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Quantitative Demand Forecasting Methods

The document discusses various methods for displaying data, including frequency distributions, bar charts, pie charts, and stem-and-leaf displays, for both qualitative and quantitative data. It explains how to calculate relative frequencies and percentages, and provides examples and exercises for constructing frequency distribution tables and graphical representations. Additionally, it covers the importance of identifying outliers and organizing data into class intervals for effective analysis.

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0% found this document useful (0 votes)
12 views85 pages

Quantitative Demand Forecasting Methods

The document discusses various methods for displaying data, including frequency distributions, bar charts, pie charts, and stem-and-leaf displays, for both qualitative and quantitative data. It explains how to calculate relative frequencies and percentages, and provides examples and exercises for constructing frequency distribution tables and graphical representations. Additionally, it covers the importance of identifying outliers and organizing data into class intervals for effective analysis.

Uploaded by

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

Displaying Data in Tables

and Charts
Construction of a
Frequency Distribution
Raw data Graph

Question
to be Collect Organize Present Draw
addressed data data data conclusion

Frequency
distribution
Graphical Presentation of Data

Techniques reviewed in this chapter:


Qualitative Quantitative
Variables Variables

• Frequency distribution • Frequency distribution


(summary table) • Histogram
• Bar chart •Frequency polygon
• Pie chart • Ogive
• Stem-and-leaf display
Displaying Qualitative Data
Frequency Distributions for
Qualitative Data Frequency
column

Variable Preferred Mode of Banking Number of clients


ATM 128
Category Tele–banking 16
Drive-in service at branch 136
In person visit at branch 328
Internet banking 192
Sum = 800

Frequency
Calculating Relative Frequency
and Percentage Distributions

Frequency of that category


Relative frequency =
Sum of all frequencies

Percentage = Relative frequency × 100


Relative Frequency and
Percentage Distributions
Preferred Mode of Frequency Relative Percent
Banking Frequency

ATM 128 128/800=0.16 0.16(100)=16


Tele–banking 16 16/800=0.02 0.02(100)=2
Drive-in service at 136 136/800=0.17 0.17(100)=17
branch

In person visit at 328 328/800=0.41 0.41(100)=41


branch

Internet banking 192 192/800=0.24 0.24(100)=24


Sum = 1.000 Sum = 100
Bar and Pie Charts
 Bar charts and Pie charts are often
used for displaying
qualitative/categorical data
Bar Chart
Pie Chart
Bar Chart showing
Preferred Mode of Banking
350

300

250
Frequency

200

150

100

50

ATM Tele_banking Drive_in In_person Internet


Mode of Banking
Pie Chart showing
Preferred Mode of Banking

ATM
16%
Internet Tele_banking
24% 2%

Drive_in
17%

In_person
41%
Class Exercise
A sample of 30 employees from large companies
was selected, and these employees were asked
how stressful their jobs were. The responses of
these employees are recorded below.

Very means very stressful


Somewhat means somewhat stressful
None means not stressful at all

Suggest an appropriate name for the variable

How stressful is an employee’s job?


somewhat none somewhat very very none

very somewhat somewhat very somewhat somewhat

very somewhat none very none somewhat

somewhat very somewhat somewhat very none

somewhat very very somewhat none somewhat

a. Prepare a frequency distribution table


b. Calculate the relative frequencies and percentages
for all categories
c. Draw bar graph for the frequency distribution
Displaying Quantitative Data
Tables and Charts for displaying
Quantitative Data

Quantitative
Data

Frequency Distributions and


Ordered Array
Cumulative Frequency Distributions

Stem-and-Leaf
Histogram Frequency Ogive
Display
Polygon
Ordered Array
Organizing Quantitative
Data: Ordered Array
An ordered array is a sequence of data, in
rank order, from the smallest value to the
largest value.

An ordered array provides a visual display of


your data.
Organizing Quantitative
Data: Ordered Array
 Shows range (minimum value to
maximum value)

 A narrow range implies that the data is


clustered around a central value.

 A wide range implies that the data is


scattered away from the central value.
Organizing Quantitative
Data: Ordered Array
 May help identify outliers (unusual
observations)
Outliers
 Outliers are unusually large or small
observations.

 Because an outlier is considerably removed


from the main body of the dataset, its
validity is suspect.

 Outliers should be checked to determine


that they are not the result of an error in
recording their values.
Example
 Copy this data. Comment on the range.
 Are there any outliers?

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
Stem and Leaf Display
Organizing Quantitative Data:
Stem and Leaf Display
 A stem and leaf display provides a visual
summary of your data.

 A stem and leaf display sorts the data and


allows you to detect the distributional
pattern of the data
Stem and Leaf
An Example of a
Stem and Leaf Display
Stem Leaf
1 5 5 9 9
2 0 1 4 5 6
3 4 5 8 8 8 9
4 1 2 6 8
5 1 2 5 7
6 2 4 4
7 0 2
8 1
9 1
Stem and Leaf Display
Skewed distribution

Positive
skew

Normal distribution
Stem and Leaf Display
 There are three steps for drawing a tem and
leaf diagram.

 Split the data into two pieces, stem and leaf.

 Arrange the stems from low to high.

 Attach each leaf to the appropriate stem.


Example
 Now create your own stem and leaf display
for this data. Remember you have already
copied the data.

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
Stem and Leaf Display

Age of College Students


Day Students Night Students
Stem Leaf Stem Leaf
1 67788899 1 8899
2 0012257 2 0138
3 28 3 23
4 2 4 15
Class Exercise

The following data give the monthly rents paid


by a sample of 30 households selected from a
small town.

Construct a stem and leaf display for the data.


Stem and Leaf Display data

880 1081 721 1075 1023 775 1235 750 965 960

1210 985 1231 932 850 825 1000 915 1191 1035

1151 630 1175 952 1100 1140 750 1140 1370 1280
Frequency Distribution
Frequency Distributions for
Numerical Data
What is a Frequency Distribution?

A frequency distribution is a summary


table.
Data is grouped into class intervals
(a.k.a classes)
Each class interval has a corresponding
frequency.
Each segment represents a class interval
range

min max
Class interval
width

Lower class limit Upper class limit


The segments must have an equal class width
Example 1

A manufacturer of insulation randomly selects


20 winter days and records the daily
maximum temperature

24, 35, 17, 21, 24, 37, 26, 46, 58, 30,
32, 13, 12, 38, 41, 43, 44, 27, 53,
27
Arrange the data into a frequency distribution
1. Find range of the data

 Range = max - min


 Range = 58 - 12 = 46
2. Select number of classes, k
(this is a subjective decision)

 The final number of classes may be


determined using Sturges Rule only
as a guide.

k = 1 + 3.322 log n
k = 5.322  5
(usually between 5 and 15)
3. Compute class interval width, c

Range
c=
k

c =46/5
then round up for convenience
c =10
4. Determine class 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
5. Count observations
and assign to classes

 You can use tallying method


Organizing Quantitative Data:
Frequency Distribution Example

Relative
Class Frequency Percentage
Frequency
10 but less than 20
20 but less than 30
30 but less than 40
40 but less than 50
50 but less than 60
Total
Organizing Quantitative Data:
Frequency Distribution Example

Relative
Class Frequency Percentage
Frequency
10 but less than 20 3
20 but less than 30 6
30 but less than 40 5
40 but less than 50 4
50 but less than 60 2
Total 20
Organizing Quantitative Data:
Frequency Distribution Example

Relative
Class Frequency Percentage
Frequency
10 but less than 20 3 .15
20 but less than 30 6 .30
30 but less than 40 5 .25
40 but less than 50 4 .20
50 but less than 60 2 .10
Total 20 1.00
Organizing Quantitative Data:
Frequency Distribution Example

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
Histogram
Distribution of Daily Maximum Temperatures
7

5
Frequency

15 25 35 45 55
Class Midpoints
How Many Class Intervals?
 Many (Narrow class intervals)
3.5
3
2.5
Frequency 2
1.5
1
0.5
0
4
8
12
16
20
24
28
32
36
40
44
48
52
56
60
More
Temperature

 Few (Wide class intervals)


12

10
Frequency

0
0 30 60 More
Temperature
Example 2
The administration in a large city wanted to know the
number of vehicles owned by households in that city. A
sample of 40 randomly selected households from this
city produced the following data on the number of
vehicles owned. Construct the frequency distribution.

5 1 1 2 0 1 1 2 1 1
1 3 3 0 2 5 1 2 3 4
2 1 2 2 1 2 2 1 1 1
4 2 1 1 2 1 1 4 1 3
Frequency Distribution of Vehicles
Owned in a large city.
X f
0 2
1 18
2 11
3 4
4 3
5 2
Σf = 40

X=Number of f=Number of
Vehicles Households
Frequency Polygon
(Using Insulation data of Ex. 1)
Class Midpoint

Class
Class Frequency Percentage
Midpoint

10 but less than 20 3 15 15


20 but less than 30 6 30 25
30 but less than 40 5 25 35
40 but less than 50 4 20 45
50 but less than 60 2 10 55
Total 20 100
Graphing Numerical Data:
The Frequency Polygon
Class
Class Midpoint Frequency
10 - < 20 15 3
20 - < 30 25 6
30 - < 40 35 5
Frequency Polygon
40 - < 50 45 4
50 - < 60 55 2 8

Frequency 6

4
(In a percentage
polygon the vertical axis 2
would be defined to
show the percentage of 0
observations per class) 5 15 25 35 45 55 65
Class Midpoints
Frequency Polygon
Cumulative Frequency
Distribution
(THE LESS THAN OGIVE)
Tabulating Numerical Data:
Cumulative Frequency

<Cumulative <Cumulative
Class Frequency Percentage
Frequency Percentage

10 but less than 20 3 15


20 but less than 30 6 30
30 but less than 40 5 25
40 but less than 50 4 20
50 but less than 60 2 10
Total 20 100
Tabulating Quantitative Data:
Cumulative Frequency

<Cumulative <Cumulative
Class Frequency Percentage
Frequency Percentage

10 but less than 20 3 15 3


20 but less than 30 6 30 9
30 but less than 40 5 25 14
40 but less than 50 4 20 18
50 but less than 60 2 10 20
Total 20 100
Tabulating Quantitative Data:
Cumulative Frequency
Less than Ogive

<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
Upper %
class Cumulative
Class boundary Frequency
10 0 Less than Ogive
10 - < 20 20 15 120
20 - < 30 30 45

% Cumulative Frequency
100
30 - < 40 40 70
40 - < 50 50 90 80
50 - < 60 60 100
60

40

20

Upper Class Boundary


Cumulative Frequency
Distribution
(THE GREATER THAN OGIVE)
Tabulating Numerical Data:
Cumulative Frequency
Greater than Ogive

>Cumulative >Cumulative
Class Frequency Percentage
Frequency Percentage

10 but less than 20 3 15 20 100


20 but less than 30 6 30 17 85
30 but less than 40 5 25 11 55
40 but less than 50 4 20 6 30
50 but less than 60 2 10 2 10
Total 20 100
Lower %
class Cumulative
Class boundary Frequency
10 - < 20 10 100
Greater than Ogive
20 - < 30 20 85

% Cumulative Frequency
120
30 - < 40 30 55
40 - < 50 40 30 100

50 - < 60 50 10 80
60 0
60

40

20

Lower Class Boundary


Shapes of Histograms

A Histogram can assume any of a large


number of shapes.

 The most common of these shapes are


1. Symmetric
2. Skewed
3. Uniform or regular
Symmetric Histogram
A symmetric histogram is identical
on both sides of its central point.
Frequency
Symmetric Histogram

Frequency
Skewed Histogram
A skewed histogram is non-symmetric.
The tail on one side is longer than the
tail on the other side.
Frequency
Skewed Histogram

Frequency
Uniform or Rectangular Histogram

A uniform or rectangular histogram


has the same frequency for each class.
Frequency
Corresponding Curves
Class Exercises
Exercise 1
The frequency distribution table below gives the
number of iPods sold by a shop on each of 30 days.
Determine the class mid-points, relative frequency
and percentages
iPods sold f
5-9 3
10 - 14 6
15 - 19 8
20 -24 8
25 -29 5
30
Solution

Class Class Relative


f Percent
Limits Midpoint Frequency

5-9 3
10 - 14 6
15 - 19 8
20 -24 8
25 -29 5
30
Solution

Class Class Relative


f Percent
Limits Midpoint Frequency

5-9 3 7 0.100 10.0


10 - 14 6 12 0.200 20.0
15 - 19 8 17 0.267 26.7
20 -24 8 22 0.267 26.7
25 -29 5 27 0.167 16.7
30 1.001 100.1
Exercise 2
Sambiri Silicon manufactures computer monitors.
The following data represents the number of
computer monitors produced at the company for a
sample of 30 days.

a. Calculate the frequency distribution, class


boundaries and class midpoints.
30 27 33 26 24
21 31 27 27 28
31 34 26 23 31
34 23 33 25 28
26 22 33 23 21
35 22 25 35 27

b. Calculate the relative frequencies and percentages


for all classes.
c. Construct a histogram and a polygon for the
percentage distribution.
d. For what percentage of the days is the number of
computer monitors produced in the interval 27-29?
Class Limits Frequency
21 - 23 7
24 - 26 6
27 - 29 6
30 - 32 4
33 - 35 7
30
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
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.
Exercise 3
A company that sells farming equipment
deployed 50 salespersons countrywide. The
following table summarises the number of
hours each salesperson worked for a period
of one month.
Data

128 203 40 149 84 164 187 124 144 130

62 93 128 87 155 94 157 195 110 133

141 104 69 121 113 79 162 149 204 103

143 30 42 164 71 105 151 161 165 175

148 114 116 122 146 197 167 184 156 140
Questions
 Use the quantitative data set provided,
to construct frequency ,percent and
cumulative percent distributions.
 Use the frequency distribution table
constructed above to construct a
histogram and a frequency polygon.
 Use the data from the frequency
distribution to construct a cumulative
“less-than” ogive.
Cumulative
Frequency Percent Percent

30-<55 3 6.0 6.0


55-<80 4 8.0 14.0
80-<105 6 12.0 26.0
105-<130 10 20.0 46.0
130-<155 11 22.0 68.0
155-<180 10 20.0 88.0
180-<205 6 12.0 100.0
Total 50 100.0
Histogram
Frequency Polygon for the 50
Salespersons
12
Frequency

10
8
6
4
2
0
17.5 42.5 67.5 92.5 117.5 142.5 167.5 192.5 217.5

Class Midpoints of Hours used in a Month


Less than Ogive for the 50
Salespersons
120
% Cum ulative Frequency

100
80
60
40
20
0
30 55 80 105 130 155 180 205

Upper Class Limits of Hours used in a Month

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