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FS BCOM-2 (Lesson2)

Uploaded by

Vivek
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© © All Rights Reserved
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BCOM GE 201-18

Business Statistics
Unit-2(Measures of Central Tendency)
L2-LESSON 2

Vivek Sharma
Vivek Sharma

Unit-2( Measures of Central Tendency)

L2- Arithmetic Mean


Unit-2
L1 –Definition, Purpose and Functions, Characteristics of
Learning Objectives
a Good Measure, Measures of Central Tendency
1. Arithmetic Mean
L2- Calculation of Arithmetic Mean
2.Calculation
L3- Calculation of Median
3.Merits
L4- Calculation of Mode 4.Demerits
L5- Measures of Variation- Absolute and Relative
Measures
L6- Range, Quartile Deviation
L7- Mean Deviation
L8- Standard Deviation and Variation
Vivek Sharma

L2- LESSON 2 Unit-2( Measures of Central Tendency)

Arithmetic Mean

Most commonly used index of central


tendency for a set of raw data or a
distribution is the mean.
Vivek Sharma

L2- LESSON 2 Unit-2( Measures of Central Tendency)

Arithmetic Mean for Ungrouped Data

Calculate mean for 40, 45, 50, 55, 60, 68


Mean= Sum of observations
Number of observations
= 40+45+50+55+60+68
6
= 318
6
Mean = 53
Vivek Sharma

L2- LESSON 2 Unit-2( Measures of Central Tendency)

Arithmetic Mean for Grouped Data

xi fi fixi

4 5 20
6 10 60
9 10 90 Calculate Mean
10 7 70 x: 4 6 9 10 15
15 8 120 f: 5 10 10 7 8
N = Σfi = 40 Σfixi = 360
∴ Mean = Σfixi/Σfi=360/40 = 9
Vivek Sharma

L2- LESSON 2 Unit-2( Measures of Central Tendency)

Short cut Formula


Mean = AM + (Σfd)* I
N
od(deviation) = X-AM
i
oX = Midpoint, AM = Assumed Mean
oi = Class Interval size
of d = Product of the frequency and
the corresponding deviation
Vivek Sharma

L2- LESSON 2 Unit-2( Measures of Central Tendency)

Example (Arithmetic Mean for Grouped Data)

CI f Mid Point d = X-AM fd


X i
30 – 40 6 35 -3 -18
40 – 50 8 45 -2 -16
50 – 60 10 55 -1 -10
60 – 70 6 65 0 0
70 – 80 4 75 1 4
80 – 90 3 85 2 6
90 - 100 3 95 3 9
N=40 Σfd= -25
Vivek Sharma

L2- LESSON2 Unit-2( Measures of Central Tendency)

Example (Arithmetic Mean for Grouped Data)

Mean = AM + (Σfd) i
N
= 65 + (-25) * 10
40
= 65 – 6.25
Mean = 58.75
Vivek Sharma

L2- LESSON2 Unit-2( Measures of Central Tendency)

Merits
oIt is easy to understand

oIt is easy to calculate

oIt utilizes entire data in the group

oIt provides a good comparison

oIt is rigidly defined


Vivek Sharma

L2- LESSON2 Unit-2( Measures of Central Tendency)

Demerits
o In the absence of actual data it can mislead

o Abnormal difference between the highest and


the lowest score would lead to fallacious
conclusions

o A mean sometimes gives such results as appear


almost absurd. e.g. 4.3 children

o Its value cannot be determined graphically

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