Statistical Analysis with

Software Application
ITC 112

Chapter 2

Organizing and Visualizing Data

 Learning Objectives

In this chapter you learn:

 The sources of data used in business
 To construct tables and charts for numerical
data
 To construct tables and charts for categorical
data
 The principles of properly presenting graphs
 A Step by Step Process For Examining &
Concluding From Data Is Helpful
In this book we will use DCOVA

 Define the variables for which you want to reach

conclusions
 Collect the data from appropriate sources
 Organize the data collected by developing tables
 Visualize the data by developing charts
 Analyze the data by examining the appropriate
tables and charts (and in later chapters by using
other statistical methods) to reach conclusions
 Why Collect Data?
DCOVA
 A marketing research analyst needs to assess the effectiveness
of a new television advertisement.

 A pharmaceutical manufacturer needs to determine whether a

new drug is more effective than those currently in use.

 An operations manager wants to monitor a manufacturing

process to find out whether the quality of the product being
manufactured is conforming to company standards.

 An auditor wants to review the financial transactions of a

company in order to determine whether the company is in
compliance with generally accepted accounting principles.
 Sources of Data
DCOVA
 Primary Sources: The data collector is the one using the data
for analysis
 Data from a political survey
 Data collected from an experiment
 Observed data
 Secondary Sources: The person performing data analysis is
not the data collector
 Analyzing census data
 Examining data from print journals or data published on the internet.
 Sources of data fall into four
categories
DCOVA
 Data distributed by an organization or an
individual

 A designed experiment

 A survey

 An observational study
 Examples Of Data Distributed
By Organizations or Individuals
DCOVA
 Financial data on a company provided by
investment services

 Industry or market data from market research

firms and trade associations

 Stock prices, weather conditions, and sports

statistics in daily newspapers
 Examples of Data From
A Designed Experiment
DCOVA
 Consumer testing of different versions of a
product to help determine which product should
be pursued further

 Material testing to determine which supplier’s

material should be used in a product

 Market testing on alternative product

promotions to determine which promotion to
use more broadly
 Examples of Survey Data
DCOVA
 Political polls of registered voters during political
campaigns

 People being surveyed to determine their

satisfaction with a recent product or service
experience
 Examples of Data From
Observational Studies
DCOVA
 Market researchers utilizing focus groups to
elicit unstructured responses to open-ended
questions

 Measuring the time it takes for customers to be

served in a fast food establishment

 Measuring the volume of traffic through an

intersection to determine if some form of
advertising at the intersection is justified
Categorical Data Are Organized By
Utilizing Tables
DCOVA
Categorical
Data

Tallying Data

One Two
Categorical Categorical
Variable Variables

Summary Contingency
Table Table
 Organizing Categorical Data:
Summary Table
DCOVA
 A summary table indicates the frequency, amount, or percentage of items
in a set of categories so that you can see differences between categories.

Summary Table From A Survey of 1000 Banking Customers

Banking Preference? Percent

ATM 16%
Automated or live telephone 2%
Drive-through service at branch 17%
In person at branch 41%
Internet 24%
 A Contingency Table Helps Organize
Two or More Categorical Variables
DCOVA
 Used to study patterns that may exist between
the responses of two or more categorical
variables

 Cross tabulates or tallies jointly the responses

of the categorical variables

 For two variables the tallies for one variable are

located in the rows and the tallies for the
second variable are located in the columns
 Contingency Table - Example
DCOVA
 A random sample of 400
invoices is drawn. Contingency Table Showing
Frequency of Invoices Categorized
 Each invoice is categorized By Size and The Presence Of Errors
as a small, medium, or large No
amount. Errors Errors Total

 Each invoice is also Small 170 20 190

Amount
examined to identify if there
Medium 100 40 140
are any errors. Amount
 These data are then Large 65 5 70
organized in the contingency Amount
table to the right. 335 65 400
Total
 Contingency Table Based On
Percentage of Overall Total
DCOVA
No
Errors Errors Total 42.50% = 170 / 400
Small 170 20 190 25.00% = 100 / 400
Amount 16.25% = 65 / 400
Medium 100 40 140
Amount No
Large 65 5 70 Errors Errors Total
Amount Small 42.50% 5.00% 47.50%
335 65 400 Amount
Total Medium 25.00% 10.00% 35.00%
Amount
83.75% of sampled invoices
Large 16.25% 1.25% 17.50%
have no errors and 47.50% Amount
of sampled invoices are for 83.75% 16.25% 100.0%
small amounts. Total
 Contingency Table Based On
Percentage of Row Totals
DCOVA
No
Errors Errors Total 89.47% = 170 / 190
Small 170 20 190 71.43% = 100 / 140
Amount 92.86% = 65 / 70
Medium 100 40 140
Amount No
Large 65 5 70 Errors Errors Total
Amount Small 89.47% 10.53% 100.0%
335 65 400 Amount
Total Medium 71.43% 28.57% 100.0%
Amount
Medium invoices have a larger
Large 92.86% 7.14% 100.0%
chance (28.57%) of having Amount
errors than small (10.53%) or 83.75% 16.25% 100.0%
large (7.14%) invoices. Total
 Contingency Table Based On
Percentage Of Column Total
DCOVA
No
Errors Errors Total 50.75% = 170 / 335
Small 170 20 190 30.77% = 20 / 65
Amount
Medium 100 40 140
Amount No
Large 65 5 70 Errors Errors Total
Amount Small 50.75% 30.77% 47.50%
335 65 400 Amount
Total Medium 29.85% 61.54% 35.00%
Amount
There is a 61.54% chance
Large 19.40% 7.69% 17.50%
that invoices with errors are Amount
of medium size. 100.0% 100.0% 100.0%
Total
 Tables Used For Organizing
Numerical Data
DCOVA
Numerical Data

Ordered Array Frequency Cumulative

Distributions Distributions
 Organizing Numerical Data:
Ordered Array
DCOVA
 An ordered array is a sequence of data, in rank order, from the
smallest value to the largest value.
 Shows range (minimum value to maximum value)
 May help identify outliers (unusual observations)

Age of Day Students

Surveyed
16 17 17 18 18 18
College
Students 19 19 20 20 21 22
22 25 27 32 38 42
Night Students
18 18 19 19 20 21
23 28 32 33 41 45
 Organizing Numerical Data:
Frequency Distribution
DCOVA
 The frequency distribution is a summary table in which the data are
arranged into numerically ordered classes.

 You must give attention to selecting the appropriate number of class

groupings for the table, determining a suitable width of a class grouping,
and establishing the boundaries of each class grouping to avoid
overlapping.

 The number of classes depends on the number of values in the data. With
a larger number of values, typically there are more classes. In general, a
frequency distribution should have at least 5 but no more than 15 classes.

 To determine the width of a class interval, you divide the range (Highest
value–Lowest value) of the data by the number of class groupings desired.
 Organizing Numerical Data:
Frequency Distribution Example
DCOVA

Example: A manufacturer of insulation randomly selects 20

winter days and records the daily high temperature

24, 35, 17, 21, 24, 37, 26, 46, 58, 30, 32, 13, 12, 38, 41, 43, 44, 27, 53, 27
 Organizing Numerical Data:
Frequency Distribution Example
DCOVA
 Sort raw data in ascending order:
12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58
 Find range: 58 - 12 = 46
 Select number of classes: 5 (usually between 5 and 15)
 Compute class interval (width): 10 (46/5 then round up)
 Determine class boundaries (limits):
 Class 1: 10 to less than 20
 Class 2: 20 to less than 30
 Class 3: 30 to less than 40
 Class 4: 40 to less than 50
 Class 5: 50 to less than 60
 Compute class midpoints: 15, 25, 35, 45, 55
 Count observations & assign to classes
 Organizing Numerical Data: Frequency
Distribution Example
DCOVA
Data in ordered array:
12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58

Class Midpoints Frequency

10 but less than 20 15 3

20 but less than 30 25 6
30 but less than 40 35 5
40 but less than 50 45 4
50 but less than 60 55 2
Total 20
 Organizing Numerical Data: Relative &
Percent Frequency Distribution Example
DCOVA
Data in ordered array:
12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58

Relative
Class Frequency Percentage
Frequency
10 but less than 20 3 .15 15
20 but less than 30 6 .30 30
30 but less than 40 5 .25 25
40 but less than 50 4 .20 20
50 but less than 60 2 .10 10
Total 20 1.00 100
 Organizing Numerical Data: Cumulative
Frequency Distribution Example
DCOVA
Data in ordered array:
12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58

Cumulative Cumulative
Class Frequency Percentage
Frequency Percentage

10 but less than 20 3 15% 3 15%

20 but less than 30 6 30% 9 45%
30 but less than 40 5 25% 14 70%
40 but less than 50 4 20% 18 90%
50 but less than 60 2 10% 20 100%
Total 20 100 20 100%
Why Use a Frequency Distribution?
DCOVA

 It condenses the raw data into a more

useful form
 It allows for a quick visual interpretation of
the data
 It enables the determination of the major
characteristics of the data set including
where the data are concentrated /
clustered
 Frequency Distributions:
Some Tips
DCOVA
 Different class boundaries may provide different pictures for
the same data (especially for smaller data sets)

 Shifts in data concentration may show up when different

class boundaries are chosen

 As the size of the data set increases, the impact of

alterations in the selection of class boundaries is greatly
reduced

 When comparing two or more groups with different sample

sizes, you must use either a relative frequency or a
percentage distribution
 Visualizing Categorical Data
Through Graphical Displays
DCOVA
Categorical
Data
Visualizing Data

Summary Contingency
Table For One Table For Two
Variable Variables

Bar Pareto Side-By-Side

Chart Chart Bar Chart
Pie Chart
 Visualizing Categorical Data:
The Bar Chart
DCOVA
 In a bar chart, a bar shows each category, the length of which
represents the amount, frequency or percentage of values falling into
a category which come from the summary table of the variable.

Banking Preference

Banking Preference? % Internet

ATM 16%
In person at branch
Automated or live 2%
telephone
Drive-through service at 17%
Drive-through service at branch
branch
In person at branch 41% Automated or live telephone
Internet 24%
ATM

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

 Visualizing Categorical Data:
The Pie Chart
DCOVA
 The pie chart is a circle broken up into slices that represent categories.
The size of each slice of the pie varies according to the percentage in
each category.
Banking Preference

Banking Preference? %
16% ATM
ATM 16% 24%
Automated or live 2% 2% Automated or live
telephone telephone
Drive-through service at
Drive-through service at 17%
17% branch
branch
In person at branch
In person at branch 41%
Internet 24% Internet
41%
 Visualizing Categorical Data:
The Pareto Chart
DCOVA
 Used to portray categorical data (nominal scale)
 A vertical bar chart, where categories are
shown in descending order of frequency
 A cumulative polygon is shown in the same
graph
 Used to separate the “vital few” from the “trivial
many”
 Visualizing Categorical Data:
The Pareto Chart (con’t)
DCOVA
Pareto Chart For Banking Preference

100% 100%
% in each category

80% 80%

Cumulative %
(line graph)
(bar graph)

60% 60%

40% 40%

20% 20%

0% 0%
In person Internet Drive- ATM Automated
at branch through or live
service at telephone
branch
 Visualizing Categorical Data:
Side-By-Side Bar Charts DCOVA
 The side by side bar chart represents the data from a contingency table.

No
Errors Errors Total
Invoice Size Split Out By Errors
Small 50.75% 30.77% 47.50% & No Errors
Amount
Medium 29.85% 61.54% 35.00% Errors

Amount
Large 19.40% 7.69% 17.50% No Errors

Amount
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%
100.0% 100.0% 100.0% Large Medium Small
Total

Invoices with errors are much more likely to be of

medium size (61.54% vs 30.77% and 7.69%)
 Visualizing Numerical Data
By Using Graphical Displays
DCOVA
Numerical Data

Frequency Distributions
Ordered Array and
Cumulative Distributions

Stem-and-Leaf
Histogram Polygon Ogive
Display
 Stem-and-Leaf Display
DCOVA

 A simple way to see how the data are distributed

and where concentrations of data exist

METHOD: Separate the sorted data series

into leading digits (the stems) and
the trailing digits (the leaves)
 Organizing Numerical Data:
Stem and Leaf Display
DCOVA
 A stem-and-leaf display organizes data into groups (called
stems) so that the values within each group (the leaves)
branch out to the right on each row.
Age of College Students

Age of Day Students Day Students Night Students

Surveyed
16 17 17 18 18 18 Stem Leaf
College Stem Leaf
Students 19 19 20 20 21 22
1 67788899 1 8899
22 25 27 32 38 42
Night Students 2 0012257 2 0138
18 18 19 19 20 21
3 28 3 23
23 28 32 33 41 45
4 2
4 15
 Visualizing Numerical Data:
The Histogram
DCOVA

 A vertical bar chart of the data in a frequency distribution is

called a histogram.

 In a histogram there are no gaps between adjacent bars.

 The class boundaries (or class midpoints) are shown on the

horizontal axis.

 The vertical axis is either frequency, relative frequency, or

percentage.

 The height of the bars represent the frequency, relative

frequency, or percentage.
 Visualizing Numerical Data:
The Histogram
DCOVA
Relative
Class Frequency
Frequency
Percentage

10 but less than 20 3 .15 15

20 but less than 30 6 .30 30
30 but less than 40 5 .25 25
40 but less than 50 4 .20 20 8
50 but less than 60 2 .10 10 Histogram: Age Of Students
Total 20 1.00 100
6

Frequency
4
(In a percentage
histogram the vertical
axis would be defined to 2
show the percentage of
observations per class)
0
5 15 25 35 45 55 More
 Visualizing Numerical Data:
The Polygon
DCOVA

 A percentage polygon is formed by having the midpoint of

each class represent the data in that class and then connecting
the sequence of midpoints at their respective class
percentages.

 The cumulative percentage polygon, or ogive, displays the

variable of interest along the X axis, and the cumulative
percentages along the Y axis.

 Useful when there are two or more groups to compare.

 Visualizing Numerical Data:
The Frequency Polygon DCOVA
Class
Class Midpoint Frequency
10 but less than 20 15 3
20 but less than 30 25 6
30 but less than 40 35 5 Frequency Polygon: Age Of Students
40 but less than 50 45 4
50 but less than 60 55 2
7
6
Frequency

5
4
3
2
(In a percentage 1
polygon the vertical axis 0
would be defined to 5 15 25 35 45 55 65
show the percentage of
Class Midpoints
observations per class)
 Visualizing Numerical Data:
The Ogive (Cumulative % Polygon)
DCOVA
Lower % less
class than lower
Class boundary boundary

10 but less than 20 10 0

20 but less than 30 20 15
30 but less than 40 30 45
40 but less than 50 40 70
50 but less than 60 50 90 Ogive: Age Of Students

Cumulative Percentage
60 but less than 70 60 100
100
80
60
40
(In an ogive the percentage 20
of the observations less 0
than each lower class
boundary are plotted versus 10 20 30 40 50 60
the lower class boundaries. Lower Class Boundary
 Visualizing Two Numerical
Variables: The Scatter Plot
DCOVA
 Scatter plots are used for numerical data consisting of paired
observations taken from two numerical variables

 One variable is measured on the vertical axis and the other

variable is measured on the horizontal axis

 Scatter plots are used to examine possible relationships

between two numerical variables
 Scatter Plot Example
DCOVA

Volume Cost per

per day day Cost per Day vs. Production Volume
23 125
250
26 140
200
Cost per Day

29 146
150
33 160
100
38 167
50
42 170
0
50 188
20 30 40 50 60 70
55 195
Volume per Day
60 200
 Visualizing Two Numerical
Variables: The Time-Series Plot
DCOVA
 Time-series plots are used to study patterns in the values of a
numeric variable over time.

 The numeric variable is measured on the vertical axis and the

time period is measured on the horizontal axis.
 Time Series Plot Example
DCOVA

Number of
Year Franchises Number of Franchises, 1996-2004
120
1996 43
100
1997 54 Franchises
Number of

80
1998 60 60
1999 73 40

2000 82 20
0
2001 95
1994 1996 1998 2000 2002 2004 2006
2002 107 Year
2003 99
2004 95
 Exploring Multidimensional Data
DCOVA
 Can be used to discover possible patterns and
relationships.

 Simple applications used to create summary or

contingency tables

 Can also be used to change and / or add variables to a

table

 All of the examples that follow can be created using

Sections EG2.3 and EG2.7 or MG2.3 and MG2.7
 Pivot Table Version of
Contingency Table For Bond Data
DCOVA
First Six Data Points In The Bond Data Set
Fund Expense Return 3-Year 5-Year
Number Type Assets Fees Ratio 2009 Return Return Risk
FN-1 Intermediate Government 7268.1No 0.45 6.9 6.9 5.5Below average
FN-2 Intermediate Government 475.1No 0.50 9.8 7.5 6.1Below average
FN-3 Intermediate Government 193.0No 0.71 6.3 7.0 5.6Average
FN-4 Intermediate Government 18603.5No 0.13 5.4 6.6 5.5Average
FN-5 Intermediate Government 142.6No 0.60 5.9 6.7 5.4Average
FN-6 Intermediate Government 1401.6No 0.54 5.7 6.4 6.2Average
 Can Easily Convert To An
Overall Percentages Table
DCOVA

Intermediate government funds are much more

likely to charge a fee.
 Can Easily Add Variables To
An Existing Table DCOVA

Is the pattern of risk the same for all combinations of

fund type and fee charge?
 Can Easily Change The
Statistic Displayed DCOVA

This table computes the sum of a numerical variable (Assets)

for each of the four groupings and divides by the overall sum
to get the percentages displayed.
 Tables Can Compute & Display
Other Descriptive Statistics
DCOVA

This table computes and displays averages of 3-year return

for each of the twelve groupings.
 Principles of Excellent Graphs
DCOVA

 The graph should not distort the data.

 The graph should not contain unnecessary adornments
(sometimes referred to as chart junk).
 The scale on the vertical axis should begin at zero.
 All axes should be properly labeled.
 The graph should contain a title.
 The simplest possible graph should be used for a given set of
data.
Graphical Errors: Chart Junk
DCOVA

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
 Graphical Errors:
No Relative Basis
DCOVA

Bad Presentation Good Presentation

A’s received by A’s received by
Freq. students. % students.
30%
300

200 20%

100 10%

0 0%
FR SO JR SR FR SO JR SR

FR = Freshmen, SO = Sophomore, JR = Junior, SR = Senior

 Graphical Errors:
Compressing the Vertical Axis
DCOVA

Bad Presentation  Good Presentation

Quarterly Sales Quarterly Sales
$ $
200 50

100 25

0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
 Graphical Errors: No Zero Point
on the Vertical Axis
DCOVA

Bad Presentation
 Good Presentations

Monthly Sales $ Monthly Sales

$ 45
45
42
42 39
39 36
36 0
J F M A M J J F M A M J

Graphing the first six months of sales

 Chapter Summary
In this chapter, we have

 Discussed sources of data used in business

 Organized categorical data using a summary table or a contingency table.
 Organized numerical data using an ordered array, a frequency distribution,
a relative frequency distribution, a percentage distribution, and a
cumulative percentage distribution.
 Visualized categorical data using the bar chart, pie chart, and Pareto chart.
 Visualized numerical data using the stem-and-leaf display, histogram,
percentage polygon, and ogive.
 Developed scatter plots and time-series graphs.
 Looked at examples of the use of Pivot Tables in Excel for
multidimensional data.
 Examined the do’s and don'ts of graphically displaying data.