BUSINESS STATISTICS

UNIT-1
FREQUENCY DISTRIBUTION
• FREQUENCY DISTRIBUTION
• Meaning:
• Frequency distribution is simply a table in which
the gathered data are grouped into classes and the
number of occurrences which fall in each class is
recorded.
• The left column (called classes or groups) includes
numerical intervals on a variable under study.
• The right column contains the list of frequencies,
or number of occurrences of each class/group.
• Intervals are normally of equal size covering the
sample observations range.
• Definition:
• A frequency distribution is a statistical table
which shows the set of all distinct values of
the variable arranged in order of magnitude,
either individually or in groups with their
corresponding frequencies. - Croxton and
Cowden.
• A Frequency Distribution Can Be Classified As
• a) Series of individual observation
• b) Discrete frequency distribution
• c) Continuous frequency distribution
• a) Series of individual observation:
• It is a series where the items are listed one
after the each observations.
• For statistical calculations, these observation
could be arranged is either ascending or
descending order. This is called as array.
Marks obtained
Ex:Roll No.
in Statistics Paper
1 83
2 80
3 75
4 92
5 65
• The above data list is a raw data.
• The presentation of data in above form
doesn’t reveal any information.
• If the data is arranged in ascending /
descending in the order of their
magnitude, which gives better
presentation then, it is called arraying of
data.
• b) Discrete (ungrouped) Frequency Distribution
• If the data series are presented in such away that
indicating its exact measurement of units, then it is
called as discrete frequency distribution.
• Discrete variable is one where the variables differ
from each other by definite amounts.
• Ex: Assume that a survey has been made to know
number of post-graduates in 10 families at
random, the resulted raw data could be as follows.
• 0, 1, 3, 1, 0, 2, 2, 2, 2, 4
• The number of post-graduates becomes variable
(x) and the frequency of occurrence (f) is in a
tabular from as follows;
No. of post graduates Frequency (f)
(x)
0 2
1 2
2 4
3 1
4 1
• c) Continuous frequency distribution (grouped
frequency distribution):
• Continuous data series is one where the
measurements are only approximations and
are expressed in class intervals within certain
limits.
• In continuous frequency distribution the class
interval is theoretically continuous from the
starting of the frequency distribution till the
end without break.
• According to Boddington ‘the variable which
can take very intermediate value between the
smallest and largest value in the distribution is
a continuous frequency distribution.
• Ex: Marks obtained by 20 students in a exam for 50
marks are as given below. Convert the data into
continuous distribution form
18 23 28 29 44 28 48 33 32 43
• By
24 grouping
29 32 the
39 marks
49 into 27class33 interval
42 28 of
29 10
following frequency distribution can be formed.

Marks No. of students

0-5 0
5 - 10 0
10 -15 0
15 - 20 1
20 - 25 2
25 - 30 7
30 - 35 4
35 - 40 1
40 - 45 3
45 – 50 2
• TECHNICAL TERMS USED IN FORMULATION
FREQUENCY DISTRIBUTION:
• a) Class limits:
• The class limits are the smallest and largest
values in the class.
• Ex: In this (0 – 10) class, the lowest value is
zero and highest value is 10.
• The two boundaries of the class are called
upper and lower limits of the class.
• Class limit is also called as class boundaries.
• b) Class intervals:
• The difference between upper and lower limit of class is
known as class interval.
• Ex: In the class 0 – 10, the class interval is (10 – 0) = 10.
• The formula to find class interval is gives on below
• i=L–S/R
• L = Largest value; S = Smallest value;
• R = the no. or classes
• Ex: If the marks of 60 students in a class varies between 40
and 100 and if we want to form 6 classes, the class interval
would be
• i=L – S / R; [ where L = 100; S = 40 ; K = 6 ]
• i=100 – 40 / 6
• i=10
• Therefore, class intervals would be 40 – 50, 50 – 60, 60 –
70, 70 – 80, 80 – 90 and 90 – 100.
• METHODS OF FORMING CLASS-INTERVAL:
• a) Exclusive method (overlapping)
• In this method, the upper limits of one class-
interval is the lower limit of next class. This
methods makes continuity of data. Ex:

Marks No. of students

20-30 5
30-40 15
40-50 25
A student whose mark is between 20 to 29.9 will
be included in the 20 -30 class. Better way of
expressing is

Marks No of students
20 to less than 30 5
(More than 20 but less than 30)
30 to less than 40 15
40 to less than 50 25
Total students 50
• b) Inclusive method (non-overlaping)

• A student whose mark is 29 is included in 20 –

29 class interval and a student whose mark in
39 is included in 30 – 39 class interval.
• CONVERSION OF INCLUSIVE SERIES TO
EXCLUSIVE SERIES:
• Step 1: Find the adjustment factor
• Adjustment factor = ½ X [ lower limit of
second class – Upper limit of first class ]
• Step 2: Subtract the adjustment factor
from the lower limit of second class and
add it to the upper limit of the first class
 Inclusive Form Exclusive Form

11 – 20 10.5 – 20.5

21 – 30 20.5 – 30.5

31 - 40 30.5 – 40.5

• Adjustment factor = ½ X [ lower limit of

second class – Upper limit of first class ]
• Adjustment factor = ½ X [ 21 - 20 ]
• Adjustment factor = ½ X [ 1 ]
• Adjustment factor = 0.5
• CONSTRUCTING A FREQUENCY DISTRIBUTION
• The following guidelines may be considered for the
construction of frequency distribution:
• The classes should be clearly defined and each
observations must belong to one and to only one of
the class interval.
• Interval classes must be inclusive and non-
overlapping.
• The number of classes should be neither too large
nor too small.
• Too small classes result greater interval width with
loss of accuracy.
• Too many class interval result is complexity.
• All interval should be of the same width. This
is preferred for easy computations.
• Open end classes should be avoided since
creates difficulty in analysis and
interpretation.
• Intervals would be continuous throughout the
distribution. This is important for continuous
distribution.
• The lower limits of the class intervals should
be simple multiples of the interval.
• CUMULATIVE FREQUENCY DISTRIBUTION
• The cumulative frequency simply means that summing up the
consecutive frequency.
• Cumulative frequency distribution indicating directly the
number of units that lie above or below the specified values of
the class intervals.
• When the interest of the investigator is on number of cases
below the specified value, then the specified value represents
the upper limit of the class interval.
• It is known as ‘less than’ cumulative frequency distribution.
• When the interest is lies in finding the number of cases above
specified value then this value is taken as lower limit of the
specified class interval.
• Then, it is known as ‘more than’ cumulative frequency
distribution.
• Cumulative Series are of two types. (
i) Less than series (ii) More than Series
• Suppose we are given the following discrete
series of marks obtained by 100 students.
With the help of this series we shall form the
“less than” and “More than” series.

Marks 30-40 40-50 50-60 60-70 70-80 80-90

Obtained
No. of 8 12 20 25 18 17
students
• Less than Cumulative Series: More than Cumulative Series:

Marks No of students   Marks Obtained No of students

Obtained

Less than 40 8   More than 40 100

(8)
Less than 50 20 ( = 8+12)   More than 50 92 (=100-8)
(12)
Less than 60 40 ( = 20+20)   More than 60 80 (=92-12)
(20)
Less than 70 65 ( = 40+25)   More than 70 60 (=80-20)
(25)
Less than 80 83 ( = 65+18)   More than 80 35 (=60-25)
(18)
Less than 90 100 ( = 83+17)   More than 90 17 (=35-18)
(17)