Chapter 2

Organizing and
Visualizing Variables

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 1

 Learning Objectives

In this chapter you learn:

 To construct tables and charts for categorical data
 To construct tables and charts for numerical data
 The principles of properly presenting graphs
 To organize and analyze many variables

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 2

Categorical Data Are Organized By
Utilizing Tables
DCOVA
Categorical
Data

Tallying Data

One Two
Categorical Categorical
Variable Variables

Summary Contingency
Table Table

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 3

 Organizing Categorical Data:
Summary Table
DCOVA
 A summary table tallies the frequencies or percentages of items in a set
of categories so that you can see differences between categories.

Main Reason Young Adults Shop Online

Reason For Shopping Online? Percent

Better Prices 37%
Avoiding holiday crowds or hassles 29%
Convenience 18%
Better selection 13%
Ships directly 3%
Source: Data extracted and adapted from “Main Reason Young Adults Shop Online?”
USA Today, December 5, 2012, p. 1A.

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 4

 A Contingency Table Helps Organize
Two or More Categorical Variables
DCOVA
 Used to study patterns that may exist between
the responses of two or more categorical
variables

 Cross tabulates or tallies jointly the responses

of the categorical variables

 For two variables the tallies for one variable are

located in the rows and the tallies for the
second variable are located in the columns
Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 5
 Contingency Table - Example
DCOVA
 A random sample of 400
invoices is drawn. Contingency Table Showing
Frequency of Invoices Categorized
 Each invoice is categorized By Size and The Presence Of Errors
as a small, medium, or large No
amount. Errors Errors Total
 Each invoice is also Small 170 20 190
Amount
examined to identify if there
Medium 100 40 140
are any errors. Amount
 This data are then organized Large 65 5 70
in the contingency table to Amount
the right. 335 65 400
Total

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 6

 Contingency Table Based On
Percentage Of Overall Total
DCOVA
No
Errors Errors Total 42.50% = 170 / 400
Small 170 20 190 25.00% = 100 / 400
Amount 16.25% = 65 / 400
Medium 100 40 140
Amount No
Large 65 5 70 Errors Errors Total
Amount Small 42.50% 5.00% 47.50%
Total 335 65 400 Amount
Medium 25.00% 10.00% 35.00%
Amount
83.75% of sampled invoices
Large 16.25% 1.25% 17.50%
have no errors and 47.50% Amount
of sampled invoices are for Total 83.75% 16.25% 100.0%
small amounts.
Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 7
 Contingency Table Based On
Percentage of Row Totals
DCOVA
No
Errors Errors Total 89.47% = 170 / 190
Small 170 20 190 71.43% = 100 / 140
Amount 92.86% = 65 / 70
Medium 100 40 140
Amount No
Large 65 5 70 Errors Errors Total
Amount Small 89.47% 10.53% 100.0%
Total 335 65 400 Amount
Medium 71.43% 28.57% 100.0%
Amount
Medium invoices have a larger
Large 92.86% 7.14% 100.0%
chance (28.57%) of having Amount
errors than small (10.53%) or Total 83.75% 16.25% 100.0%
large (7.14%) invoices.
Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 8
 Contingency Table Based On
Percentage Of Column Totals
DCOVA
No
Errors Errors Total 50.75% = 170 / 335
Small 170 20 190 30.77% = 20 / 65
Amount
Medium 100 40 140
Amount No
Large 65 5 70 Errors Errors Total
Amount Small 50.75% 30.77% 47.50%
Total 335 65 400 Amount
Medium 29.85% 61.54% 35.00%
Amount
There is a 61.54% chance
Large 19.40% 7.69% 17.50%
that invoices with errors are Amount
of medium size. Total 100.0% 100.0% 100.0%

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 9

 Tables Used For Organizing
Numerical Data
DCOVA
Numerical Data

Ordered Array Frequency Cumulative

Distributions Distributions

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 10

 Organizing Numerical Data:
Ordered Array
DCOVA
 An ordered array is a sequence of data, in rank order, from the smallest
value to the largest value.
 Shows range (minimum value to maximum value)
 May help identify outliers (unusual observations)

Age of Day Students

Surveyed
16 17 17 18 18 18
College
Students 19 19 20 20 21 22
22 25 27 32 38 42
Night Students
18 18 19 19 20 21
23 28 32 33 41 45
Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 11
 Organizing Numerical Data:
Frequency Distribution
DCOVA
 The frequency distribution is a summary table in which the data are
arranged into numerically ordered classes.

 You must give attention to selecting the appropriate number of class

groupings for the table, determining a suitable width of a class grouping,
and establishing the boundaries of each class grouping to avoid overlapping.

 The number of classes depends on the number of values in the data. With a
larger number of values, typically there are more classes. In general, a
frequency distribution should have at least 5 but no more than 15 classes.

 To determine the width of a class interval, you divide the range (Highest
value–Lowest value) of the data by the number of class groupings desired.

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 12

 Organizing Numerical Data:
Frequency Distribution Example
DCOVA

Example: A manufacturer of insulation randomly selects 20

winter days and records the daily high temperature

24, 35, 17, 21, 24, 37, 26, 46, 58, 30, 32, 13, 12, 38, 41, 43, 44, 27, 53,
27

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 13

 Organizing Numerical Data:
Frequency Distribution Example
DCOVA
 Sort raw data in ascending order:
12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58
 Find range: 58 - 12 = 46
 Select number of classes: 5 (usually between 5 and 15)
 Compute class interval (width): 10 (46/5 then round up)
 Determine class boundaries (limits):

Class 1: 10 to less than 20

Class 2: 20 to less than 30

Class 3: 30 to less than 40

Class 4: 40 to less than 50

Class 5: 50 to less than 60
 Compute class midpoints: 15, 25, 35, 45, 55
 Count observations & assign to classes

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 14

 Organizing Numerical Data: Frequency
Distribution Example
DCOVA
Data in ordered array:
12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58

Class Midpoints Frequency

10 but less than 20 15 3

20 but less than 30 25 6
30 but less than 40 35 5
40 but less than 50 45 4
50 but less than 60 55 2
Total 20

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 15

 Organizing Numerical Data: Relative &
Percent Frequency Distribution Example
DCOVA
Data in ordered array:
12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58

Relative
Class Frequency Percentage
Frequency
10 but less than 20 3 .15 15%
20 but less than 30 6 .30 30%
30 but less than 40 5 .25 25%

40 but less than 50 4 .20 20%

50 but less than 60 2 .10 10%

Total 20 1.00 100%

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 16
 Organizing Numerical Data: Cumulative
Frequency Distribution Example
DCOVA
Data in ordered array:
12, 13, 17, 21, 24, 24, 26, 27, 27, 30, 32, 35, 37, 38, 41, 43, 44, 46, 53, 58

Cumulative Cumulative
Class Frequency Percentage
Frequency Percentage

10 but less than 20 3 15% 3 15%

20 but less than 30 6 30% 9 45%
30 but less than 40 5 25% 14 70%
40 but less than 50 4 20% 18 90%
50 but less than 60 2 10% 20 100%
Total 20 100 20 100%

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 17

Why Use a Frequency Distribution?
DCOVA
 It condenses the raw data into a more
useful form
 It allows for a quick visual interpretation of
the data
 It enables the determination of the major
characteristics of the data set including
where the data are concentrated /
clustered

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 18

 Frequency Distributions:
Some Tips
DCOVA
 Different class boundaries may provide different pictures for
the same data (especially for smaller data sets)

 Shifts in data concentration may show up when different

class boundaries are chosen

 As the size of the data set increases, the impact of

alterations in the selection of class boundaries is greatly
reduced

 When comparing two or more groups with different sample

sizes, you must use either a relative frequency or a
percentage distribution

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 19

 Visualizing Categorical Data
Through Graphical Displays
DCOVA
Categorical
Data
Visualizing Data

Summary Contingency
Table For One Table For Two
Variable Variables

Bar Pareto Side By Side

Chart Chart Bar Chart
Pie Chart

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 20

 Visualizing Categorical Data:
The Bar Chart
DCOVA
 The bar chart visualizes a categorical variable as a series of bars. The
length of each bar represents either the frequency or percentage of
values for each category. Each bar is separated by a space called a gap.

Reason For Percent

Shopping Online?
Better Prices 37%
Avoiding holiday 29%
crowds or hassles
Convenience 18%
Better selection 13%
Ships directly 3%

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 21

 Visualizing Categorical Data:
The Pie Chart
DCOVA
 The pie chart is a circle broken up into slices that represent categories.
The size of each slice of the pie varies according to the percentage in
each category.

Reason For Shopping Percent

Online?
Better Prices 37%
Avoiding holiday crowds or 29%
hassles
Convenience 18%
Better selection 13%
Ships directly 3%

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 22

 Visualizing Categorical Data:
The Pareto Chart
DCOVA
 Used to portray categorical data (nominal scale)
 A vertical bar chart, where categories are
shown in descending order of frequency
 A cumulative polygon is shown in the same
graph
 Used to separate the “vital few” from the “trivial
many”

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 23

 Visualizing Categorical Data:
The Pareto Chart (con’t) DCOVA
Ordered Summary Table For Causes
Of Incomplete ATM Transactions
Cumulative
Cause Frequency Percent Percent
Warped card jammed 365 50.41% 50.41%
Card unreadable 234 32.32% 82.73%
ATM malfunctions 32 4.42% 87.15%
ATM out of cash 28 3.87% 91.02%
Invalid amount requested 23 3.18% 94.20%
Wrong keystroke 23 3.18% 97.38%
Lack of funds in account 19 2.62% 100.00%
Total 724 100.00%
Source: Data extracted from A. Bhalla, “Don’t Misuse the Pareto Principle,” Six Sigma Forum
Magazine, May 2009, pp. 15–18.

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 24

 Visualizing Categorical Data:
The Pareto Chart (con’t) DCOVA

The “Vital
Few”

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 25

 Visualizing Categorical Data:
Side By Side Bar Charts DCOVA
 The side by side bar chart represents the data from a contingency
table.
No
Errors Errors Total
Small 50.75% 30.77% 47.50%
Amount
Medium 29.85% 61.54% 35.00%
Amount
Large 19.40% 7.69% 17.50%
Amount
Total 100.0% 100.0% 100.0%

Invoices with errors are much more likely to be of

medium size (61.54% vs 30.77% and 7.69%)

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 26

 Visualizing Numerical Data
By Using Graphical Displays
DCOVA
Numerical Data

Frequency Distributions
Ordered Array and
Cumulative Distributions

Stem-and-Leaf
Histogram Polygon Ogive
Display

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 27

 Stem-and-Leaf Display
DCOVA

 A simple way to see how the data are distributed

and where concentrations of data exist

METHOD: Separate the sorted data series

into leading digits (the stems) and
the trailing digits (the leaves)

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 28

 Organizing Numerical Data:
Stem and Leaf Display
DCOVA
 A stem-and-leaf display organizes data into groups (called
stems) so that the values within each group (the leaves)
branch out to the right on each row.
Age of College Students

Age of Day Students Day Students Night Students

Surveyed
16 17 17 18 18 18 Stem Leaf
College Stem Leaf
Students 19 19 20 20 21 22
1 67788899 1 8899
22 25 27 32 38 42
Night Students 2 0012257 2 0138
18 18 19 19 20 21
3 28 3 23
23 28 32 33 41 45
4 2
4 15

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 29

 Visualizing Numerical Data:
The Histogram
DCOVA
 A vertical bar chart of the data in a frequency distribution is
called a histogram.

 In a histogram there are no gaps between adjacent bars.

 The class boundaries (or class midpoints) are shown on the

horizontal axis.

 The vertical axis is either frequency, relative frequency, or

percentage.

 The height of the bars represent the frequency, relative

frequency, or percentage.
Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 30
 Visualizing Numerical Data:
The Histogram
DCOVA
Relative
Class Frequency Percentage
Frequency

10 but less than 20 3 .15 15

20 but less than 30 6 .30 30
30 but less than 40 5 .25 25

40 but less than 50 4 .20 20

8
50 but less than 60 2 .10 10
Histogram: Age Of Students
6

Frequency
Total 20 1.00 100

4
(In a percentage
histogram the vertical
axis would be defined to 2
show the percentage of
observations per class)
0
5 15 25 35 45 55 More

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 31

 Visualizing Numerical Data:
The Polygon
DCOVA
 A percentage polygon is formed by having the midpoint of
each class represent the data in that class and then connecting
the sequence of midpoints at their respective class percentages.

 The cumulative percentage polygon, or ogive, displays the

variable of interest along the X axis, and the cumulative
percentages along the Y axis.

 Useful when there are two or more groups to compare.

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 32

Visualizing Numerical Data:
The Frequency Polygon DCOVA
Useful When Comparing Two or More Groups

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 33

Visualizing Numerical Data:
The Percentage Polygon
DCOVA

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 34

Visualizing Two Numerical Variables
By Using Graphical Displays
DCOVA

Two Numerical
Variables

Scatter Time-
Plot Series
Plot

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 35

 Visualizing Two Numerical
Variables: The Scatter Plot
DCOVA
 Scatter plots are used for numerical data consisting of paired
observations taken from two numerical variables

 One variable is measured on the vertical axis and the other

variable is measured on the horizontal axis

 Scatter plots are used to examine possible relationships between

two numerical variables

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 36

 Scatter Plot Example
DCOVA

Volume Cost per

per day day
Cost per Day vs. Production Volume
23 125
250
26 140
200
29 146
Cost per Day

150
33 160
100
38 167
50
42 170
0
50 188
20 30 40 50 60 70
55 195
Volume per Day
60 200

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 37

Visualizing Two Numerical
Variables: The Time Series Plot
DCOVA
 A Time-Series Plot is used to study
patterns in the values of a numeric
variable over time

 The Time-Series Plot:

 Numeric variable is measured on the

vertical axis and the time period is

measured on the horizontal axis

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 38

 Time Series Plot Example
DCOVA

Number of
Year Franchises Number of Franchises, 1996-2004
120
1996 43
100
1997 54 Franchises
Number of
80
1998 60 60
1999 73 40

2000 82 20
0
2001 95 1994 1996 1998 2000 2002 2004 2006
2002 107 Year
2003 99
2004 95

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 39

Organizing Many Categorical Variables:
The Multidimensional Contingency Table
DCOVA
 A multidimensional contingency table is constructed by
tallying the responses of three or more categorical variables.

 In Excel creating a Pivot Table to yields an interactive

display of this type.

 While Minitab will not create an interactive table, it has many

specialized statistical & graphical procedures (not covered in
this book) to analyze & visualize multidimensional data.

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 40

Using Excel Pivot Tables To Organize &
Visualize Many Variables
DCOVA
A pivot table:
 Summarizes variables as a multidimensional summary

table
 Allows interactive changing of the level of

summarization and formatting of the variables

 Allows you to interactively “slice” your data to

summarize subsets of data that meet specified criteria

 Can be used to discover possible patterns and

relationships in multidimensional data that simpler

tables and charts would fail to make apparent.

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 41

 A Two Variable Contingency Table
For The Retirement Funds Data
DCOVA
There are many more growth funds of average
risk than of low or high risk

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 42

A Multidimensional Contingency Table
Tallies Responses Of Three or More
Categorical Variables
DCOVA

•Growth funds
risk pattern depends
on market

•Value funds risk

risk pattern is
different from that of
growth funds.

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 43

 Guidelines For Avoiding The
Obscuring Of Data DCOVA
 Avoid chartjunk
 Use the simplest possible visualization
 Include a title
 Label all axes
 Include a scale for each axis if the chart contains axes
 Begin the scale for a vertical axis at zero
 Use a constant scale

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 44

Graphical Errors: Chart Junk
DCOVA

Bad Presentation  Good Presentation

Minimum Wage Minimum Wage
1960: $1.00
$
4
1970: $1.60
2
1980: $3.10
0
1990: $3.80 1960 1970 1980 1990

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 45

 Graphical Errors:
No Relative Basis
DCOVA

Bad Presentation Good Presentation

A’s received by A’s received by
Freq. students. % students.
30%
300

200 20%

100 10%

0 0%
FR SO JR SR FR SO JR SR

FR = Freshmen, SO = Sophomore, JR = Junior, SR = Senior

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 46

 Graphical Errors:
Compressing the Vertical Axis
DCOVA

Bad Presentation  Good Presentation

Quarterly Sales Quarterly Sales
$ $
200 50

100 25

0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 47

 Graphical Errors: No Zero Point
on the Vertical Axis
DCOVA

Bad Presentation
 Good Presentations

Monthly Sales $ Monthly Sales

$ 45
45
42
42 39
39 36
36 0
J F M A M J J F M A M J

Graphing the first six months of sales

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 48

 In Excel It Is Easy To
Inadvertently Create Distortions

 Excel often will create a graph where the

vertical axis does not start at 0

 Excel offers the opportunity to turn simple

charts into 3-D charts and in the process can
create distorted images

 Unusual charts offered as choices by excel will

most often create distorted images

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 49

 Chapter Summary

In this chapter we have:

 Constructed tables and charts for categorical data
 Constructed tables and charts for numerical data
 Examined the principles of properly presenting
graphs
 Examined methods to organize and analyze many
variables in Excel

Copyright © 2015, 2012, 2009 Pearson Education, Inc. Chapter 2, Slide 50