Академический Документы
Профессиональный Документы
Культура Документы
…2
= Rs. 8.30
Arithmetic Mean
Short-Cut Method
In this method an arbitrary assumed mean is
taken as the basis of calculating the
deviations from individual values in the data
set
Arithmetic Mean
Indirect Method
Example 1: The daily earnings (in rupees) of
employees working on a daily basis in a firm
are given below. Calculate the average daily
earning for all employees.
Daily earnings (Rs.) 100 120 140 160 180 200 220
Number of employees 3 6 10 14 24 42 75
No. of employees 11 20 35 20 8 6
Exercise 2: In an examination of 675 candidates, the
examiner supplied the following information. Calculate the
mean percentage of marks obtained
Marks No. of Marks No. of
obtained (%) students obtained (%) students
110 25
112 17
113 13
117 15
X 14
125 8
128 6
130 2
Merits and Demerits of Arithmetic
Mean
Merits
Calculation of AM is simple
Calculation is based on all observations and hence
it can be regarded as representative of the given
data
It is capable of being treated mathematically and
hence, is widely used in statistical analysis
It represents center of gravity of the distribution
because it balances the magnitudes of
observations which are greater and less than it
It gives good basis of comparison of two or more
distributions
Merits and Demerits of Arithmetic
Mean
Demerits
It can neither be determined by inspection nor by
graphical location
Arithmetic mean cannot be computed for a
qualitative data
It is affected too much by extreme observations
and hence does not adequately represent data
consisting of some extreme observations
AM cannot be computed when class intervals have
open ends
Simple arithmetic mean gives greater importance
to larger values and lesser importance to smaller
values
Weighted Arithmetic Mean
GM = antilog{ }
Geometric Mean
Exercise 1: The rate of increase in population
of a country during the last three decades is 5
percent, 8 percent and 12 percent. Find the
average rate of growth during the last three
decades.
Uses, Merits and Demerits of GM
Uses
GM is highly useful in averaging, ratios, percentages,
and rate of increase between two periods
GM is important for construction of index numbers
Merits
The value of GM is not much affected by extreme
observations and is computed by taking all observations
Useful in studying economic and social data
Demerits
GM cannot be computed if any item in the series is
negative or zero
Difficult to calculate
Harmonic Mean
Harmonic Mean of a set of observations is
defined as the reciprocal of the arithmetic
mean of the reciprocal of the individual
observations
= Rs. 166.66
Harmonic Mean
Example 2: Find the harmonic mean of the
following distribution of data
Dividend yield (%) 2–6 6 – 10 10 – 14
Number of 10 12 18
companies
Solution
Class (DY) Mid value No. of Reciprocal
(mi) companies (fi)
2–6 4 10 ¼ 2.5
6 – 10 8 12 1/8 1.5
10 – 14 12 18 1/12 1.5
N = 40 5.5
HM = 7.27
Merits and Demerits of HM/
Relationship between AM, GM and HM
Merits
It is based on all observations of the series
It is suitable in case of series having wide dispersion
Demerits
Difficult to calculate
It is not often used for analyzing business problems
Relationship between AM, GM, and HM
If all values are equal then AM = GM = HM
If values are different then AM > GM > HM
If the values of an observation takes the values a, ar,
ar2, ar3, …., arn, then (GM)2 = AM x HM
Averages of Position - Median
Median – Median may be defined as the middle
value in the data set when the elements are
arranged in sequential order (either ascending or
descending)
Median for ungrouped data:
If number of observations (n) is odd, then
Median = Size or value of { }th observation
If the number of observations are odd, then
= 8 + 1.5 = 9.5
Partition Values – Quartiles, Deciles,
Percentiles
Quartiles: The values of observations in a data set,
when arranged in an ordered sequence, can be
divided into four equal parts, or quarters, using three
quartiles viz. Q1, Q2 and Q3. The first quartile Q1
divides the distribution in such a way that 25 percent
of the observations have a value less than Q1 and 75
percent of the values are more than Q1.
Q1 Q2 Q3
Partition Values – Quartiles, Deciles,
Percentiles
Deciles: The values of observations in a data
set when arranged in an ordered sequence
can be divided into then equal parts, using
nine deciles (D1, D2, ….., D9)
10
5 15 25 35 45 Class interval
Mode
Relationship between Mean, Median
and Mode
Mean=median=mode
Mode Median Mean Mean Median Mode