HERCOR COLLEGE

Km. 1 Lawaan, Roxas City, Capiz 5800

ACADEMIC YEAR 2022-2023

Department: CBA Course Code: GEE 302

Name of Instructor: Mary U. Amante Schedule:
Course Descriptive Title: Business Statistics Semester: 1ST Semester

Name of Student: __________________________________ Year and Section: _____________________________

Student ID Number: ________________________________ Contact Number: _____________________________
Email Address: ____________________________________ Alternate Contact Number: _____________________
Basic Statistics (Measures of Variability)

Learning Objectives:

At the end of the module, the students should be able to:

 Find the range of ungrouped and grouped data
 Calculate the mean average deviation of ungrouped and grouped data
 Solve for the standard deviation and variance of ungrouped and grouped data

Measures of Variablity

Overview
• In statistics, our goal is to measure the amount of variability for a particular set of scores, a distribution.
• In simple terms, if the scores in a distribution are all the same, then there is no variability.
• If there are small differences between scores, then the variability is small, and if there is large differences between
scores, then the variability is large.
• Definition: VARIABILITY provides a quantitative measures of the degreeto which scores in a distribution are
spread out or clustered together.

• In general, a good measures of variability serves two purposes:

-Variability describes the distribution.
o Specifically, it tells whether the score are clustered together or are spread out over a large distance.
-Variability measures how well an individual score ( or group of scores) represents the entire distribution.
o This aspect of variability is ver important for inferential statistics where relatively small samples are used
to answer questions about populations.
 In this chapter, we consider three different measures of variability:
- Range
- Standaed Deviation
- Variation
 Of these three, the standard deviation (and the related measure of variance) isby far the most important

Range
The range of a set of data values is the difference between the greatest data value and the least data value.

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Range indicates statistical dispersion around the central tendency or the degree of spread in the data.
𝑅𝑎𝑛𝑔𝑒 𝑖𝑠 𝑠𝑒𝑛𝑠𝑖𝑡𝑖𝑣𝑒 𝑡𝑜 𝑒𝑥𝑡𝑟𝑒𝑚𝑒 𝑣𝑎𝑙𝑢𝑒𝑠.
Formula: 𝑅 = 𝐻𝑖𝑔ℎ𝑒𝑠𝑡 𝑣𝑎𝑙𝑢𝑒 − 𝐿𝑜𝑤𝑒𝑠𝑡 𝑣𝑎𝑙𝑢𝑒
𝑹 = 𝑯𝑽 − 𝑳𝑽

Example:
1. Find the range of the numbers of ounces dispensed by Machine 1 in the table.

Soda dispensed (ounces) 𝑅 = 𝐻𝑉 − 𝐿𝑉

Machine 1 𝑅 = 10.07 − 5.85
9.52 𝑹 = 𝟒. 𝟐𝟐 𝒐𝒖𝒏𝒄𝒆𝒔
6.41
10.07
5.85
8.15
The Standard Deviation
The range of a set of data is easy to compute, but it can be deceiving. The range is a measure that depends only on
the two values, and as such, it is very sensitive. A measure of dispersion that is less sensitive to extreme values is the
standard deviation.

Formula: Standard Deviation for sample Standard Deviation for population

∑(𝒙−𝒙)𝟐 Where: ∑(𝒙−𝒙)𝟐

𝒔=√ 𝜹=√
𝒏−𝟏 𝒏
x = individual values
x = mean
n = total number of Most statisticals applications involve a sample
values rather than a population.
s = standard deviation

Procedure for Computing a Standard Deviation

1. Determine the mean of the n numbers.
2. For each number, calculate the deviation (difference) between the number and the mean of the numbers.
3. Calculate the square of each deviation and find the sum of these squared deviations.
4. If the data is a population, then divide the sum by n. If the data is a sample, then divide the sum by n-1.
5. Find the square root of the quotient in step 4.

Example 1. The following numbers were obtained by sampling a population.

2, 4, 7, 12, 15
Find the standard deviation of the sample.
Solution: It is easy if you present your computation in a table.

x x-x x-x (x – x)2 (x – x)2 Solve for mean ( x )

2 2-8 -6 (-6)2 36 ∑𝑥 2 + 4 + 7 + 12 + 15 40
4 4-8 -4 (-4)2 16 𝑥= = =
𝑛 5 5
7 7-8 -1 (-1)2 1 𝑥=8
12 12-8 4 42 16
15 15-8 7 72 49
∑x= 40 ∑(x – x)2 = 118
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∑(x – x)2 = 36 + 16 + 1 + 16 + 49 =118 Example 2. A student has the following quiz scores: 5. 8,
16, 17, 18, 20. Find the standard deviation for this
Solve for standard deviation population of quiz scores.
∑(𝒙−𝒙)𝟐 118 118
𝒔=√ = √5−1 = √ =√29.5 = 𝟓. 𝟒𝟑 Solution:
𝒏−𝟏 4
Step 1: solve the mean
𝒔 = 𝟓. 𝟒𝟑 𝑎𝑛𝑠𝑤𝑒𝑟 5 + 8 + 16 + 17 + 18 + 20 84
𝑥= = = 14
6 6
𝒙 = 𝟏𝟒

Step 2: Find x – x and (x – x)2

x x–x (x – x)2 Step 3: Solve for standard deviation for population.

5 5 -14= -9 81
8 8 -14 = -6 36
∑ (𝒙 − 𝒙 )𝟐 𝟏𝟖𝟐
16 16 -14=2 4 𝜹=√ =√ = √𝟑𝟎. 𝟑𝟑 = 𝟓. 𝟓𝟏
𝒏 𝟔
17 17 -14 =3 9
18 18 -14 = 4 16
𝜹 = 𝟓. 𝟓𝟏 answer
20 20 -14 = 6 36
∑(𝑥 − 𝑥)2 = 182

Use of Standard Deviations

A consumer group has tested a sample of 8 size-D batteries from each of the three companies. The result
of the tests is shown in the following table. According to these tests, which company produces batteries for
which the values representing hours of constant use have the smallest standard deviation?
Company Hours of constant use per battery
EverSoBright 6.2, 6.4, 7.1, 5.9, 8.3, 5.3, 7.5, 9.3
Dependable 6.8, 6.2, 7.2, 5.9, 7.0, 7.4, 7.3, 8.2
Beacon 6.1, 6.6, 7.3, 5.7, 7.1, 7.6, 7.1, 8.5

Solve for the mean (x) first.

6.2+6.4+7.1+5.9+8.3+5.3+7.5+9.3 56 Beacon:
EverSoBright: 𝑥 = = =7
8 8 6.1 + 6.6 + 7.3 + 5.7 + 7.1 + 7.6 + 7.1 + 8.5
𝑥=
6.8+6.2+7.2+5.9+7.0+7.4+7.3+8.2 56 8
Dependable:𝑥 = = =7 56
8 8 𝑥= =7
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The mean for each sample of batteries is 7hours.
x x-x (x – x)2
The batteries from EverSoBright have a standard deviation of 6.2 6.2-7=-0.8 0.64
6.4 -0.6 0.36
∑(x – x)2 12.34
𝑠=√ =√ = √1.7629 = 1.328 7.1 0.1 0.01
𝑛−1 8−1
5.9 -1.1 1.21
8.3 1.3 1.69
𝒔𝑬 = 𝟏. 𝟑𝟐𝟖𝒉
5.3 -1.7 2.89
7.5 0.5 0.25
9.3 2.3 5.29
x x-x (x – x)2 ∑(x – x)2 = 12.34
6.8 6.8-7=-0.2 0.04 The batteries
6.2 -0.8 0.64 from Dependable have a standard deviation of
7.2 0.2 0.04
5.9 -1.1 1.21 ∑(𝑥−𝑥)2 3.62
s= √ = √8−1 = √0.5171 = 0.719
𝑛−1
7.0 0 0
7.4 0.4 0.16
𝒔𝑫 = 𝟎. 𝟕𝟏𝟗𝒉
7.3 0.3 0.09
8.2 1.2 1.44
∑(x – x)2 = 3.62
The batteries from Beacon have a standard deviation of
x x-x (x – x)2
6.1 6.1-7=-0.9 0.81 ∑(𝑥 − 𝑥)2 5.38
6.6 -0.4 0.16 𝑠𝐵 = √ =√ = √0.7686 = 0.877
𝑛−1 8−1
7.3 0.3 0.09
5.7 -1.3 1.69 𝒔𝑩 = 𝟎. 𝟖𝟕𝟕𝒉
7.1 0.1 0.01
7.6 0.6 0.36
7.1 0.1 0.01
8.5 1.5 2.25
∑(x – x)2 = 5.38

Basing on the results of the standard deviations (s), the batteries from Dependable have the smallest standard
deviation (s = 0.719h). According to these results, the Dependable company produces the most consistent
batteries concerning life expectancy under constant use.

Assignment:
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A consumer testing agency has tested the strengths of 3 brands of 8 − 𝑖𝑛𝑐ℎ rope. The results of the tests are
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shown in the following table. According to the sample test results, which company produces 8 − 𝑖𝑛𝑐ℎ rope for
which the breaking point has the smallest standard deviation?
Company 1
Breaking point of − 𝑖𝑛𝑐ℎ rope in pounds
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Trustworthy 122, 141, 151, 114, 108, 149, 125
Brand x 128, 127, 148, 164, 97, 109, 137
NeverSnap 112, 121, 138, 131, 134, 139, 135
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The Variance
A statistic known as the variance is also used as a measure of dispersion. The variance for a given set of
data is the square of the standard deviation of the data. The following chart shows the mathematical notations
that are used to denote standard deviations and variances.

Notations for Standard Deviation and Variance

𝜎 𝑖𝑠 𝑡ℎ𝑒 𝑠𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑑𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛 𝑜𝑓 𝑎 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛.
𝜎 2 𝑖𝑠 𝑡ℎ𝑒 𝑣𝑎𝑟𝑖𝑎𝑛𝑐𝑒 𝑜𝑓 𝑡ℎ𝑒 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛
𝑠 𝑖𝑠 𝑡ℎ𝑒 𝑠𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑑𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛 𝑜𝑓 𝑎 𝑠𝑎𝑚𝑝𝑙𝑒
𝑠 2 𝑖𝑠 𝑡ℎ𝑒 𝑣𝑎𝑟𝑖𝑎𝑛𝑐𝑒 𝑜𝑓 𝑎 𝑠𝑎𝑚𝑝𝑙𝑒

Example: The fuel efficiency, in miles per gallon, of 10 small utility trucks was measured. The results are
recorded in the table below.
Fuel Efficiency (mpg)
22 25 23 27 15 24 24 32 23 22 25 22
Find the mean, sample standard deviation, and variance of these data. Round to the nearest hundredth.
22+25+23+27+15+24+24+32+23+22+25+22 284
Solution: 𝑥 = 12
= 12
= 23.67
𝒙 = 𝟐𝟑. 𝟔𝟕 𝒎𝒑𝒈

x x-x (x-x)2
∑(𝑥−𝑥)2
𝑠=√ 22 22 – 23.67= -1.67 2.7889
𝑛−1

25 1.33 1.7689
168.6668
𝑠=√ 12−1 23 -0.67 0.4489
27 3.33 11.0889
𝑠 = √15.3333
15 -8.67 75.1689
𝒔 = 𝟑. 𝟗𝟐 24 0.33 0.1089
24 0.33 0.1089
32 8.33 69.3889
𝑠 2 = 3.922
23 -0.67 0.4489
𝒔𝟐 = 𝟏𝟓. 𝟑 22 -1.67 2.7889
25 1.33 1.7689
22 -1.67 2.7889
∑(x-x)2 = 168.6668
Assignment :
A survey of 10 fast-food restaurants noted that the number of calories in a mid-sized hamburger. The
results are given in the table below.
Calories in a mid-sized hamburger
514 507 502 498 496 506 458 478 463 514

Find the mean, standard deviation, and variance of these data. Round to the nearest hundredth.

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