Statistics for Decision- Making in Business - Maricopa Community ...
Statistics for Decision- Making in Business - Maricopa Community ...
Statistics for Decision- Making in Business - Maricopa Community ...
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2.3 Descriptive <strong>Statistics</strong> – Center and Position<br />
Histograms provide us with a great visualization of the overall distribution of values. A<br />
distribution describes the layout of the values of a quantitative or categorical variable. To further<br />
describe the differences between two similar distributions, it is helpful to use statistics that<br />
describe center, location, and spread.<br />
2.3.1 Mean and Median<br />
To make peace with some regularly occurr<strong>in</strong>g notation <strong>in</strong> statistics, we will use<br />
mean “the sum of.” For <strong>in</strong>stance,<br />
(“sigma”) to<br />
Let‟s say that we have a set of variable values. To dist<strong>in</strong>guish each of these “ ‟s” we‟ll use<br />
subscripts, denot<strong>in</strong>g them:<br />
Then, to <strong>in</strong>dicate that we want to sum these values across all subscripts, we would write:<br />
Which means, “sum up all<br />
values <strong>in</strong> the dataset,” or<br />
Us<strong>in</strong>g this new notation, we already know how to calculate the mean:<br />
Mean – x-bar notation<br />
The mean value, or average, of a dataset conta<strong>in</strong><strong>in</strong>g<br />
values can be written as:<br />
̅, is used to denote the mean of a sample and can be read as “x-bar.”<br />
A common po<strong>in</strong>t of confusion <strong>for</strong> students is the difference <strong>in</strong> the subscript and the<br />
denom<strong>in</strong>ator . Many people th<strong>in</strong>k that the subscript should be to match the number of<br />
elements <strong>in</strong> the dataset. However, specifically refers to the very last value <strong>in</strong> the dataset. We<br />
treat the as an <strong>in</strong>dex that goes across all subscripts from 1 all the way up to and <strong>in</strong>clud<strong>in</strong>g . To<br />
<strong>Statistics</strong> <strong>for</strong> <strong>Decision</strong>-<strong>Mak<strong>in</strong>g</strong> <strong>in</strong> Bus<strong>in</strong>ess © Milos Podmanik Page 56