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Using Graphical Representations

The document discusses the use of scatterplots and histograms in business analysis, highlighting their distinct purposes. Scatterplots are effective for analyzing relationships between two continuous variables, while histograms help in understanding the distribution of a single variable. Together, these tools enhance data interpretation and support informed decision-making.

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paul mulwa
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5 views3 pages

Using Graphical Representations

The document discusses the use of scatterplots and histograms in business analysis, highlighting their distinct purposes. Scatterplots are effective for analyzing relationships between two continuous variables, while histograms help in understanding the distribution of a single variable. Together, these tools enhance data interpretation and support informed decision-making.

Uploaded by

paul mulwa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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200 Mod12 Reflection

Student’s Name

Institution Affiliation

Instructor
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The decision as to whether to use a scatterplot or a histogram is based on the form of the

analysis and the results that are expected. Each graphical representation has its uses in business

since they are specific tools that help in various analytical activities that underpin business

decisions. A scatterplot can be used when two continuous variables are being analyzed to allow

the analyst to look at ‘trends’ which may exist. In scatter plots, two variables are compared by

graphing them concerning the axes of a Cartesian plane, where it is readily evident whether a

variable varies directly or inversely with another variable. For instance, organizational managers

may employ scatterplots to evaluate the relationship between advertising expenditure and sales

revenue. When data points are grouped in the direction of the ascending straight line, there is a

positive correlation, meaning that the first variable, advertising expenditure, may cause the

second variable, sales. This knowledge can contribute to understanding where to invest money

and how to create prediction models that direct funds.

A histogram is very helpful in analyzing the distribution of the single variable in the

observation to distinguish between outliers, skewness, and clumping, among others. A histogram

is a graphical representation of the frequency distribution of values in intervals that can show the

regions or areas with the most excellent data density. Histograms are typically utilized in quality

assurance measures in manufacturing sectors where product sizes or defects are observed. By

analyzing these distributions, firms can help control quality and implement modifications in

manufacturing processes to diminish variation. In conclusion, scatterplots and histograms have

different purposes or uses in business and finance. Scatter plots are very useful for comparing the

distribution of variables and the correlation or otherwise between them histograms are of

immense use for analyzing individual distribution of the variables. Together, they enable the

analysts to interpret the data better, the insights they produce, and the decisions they support.
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