Numerical Measures

of Relative Standing

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 Numerical Measures of Relative Standing:
Percentile Ranking (Percentile Score)

• Describes the relative location of a

measurement compared to the rest of the data
• For any set of n measurements (arranged in
ascending or descending order), the pth
percentile is a number such that p% of the
data falls below it and (100 – p)% falls above
it
• 50th percentile?
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 Percentile Example
You scored 560 on the GMAT exam. This score
puts you in the 58th percentile.
• What percentage of test takers scored lower
than you did?
• What percentage of test takers scored higher
than you did?

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 Calculating the pth percentile
• Arrange the data in ascending order
• Compute index i, the position of the pth percentile

i = (p/100)n

– If i is not an integer, round up. The pth percentile is the

value in the i th position.
– If i is an integer, the pth percentile is the average of the
values in positions i and i +1.

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 Example 5- Calculating the pth
percentile
Determine the 85th percentile for the starting salary data set:
Graduate Monthly Salary Graduate Monthly Salary
1 2850 7 2890
2 2950 8 3130
3 3050 9 2940
4 2880 10 3325
5 2755 11 2920
6 2710 12 2880

Step 1:

Step 2:

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 Example 5- Calculating the pth
percentile
Determine the 50th percentile.

Step 1:

Step 2:

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Numerical Measures of Relative Standing:
z–Scores

• Describes the relative location of a

measurement compared to the rest of the data
• Sample z–score Population z–score
x- x x- µ
z= z=
s s
• Measures the number of standard deviations
away from the mean a data value is located

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 z–Score Example
The mean time to assemble a product
is 22.5 minutes with a standard
deviation of 2.5 minutes.
•Find the z–score for an item that took
20 minutes to assemble.
•Find the z–score for an item that took
27.5 minutes to assemble.

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Interpretation of z–Scores for Mound-
Shaped Distributions of Data

1. Approximately 68% of the measurements

will have a z-score between –1 and 1.
2. Approximately 95% of the measurements
will have a z-score between –2 and 2.
3. Approximately 99.7% of the measurements
will have a z-score between –3 and 3.

(see the figure on the next slide)

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 Interpretation of z–Scores

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 Methods for Detecting Outliers: Box
Plots and z-Scores

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 Outlier
An observation (or measurement) that is unusually large
or small relative to the other values in a data set is called
an outlier. Outliers typically are attributable to one of
the following causes:
1. The measurement is observed, recorded, or entered
into the computer incorrectly.
2. The measurement comes from a different
population.
3. The measurement is correct but represents a rare
(chance) event.
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 Quartiles
Split ordered data into 4 quarters

25% 25% 25% 25%

QL m QU
Lower quartile QL is 25th percentile.
Middle quartile m is the median.
Upper quartile QU is 75th percentile.

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 Interquartile Range
Interquartile range: IQR = QU – QL

1. Measure of dispersion
2. Also called midspread
3. Spread in middle 50%
4. Not affected by extreme values

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 Box Plot
Graphical method to detect outliers:
whisker
whisker
Median
QL (m) QU
*

Upper hinge
Lower hinge

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 Elements of a Box Plot
1. Draw a rectangle (box) with the ends
(hinges) drawn at the lower and upper
quartiles (QL and QU). The median data is
shown by a line or symbol (such as “+”).
2. The points at distances 1.5(IQR) from each
hinge define the inner fences of the data set.
Line (whiskers) are drawn from each hinge
to the most extreme measurements inside the
inner fence.

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 Elements of a Box Plot
3. A second pair of fences, the outer fences, are
defined at a distance of 3(IQR) from the hinges.
One symbol (usually *) represents measurements
falling between the inner and outer fences, and
another (0) represents measurements beyond the
outer fences. Outer fences are not shown unless be
or more measurements lie beyond them.
4. Symbols that represent the median and extreme data
points vary depending on software used. You may
use your own symbols if you are constructing a box
plot by hand.

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 Detecting Outliers
Box Plots: Observations falling between the
inner and outer fences are deemed suspect
outliers. Observations falling beyond the
outer fence are deemed highly suspect
outliers.

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 R&D Data Example

Largest
measurement
inside the
inner
fence:13.2

Smallest
measurement
inside the
inner fence:
5.2
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Aids to the Interpretation of Box Plots
1. The line (median) inside the box represents the center of the distribution
of data.
2. Examine the length of the box. The IQR is a measure of the sample’s
variability and is especially useful for the comparison of two samples.
3. Visually compare the lengths of the whiskers. If one is clearly longer, the
distribution of the data is probably skewed in the direction of the longer
whisker.
4. Analyze any measurements that lie beyond the fences. Fewer than 5%
should fall beyond the inner fences, even for very skewed distributions.
Measurements beyond the outer fences are probably outliers, with one
of the following explanations:
1. The measurement is incorrect.
2. The measurement belongs to a population different from the population that the rest
of the sample was drawn from
3. The measurement is correct and from the same population as the rest.
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 Shape & Box Plot

Left-Skewed Symmetric Right-Skewed

Q 1 Median Q3 Q1 Median Q 3 Q 1 Median Q 3

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 Example 7- Interpreting a Box Plot

* * *

0 2 4 6 8 10 12 14 16

Consider the horizontal box plot shown above.

a) What is the median of the data set (approximately)?
b) What are the upper and lower quartiles of the data set (approximately)?
c) Is the data skewed to the left, skewed to the right, or symmetric?
d) What percentage of the measurements in the data set lie to the right of the
median? To the left of the upper quartile?
e) Identify any outliers in the data.

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 Detecting Outliers
z-scores: Observations with z-scores greater than
3 in absolute value are considered outliers.
(For some highly skewed data sets,
observations with z-scores greater than 2 in
absolute value may be outliers.)

Possible Outliers Outliers

z>2 z >3

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 Example 8- Inference Using z-scores
At the U.S. Open Tennis Championship a statistician keeps track
of every serve that a player hits during the tournament. The
statistician reported that the mean serve speed of a particular
player was 102 miles per hour (mph) and the standard deviation
of the serve speeds was 14 mph. Using the z-score approach for
detecting outliers, which of the following serve speeds would
represent outliers in the distribution of the player’s serve speeds?

Speeds: 53 mph, 116 mph, and 130 mph.

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 Graphing Bivariate Relationships

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 Graphing Bivariate Relationships
• Describes a relationship between two
quantitative variables
• Plot the data in a scattergram (or scatterplot)
y y y

x x x
Positive Negative No
relationship relationship relationship
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 Scattergram Example
You’re a marketing analyst for Hasbro Toys. You gather the
following data. Draw a scattergram of the data.

Sales
Ad $ (x) Sales (Units) (y) 4
1 1
2 1 3
3 2 2
4 2 1
5 4 0
0 1 2 3 4 5
Advertising

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 Time Series Plot
• Used to graphically display data produced
over time
• Shows trends and changes in the data over
time
• Time recorded on the horizontal axis
• Measurements recorded on the vertical axis
• Points connected by straight lines

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 Time Series Plot Example
• The following data shows the average retail price of
regular gasoline in New York City for 8 weeks in 2006.
• Draw a time series plot for this data. Average
Date Price
2.35
Oct 16, 2006 $2.219
2.3
Oct 23, 2006 $2.173
2.25
Oct 30, 2006 $2.177
2.2
Nov 6, 2006 $2.158
2.15
Nov 13, 2006 $2.185
2.1

Nov 20, 2006 $2.208

2.05
10/16 10/23 10/30 11/6 11/13 11/20 11/27 12/4
Nov 27, 2006 $2.236
Dec 4, 2006 $2.298
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 Distorting the Truth with Descriptive Statistics

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 Errors in Presenting the Data
1. Use area to equate to value
2. No relative basis in comparing data batches
3. Compress the vertical axis
4. No zero point on the vertical axis
5. Gap in the vertical axis
6. Use of misleading wording
7. Knowing central tendency without knowing
variability
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 Reader Equates Area to Value

Bad Presentation Good Presentation

Minimum Wage Minimum Wage
1960: $1.00 $
4
1970: $1.60
2
1980: $3.10
0
1990: $3.80 1960 1970 1980 1990

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 No Relative Basis

Bad Presentation Good Presentation

A’s by Class A’s by Class
Freq. %
300 30%
200 20%
100 10%
0 0%
FR SO JR SR FR SO JR SR

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 Compressing Vertical Axis

Bad Presentation Good Presentation

Quarterly Sales Quarterly Sales
$ $
200 50

100 25

0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

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 No Zero Point on Vertical Axis

Bad Presentation Good Presentation

Monthly Sales Monthly Sales
$ $
45 60
42 40
39 20
36 0
J M M J S N J M M J S N

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 Changing the Word
Changing the title of the graph can influence the reader.

We’re not doing so well. Still in prime years!

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 Knowing only Central Tendency

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 Key Ideas
Describing Qualitative Data

1. Identify category classes

2. Determine class frequencies
3. Class relative frequency = (class freq)/n
4. Graph relative frequencies

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 Key Ideas
Graphing Quantitative Data
1. Identify class intervals
2. Determine class interval frequencies
3. Class relative frequency =
(class interval frequencies)/n
4. Graph class interval relative frequencies

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 Key Ideas
Numerical Description of Quantitative Date

Central Tendency
Mean
Median
Mode

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 Key Ideas
Numerical Description of Quantitative Date

Variation
Range
Variance
Standard Deviation
Interquartile range

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 Key Ideas
Numerical Description of Quantitative Date

Relative standing
Percentile score
z-score

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 Key Ideas
Interpreting the Standard Deviation

Interval Chebyshev’s Rule Empirical Rule

x±s - ≈ 68%
x ± 2s At least 3/4 ≈ 95%
x ± 3s At least 8/9 ≈ 99.7%

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 Key Ideas
Rules for Detecting Quantitative Outliers

Method Suspect Highly Suspect

Box plot: Values Values beyond
between inner outer fences
and outer
fences
|z| > 3
z-score 2 < |z| < 3
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