Essentials of Modern Business Statistics (7e)

Fundamental in Business Statistics

Descriptive Statistics:
TABULAR and
GRAPHICAL DISPLAYS
Part A

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 Essentials of Modern Business Statistics (7e)

Chapter 2, Part A -Descriptive Statistics:

Tabular and Graphical Displays
➢ Summarizing Data for a Categorical Variable
• Categorical data use labels or names to identify categories of
like items.
➢ Summarizing Data for a Quantitative Variable
• Quantitative data are numerical values that indicate how much
or how many.

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 Essentials of Modern Business Statistics (7e)

Summarizing Categorical Data

Relative Percent
Frequency
Frequency Frequency
Distribution
Distribution Distribution

Bar Chart Pie Chart

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 Essentials of Modern Business Statistics (7e)

Frequency Distribution
▪ A tabular summary of data showing the number (frequency) of
observations in each of several non-overlapping categories or
classes.
▪ The objective is to provide insights about the data that cannot be
quickly obtained by looking only at the original data.

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 Essentials of Modern Business Statistics (7e)

Frequency Distribution Example

▪ Soft drink purchasers were asked to select one among the five popular soft drinks:
Coca-cola, Diet Coke, Dr.Pepper, Pepsi and Sprite.
▪ Soft drink selected by a sample of 20 purchasers are:

Coca-Cola Pepsi Dr. Pepper

Diet Coke Dr. Pepper Dr. Pepper
Dr. Pepper Pepsi Pepsi
Pepsi Coca-Cola Diet Coke
Pepsi Diet Coke Dr. Pepper
Pepsi Pepsi Sprite
Pepsi Pepsi

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 Essentials of Modern Business Statistics (7e)

Frequency Distribution Example

Rating Frequency
Coca-Cola 2
Diet Coke 3
Dr. Pepper 5
Pepsi 9
Sprite 1
Total 20

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 Essentials of Modern Business Statistics (7e)

Using Excel’s COUNTIF Function

to Construct a Frequency Distribution
❑ Excel Formula worksheet
A B C D
1 Soft drink selected Soft drink Frequency
2 Coca-Cola Coca-Cola = COUNTIF(A$2:A$21,C2)
3 Diet coke Diet coke = COUNTIF(A$2:A$21,C3)
4 Dr. Pepper Dr. Pepper = COUNTIF(A$2:A$21,C4)
5 Pepsi Pepsi = COUNTIF(A$2:A$21,C5)
6 Pepsi Sprite = COUNTIF(A$2:A$21,C6)
7 Pepsi Total = SUM(D2:D6)
8 Pepsi

Note: Rows 9-21 are not shown.

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 Essentials of Modern Business Statistics (7e)

Using Excel’s COUNTIF Function

to Construct a Frequency Distribution
❑ Excel value worksheet
A B C D
1 Soft drink selected Soft drink Frequency
Coca-Cola Coca-Cola
2 2
3 Diet coke Diet coke 3
4 Dr. Pepper Dr. Pepper 5
5 Pepsi Pepsi 9
6 Pepsi Sprite 1
7 Pepsi Total 20
8 Pepsi

Note: Rows 9-21 are not shown.

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 Essentials of Modern Business Statistics (7e)

Relative Frequency Distribution

▪ The relative frequency of a class is the fraction or proportion of
the total number of data items belonging to a class.
Frequency of the class
Relative frequency of a class =
𝑛

▪ A relative frequency distribution is a tabular summary of a set

of data showing the relative frequency for each class.

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 Essentials of Modern Business Statistics (7e)

Percent Frequency Distribution

▪ The percent frequency of a class is the relative frequency
multiplied by 100.

▪ A percent frequency distribution is a tabular summary of a set

of data showing the percent frequency for each class.

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 Essentials of Modern Business Statistics (7e)

Relative Frequency and Percent Frequency Distributions Example

Rating Relative Percent

Frequency Frequency
Coca-Cola .10 10
Diet Coke .15 15
.10(100) = 10
Dr. Pepper .25 25
Pepsi .45 45
Sprite .05 5
Total 1.00 100
1/20 = 0.05

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 Essentials of Modern Business Statistics (7e)

Using Excel to Construct Relative Frequency and Percent

Frequency Distributions
❑ Excel Formula worksheet
C D E F
Relative Percent
1 Soft drink Frequency Frequency Frequency
2Coca-Cola = COUNTIF(A$2:A$21,C2) = D2/$D$7 = E2*100
3Diet coke = COUNTIF(A$2:A$21,C3) = D3/$D$7 = E3*100
4Dr. Pepper = COUNTIF(A$2:A$21,C4) = D4/$D$7 = E4*100
5Pepsi = COUNTIF(A$2:A$21,C5) = D5/$D$7 = E5*100
6Sprite = COUNTIF(A$2:A$21,C6) = D6/$D$7 = E6*100
7Total = SUM(D2:D6) = SUM(E2:E6) = SUM(F2:F6)
8

Note: Columns A-B and rows 9-21 and are not shown.

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 Essentials of Modern Business Statistics (7e)

Using Excel to Construct Relative Frequency and Percent Frequency

Distributions
❑ Excel value worksheet

C E F D
Relative Percent
1 Soft drink Frequency Frequency Frequency
2 Coca-Cola 2 0.1 10
3 Diet coke 3 0.15 15
4 Dr. Pepper 5 0.25 25
5 Pepsi 9 0.45 45
6 Sprite 1 0.05 5
7 Total 20 1.00 100
8

Note: Columns A-B and rows 9-21 and are not shown.
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 Essentials of Modern Business Statistics (7e)

Bar Chart
▪ A graphical display for depicting qualitative data.
▪ On one axis (usually the horizontal axis), we specify the labels that
are used for each of the classes.
▪ A frequency, relative frequency, or percent frequency scale can be
used for the other axis (usually the vertical axis).
▪ Using a bar of fixed width drawn above each class label, we extend
the height appropriately.
▪ The bars are separated to emphasize the fact that each class is
separate.

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 Essentials of Modern Business Statistics (7e)

Bar Chart
BAR CHART FOR PURCHASE OF SOFT DRINK
10
Softdrinks Frequency
9
Coca cola 2
8
Diet coke 3 7
Dr. Pepper 5 6

Frequency
Pepsi 9 5
Sprite 1 4
Total 20 3
2
1
0
COCA-COLA DIET COKE DR. PEPPER PEPSI SPRITE
Soft Drink

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 Essentials of Modern Business Statistics (7e)

Using Excel’s Recommended Charts Tool to Construct a

Bar Chart
➢ Step 1 - Select cells C1:D6
➢ Step 2 - Click Insert on the Ribbon
➢ Step 3 - In the Charts group, click Recommended Charts (a preview
showing of bar chart appears)
➢ Step 4 - Click OK (the bar chart will appear in a new worksheet)
…… editing options

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 Essentials of Modern Business Statistics (7e)

Using Excel’s Recommended Charts Tool to Construct a

Bar Chart
➢ Step 1 – Click the Chart Title and replace it with Bar chart of Soft
Drink Purchases
➢ Step 2 - Click the Chart Elements button
➢ Step 2 - When the list of chart elements appears: Click Axis Titles
➢ Step 3 - Click the Horizontal (Category) Axis Title and replace it
with Soft Drink
➢ Step 4 - Click the Vertical (Value) Axis Title and replace it with
Frequency

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 Essentials of Modern Business Statistics (7e)

Using Excel’s Recommended Charts Tool

to Construct a Bar Chart
Bar chart for Purchase of Soft Drink
50

45

40

35

Percent Frequency 30

25

20

15

10

0
Coca-Cola Diet Coke Dr. Pepper Pepsi Sprite
Softdrink

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 Essentials of Modern Business Statistics (7e)

Pareto Diagram
▪ In quality control, bar charts are used to identify the most
important causes of problems.
▪ When the bars are arranged in descending order of height from left
to right (with the most frequently occurring cause appearing first)
the bar chart is called a Pareto diagram.
▪ This diagram is named for its founder, Vilfredo Pareto, an Italian
economist.

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 Essentials of Modern Business Statistics (7e)

Pie Chart
▪ A commonly used graphical display for presenting relative frequency
and percent frequency distributions for categorical data.
▪ First draw a circle; then use the relative frequencies to subdivide
the circle into sectors that correspond to the relative frequency for
each class.
▪ Since there are 360 degrees in a circle, a class with a relative
frequency of .25 would consume .25(360) = 90 degrees of the circle.

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 Essentials of Modern Business Statistics (7e)

Pie Chart
Sprite Coca-Cola
5% 10%

Diet Coke
15%
Coca-Cola
Diet Coke
Dr. Pepper
Pepsi Pepsi
45%
Sprite

Dr. Pepper
25%

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 Essentials of Modern Business Statistics (7e)

Pie Chart Example

Inferences from the Pie Chart
✓ Almost one-half of the customers surveyed preferred Pepsi
(looking at the left side of the pie).
✓ The second preference is for Dr. Pepper with 25% of the
customers opting for it.
✓ Only 5% of the customers opted for Sprite.

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 Essentials of Modern Business Statistics (7e)

Using Excel’s Recommended Charts Tool

to Construct a Pie Chart
➢ To display a pie chart, click anywhere in the bar chart to display
three tabs (Analyze, Design, and Format) located on the ribbon
under the heading PivotChart Tools.

➢ Click the Design tab and choose the Change Chart Type option to
display the Change Chart Type dialog box.

➢ Click the Pie option and then OK.

© 2018 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 23
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Essentials of Modern Business Statistics (7e)

Using Excel’s Recommended Charts Tool

to Construct a Pie Chart

© 2018 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 24
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Essentials of Modern Business Statistics (7e)

Learning Exercise:
Summarize the following data
using the following:
Highschool College Highschool College
1. Frequency Distribution
College Elementary Highschool College
2. Relative Frequency Distribution
Elementary Post-graduate Highschool College
3. Percent Frequency
4. Bar Graph Post-graduate Elementary Highschool College

5. Pie Chart Elementary College Highschool College

Highschool College Elementary College
Give your analysis of the result for Highschool Post-graduate College Elementary
each.

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 Essentials of Modern Business Statistics (7e)

Summarizing Quantitative Data

Relative Frequency
Frequency
and Percent Dot Plot
Distribution
Distribution

Cumulative Stem and Leaf

Histogram
Distribution Display

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 Essentials of Modern Business Statistics (7e)

Frequency Distribution
Example
Sanderson and Clifford, a small public accounting firm wants to
determine time in days required to complete year end audits. It takes a
sample of 20 clients.

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 Essentials of Modern Business Statistics (7e)

Frequency Distribution
Example: Sanderson and Clifford

Year-end Audit Time (in Days)

12 14 19 18
15 15 18 17
20 27 22 23
22 21 33 28
14 18 16 13

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 Essentials of Modern Business Statistics (7e)

Frequency Distribution
The three steps necessary to define the classes for a frequency
distribution with quantitative data are:

➢ Step 1 - Determine the number of non-overlapping classes

➢ Step 2 - Determine the width of each class.

➢ Step 3 - Determine the class limits.

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 Essentials of Modern Business Statistics (7e)

Frequency Distribution
Guidelines for Determining the Number of Classes

▪ Use between 5 and 20 classes.

▪ Data sets with a larger number of elements usually require a larger

number of classes.

▪ Smaller data sets usually require fewer classes.

▪ The goal is to use enough classes to show the variation in the data,
but not so many classes that some contain only a few data items.

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 Essentials of Modern Business Statistics (7e)

Frequency Distribution
Guidelines for Determining the Width of Each Class

▪ Use classes of equal width.

Largest data value−Smallest data value
Approximate Class Width =
Number of classes

▪ Making the classes the same width reduces the chance of

inappropriate interpretations.

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 Essentials of Modern Business Statistics (7e)

Frequency Distribution
Note on Number of Classes and Class Width

▪ In practice, the number of classes and the appropriate class width

are determined by trial and error.
▪ Once a possible number of classes is chosen, the appropriate class
width is found.
▪ The process can be repeated for a different number of classes.
▪ Ultimately, the analyst uses judgment to determine the combination
of the number of classes and class width that provides the best
frequency distribution for summarizing the data.

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 Essentials of Modern Business Statistics (7e)

Frequency Distribution
Guidelines for Determining the Class Limits – cont.

▪ Class limits must be chosen so that each data item belongs to one
and only one class.
▪ The lower class limit identifies the smallest possible data value
assigned to the class.
▪ The upper class limit identifies the largest possible data value
assigned to the class.
▪ The appropriate values for the class limits depend on the level of
accuracy of the data.
▪ An open-end class requires only a lower class limit or an upper class
limit.

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 Essentials of Modern Business Statistics (7e)

Frequency Distribution
Class Midpoint

▪ In some cases, we want to know the midpoints of the classes in a

frequency distribution for quantitative data.

▪ The class midpoint is the value halfway between the lower and
upper class limits.

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 Essentials of Modern Business Statistics (7e)

Frequency Distribution
Example: Sanderson and Clifford
▪ If we choose five classes:
▪ Approximate Class Width = (33 - 12)/5 = 4.2  4
Time in days Frequency
10-14 4
15-19 8
20-24 5
25-29 2
30-34 1
Total 20

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 Essentials of Modern Business Statistics (7e)

Using Excel’s PivotTable

to Construct a Frequency Distribution
➢ Step 1 – Select any cell in the data set

➢ Step 2 – Click Insert on the Ribbon

➢ Step 3 – In the Tables group click Pivot Table

➢ Step 4 - When the Create PivotTable dialog box appears: Click

(a PivotTable and PivotTable Fields dialog box will appear in a
new worksheet)

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 Essentials of Modern Business Statistics (7e)

Using Excel’s PivotTable

to Construct a Frequency Distribution
➢ Step 5 - In the PivotTable Fields dialog box:
Drag Audit time to the Rows area
Drag Audit time to the Values area

➢ Step 6 - Click on Sum of Audit time in the Values area

➢ Step 7 - Click Value Field Settings from the list of options
➢ Step 8 - When the Value Field Settings dialog box appears: Under
Summarize value field by, choose Count Click OK

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 Essentials of Modern Business Statistics (7e)

Using Excel’s PivotTable

to Construct a Frequency Distribution
To construct the frequency distribution, we must group the rows containing audit
time.

➢ Step 1 - Right click any cell in the PivotTable report

containing a an audit time.

➢ Step 2 - Choose Group from the list of options that appears

➢ Step 3 - When the Grouping dialog box appears:

✓ Enter 10 in the Starting at box
✓Enter 34 in the Ending at box
✓Enter 5 in the By box
✓Click OK

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 Essentials of Modern Business Statistics (7e)

Using Excel’s Pivot table to construct

a frequency distribution

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otherwise on a password-protected website or school-approved learning management system for classroom use.
 Essentials of Modern Business Statistics (7e)

Relative Frequency and Percent Frequency Distributions

Example: Sanderson and Clifford

Audit time Relative Frequency Percent Frequency

(in days)
10 – 14 .20 (4/20) 20 (0.2 * 100)
15 – 19 .40 40
20 – 25 .25 25
25 – 29 .10 10
30 – 34 .05 5
Total 1.00 100

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 Essentials of Modern Business Statistics (7e)

Relative Frequency and Percent Frequency Distributions

Example: Sanderson and Clifford

Insights obtained from the Percent Frequency Distribution:

✓40% of the audits required from 15 to 19 days.

✓Another 25% of the audits required 20 to 25 days.

✓Only 5% of the audits required more than 30 days.

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 Essentials of Modern Business Statistics (7e)

Dot Plot
▪ One of the simplest graphical summaries of data is a dot plot.

▪ A horizontal axis shows the range of data values.

▪ Then each data value is represented by a dot placed above the axis.

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 Essentials of Modern Business Statistics (7e)

Dot Plot
Example: Sanderson and Clifford

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otherwise on a password-protected website or school-approved learning management system for classroom use.
 Essentials of Modern Business Statistics (7e)

Histogram
▪ Another common graphical display of quantitative data is a
histogram.
▪ The variable of interest is placed on the horizontal axis.
▪ A rectangle is drawn above each class interval with its height
corresponding to the interval’s frequency, relative frequency, or
percent frequency.
▪ Unlike a bar graph, a histogram has no natural separation between
rectangles of adjacent classes.

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 Essentials of Modern Business Statistics (7e)

Histogram
Example: Sanderson and Clifford

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otherwise on a password-protected website or school-approved learning management system for classroom use.
45
 Essentials of Modern Business Statistics (7e)

Using Excel’s Recommended Charts Tool

to Construct a Histogram
➢ Step 1 - Select any cell in the PivotTable report

➢ Step 2 - Click Insert on the Ribbon

➢ Step 3 - In the Charts group, click Recommended Charts

➢ Step 4 - Click OK

… editing options

© 2018 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or 46
otherwise on a password-protected website or school-approved learning management system for classroom use.
 Essentials of Modern Business Statistics (7e)

Using Excel’s Recommended Charts Tool

to Construct a Histogram
➢ Step 1 – Right-click any bar in the chart and choose
Format Data Series from the list of options
➢ Step 2 - When the Format Data Series dialog box appears:
Go to the Series Options section
Set the Gap Width to 0
Click the Close button at the top right
➢ Step 3 - Click the Chart Title and replace it with Audit time data

➢ Step 4 - Click the Chart Elements button (in top right corner of the chart)

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otherwise on a password-protected website or school-approved learning management system for classroom use.
 Essentials of Modern Business Statistics (7e)

Using Excel’s Recommended Charts Tool

to Construct a Histogram
➢ Step 5 – When the list of chart elements appears:
Click Axis Titles
Click Legend (to remove check in Legend box)
➢ Step 6 - Click the Horizontal (Category) Axis Title and
replace it with Audit time (days)
Click the Close button at the top right
➢ Step 7 - Click the Vertical (Value) Axis Title and replace
it with Frequency

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otherwise on a password-protected website or school-approved learning management system for classroom use.
 Essentials of Modern Business Statistics (7e)

Using Excel’s Recommended Charts Tool

to Construct a Histogram
Example

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 Essentials of Modern Business Statistics (7e)

Histograms Showing Skewness

❑ Symmetric
▪ Left tail is the mirror image of the right tail
▪ Example: Heights of People

Relative Frequency

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 Essentials of Modern Business Statistics (7e)

Histograms Showing Skewness

❑ Moderately Skewed Left
▪ A longer tail to the left
▪ Example: Exam Scores

Relative Frequency

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 Essentials of Modern Business Statistics (7e)

Histograms Showing Skewness

❑ Moderately Right Skewed
▪ A Longer tail to the right
▪ Example: Housing Values

Relative Frequency

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 Essentials of Modern Business Statistics (7e)

Histograms Showing Skewness

❑ Highly Skewed Right
▪ A very long tail to the right
▪ Example: Executive Salaries

Relative Frequency

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 Essentials of Modern Business Statistics (7e)

Cumulative Distributions
▪ Cumulative frequency distribution - shows the number of items with
values less than or equal to the upper limit of each class.

▪ Cumulative relative frequency distribution – shows the proportion

of items with values less than or equal to the upper limit of each
class.

▪ Cumulative percent frequency distribution – shows the percentage

of items with values less than or equal to the upper limit of each
class.

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 Essentials of Modern Business Statistics (7e)

Cumulative Distributions
▪ The last entry in a cumulative frequency distribution always equals
the total number of observations.

▪ The last entry in a cumulative relative frequency distribution always

equals 1.00.

▪ The last entry in a cumulative percent frequency distribution always

equals 100.

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 Essentials of Modern Business Statistics (7e)

Cumulative Distributions
Example: Sanderson and Cliffords

Audit time (Days) Cumulative Cumulative Cumulative

Frequency Relative Frequency Percent Frequency
≤ 14 4 .20 20
≤ 19 12 .60 60
≤ 24 17 .85 85
≤ 29 19 .95 95
≤ 34 20 1.00 100

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 Essentials of Modern Business Statistics (7e)

Stem-and-Leaf Display
▪ Shows both the rank order and shape of the distribution of the
data.
▪ It is similar to a histogram on its side, but it has the advantage of
showing the actual data values.
▪ The first digits of each data item are arranged to the left of a vertical
line.
▪ To the right of the vertical line we record the last digit for each item
in rank order.
▪ Each line (row) in the display is referred to as a stem.
▪ Each digit on a stem is a leaf.
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 Essentials of Modern Business Statistics (7e)

Stem-and-Leaf Display
Example
The number of questions answered correctly on an aptitude test by 50
students analysed with the help of a Stem – and – leaf display here.
The relevant data is given in the following table.

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 Essentials of Modern Business Statistics (7e)

Stem-and-Leaf Display
Number of questions answered correctly by 50 students

112 73 126 82 92 115 95 84 68 100

72 92 128 104 108 76 141 119 98 85
69 76 118 132 96 91 81 113 115 94
97 86 127 134 100 102 80 98 106 106
107 73 124 83 92 81 106 75 95 119

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 Essentials of Modern Business Statistics (7e)

Stem-and-Leaf Display
6 9 8
7 2 3 6 3 6 5
8 6 2 3 1 1 0 4 5
9 7 2 2 6 2 1 5 8 8 5 4
10 7 4 8 0 2 6 6 0 6
11 2 8 5 9 3 5 9
12 6 8 7 4
13 2 4
14 1

Stem Leaf

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 Essentials of Modern Business Statistics (7e)

Stretched Stem-and-Leaf Display

▪ If we believe the original stem-and-leaf display has condensed the
data too much, we can stretch the display vertically by using two
stems for each leading digit(s).

▪ Whenever a stem value is stated twice, the first value corresponds

to leaf values of 0 - 4, and the second value corresponds to leaf
values of 5 - 9.

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 Essentials of Modern Business Statistics (7e)

Stretched Stem-and-Leaf Display

6 8 9
7 2 3 3
7 5 6 6
8 0 1 1 2 3 4
8 5 6
9 1 2 2 2 4
9 5 5 6 7 8 8
10 0 0 2 4
10 6 6 6 7 8
11 2 3
11 5 5 8 9 9
12 4
12 6 7 8
13 2 4
14 1

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 Essentials of Modern Business Statistics (7e)

Stem-and-Leaf Display
Leaf Units
▪ A single digit is used to define each leaf.

▪ In the preceding example, the leaf unit was 1.

▪ Leaf units may be 100, 10, 1, 0.1, and so on.

▪ Where the leaf unit is not shown, it is assumed to equal 1.

▪ The leaf unit indicates how to multiply the stem-and-leaf numbers in

order to approximate the original data.

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 Essentials of Modern Business Statistics (7e)

Stem-and-Leaf Display
Example: Leaf Unit = 0.1
If we have data with values such as
8.6 11.7 9.4 9.1 10.2 11.0 8.8
Leaf Unit = 0.1
8 6 8
9 1 4
10 2
11 0 7

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 Essentials of Modern Business Statistics (7e)

Stem-and-Leaf Display
Example: Leaf Unit = 10
If we have data with values such as
1806 1717 1974 1791 1682 1910 1838

Leaf Unit = 10
16 8
17 1 9
18 0 3
19 1 7

The 82 in 1682 is rounded down to 80 and is represented as an 8.

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otherwise on a password-protected website or school-approved learning management system for classroom use.