Business Statistics and Decision

Making
Business statistics and decision Making
MBA 1ST SEM

Prof.Shriya Kalbande

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Introduction of measure of dispersion

• Collecting data of any subject , concept can be easy and

fun.

• But sometimes it can be hard to tell other people about

what you have found. That’s why we use statistics.

• Two kinds of statistics are frequently used to describe

data.

• They are measures of central tendency and dispersion.

• These are often called descriptive statistics because they

can help you describe your data.
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 Mean, median and mode

• These are all measures of central tendency.

• They help summarize a bunch of scores with a single

number.

• For Example: Suppose you want to describe a bunch of

data that you collected to a friend for a particular variable
like height of students in your class.

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• One way would be to read each height you recorded to
your friend. Your friend would listen to all of the heights
and then come to a conclusion about how tall students
generally are in your class ,But this would take too
much time. Especially if you are in a class of 200 or 300
students

• Another way to communicate with your friend would be

to use measures of central tendency They help you
summarize bunches of numbers with one or just a few
numbers.

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Measure of dispersion
The various measures of dispersion are:

• Range

• Quartile deviation or semi –Interquartile range

• Mean deviation

• Standard deviation

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Range, variance and standard deviation
• These are all measures of dispersion.

• These help you to know the spread of scores within a bunch

of scores.

• For example, if you were describing the heights of students

in your class to a friend, they might want to know how much
the heights vary. Are all the men about 5 feet 11 inches
within a few centimeters or so? Or is there a lot of variation
where some men are 5 feet and others are 6 foot 5 inches?

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• Measures of dispersion like the range, variance and
standard deviation tell you about the spread of scores
in a data set. Like central tendency, they help you
summarize a bunch of numbers with one or just a few
numbers

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1) Range:

Range is the difference between the greatest (maximum) and

the smallest (minimum) observation of the distribution.
Thus,
Range = L-S

L, is the greatest observation and S, is the smallest

observation of the variable values.

 Coefficient of range

It is the ratio of the difference between two extreme

observations (the biggest
and the smallest) of the distribution to their sum
Coefficient of Range =
Xmax – Xmin 8

Xmax + Xmin
 1. Calculate the range and the coefficient of range of A’s
monthly earnings for a year

SOLUTION:

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 QUARTILE DEVIATION OR SEMI INTER-QUARTILE RANGE

It is a measure of dispersion based on the upper quartile Q3

and the lower quartile Q1.
Inter-quartile Range = Q3 – Q1

Quartile deviation is obtained from inter-quartile range

on dividing by 2 and hence is also known as semi inter-
quartile range.

Thus
Quartile Deviation (Q.D.) = Q3 – Q1
2

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Coefficient of Q.D.

= (Q3 – Q1)/2
(Q3 + Q1)/2

=Q3 – Q1
Q3 + Q1

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2. Find :
(i) Inter-quartile Range; (ii) Quartile Deviation; (iii)
Coefficient of Quartile Deviation,
for the following distribution :

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Solve:

Evaluate an appropriate measure of dispersion for the

following data :

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MEAN DEVIATION OR AVERAGE DEVIATION

Coefficient of M.D. about mean =

M.D.
Mean

and Coefficient of M.D. about median =

M.D.
Median

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Calculate the mean deviation from mean for the
following data

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Mean()=5.2

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Find the Mean Deviation from the Mean for the following data :

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