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Batch: 2012-2014.
Specialization: Major – Marketing
Minor – Finance
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Measures of Dispersion
Are measures of scatter ( spread) about an
average
i.e. extent to which individual items vary
Measures of Dispersion
Absolute Measures – measure value in same units
– age
Relative Measures - % or coefficient of absolute
measures
Measures of Dispersion
1. Range
2. Inter-quartile range
3. Quartile deviation
4. Mean deviation
5. Standard deviation
A. 1. Range = Xmax – X min = L-S
Xmax – X min L-S
2. Coefficient of Range = ---------------- = ------
Xmax + X min L+S
Measures of Dispersion
Q1. Calculate range & co-efficient of range from
following information
480,562,570,322,435,497,675,732,375,482,791,820,275
B. Quartiles
1.Inter quartile range = Q3 – Q1
2. Quartile déviation
or semi inter quartile range = ( Q3 – Q1)/2
a. In a normal distribution
Q1 < Q2 < Q3
Q2 = M
b. In a symmetrical distribution
Q2 + Quartile Déviation = Q3
Q2 - Quartile Déviation = Q1
Q1 = first quartile or lower quartile
Q2 = second / middle Quartile or median
Q3 = third quartile or upper quartile
Q3 – Q1
Coefficient of Quartile deviation = -----------
Q3 + Q1
Coefficient of Quartile Deviation
Deviation by Quartiles =---------------------- x 100
Median
Calculation of Quartile deviation under
continuous series
1. If inclusive class intervals , convert to
exclusive class intervals
2. Size of class intervals should be equal
throughout distribution
3. L2 of first class interval should be equal to
L1 of next class interval
4. If mid values are given , it is necessary to
determine class intervals
5. If it is open end type of frequency
distribution , coefficient of variation is
suitable measure
Calculation of Quartile deviation
N+1
Q1=size of (---------) th item of the series
4
3(N+1)
Q3=size of ---------) th item of the series
4
Q2. Calculate quartile deviation & its co-efficient
for the data given below
168
147 150 169 170 154 156 171 162 159 174 173 166 164 172
Q3. Compute quartile deviation & its coefficient
for following data
X 10 12 14 16 18 20 22 24 28 30 34 36 38
F 3 6 10 15 20 24 30 22 18 14 10 6 6
Soln. calculate cumulative frequency
calculate Q1=N+1/4 &Q3=3(N+1)/4 th observation
Procedure:
Compute cumulative frequency
N
Find out Q1 & Q3 classes by m (Q1)=---------
4
3N
& m(Q3)= ---------
4
After locating l1, l2 , f & c substitute values in
l2-l1 N
Q1= l1+ --------- ( m-c) where m =---------
f 4
N/4 - C
Q1 =l1+ --------- (l2-l1)
f
l1= lower limit of quartile class
l2 = upper limit of quartile class
f =frequency of quartile class
c =cumulative frequency before quartile class
M = quartile position
After locating l1, l2 , f & c substitute values in
l2-l1 3N
Q3= l1+ --------- ( m-c) where m =---------
f 4
3N/4 - C
Q3 =l1+ --------- (l2-l1)
f
Q4. Compute quartile deviation & its
coefficient for marks of 215 students
Marks 0-
10
10-
20
20-
30
30-
40
40-
50
50-
60
60-
70
70-
80
80-
90
90-
100
Students 10 15 28 32 40 35 26 14 10 5
Soln. condition if class interval inclusive convert into
exclusive, class size equal
calculate cumulative frequency
calculate m (Q1)=N/4 &m(Q3)=3N/4 th observation
inter quartile range = (Q3-Q1)
quartile deviation = (Q3-Q1)/2
X 10 12 14 16 18 20 22 24 28 30 34 36 38
F 3 6 10 15 20 24 30 22 18 14 10 6 6
cf 3 9 19 34 54 78 10
8
130 148 162 172 178 184
Soln. calculate cumulative frequency
calculate Q1=N+1/4 &Q3=3(N+1)/4 th observation
inter quartile range = (Q3-Q1)
quartile deviation = (Q3-Q1)/2
Q3-Q1
coefficient of quartile deiation = -----------------
Q3+Q1
l2-l1 N
Q1 = l1+--------------* (m-c) m= ------------
m 4
l1- lower limit of Q1 class , l2= upper limit of Q1 class
f = frequency of Q1 class , c= cumulative frequency
before Q1 class
l2-l1 3N
Q3 = l1+--------------* (m-c) m= -------------
f 4
l1- lower limit of Q3 class , l2= upper limit of Q3 class
f = frequency of Q3 class , c= cumulative frequency
before Q3 class
Inter quartile range = (Q3-Q1)
Quartile deviation = (Q3-Q1)/2
Q3-q1
Coefficient of quartile deiation = ---------------
--
q3+q1
Mean Deviation = sum of absolute deviations
from an average divided by total number of
items
Coefficient of Mean Deviation = mean
Deviation / Mean
Σ f(x-a)mod Σ f dmod
Mean deviation = ------------- = ---------------
Σ fx N
Q5A. calculate mean deviation & coefficient of
mean for the following two series
A
105 112 110 125 138 149 161 175 185 190
B 22 24 26 28 30 32 34 40 44 50
Standard deviation of a series is the square
root of the average of the squared deviations
from the mean ( Average – Arithmatic mean)
Standard deviation σ – positive square root of
arithmetic mean of squares of deviations
Σ dx2 Σ fdx2
σ = √ (-------) = (--------)
N N
For frequencies of a value
σ
Coefficient of Standard deviation = ------------------
average
σ
Coefficient of variation = --------------- x 100
average
Q5Calculate standard deviation & coefficient of
variation
X 65 67 68 68 69 71 72 72
Q6.Calculate standard deviation & coefficient of
variation
X 95 10
0
10
5
11
5
12
5
13
0
13
5
14
0
15
0
16
0
170
f 5 8 12 15 35 40 30 20 10 10 10
Q6.Calculate standard deviation & coefficient of
variation
X 95 100 105 115 125 130 135 140 150 160 170
f 5 8 12 15 35 40 30 20 10 10 10
dx=(x-
130)
-35 -30 -25 -15 -05 0 5 10 20 30 40
Standard deviation σ – positive square root of
arithmetic mean of squares of deviations
Σ dx Σ dx2 Σ dx
σ = √ (-------)2 = √ ------- - (------------) 2
N N N
Σ fdx Σ fdx2 Σ fdx
σ = √ (-------)2 = √ ------- - (------------) 2
Σ f Σ f Σ f
A 158 160 163 165 167 170 172 175 177 181
B 163 158 167 170 160 180 170 175 172 175
By using standard deviation find out which series
is more variable
A 15
8
16
0
16
3
16
5
16
7
17
0
17
2
17
5
17
7
18
1
1688 168.8
B 16
3
15
8
16
7
17
0
16
0
18
0
17
0
17
5
17
2
17
5
1690 169
dxA -12 -10 -7 -5 -3 0 2 5 7 11 -12 (dxA)2
A 15
8
16
0
16
3
16
5
16
7
17
0
17
2
17
5
17
7
18
1
1688 168.8
B 16
3
15
8
16
7
17
0
16
0
18
0
17
0
17
5
17
2
17
5
1690 169
dxA -12 -10 -7 -5 -3 0 2 5 7 11 -12 (dxA)2
dx2
A
14
4
10
0
49 25 9 0 4 25 49 12
1
526
A 158 160 163 165 167 170 172 175 177 181 1688 168.8
B 163 158 167 170 160 180 170 175 172 175 1690 169
dxA -12 -10 -7 -5 -3 0 2 5 7 11 -12 (dxA)2
dx2A 144 100 49 25 9 0 4 25 49 121 526
dxB -7 -12 -3 0 -10 10 0 5 2 5 10 (dxB)2
A 158 16
0
16
3
16
5
16
7
17
0
17
2
17
5
17
7
181 1688 168.8
B 163 15
8
16
7
17
0
16
0
18
0
17
0
17
5
17
2
175 1690 169
dx
A
-12 -10 -7 -5 -3 0 2 5 7 11 -12 (dxA)2
dx2
A
144 10
0
49 25 9 0 4 25 49 121 526
dx
B
-7 -12 -3 0 -10 10 0 5 2 5 10 (dxB)2
dx2
B
49 14
4
9 0 10
0
10
0
0 25 4 25 456
Σ dx Σ dx2 Σ dx 526 12
σ = √ (-------)2 = √ ------- - (------------) 2 =√ [ ----------- - ( ------)
2
N N 10
10
=√ [ 52.6- 1.2*1.2] =√ 52.6-1.44 =√ 51.46 =7.2
Coefficient of variation = σ / x bar = 7.2*100/ 166.8 = 4.26%
Σ dx Σ dx2 Σ dx
Σ dx Σ dx2 Σ dx 456 10
σ = √ (-------)2 = √ ------- - (------------) 2 =√ [ ----------- - ( ------
) 2
N N 10
10
=√ [ 45.6- 1] =√ 44.6 = 6.7
Coefficient of variation = σ / x bar = 6.7*100 / 169 = 3.96%
Σ fd’x Σ fd’x2 Σ fd’x
σ = √ (-------)2 x i = [√ ------- - (------------) 2 ]xi
Σ f Σ f Σ f
i= class interval
Σ fd’x Σ fd’x2 Σ fd’x
σ = √ (-------)2 x i = [√ ------- - (------------) 2 ]xi
Σ f Σ f Σ f
i= class interval
class 80-
84
75-
79
70-
74
65-
69
60-
64
55-
59
50-
54
45-
49
40-
44
35-
39
30-
34
25-
29
Mid v 82 77 72 67 62 57 52 47 42 37 32 27
frequenc
y
1 1 1 4 4 7 6 6 6 3 0 1
dx=x-52 30 25 20 15 10 5 0 -5 -10 -15 -20 -25
d’x=(x-
52/5)
6 5 4 3 2 1 0 -1 -2 -3 -4 -5
fd’x 6 5 4 12 8 7 0 -6 -12 -9 0 -5
d’x2 36 25 16 9 4 1 0 1 4 9 16 25
fd’x2 36 25 16 36 16 7 0 6 24 27 0 25
σ = i* σA = 5* σ
Σ dx Σ fd’x2 Σ fd’x 218 10
σ = √ (-------)2 = √ ------- - (------------) 2
=√ [ --------- - ( ------) 2
N N N 40 40
=√ [ 5.45- 0.25 ] =√ 5.20 = 2.32
σ = i* σA = 5* σ = 5*2.32 = 11.60
Standard deviation σ – positive square root of
arithmetic mean of squares of deviations
Properties
Standard deviation σ is independent of change of
origin but not of scale
If dx = x-A σx=σd
x-A
If d’x =------ σx= i.σd
i
Standard deviation σ – positive square root of
arithmetic mean of squares of deviations
N1σ1
2 + N2σ2
2 + N3σ3
2 + …….Nnσn
2
σ12...n = √ --------------------------------------------
N1 + N2+ N3 +……….. Nn
compute coefficient of variation & comment which
factory profits are more consistent
Particular
s
Factory A Factory B
Average
profits
19.7 21
Standard
deviation
6.5 8.64
907/A Uvarshad,
Gandhinagar
Highway,
Ahmedabad – 382422.
Ahmedabad Kolkata
Infinity Benchmark,
10th Floor, Plot G1,
Block EP & GP,
Sector V, Salt-Lake,
Kolkata – 700091.
Mumbai
Goldline Business Centre
Linkway Estate,
Next to Chincholi Fire
Brigade, Malad (West),
Mumbai – 400 064.
Measures of dispersion   unitedworld school of business

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Measures of dispersion unitedworld school of business

  • 1.
  • 2. Designation: PGDM Student Batch: 2012-2014. Specialization: Major – Marketing Minor – Finance Facebook: http://on.fb.me/106D9UM Blog: http://bit.ly/13yMJAt LinkedIn: http://lnkd.in/jFgcBV
  • 3. Measures of Dispersion Are measures of scatter ( spread) about an average i.e. extent to which individual items vary Measures of Dispersion Absolute Measures – measure value in same units – age Relative Measures - % or coefficient of absolute measures
  • 4. Measures of Dispersion 1. Range 2. Inter-quartile range 3. Quartile deviation 4. Mean deviation 5. Standard deviation
  • 5. A. 1. Range = Xmax – X min = L-S Xmax – X min L-S 2. Coefficient of Range = ---------------- = ------ Xmax + X min L+S
  • 6. Measures of Dispersion Q1. Calculate range & co-efficient of range from following information 480,562,570,322,435,497,675,732,375,482,791,820,275
  • 7. B. Quartiles 1.Inter quartile range = Q3 – Q1 2. Quartile déviation or semi inter quartile range = ( Q3 – Q1)/2 a. In a normal distribution Q1 < Q2 < Q3 Q2 = M b. In a symmetrical distribution Q2 + Quartile Déviation = Q3 Q2 - Quartile Déviation = Q1
  • 8. Q1 = first quartile or lower quartile Q2 = second / middle Quartile or median Q3 = third quartile or upper quartile Q3 – Q1 Coefficient of Quartile deviation = ----------- Q3 + Q1 Coefficient of Quartile Deviation Deviation by Quartiles =---------------------- x 100 Median
  • 9. Calculation of Quartile deviation under continuous series 1. If inclusive class intervals , convert to exclusive class intervals 2. Size of class intervals should be equal throughout distribution 3. L2 of first class interval should be equal to L1 of next class interval 4. If mid values are given , it is necessary to determine class intervals 5. If it is open end type of frequency distribution , coefficient of variation is suitable measure
  • 10. Calculation of Quartile deviation N+1 Q1=size of (---------) th item of the series 4 3(N+1) Q3=size of ---------) th item of the series 4
  • 11. Q2. Calculate quartile deviation & its co-efficient for the data given below 168 147 150 169 170 154 156 171 162 159 174 173 166 164 172
  • 12. Q3. Compute quartile deviation & its coefficient for following data X 10 12 14 16 18 20 22 24 28 30 34 36 38 F 3 6 10 15 20 24 30 22 18 14 10 6 6 Soln. calculate cumulative frequency calculate Q1=N+1/4 &Q3=3(N+1)/4 th observation
  • 13. Procedure: Compute cumulative frequency N Find out Q1 & Q3 classes by m (Q1)=--------- 4 3N & m(Q3)= --------- 4
  • 14. After locating l1, l2 , f & c substitute values in l2-l1 N Q1= l1+ --------- ( m-c) where m =--------- f 4 N/4 - C Q1 =l1+ --------- (l2-l1) f l1= lower limit of quartile class l2 = upper limit of quartile class f =frequency of quartile class c =cumulative frequency before quartile class M = quartile position
  • 15. After locating l1, l2 , f & c substitute values in l2-l1 3N Q3= l1+ --------- ( m-c) where m =--------- f 4 3N/4 - C Q3 =l1+ --------- (l2-l1) f
  • 16. Q4. Compute quartile deviation & its coefficient for marks of 215 students Marks 0- 10 10- 20 20- 30 30- 40 40- 50 50- 60 60- 70 70- 80 80- 90 90- 100 Students 10 15 28 32 40 35 26 14 10 5 Soln. condition if class interval inclusive convert into exclusive, class size equal calculate cumulative frequency calculate m (Q1)=N/4 &m(Q3)=3N/4 th observation inter quartile range = (Q3-Q1) quartile deviation = (Q3-Q1)/2
  • 17. X 10 12 14 16 18 20 22 24 28 30 34 36 38 F 3 6 10 15 20 24 30 22 18 14 10 6 6 cf 3 9 19 34 54 78 10 8 130 148 162 172 178 184 Soln. calculate cumulative frequency calculate Q1=N+1/4 &Q3=3(N+1)/4 th observation inter quartile range = (Q3-Q1) quartile deviation = (Q3-Q1)/2 Q3-Q1 coefficient of quartile deiation = ----------------- Q3+Q1
  • 18. l2-l1 N Q1 = l1+--------------* (m-c) m= ------------ m 4 l1- lower limit of Q1 class , l2= upper limit of Q1 class f = frequency of Q1 class , c= cumulative frequency before Q1 class
  • 19. l2-l1 3N Q3 = l1+--------------* (m-c) m= ------------- f 4 l1- lower limit of Q3 class , l2= upper limit of Q3 class f = frequency of Q3 class , c= cumulative frequency before Q3 class
  • 20. Inter quartile range = (Q3-Q1) Quartile deviation = (Q3-Q1)/2 Q3-q1 Coefficient of quartile deiation = --------------- -- q3+q1
  • 21. Mean Deviation = sum of absolute deviations from an average divided by total number of items Coefficient of Mean Deviation = mean Deviation / Mean
  • 22. Σ f(x-a)mod Σ f dmod Mean deviation = ------------- = --------------- Σ fx N
  • 23. Q5A. calculate mean deviation & coefficient of mean for the following two series A 105 112 110 125 138 149 161 175 185 190 B 22 24 26 28 30 32 34 40 44 50
  • 24. Standard deviation of a series is the square root of the average of the squared deviations from the mean ( Average – Arithmatic mean)
  • 25. Standard deviation σ – positive square root of arithmetic mean of squares of deviations Σ dx2 Σ fdx2 σ = √ (-------) = (--------) N N For frequencies of a value σ Coefficient of Standard deviation = ------------------ average σ Coefficient of variation = --------------- x 100 average
  • 26. Q5Calculate standard deviation & coefficient of variation X 65 67 68 68 69 71 72 72
  • 27. Q6.Calculate standard deviation & coefficient of variation X 95 10 0 10 5 11 5 12 5 13 0 13 5 14 0 15 0 16 0 170 f 5 8 12 15 35 40 30 20 10 10 10
  • 28. Q6.Calculate standard deviation & coefficient of variation X 95 100 105 115 125 130 135 140 150 160 170 f 5 8 12 15 35 40 30 20 10 10 10 dx=(x- 130) -35 -30 -25 -15 -05 0 5 10 20 30 40
  • 29. Standard deviation σ – positive square root of arithmetic mean of squares of deviations Σ dx Σ dx2 Σ dx σ = √ (-------)2 = √ ------- - (------------) 2 N N N Σ fdx Σ fdx2 Σ fdx σ = √ (-------)2 = √ ------- - (------------) 2 Σ f Σ f Σ f
  • 30. A 158 160 163 165 167 170 172 175 177 181 B 163 158 167 170 160 180 170 175 172 175 By using standard deviation find out which series is more variable
  • 31. A 15 8 16 0 16 3 16 5 16 7 17 0 17 2 17 5 17 7 18 1 1688 168.8 B 16 3 15 8 16 7 17 0 16 0 18 0 17 0 17 5 17 2 17 5 1690 169 dxA -12 -10 -7 -5 -3 0 2 5 7 11 -12 (dxA)2
  • 32. A 15 8 16 0 16 3 16 5 16 7 17 0 17 2 17 5 17 7 18 1 1688 168.8 B 16 3 15 8 16 7 17 0 16 0 18 0 17 0 17 5 17 2 17 5 1690 169 dxA -12 -10 -7 -5 -3 0 2 5 7 11 -12 (dxA)2 dx2 A 14 4 10 0 49 25 9 0 4 25 49 12 1 526
  • 33. A 158 160 163 165 167 170 172 175 177 181 1688 168.8 B 163 158 167 170 160 180 170 175 172 175 1690 169 dxA -12 -10 -7 -5 -3 0 2 5 7 11 -12 (dxA)2 dx2A 144 100 49 25 9 0 4 25 49 121 526 dxB -7 -12 -3 0 -10 10 0 5 2 5 10 (dxB)2
  • 34. A 158 16 0 16 3 16 5 16 7 17 0 17 2 17 5 17 7 181 1688 168.8 B 163 15 8 16 7 17 0 16 0 18 0 17 0 17 5 17 2 175 1690 169 dx A -12 -10 -7 -5 -3 0 2 5 7 11 -12 (dxA)2 dx2 A 144 10 0 49 25 9 0 4 25 49 121 526 dx B -7 -12 -3 0 -10 10 0 5 2 5 10 (dxB)2 dx2 B 49 14 4 9 0 10 0 10 0 0 25 4 25 456
  • 35. Σ dx Σ dx2 Σ dx 526 12 σ = √ (-------)2 = √ ------- - (------------) 2 =√ [ ----------- - ( ------) 2 N N 10 10 =√ [ 52.6- 1.2*1.2] =√ 52.6-1.44 =√ 51.46 =7.2 Coefficient of variation = σ / x bar = 7.2*100/ 166.8 = 4.26%
  • 36. Σ dx Σ dx2 Σ dx Σ dx Σ dx2 Σ dx 456 10 σ = √ (-------)2 = √ ------- - (------------) 2 =√ [ ----------- - ( ------ ) 2 N N 10 10 =√ [ 45.6- 1] =√ 44.6 = 6.7 Coefficient of variation = σ / x bar = 6.7*100 / 169 = 3.96%
  • 37. Σ fd’x Σ fd’x2 Σ fd’x σ = √ (-------)2 x i = [√ ------- - (------------) 2 ]xi Σ f Σ f Σ f i= class interval
  • 38. Σ fd’x Σ fd’x2 Σ fd’x σ = √ (-------)2 x i = [√ ------- - (------------) 2 ]xi Σ f Σ f Σ f i= class interval
  • 39. class 80- 84 75- 79 70- 74 65- 69 60- 64 55- 59 50- 54 45- 49 40- 44 35- 39 30- 34 25- 29 Mid v 82 77 72 67 62 57 52 47 42 37 32 27 frequenc y 1 1 1 4 4 7 6 6 6 3 0 1 dx=x-52 30 25 20 15 10 5 0 -5 -10 -15 -20 -25 d’x=(x- 52/5) 6 5 4 3 2 1 0 -1 -2 -3 -4 -5 fd’x 6 5 4 12 8 7 0 -6 -12 -9 0 -5 d’x2 36 25 16 9 4 1 0 1 4 9 16 25 fd’x2 36 25 16 36 16 7 0 6 24 27 0 25 σ = i* σA = 5* σ Σ dx Σ fd’x2 Σ fd’x 218 10 σ = √ (-------)2 = √ ------- - (------------) 2 =√ [ --------- - ( ------) 2 N N N 40 40 =√ [ 5.45- 0.25 ] =√ 5.20 = 2.32 σ = i* σA = 5* σ = 5*2.32 = 11.60
  • 40. Standard deviation σ – positive square root of arithmetic mean of squares of deviations Properties Standard deviation σ is independent of change of origin but not of scale If dx = x-A σx=σd x-A If d’x =------ σx= i.σd i
  • 41. Standard deviation σ – positive square root of arithmetic mean of squares of deviations N1σ1 2 + N2σ2 2 + N3σ3 2 + …….Nnσn 2 σ12...n = √ -------------------------------------------- N1 + N2+ N3 +……….. Nn
  • 42. compute coefficient of variation & comment which factory profits are more consistent Particular s Factory A Factory B Average profits 19.7 21 Standard deviation 6.5 8.64
  • 43. 907/A Uvarshad, Gandhinagar Highway, Ahmedabad – 382422. Ahmedabad Kolkata Infinity Benchmark, 10th Floor, Plot G1, Block EP & GP, Sector V, Salt-Lake, Kolkata – 700091. Mumbai Goldline Business Centre Linkway Estate, Next to Chincholi Fire Brigade, Malad (West), Mumbai – 400 064.