Business statistics

Résumé du document

Talking about central tendencies, in which cases the median and the mode can be more useful than the mean? Illustrate through real life examples.
•Definition of different central tendencies
The notion of central tendencies represents the average of the set of values.

It is a basis calculation when you have to analyze a series of values. However, you have to pay attention because there exists three types of central tendencies. In each case, the result is different because the calculation is not exactly the same.

The average that everybody knows is the mean. It is the result of the sum of the values divided by the number of values (generally named N).

The median is determined by the central value of the range. The way to find it is different depending on the number of total values. In fact, if the value' number of the series is odd, then the median of the series will be corresponding to the middle value. If the value' number of the series is even, then the median of the series will be corresponding to the mean of the two middle value of the series.

The mode is defined by the value that happens more frequently in a series of data.

Extraits

[...] Illustrate through real life examples. Definition of different central tendencies The notion of central tendencies represents the average of the set of values. It is a basis calculation when you have to analyze a series of values. However, you have to pay attention because there exists three types of central tendencies. In each case, the result is different because the calculation is not exactly the same. Indeed, the average that everybody knows is the mean. It is the result of the sum of the values divided by the number of values (generally named N). [...]

[...] So, when we aggregate forecasts, we multiply the probability that forecasts are more accurate. Keep in mind that forecasts are used to reduce future uncertainty but not to know future. Forecast is also used for traffic on the country roads. When you are in holidays on the south of the France, you have to be used to listen radio in order to avoid traffic jam. In order to have precise information, you have to listen different radio to multiply forecasts. More you switch radio, less there are uncertain information. [...]

[...] It is why, we can say forecasts are usually wrong. The more popular forecast stay weather forecasting. But these forecasts are not exactly right because nobody (even if we have advanced technology tools) know future. So it is why weather forecast changes each hour, each minute. b. A good forecast is more than a single number A good forecast cannot bring it to be one single number. A forecast by definition is a set of tendencies that draw more or less future profile. [...]

[...] It a crucial part of hypothesis testing. In hypothesis model, we can make two types of errors: a false negative or a false positive, also called as Type II and Type I Explain why it is so important to consider the seasonal factors when doing forecasting. Seasonality is a phenomenon related to human behavior. It is defined by pattern that repeats in each period. These periods are called seasons. In the real business life, human behavior is the demand and seasons are function of the time. [...]

[...] The mode is defined by the value that happens more frequently in a series of data. Real life example In order to illustrate my answer, I have chosen an example inspired of the stocks exchange trends. In fact, nowadays a lot of share value are decreasing, it is why I decided to elaborate a shares' portfolio with all the decreasing values in order to calculate the mean, the median and the mode of the losses. Mean = -2,67 + + + + + + 2,67)*2 + + + / Mean = -1,49 a. [...]