Business Statistics:

A Decision-Making Approach
7th Edition

Chapter 2
Graphs, Charts, and Tables –
Describing Your Data

Chap 2-1
 Chapter Goals

After completing this chapter, you should be

able to:
 Construct a frequency distribution both manually and with
a computer
 Construct and interpret a histogram
 Create and interpret bar charts, pie charts, and stem-and-
leaf diagrams
 Present and interpret data in line charts and scatter
diagrams

Chap 2-2
 Chapter Focus
 First time trying practices using Excel
 Practices are simple….not strongly fun
 Try to be familiar with Excel
 Describe data using frequency distribution and
relative frequency distribution.
 Discrete
 Continuous
 Present data using a chart
 Universal and popular way: Histogram

Chap 2-3
 Variable (Data) Types
Variable
(Data)

Qualitative Quantitative
(Categorical) (Numerical)

1) Discrete 2) Continuous

Chap 2-4
Detail View
Data

Qualitative Quantitative
Data Data

Tabular Graphic Tabular Graphic

Methods Methods Methods Methods

1) Frequency Distr. Charts: 1) Frequency Distr. 1) Dot Plot

2) Relative/Percent 1) Column 2) Relative/Percent 2) Histogram
Frequency Distr. 2) Pie Frequency Distr. 3) Ogive
3) Crosstabulation 3) Cumulative 4) Stem & Leaf Display
Frequency Distr. 5) Scatter Diagram
4) Cumulative
Relative/Percent
Frequency Distr.
5) Crosstabulation

Chap 2-5
 Frequency Distribution (FD)
 It is a tabulation of the values.. Number of
Frequency
days read
 Each entry in the table contains
0 44
the frequency or count of the
1 24
occurrences of values within a
2 18
particular group or interval,
3 16
 and in this way the table 4 20
summarizes the distribution of 5 22
values in the sample.
6 26
7 30
Total 200

Chap 2-6
 Why Use FD?
 A frequency distribution is a way to
summarize data
 The distribution condenses the raw data
into a more useful form...
 and allows for a quick visual interpretation
of the data

Chap 2-7
 Frequency Distribution:
Discrete Data
 Discrete data: possible values are countable
Number of days
Example: An read
Frequency
advertiser asks 0 44
200 customers 1 24
how many days 2 18
per week they 3 16
read the daily 4 20
newspaper. 5 22
6 26
7 30
Total 200

Chap 2-8
 Relative Frequency
Relative Frequency: What proportion (%) is in each category?

Number of days Relative

Frequency
read Frequency
44
0 44 .22  .22
1 24 .12 200
2 18 .09
22% of the
3 16 .08 people in the
4 20 .10 sample report
that they read
5 22 .11 the newspaper
6 26 .13 0 days per week
7 30 .15
Total 200 1.00

Chap 2-9
 Practice
 Develop FD using Discreet Data
 Download the “SportShoes” Excel data file
from the class website
 Make sure to download and SAVE the data
file.
 See the note (ppt).

Chap 2-10
 Frequency Distribution:
Continuous Data
 Continuous Data: uncountable…..may take on any
value in some interval
Example: A manufacturer of insulation randomly selects
20 winter days and records the daily high temperature
 (Temperature is a continuous variable because it could
be measured to any degree of precision desired – 98.58697 F)

24, 35, 17, 21, 24, 37, 26, 46, 58, 30,
32, 13, 12, 38, 41, 43, 44, 27, 53, 27

Chap 2-11
 Grouping Data by Classes

Sort raw data from low to high (easy using Excel):

12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58
 Find range: 58 (Max) – 12 (Min) = 46 (use for class width)
 Determine number of classes:
 Rule of thumb: between 5 and 20
 Calculation of class: follow 2^k>= n (n=20)
 Two to the power of four and five (in Excel: 2^4=16 and 2^5=32).
Then, take 5.
 Thus, there should be 5 classes.

Chap 2-12
 Grouping Data by Classes
 Compute class width: 10 (46/5 = 9.2 then round off 10)
Largest Value - Smallest Value
W =
Number of Classes
 Determine intervals:10, 20, 30, 40, 50
 (Sometimes class midpoints are reported: 15, 25, 35, 45, 55 – if
calculation result is 13.5)
 Construct frequency distribution
 count number of values in each class

Chap 2-13
 Frequency Distribution
Data from low to high:
12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58

Frequency Distribution

Class Frequency Relative

0 or 12 is also OK Frequency
10 but under 19.99 3 .15
20 but under 29.99 6 .30
30 but under 39.99 5 .25
40 but under 49.99 4 .20
50 but under 59.99 2 .10
Total 20 1.00
Chap 2-14
 Histogram based on FD

Data in ordered array:

12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58

His togram
7 6
6 5
F req u en cy

5 4 No gaps
4 3 between
3 2 bars, since
2
continuous
1 0 0 data
0
0 5 10 15 20 25 30 36 40 45 50 55 60More
Class Midpoints
Class Endpoints
Chap 2-15
 Histogram

 The classes or intervals are shown on the

horizontal axis
 frequency is measured on the vertical axis
 Bars of the appropriate heights can be used
to represent the number of observations
within each class
 Such a graph is called a histogram

Chap 2-16
 How Many Class Intervals?

 Many (Narrow class intervals) 3.5

 may yield a very jagged distribution 3
2.5

with gaps from empty classes

Frequency
2
1.5
 Can give a poor indication of how 1

frequency varies across classes

0.5
0

4
8
12
16
20
24
28
32
36
40
44
48
52
56
60
More
 Few (Wide class intervals) Temperature

 may compress variation too much and 12

yield a blocky distribution 10

8

Frequency
 can obscure important patterns of 6

variation. 4

0
0 30 60 More
Temperature

(X axis labels are upper class endpoints)

Chap 2-17
 General Guidelines

 Number of Data Points Number of Classes

under 50 5- 7
50 – 100 6 - 10
100 – 250 7 - 12
over 250 10 - 20

Chap 2-18
 Practice
 Develop FD using continuous data
 Download the “Capital Credit Union” Excel
file from the class website
 See the note (ppt).

Chap 2-19
 Joint Frequency Distribution
 What does the credit card balance distribution
look like from male versus female cardholder?
 Conventional way: Develop F.D. and Hist. for each
gender separately
 Better way: joint the two variables (M/F) using joint
frequency distribution…much easier to compare two
different variables
 See the next slide

Chap 2-20
Joint Frequency Distribution

Chap 2-21
Chap 2-22
 Practice
 Develop JFD and relative JFD using
“Capital Credit Union” Excel file and then
develop other types (i.e., charts, diagram)
using “Bach, Lombard, & Wilson” Excel files
 See the note (ppt).

Chap 2-23
 Ogives

 An Ogive is a graph of the cumulative

relative frequencies from a relative
frequency distribution
 Ogives are sometime shown in the same
graph as a relative frequency histogram

Chap 2-24
 Ogives
(continued)
12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58
Add a cumulative relative frequency column:

Frequency Distribution
Cumulative
Relative Relative
Class Frequency Frequency Frequency

10 but under 20 3 .15 .15

20 but under 30 6 .30 .45
30 but under 40 5 .25 .70
40 but under 50 4 .20 .90
50 but under 60 2 .10 1.00
Total 20 1.00
Chap 2-25
 Ogive Example

His togram / Ogive

7 100

Cumulative Frequency (%)

6 80
F req u en cy

5
60
4
40
3
2 20

1 0
0
0 5 10 15 20 25 30 36 40 45 50 55 60More
Class Midpoints
Class Endpoints

Chap 2-26
 Ogives in Excel

Excel will show the Ogive

graphically if the
“Cumulative Percentage”
option is selected in the
Histogram dialog box

Chap 2-27
 Other Graphical
Presentation Tools
** Try the rest of them by yourself **

Qualitative Quantitative
(Categorical) (Numerical)
Data Data

Bar Pie Stem and Leaf

Chart Charts Diagram

Chap 2-28
 Bar and Pie Charts

 Bar charts and Pie charts are often used

for qualitative (category) data

 Height of bar or size of pie slice shows

the frequency or percentage for each
category

Chap 2-29
 Bar Chart Example 1
Investor's Portfolio

Savings
CD
Bonds
Stocks

0 10 20 30 40 50
Amount in $1000's

(Note that bar charts can also be displayed with vertical bars)
Chap 2-30
 Bar Chart Example 2

Number of Frequency
days read Newspaper readership per week
0 44
1 24 50
2 18
40
3 16
Freuency

4 20 30
5 22 20
6 26
10
7 30
0
Total 200
0 1 2 3 4 5 6 7
Number of days new spaper is read per w eek

Chap 2-31
 Pie Chart Example
Current Investment Portfolio
Investment Amount Percentage Savings
Type (in thousands $)
15%
Stocks 46.5 42.27 Stocks
Bonds 32.0 29.09 42%
CD 15.5 14.09 CD
Savings 16.0 14.55 14%
Total 110 100

Bonds Percentages
(Variables are Qualitative) are rounded to
29% the nearest
percent

Chap 2-32
 Tabulating and Graphing
Multivariate Categorical Data

 Investment in thousands of dollars

Investment Investor A Investor B Investor C Total
Category
Stocks 46.5 55 27.5 129
Bonds 32.0 44 19.0 95
CD 15.5 20 13.5 49
Savings 16.0 28 7.0 51
Total 110.0 147 67.0 324

Chap 2-33
 Tabulating and Graphing
Multivariate Categorical Data
(continued)

 Side by side charts

Comparing Investors

Savings

CD

Bonds

Stocks

0 10 20 30 40 50 60

Investor A Investor B Investor C

Chap 2-34
 Side-by-Side Chart Example
 Sales by quarter for three sales territories:
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
East 20.4 27.4 59 20.4
W est 30.6 38.6 34.6 31.6
North 45.9 46.9 45 43.9

60

50

40
East
30 West
North
20

10

0
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Chap 2-35
 Stem and Leaf Diagram

 A simple way to see distribution details from

qualitative data
METHOD
1. Separate the sorted data series into leading digits
(the stem) and the trailing digits (the leaves)
2. List all stems in a column from low to high
3. For each stem, list all associated leaves

Chap 2-36
 Example:

Data sorted from low to high:

12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58

 Here, use the 10’s digit for the stem unit:

Stem Leaf
 12 is shown as 1 2

 35 is shown as 3 5

Chap 2-37
 Example:

Data in ordered array:

12, 13, 17, 21, 24, 24, 26, 27, 28, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58

 Completed Stem-and-leaf diagram:

Stem Leaves
1 2 3 7
2 1 4 4 6 7 8
3 0 2 5 7 8
4 1 3 4 6
5 3 8

Chap 2-38
 Using other stem units

 Using the 100’s digit as the stem:

 Round off the 10’s digit to form the leaves

Stem Leaf
 613 would become 6 1
 776 would become 7 8
 ...
 1224 becomes 12 2

Chap 2-39
 Line Charts and
Scatter Diagrams
 Line charts show values of one variable
vs. time
 Time is traditionally shown on the horizontal axis

 Scatter Diagrams show points for bivariate

data
 one variable is measured on the vertical axis and
the other variable is measured on the horizontal
axis

Chap 2-40
 Line Chart Example
Inflation
Year Rate
1985 3.56
1986 1.86 U.S. Inflation Rate
1987 3.65
1988 4.14
1989 4.82 6
1990 5.40
Inflation Rate (%)

5
1991 4.21
1992 3.01 4
1993 2.99
3
1994 2.56
1995 2.83 2
1996 2.95
1
1997 2.29
1998 1.56 0
1999 2.21 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006
2000 3.36
2001 2.85 Year
2002 1.59
2003 2.27
2004 2.68
2005 3.39
2006 3.24
Chap 2-41
 Scatter Diagram Example

Volume Cost per Production Volume vs. Cost per Day

per day day
23 125 250
26 140
200
29 146
Cost per Day

33 160 150
38 167 100
42 170
50
50 188
55 195 0
60 200 0 10 20 30 40 50 60 70
Volume per Day

Chap 2-42
 Types of Relationships

 Linear Relationships

Y Y

X X

Chap 2-43
 Types of Relationships
(continued)

 Curvilinear Relationships

Y Y

X X

Chap 2-44
 Types of Relationships
(continued)

 No Relationship

Y Y

X X

Chap 2-45
 Chapter Summary

 Data in raw form are usually not easy to use for

decision making -- Some type of organization is
needed:
 Table  Graph
 Techniques reviewed in this chapter:
 Frequency Distributions, Histograms, and Ogives

 Bar Charts and Pie Charts

 Stem and Leaf Diagrams

 Line Charts and Scatter Diagrams

Chap 2-46
Chapter Summary

Chap 2-47