(re. Zikmund, Chapter 14)

Why we need Statistics The main purpose of statistics is to accurately summarise the data into easily interpretable fewer numbers

Descriptive statistics: Convergence - Divergence Looking for what is NORMAL

Average (or mean) The average is one kind of descriptive statistic, which indicates a ‘typical’ or ‘central’ figure for a group of numbers. It is officially called a ‘measure of central tendency’.

Median: If you have a set of values, and wish to obtain a figure which represents the central point, then a sensible way of doing this may be to arrange the numbers in order of size and pick the number which falls in the middle as being of typical value. 

For example If we had seven competitor prices at 120, 100, 200, 80, 130, 160 and 140, Arrange them in order of value, 80, 100, 120, 130, 140, 160 and 200.  The value in the middle i.e. the fourth from the end is 130, our median value

Mode: It is simply the value in any set of scores that occurs most often

Advantages of the mode: The mode can be a very useful statistic.  One of its main assets is that it can be used to indicate a ‘normal’ or ‘usual’ figure. 

…a useful descriptive statistic when the numbers in a distribution are not evenly a spread around a central value (as is the median).  Such a lopsided distribution is called a ‘skewed’ distribution

Measures of Dispersion descriptive statistic known as the measure of spread;

The Range The range tells you over how many numbers altogether a distribution is spread over.  It is easily obtained by subtracting the smallest score from the largest. 

The Standard Deviation ... summarises an average distance of all the scores from the mean of a particular set.

Normal Distribution