Basic Business Statistics
Chapter 2
Presenting Data in Tables and Charts
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc. Chap 2-1
Learning Objectives
In this chapter you learn:
To develop tables and charts for categorical
data
To develop tables and charts for numerical
data
The principles of properly presenting graphs
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-2
Categorical Data Are Summarized
By Tables & Graphs
Categorical
Data
Tabulating Data Graphing Data
Summary Bar Pie Pareto
Table Charts Charts Diagram
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-3
Organizing Categorical Data:
Summary Table
A summary table indicates the frequency, amount, or percentage of items
in a set of categories so that you can see differences between categories.
Banking Preference? Percent
ATM 16%
Automated or live telephone 2%
Drive-through service at branch 17%
In person at branch 41%
Internet 24%
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-4
Bar and Pie Charts
Bar charts and Pie charts are often used
for categorical data
Length of bar or size of pie slice shows
the frequency or percentage for each
category
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-5
Organizing Categorical Data:
Bar Chart
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.
Banking Preference
Internet
In person at branch
Drive-through service at branch
Automated or live telephone
ATM
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-6
Organizing Categorical Data:
Pie Chart
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
16% ATM
24%
2% Automated or live
telephone
Drive-through service at
17% branch
In person at branch
Internet
41%
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-7
Organizing Categorical Data:
Pareto Diagram
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”
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-8
Organizing Categorical Data:
Pareto Diagram
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
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-9
Tables and Charts for
Numerical Data
Numerical Data
Frequency Distributions
Ordered Array and
Cumulative Distributions
Stem-and-Leaf
Histogram Polygon Ogive
Display
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-10
Organizing Numerical Data:
Ordered Array
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
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-11
Stem-and-Leaf Display
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)
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-12
Organizing Numerical Data:
Stem and Leaf Display
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
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-13
Organizing Numerical Data:
Frequency Distribution
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.
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-14
Organizing Numerical Data:
Frequency Distribution Example
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
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-15
Organizing Numerical Data:
Frequency Distribution Example
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
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-16
Organizing Numerical Data:
Frequency Distribution Example
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
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-17
Tabulating Numerical Data:
Cumulative Frequency
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
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-18
Why Use a Frequency Distribution?
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
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-19
Frequency Distributions:
Some Tips
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
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-20
Organizing Numerical Data:
The Histogram
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.
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-21
Organizing Numerical Data:
The Histogram
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
Histogram : Daily High Tem perature
50 but less than 60 2 .10 10
7
Total 20 1.00 100
6
5
(In a percentage
Frequency 4
histogram the vertical 3
axis would be defined to
show the percentage of 2
observations per class)
1
0
5 15 25 35 45 55 More
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-22
Organizing Numerical Data:
The Polygon
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.
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-23
Graphing Numerical Data:
The Frequency Polygon
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: Daily High Temperature
40 but less than 50 45 4
50 but less than 60 55 2
7
6
5
Frequency
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
observations per class) Class Midpoints
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-24
Graphing Cumulative Frequencies:
The Ogive (Cumulative % Polygon)
Lower % less
class than lower
Class boundary boundary
10 but less than 20 10 15
20 but less than 30 20 45
30 but less than 40 30 70
Ogive: Daily High Temperature
40 but less than 50 40 90
Cumulative Percentage
50 but less than 60 50 100
100
80
60
40
(In an ogive the percentage 20
of the observations less
than each lower class
0
boundary are plotted versus 10 20 30 40 50 60
the lower class boundaries. Lower Class Boundary
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-25
Cross Tabulations
Used to study patterns that may exist between
two or more categorical variables.
Cross tabulations can be presented in:
Tabular form -- Contingency Tables
Graphical form -- Side by Side Charts
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-26
Cross Tabulations:
The Contingency Table
A cross-classification (or contingency) table presents the
results of two categorical variables. The joint responses are
classified so that the categories of one variable are located in
the rows and the categories of the other variable are located in
the columns.
The cell is the intersection of the row and column and the
value in the cell represents the data corresponding to that
specific pairing of row and column categories.
A useful way to visually display the results of cross-
classification data is by constructing a side-by-side bar chart.
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-27
Cross Tabulations:
The Contingency Table
A survey was conducted to study the importance of brand
name to consumers as compared to a few years ago. The
results, classified by gender, were as follows:
Importance of Male Female Total
Brand Name
More 450 300 750
Equal or Less 3300 3450 6750
Total 3750 3750 7500
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-28
Cross Tabulations:
Side-By-Side Bar Charts
Importance of Brand Name
Less or Equal
Response
More
Female 0 500 1000 1500 2000 2500 3000 3500 4000
Male
Number of Responses
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-29
Scatter Plots
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
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-30
Scatter Plot Example
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
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-31
Time Series Plot
A Time Series Plot is used to study
patterns in the values of a numeric
variable over time
The Time Series Plot:
Numeric variable is measured on the
vertical axis and the time period is
measured on the horizontal axis
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-32
Time Series Plot Example
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
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-33
Principles of Excellent Graphs
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.
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-34
Graphical Errors: Chart Junk
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
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-35
Graphical Errors:
No Relative Basis
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
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-36
Graphical Errors:
Compressing the Vertical Axis
Bad Presentation Good Presentation
Quarterly Sales Quarterly Sales
$ $
200 50
100 25
0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-37
Graphical Errors: No Zero Point
on the Vertical Axis
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
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-38
Chapter Summary
In this chapter, we have
Organized categorical data using the summary table, bar
chart, pie chart, and Pareto diagram.
Organized numerical data using the ordered array, stem-and-
leaf display, frequency distribution, histogram, polygon, and
ogive.
Examined cross tabulated data using the contingency table
and side-by-side bar chart.
Developed scatter plots and time series graphs.
Examined the do’s and don'ts of graphically displaying data.
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 2-39