissan motor 2567878 2629044 2.4
Honda motor 2395000 2540000 6.1
Representation through
scatter plot
SALESVALUESFORYEAR1999AND2000
10000000
8000000
6000000
XAXIS-1999, Y AXIS-
4000000
2000
2000000
0
0 5000000 10000000
 ARITHMETIC MEAN
 The arithmetic mean (AM) of a set of observations is their sum,
divided by the number of observations.
 It is generally denoted by x or AM. Population mean is denoted by μ.

Arithmetic mean is of two types:

 Simple arithmetic mean

 Weighted arithmetic mean
Weighted Arithmetic Mean

 The weighted mean enables us to calculate an average

that takes into account the importance of each value to the
overall total.
GEOMETRIC MEAN
 Geometric mean (GM) is the nth root of the product of n items of
a series.

 Commonly used in the calculation of average rate of growth.

Chemical,industrial & pharmaceutical laboratories(cipla)

Cipla was registered as a public ltd co. with authorized capital of rs.60000 million in 1935.operations
officially started in sept 1937.its products & services are categorized as prescription,animal health
care products etc.It now exports to countries in europe,america,africa,asia,mid-east,asia.it has won
“EXPRESS PHARMA PULSE AWARD” for “sustained growth” for 205-06.It overtook ranbaxy and
glaxosmithkline to become the largest pharmaceutical co. in the domestic market in 2007.

Mean= 8631.138889
HARMONIC MEAN
 Based on the reciprocal of the numbers averaged.
 Defined as the reciprocal of the arithmetic mean of the
reciprocal of the individual observation.

 It can be written as
Applications of Harmonic
Mean
Useful for computing average rates
e.g. Average rate of increase of profits or
average speed at which any journey
has been performed.
Chemical,industrial & pharmaceutical laboratories(cipla)

Sales turnover for year 1989-2006

YEAR SALES 1/X
(In million Rs.)
(x)
1989 971.2 0.0010297
1990 928.9 0.0010765
1991 1236.4 0.0008088
1992 1514 0.0006605
1993 1990.3 0.0005024
1994 2454.7 0.0004074
1995 2987.1 0.0003348
1996 3623.6 0.000276
1997 4525.8 0.000221
1998 5170.8 0.0001934
1999 6255.4 0.0001599
2000 7721.4 0.000129
2001 10643.1 0.000093
2002 14008.1 0.000071
2003 15730.2 0.000063
2004 20554.2 0.000048
2005 24008.9 0.000041
2006 31036.2 0.000032
∑1/x = 0.0061473
n=18
∑ 1/x=0.0061473

Harmonic Mean = n
∑ 1/x

= 18/0.0061473
= 2928.1148
Merit and limitations
It is useful in special cases of averaging rates.
It can not be used when there are both
positive and negative observations or one or
more observations have zero values.
It is rarely used in business problems
The median may be defined as the middle or central value of
the variable when values are arranged in the order of
magnitude.
In other words, median is defined as that value of the variable
that divides the group into two equal parts, one part comprising
all values greater and the other all values lesser than the
median.
To measure the qualitative characteristics of data, other
measures of central tendency, namely median and mode are
used.
 Positional averages, as the name indicates, mainly focus on
the position of the value of an observation in the data set.
UNGROUPED DATA:
1) If n(no. of observation) is odd, middle term of a series is size of ((n+1)/2)th term &
is the value of a median.
2) If n(no. of observation) is even, middle term of a series are (n/2)th and (n/2+1)th
terms . So, arithmetic mean of both the observations is our median.

GROUPED DATA:
MEDIAN=L+ [N/2-p.c.f]/F* I
Where L=lower limit of class
N=sum of all the frequencies
p.c.f=preceding cumulative frequency to median class
F=frequency of median class
i=class interval of median class
Chemical,industrial & pharmaceutical laboratories(cipla)

Cipla was registered as a public ltd co. with authorized capital of rs.60000 million in 1935.operations officially
started in sept 1937.its products & services are categorized as prescription,animal health care products etc.It
now exports to countries in europe,america,africa,asia,mid-east,asia.it has won “EXPRESS PHARMA
PULSE AWARD” for “sustained growth” for 205-06.It overtook ranbaxy and glaxosmithkline to become
the largest pharmaceutical co. in the domestic market in 2007.
SALES TURNOVER FROM 1989-2006
MEDIAN :
total observations(n)=18

n/2th term=9th term=4525.8

(n/2+1)th term=10th term=5170.8

median=(4525.8+5170.8)/2
=4848.3
MODE
UNGROUPED DATA:
Mode is that value which occurs the maximum no. of times

GROUPED DATA:
Mode=L+(f-f1)/(2f-f1-f2) *I

Where,
L=lower limit of modal class
f = frequency of modal class
f 1=frequency of class preceding the modal class
f 2=frequency of class succeeding the modal class
i=size of modal class
Chemical,industrial & pharmaceutical laboratories(cipla)

 Cipla was registered as a public ltd co. with authorized capital of rs.60000 million in 1935.operations
officially started in sept 1937.its products & services are categorized as prescription,animal health care
products etc.It now exports to countries in europe,america,africa,asia,mid-east,asia.it has won “EXPRESS
PHARMA PULSE AWARD” for “sustained growth” for 205-06.It overtook ranbaxy and glaxosmithkline
to become the largest pharmaceutical co. in the domestic market in 2007.
 SALES TURNOVER FROM 1989-2006 mode=0
RELATIONSHIP BETWEEN MEAN,MEDIAN &
MODE
*distribution in which values of mean,median,mode
coincide are symmetrical distribution.
*distribution in which values of mean,median,mode are not
equal are asymmetrical or skewed.
The distance between mean & median is approximately
one-third of the distance between the mean and mode.
Acc. To Karl Pearson :
Mean-median=1/3(mean-mode)
Mode=3median-2mean
Median=(2mean+mode)/3
QUARTILES
 Partition values are measures that divide the data into several
equal parts. Quartiles divide data into 4 equal parts, deciles
divide data into 10 equal parts, and percentiles divide data into
100 equal parts.

 For an individual series, the first and third quartiles can be

computed using the following formula:
 Values of quartiles can be measured as : Q(for k=1 to
n)=k(n+1)/4

 Example : Q1=first quartile = (n+1)/4

DECILES
 In a data series, when the observations are arranged
in an ordered sequence, deciles divide the data into 10
equal parts. In the case of individual series and
discrete frequency distribution, the generalized
formula for computing deciles is given as:
Values of decile can be measured as :
D(for k=1 to n)=k(n+1)/10
Example: D1=(N+1)/10
PERCENTILES
 In a data series, when observations are arranged in an ordered
sequence, percentiles divide the data into 100 equal parts. For
an individual series and a discrete frequency distribution, the
generalized formula for computing percentiles is given as:

VALUES OF PERCENTILE CAN BE MEASURED AS :

P(for k=1 to n)=k(n+1)/100
Example : P1=(n+1)/100
 Example: From the following data, find the first and third
quartiles.

 The first and third quartiles can be computed by applying the

formula
discussed above. The data is already arranged in an ordered manner:
Submitted by:

Gaurav 80
Monika 84
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Jatinder 76
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