BBM 404

DEEPAK BANSAL
AYUSHI SRIVASTAVA
DEVYANEE KAUSHAL
MEASURES OF CENTRAL
TENDENCY

MEAN MEDIAN

MODE
• In a uni-modal distribution where the distribution has only one mode
and the highest concentration of values is around one value only, we
face no difficulty in locating a modal value.

• However, the difficulty is experienced when nearly equal concentration

of the frequencies is observed in two or more neighbouring values.
In such cases attempt is made to find the value
of concentration with the help of grouping
method.
• In grouping method, the values are first arranged in
ascending order and their frequencies are noted.

• Normally, the grouping table has the following SEVEN columns

:
Column 1 – Variable values are arranged in ascending order.
Column 2 – Contains the original frequencies marked against
each other. The maximum frequency is marked by putting a
mark or circle.
Column 3 – The frequencies are grouped in twos, the totals are
indicated against each pair and the highest total is marked.
Column 4 – Leaving the first frequency, the remaining
frequencies are grouped in twos and the highest total is marked.
Column 5 – The frequencies are grouped in threes and the
highest total is marked.
Column 6 – Leaving the first frequency, the remaining
frequencies are grouped in threes and the highest total is
marked.
Column 7 – Leaving the first two frequencies, the remaining
frequencies are grouped in threes and the highest total is
marked.
Collar Frequency
Size Col. 1 Col. 2 Col.3 Col. 4 Col. 5 Col.6
32 7
} 21
33
34
14
30
}
} 44 } 51
}
35
36
28
35
}
58
} 63
}
72
} 93

37
38
34
16
}
69
} 50
97
} 85
}
39
40
14
36
}
30

52
} 50 } 66
} 66
64

41 16
Column Collar Size Value contributing to the Highest Frequency
Number 32 33 34 35 36 37 38 39 40 41

1 |

2 | |

3 | |

4 | | |

5 | | |

6 | | |

No. of Times - - 1 3 5 3 1 - 1 -
DETERMINE THE MEDIAN GRAPHICALLY

DAILY WAGES(in Rs.) No. of WORKERS

50-55 6
55-60 10
60-65 22
65-70 30
70-75 16
75-80 12
80-100 15
 Table for less than ogive Table for more than ogive

Daily Wages (Rs.) No.of Workers Daily Wages (Rs.) No.of Workers
less than 55 6 more than 50 111
less than 60 16 more than 55 105
less than 65 38 more than 60 95
less than 70 68 more than 65 73
less than 75 84 more than 70 43
less than 80 96 more than 75 27
less than 100 111 more than 80 15
DAILY WAGES(in NO. of Workers (f) Cumulative
Rs.) Frequency
50-55 6 6
55-60 10 16
60-65 22 38
65-70}MEDIAN CLASS 30 68
70-75 16 84
75-80 12 96
80-85 15 111

total 111=N

N/2=111/2=55.5 CFMED-1= 38 f= 30

Lower limit= 65 CW=UL-LL=70-65=5

MEDIAN= LL+[(N/2)-CF-1 ]*CW
f
= 65+[(55.5-38)/30]*5
= 67.9=68(approx.)
Thus median may be regarded as a particular partition value
which divides the given data into two equal parts
 The values which divide the given data into
four equal parts are known as quartiles.

 There are three such points in a given data set

Q , Q , Q having values 25%, 50% and 75%
1 2 3

respectively.
 Q , the second quartile coincides with the
2

median and has an equal number of

observations above it and below it.
 These are the values which divide the series
into ten equal parts. There are nine deciles
D , D , D ……D
1 2 3 9

 Decile is a better measure than quartiles

and percentiles in the cases like if you want
to display class ranking of a class of say 100
students on a pie chart, using deciles would
make more sense than percentiles or
quartiles.
That is because a pie chart with 10
categories would be much easier to read than
a pie chart with 99 categories and a pie chart
with 4 categories will not be able to describe
the information properly.
 These are the values which
divide the series into 100 equal
parts. There are 99 percentiles
P , P ,…….P
1 2 99

 P = Q , P = D = Q, P = Q
25 1 50 5 2 75 3

 D = P , D = P ……. D = P
1 10 2 20 9 90
 Partition values, particularly the percentiles
are specially useful in the scaling and
ranking of test scores in psychological and
educational statistics. In the data relating to
business and economic statistics, these
partition values, specially quartiles, are
useful in personnel work and productivity
ratings.
 HARMONIC MEAN
The Harmonic Mean of a number of values of a variable
is a reciprocal of the arithmetic mean of the reciprocal
of the given values of the variable.
 APPLICATION OF HARMONIC
MEAN
If different types shares or some other articles are
purchased at different rates by making equal investment
on each type, then the average price is given by the
harmonic mean of different rates.
 FOR EXAMPLE :
If a family spends Rs. 400 per month for milk and the
price of the milk per litre during the month of January,
February, and March is Rs. 5, Rs. 6 and Rs.7 per litre
respectively, then in these three months what will the
average price of milk be?

H.M. = 3 .per litre = Rs. 5.89 p/l

1 + 1 + 1
5 6 7
OTHERWISE
Quantity of milk purchased in :
January = 400 litres
5
February = 400 litres
6
March = 400 litres
7
Average Price per litre = Total Amount Spent .
Total Qnty. Of Milk Purchased
= 400 * 3 . = Rs. 5.89
400 + 400 + 400
5 6 7
IS AN IDEAL AVERAGE WHICH
CAN SERVE ALL PURPOSES
 IT FAILS IN THE FOLLOWING CASES:-

Compound interest Modal wage by

calculation average rate trade union
of interest against leaders/workers
varying rate of interest-
GM

If the data is
qualitative
Manufacturers take
the modal size as
the average
There are some situations where mean has wide variety of applications

Calculating per capita income of a country

Calculating standard deviation
Used in correlation and regression analysis
Used in sampling techniques
Used in quality control and many other applications

OF CENTRAL TENDENCY
NO SINGLE AVERAGE IS SUFFICIENT TO SERVE EACH AND EVERY
PURPOSE

SITUATION HAS TO BE ANALYSED

 MEAN MEDIAN MODE

It takes into account all Qualitative data ,e.g. In case of business
the values in the intelligence, honesty, situations where selection
distribution. psych, etc. of “ most common” is
required
Total value estimate Useful when extreme -shoe size of certain age
E.g. per capita income of a values are either not group
country available or abnormal -garment size

In open-ended cases, it Not affected by outliers

cannot be found
Affected by sampling
the mean is affected by fluctuations
outliers
Salaries being offered by companies to there employees are given..which
company will you choose?

C1 45,000
Rs.15,000
Rs.16,000
Rs.45,000
Rs.45,000
Rs.45,000
Rs.1,00,000
C2
Rs.10,000
42,000
Rs.39,000
Rs.40,000
Rs.42,000
Rs.45,000
Rs.46,000
Rs.1,56,000
C3
Rs.39,000
Rs.40,000 44,187.50

Rs.42,000
Rs.45,000
Rs.45,500
Rs.46,000 45,250.00
Rs.47,000
Rs.49,000
A company is looking at employee salaries to make sure that employees with same job
receive the same pay .The salaries, in Rupees, of employees in one job class are as follows:

27,800 34,750 34,750 34,900 36,000 38,500 41,900

What salary should all the employees receive?

MEAN Rs.35,514.28
MEDIAN Rs.34,900
MODE Not Defined
 QUESTION 1

Suppose a company is considering expanding into an

area and is studying the size of containers that
competitors are offering. Would the company be
more interested in the mean, the median, or the
mode of their containers?
 ANSWER 1

The mode because they want to know what size

tends to sell most often.
 QUESTION 2
An ad agency is planning an ad campaign for a city.
Would they be more interested in the median or
mean family income for the city?
 ANSWER 2

Answer, the median because a few very large

incomes could drastically alter the value of the mean
as the "average" income in the city.
 QUESTION 3

An economist is comparing interest rates on 90-day

CDs in 8 major cities. Should he compare the mean,
the median, or the mode?
 ANSWER 3

The mean, because these don't usually have

outliers with drastically different percentage rates,
so the mean is reasonable.
 QUESTION 4
A restaurant wants to know if their customers rate
their service as excellent, good, average, or poor.
Would the company be more interested in the mean,
the median, or the mode?
 ANSWER 4
Either the median or the mode. The mode would
indicate the most common answer. If numbers were
assigned as 4=excellent, 3=good, 2=average, and
1=poor, the median as the centre value would provide
useful information.
QUESTION 5

Houses sold at $203000, $214000, $220000, and

$4,257,000. Which would be more helpful to a
potential buyer, the mean, the median or the mode?
 ANSWER 5
There is no mode that occurs more often. The mean
would be skewed by the outlier to indicate a mean
price over 1 million dollars. The median as the average
of 214000 and 220000 would be far more
representative of the centre of the prices for recently
purchased homes.
 QUESTION 6

Scores of a test match were 99, 99, 97,89,88,88, and 0.

Which would be more helpful, the mean, the median
or the mode?
 ANSWER 6

The mean would not be helpful due to the obvious

outlier. The 2 modes indicate 2 higher positions which
are both helpful, but split the effect of either number.
The median gives the best overall picture of the data.
 QUESTION 7
SAT scores in a class are 360, 430, 450, 480,480, 500,
510, 510, 520, 520, 530, 540, 600, 620, 710. Which
would be more helpful to the teacher, the mean, the
median or the mode?
 ANSWER 7

The mode does little to provide insight. As the data is

roughly bell-shaped, either the mean or median
would be a reasonable predictor.
Z SCORE
 INTRODUCTION
• A ‘Z Score’ is a statistical measurement of a score’s
relationship to the Mean in a group of scores.

• A ‘Z Score’ refers to : how many standard deviations

a particular data point is from the Mean of that
data.
• A ‘Z Score’ of 1 means that the data point is ONE
standard deviation from the Mean.
• A ‘Z Score’ of 2 means TWO standard deviations.
• A ‘Z Score’ of 0 means the score is same as the Mean.

A ‘Z Score’ can either be positive or negative,

indicating whether it is above or below the Mean and
by how many standard deviations.
 FORMULA
Z = Observation – Mean
Standard Deviation
SAMPLE FORMULA
POPULATION FORMULA
 For Example :
Observation = 105
Mean = 100
S.D. = 5

Z = 105 – 100 = 5 = 1.0

5 5
 APPLICATION
What is the probability any observed value is less
than 105? Or greater than 105?
 IDENTIFYING THE OUTLIERS
Z Score Method :

It is unusual for an observation to fall more than +3

or less than -3 standard deviations from the Mean.

Thus, any observation with a Z Score less than -3 or

greater than +3 is considered an outlier.
 For Example :
Survey – “How many novels do you own?”

Responses : 2 , 0 , 5 , 3 , 0 , 25 , 18

Mean = 8 ; Standard Deviation = 9.890

 RESULT
Using the Z Score Method, there are NO
outliers in this distribution.
Find mean, median and mode from the
following data:
WAGES NO. OF WORKERS

Above 0 650
Above 10 500
Above 20 425
Above 30 375
Above 40 300
Above 50 275
Above 60 250
Above 70 100
 Calculations
Wages No. Of Workers Mid Value fd’ c.f.
(f) (m)
0-10 650-500=150 5 -3 -450 150
10-20 500-425=75 15 -2 -150 225
20-30 425-375=50 25 -1 -50 275
30-40 375-300=75 35 0 0 350
40-50 300-275=25 45 1 25 375
50-60 275-250=25 55 2 50 400
60-70 250-100=150 65 3 450 550
70-80 100 75 4 400 650
∑f=N=650 ∑fd’=275
Mean
 Median
𝑁
• Median= Size of th item =650/2= 325th item
2
• Median size lies in class interval 30-40
𝑁
−𝐶𝑓−1
• Median=L1+ 2
*I
𝑓𝑚𝑒𝑑
• Where,
𝑁
• i=10; L1=30; =325; 𝐶𝑓−1 =275; f=75
2
325−275
• Median= 30+ * 10 = 36.67
75
 Mode
• Since it seems to be multimodal series, mode can
be calculated by using the Empirical formula as
under:
• Mode= 3(median)-2(mean)= 3*36.67- 2*39.23
• 110.01-78.46=31.55
 Finding frequency.
A survey conducted on the effectiveness of a particular weight reduction drug gives the following results.
The classification based on the weight of the surveyed people after their using the drug is as follows:

Weight (kgs) Number of People

Before using Drug After using Drug

30-40 X X’
40-50 Y Y’
50-60 31 40
60-70 35 20
70-80 11 6
80-90 7 4
 Calculations
Weights (kgs) Before using the Cf After using the Cf
drug (f) drug (f)

30-40 x x X’ X’
40-50 y x+y Y’ X’+Y’
50-60 31 x+y+31 40 X’+Y’+40
60-70 35 x+y+66 20 X’+Y’+60
70-80 11 x+y+77 6 X’+Y’+66
80-90 7 x+y+84 4 X’+Y’+70

Given:
The median of two weights are 60.9 Kg and 55.0 Kg respectively.
The people in the first classification after using the drug were 1.5 times as many as in number as
were before using it.
The people in the second classification after using the drug were twice as many as they were
before using it.
• X’ = 1.5 x
• Y’ = 2 y
• x+y+84 = X’+Y’+70
x+y+84 = 1.5x + 2y +70
x + 2y = 28 …….. (1)
 (n / 2)  cf me1
Med  lme  * hme
f me

Med = 55
L = 50
N = X’ + Y’ + 70
cfme-1 = X’ + Y’ + 40
fme = 31
hme = 10

3x + 4y = 78……..(2)
• x= 6
• y=11
• X’ = 9
• Y’ = 22
 An average fails to give the complete picture of a distribution.
We might come across a number of distributions having the same
average but differing widely in their structure and constitution. To
form a complete idea about the distribution, the measures of
central tendency are to be supplemented by some more
measures such as dispersion, skewness and kurtosis.

 Sometimes an average might give very absurd results. For

instance, the average of a family might come out in fractions
which is obviously absurd. In this context we might quote :
“ The figure of 2.2 children per adult female is felt in some respects
to be absurd and the Royal Commission suggested that the middle
classes be paid money to increase the average to a rounder and
more convenient number”.
 It is about a village school teacher who had to cross a river
along with his family. On enquiry he was given to
understand that the average depth of the river was 3 feet.
He measured the heights of the members of the family
(himself, his wife, 2 daughters and 3 sons) and found that
their average (mean) height was 3½ feet. Since the
average height of the family came out to be higher than
the average depth of the river, he ordered his family to
cross the river. But when he reached the other side of the
river, three of his children were missing. He again checked
his arithmetical calculations which still gave him the same
result and was wondering as to what and where was the
mistake. He wrote a couplet in Urdu, reading
Arba means calculations
In fact, the teacher had the misconception
about the average depth of the river which
he mistook for uniform depth but in fact the
river was very shallow in the beginning but
became deeper and deeper and in the
middle it was as deep as 4 feet or so.
Accordingly, the members of the family with
height below 4 feet were drowned.
 If you were that school teacher and in this
situation what would you have done if the
average height of your family is
 3½ feet
 4 feet
 4½ feet
 REFERENCES
 Business Mathematics and Statistics – B.M. Agarwal
 Fundamentals in Statistics – S.C. Gupta

 Statistical Mathematics – A.L. Nagar

 http://www.mathsstatics.com/

 http://www.regentmathematics.com/statistics

 Anderson, Sweeny and Williams