CB2200 Business Statistics

Topic 1
Introduction to Statistics
Tutorial Week3

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Concept Review
 Measures of Central Tendency: Mean, Median and
Mode

 Measures of Variation: Range, Interquartile Range,

Variance and Standard deviation

 Distribution Shape

 Five-numbers Summary and Boxplot

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Mean

 Sample mean
n

X
pronounced x-
bar i
X1  X 2    X n
X i 1

n n Sample
Size
 Population mean
N
Pronounced
miu X i
X1  X 2   X N
 i 1

N N Population
Size

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Median
 In an ordered array, the median is the “middle”
number (50% above, 50% below)
 If n or N is odd, the median is the middle number
𝑵 +𝟏
𝐼𝑓 𝑁 𝑖𝑠 𝑜𝑑𝑑 , 𝑡h𝑒𝑚𝑒𝑑𝑖𝑎𝑛 𝑖𝑠 𝑡h𝑒𝑛𝑢𝑚𝑏𝑒𝑟 𝑟𝑎𝑛𝑘𝑒𝑑 𝑖𝑛 𝑡h𝑒 𝑎𝑟𝑟𝑎𝑦
𝟐
 If n or N is even, the median is the average of the 2 middle
numbers

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Mode
 Value that occurs most often
 Not affected by extreme values (outliers)
 Used for both numerical and categorical data
 There may be no mode
 There may be several modes

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

No Mode
Modes =5, 9 and 12
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Comparison Table
Measures Variable Type Can be non- Can be more- Effect of
exist? than-one? Outliers

Mean Numerical No No Yes

Median Numerical No No No

Mode Numerical & Yes Yes No

Categorical

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Range
 Simplest measure of variation
 Difference between the largest and the smallest
values Range= 𝑋 Largest − 𝑋 Smallest
 Ignores the way in which data are distributed

7 8 9 10 11 12 7 8 9 10 11 12
Range = 12 - 7 = 5 Range = 12 - 7 = 5

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Quartiles

Calculating the quantile position for n values:

Q1 position: Q2 position: Q3 position:
r= r= r=

 If r is a whole number, it is the ranked position to use

 When r is not a whole number, the following linear interpolation
steps can be used to determine the quantile value
1. d = r – [r], where [r] is the integer part of r
2. Quantile value = X[r] + d*(X[r]+1 – X[r]), where X[r] is the value at the rank rth position

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Interquartile Range
Cont’d

 Interquartile range IQR = Q3 – Q1 and measures the spread in

the middle 50% of the data
25% 25% 25% 25%

Q1 Q2 Q3
Interquartile Range
 Interquartile range is also called the mid-spread because it covers the
middle 50% of the data
 Not influenced by outliers or extreme values
 Usually, values fall outside the range [Q1 - 1.5*IQR, Q3 + 1.5*IQR] are
considered as outliers

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Variance
 Most preferred measure of variation due to its
mathematical property
 It shows variation of each value from the mean
 Sample Variance 𝑛

∑ ( 𝑋𝑖 − 𝑋 )
¯ 2

2 𝑖=1
𝑆 =
 Population Variance
𝑛 −𝟏
𝑁

pronounced ∑ ( 𝑋 𝑖 − 𝜇) 2

sigma 𝜎 2= 𝑖=1
squared 𝑁
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Standard Deviation

 It is the square-root of variance.

 It has the same units as the original data

√
 Sample Standard Deviation 𝑛

∑ ( 𝑋𝑖− 𝑋 )
¯ 2

𝑖 =1
𝑆=
𝑛− 𝟏

√
 Population Standard Deviation 𝑁
pronounce
d sigma
∑ ( 𝑋 𝑖 − 𝜇) 2

𝑖 =1
𝜎=
𝑁

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Standard Deviation
Smaller standard deviation

Larger standard deviation

𝜇or 𝑋
 Smaller standard deviation means most values of X are closer
to its mean value. Larger standard deviation means the
values of X are more spread out

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 Distribution Shape
 Position of mean and median for unimodal
continuous distribution
Left-Skewed Symmetric Right-Skewed
Mean < Median Mean = Median Median < Mean

Skewness <0 0 >0

Statistic
If data are skewed, the median may be a more
appropriate measure of central tendency

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The Five Number Summary and
Boxplot
 The five numbers that help describe the center,
spread and shape of data are
Xsmallest -- Q1 -- Median -- Q3 -- Xlargest

 Boxplot
25% of data 25% 25% 25% of data
of data of data

Xsmallest Q1 Median Q3 Xlargest

or Q1 - 1.5 (IQR) or Q3 + 1.5 (IQR)

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 Distribution Shape and Boxplot
X smallest 𝑄1 𝑄2 𝑄 3 X largest
If A = B, then Symmetric
If A > B, then Left-Skewed
A B If A < B, then Right-
Skewed
If C = D, then Symmetric
If C > D, then Left-
C D Skewed If C < D, then
Right-Skewed
If E = F, then Symmetric
If E > F, then Left-Skewed
E F If E < F, then Right-
Skewed
 Look at all the three pairs of comparisons, go for the majority
Distribution Shape and Boxplot

Left-Skewed Symmetric Right-Skewed

Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3

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Quick Check
 Kahoot! (20s for each question)
Please Google Kahoot and Click the first link.

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Tutorial Question

 Topic 1
 Question 9 & 10.

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Formula Reference n N

X i
X  X 2   X n X i
X1  X 2    X N
Mean X i 1
 1  i 1

n n N N

Median th (odd) Average of th (even)

Range= 𝑋 Largest − 𝑋 Smallest

Quantile

If r is not an integer

Interquartile Range = Q3 – Q1

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Formula Reference

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Summary

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