Chapter 2 | Graphs, Charts, and Tables—Describing Your Data 10

Solution Manual for Business Statistics 8th Edition

Groebner
Complete downloadable file at:
https://TestBanksCafe.eu/Solution-Manual-for-Business-Statistics-8th-Edition-Groebner
When applicable, the first few problems in each section will be done following the appropriate step by step
procedures outlined in the corresponding sections of the chapter. Following problems will provide key points and
the answers to the questions, but all answers can be arrived at using the appropriate steps.

The more difficult problems in this chapter are:

For Section 2.1

2.14, 2.15, 2.16, 2.21, 2.22, 2.23

For Section 2.2

2.39, 2.40, 2.43, 2.45

For Section 2.3

2.54, 2.59, 2.61, 2.62

For End of Chapter

2.74, 2.76, 2.77, 2.78

Section 2.1
2.1 Step 1: List the possible values.
The possible values for the discrete variable are 0 through 12.
Step 2: Count the number of occurrences at each value.
The resulting frequency distribution is shown as follows:

2.2 Given n = 2,000, the minimum number of groups for a grouped data frequency distribution determined using
the 2 k �n guideline is:
2k �n or 2 = 2, 048 �2, 000 Thus, use k = 11 groups.
11
11 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

2.3
a. Given n = 1,000, the minimum number of classes for a grouped data frequency distribution determined
using the 2 k �n guideline is:
2k �n or 2 = 1, 024 �1, 000 Thus, use k = 10 classes.
10

b. Assuming that the number of classes that will be used is 10, the class width is determined as follows:
High - Low 2,900 - 300 2, 600
w= = = = 260
Classes 10 10
Then we round to the nearest 100 points giving a class width of 300.

2.4

Class Frequency Relative Cumulative

Frequency Relative
Frequency
0 – < 100 10 0.20 0.20
100 – < 200 10 0.20 0.40
200 – < 300 5 0.10 0.50
300 – < 400 5 0.10 0.60
400 – < 500 20 0.40 1.00
500 – < 600 0 0.00 1.00

2.5
a. There are n = 60 observations in the data set. Using the 2k > n guideline, the number of classes, k, would be
6. The maximum and minimum values in the data set are 17 and 0, respectively. The class width is computed
to be: w = (17-0)/6 = 2.833, which is rounded to 3. The frequency distribution is

Class Frequency
0-2 6
3-5 13
6-8 20
9-11 14
12-14 5
15-17 2
Total = 60
b. To construct the relative frequency distribution divide the number of occurrences (frequency) in each class by
the total number of occurrences. The relative frequency distribution is shown below.

Relative
Class Frequency Frequency
0-2 6 0.100
3-5 13 0.217
6-8 20 0.333
9-11 14 0.233
12-14 5 0.083
15-17 2 0.033
Total = 60
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c. To develop the cumulative frequency distribution, compute a running sum for each class by adding the
frequency for that class to the frequencies for all classes above it. The cumulative relative frequencies are
computed by dividing the cumulative frequency for each class by the total number of observations. The
cumulative frequency and the cumulative relative frequency distributions are shown below.
Cumulative
Relative Cumulative Relative
Class Frequency Frequency Frequency Frequency
0-2 6 0.100 6 0.100
3-5 13 0.217 19 0.317
6-8 20 0.333 39 0.650
9-11 14 0.233 53 0.883
12-14 5 0.083 58 0.967
15-17 2 0.033 60 1.000
Total = 60
d. To develop the histogram, first construct a frequency distribution (see part a). The classes form the horizontal
axis and the frequency forms the vertical axis. Bars corresponding to the frequency of each class are developed.
The histogram based on the frequency distribution from part (a) is shown below.

2.6
Class Frequency Relative Cumulative
Frequency Relative
Frequency
7.85 – < 7.95 6 0.12 0.12
7.95 – < 8.05 18 0.36 0.48
8.05 – < 8.15 12 0.24 0.72
8.15 – < 8.25 5 0.10 0.82
8.25 – < 8.35 9 0.18 1.00

2.7
a. Proportion of days in which no shortages occurred = 1 – proportion of days in which shortages occurred =
1 – 0.24 = 0.76
b. Less than $20 off implies that overage was less than $20 and the shortage was less than $20 = (proportion
of overages less $20) – (proportion of shortages at most $20) = 0.56 – 0.08 = 0.48
c. Proportion of days with less than $40 over or at most $20 short = Proportion of days with less than $40
over – proportion of days with more than $20 short = 0.96 – 0.08 = 0.86.
13 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

2.8
a. The data do not require grouping. The following frequency distribution is given:

x Frequency
0 0
1 0
2 1
3 1
4 10
5 15
6 13
7 13
8 5
9 1
10 1

b. The following histogram could be developed.

16
14
12
Frequency

10
8
6
4
2
0
0 1 2 3 4 5 6 7 8 9 10
x variable

c. The relative frequency distribution shows the fraction of values falling at each value of x.
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d. The relative frequency histogram is shown below.

e. The two histograms look exactly alike since the same data are being graphed. The bars represent either the
frequency or relative frequency.

2.9
a. Step 1 and Step 2. Group the data into classes and determine the class width:
The problem asks you to group the data. Using the 2 k �n guideline we get:
2k  60 so 26  60
Class width is:
Maximum - Minumum 10 - 2
W = = = 1.33
# Classes 6
which we round up to 2.0
Step 3. Define the class boundaries:
Since the data are discrete, the classes are:
Class
2-3
4-5
6-7
8-9
10-11
Step 4. Count the number of values in each class:
Class Frequency Relative Frequency
2-3 2 0.0333
4-5 25 0.4167
6-7 26 0.4333
8-9 6 0.1000
10-11 1 0.0167
b. The cumulative frequency distribution is:
Class Frequency Cumulative Frequency
2-3 2 2
4-5 25 27
6-7 26 53
8-9 6 59
10-11 1 60
c.
Class Frequency Relative Frequency Cumu. Rel. Freq.
2-3 2 0.0333 0.0333
4-5 25 0.4167 0.4500
6-7 26 0.4333 0.8833
8-9 6 0.1000 0.9833
10-11 1 0.0167 1.000
15 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

The relative frequency histogram is:

0.5
0.45
0.4

Relative Frequency
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
2-3 4-5 6-7 8-9 10-11
Classes

d. The ogive is a graph of the cumulative relative frequency distribution.

2.10.
a. Because the number of possible values for the variable is relatively small, there is no need to group the data
into classes. The resulting frequency distribution is:

This frequency distribution shows the manager that most customer receipts have 4 to 8 line items.
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b. A histogram is a graph of a frequency distribution for a quantitative variable. The resulting histogram is
shown as follows.

2.11
a.
Knowledge Level
Savvy Experienced Novice Total
Online Investors 32 220 148 400
Traditional Investors 8 58 134 200
40 278 282 600
b.
Knowledge Level
Savvy Experienced Novice
Online Investors 0.0533 0.3667 0.2467
Traditional Investors 0.0133 0.0967 0.2233
c. The proportion that were both on-line and experienced is 0.3667.
d. The proportion of on-line investors is 0.6667

2.12
a. The following relative frequency distributions are developed for the two variables:
17 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

b. The joint frequency distribution is a two dimensional table showing responses to the rating on one dimension
and time slot on the other dimension. This joint frequency distribution is shown as follows:

c. The joint relative frequency distribution is determined by dividing each frequency by the sample size, 20.
This is shown as follows:

Based on the joint relative frequency distribution, we see that those who advertise in the morning tend to
provide higher service ratings. Evening advertisers tend to provide lower ratings. The manager may wish to
examine the situation further to see why this occurs.

2.13
a. The weights are sorted from smallest to largest to create the data array.
77 79 80 83 84 85 86
86 86 86 86 86 87 87
87 88 88 88 88 89 89
89 89 89 90 90 91 91
92 92 92 92 93 93 93
94 94 94 94 94 95 95
95 96 97 98 98 99 101

b.
Weight (Classes) Frequency
77-81 3
82-86 9
87-91 16
92-96 16
97-101 5
Total = 49
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c. The histogram can be created from the frequency distribution. The classes are shown on the horizontal axis
and the frequency on the vertical axis. The histogram is shown below.
Frequency

Histogram of Weights

18
16
14
12
10
8
6
4
2
0
77-81 82-86 87-91 92-96 97-101
Weight (Pounds)

d. Convert the frequency distribution into relative frequencies and cumulative relative
frequencies as shown below.
Cumulative
Relative Relative
Weights (Classes) Frequency Frequency Frequency
77-81 3 0.0612 0.0612
82-86 9 0.1837 0.2449
87-91 16 0.3265 0.5714
92-96 16 0.3265 0.8980
97-101 5 0.1020 1.0000
Total = 49
The percentage of sampled crates with weights greater than 96 pounds is 10.20%.

2.14
a. There are n = 100 values in the data. Then using the 2 k �n guideline we would need at least k = 7 classes.
b. Using k = 7 classes, the class width is determined as follows:
High - Low $376, 644 - $87, 429 $289, 215
w= = = = $41,316.43
Classes 7 7
Rounding this up to the nearest $1,000, the class width is $42,000.
c.
19 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

d. The histogram for the frequency distribution in part c. is shown as follows:

Histogram
Frequency

35

30

25

20

15

10

0
$85,000 - $127,000 - $169,000 - $211,000 - $253,000 - $295,000 - $337,000 -
$126,999 $168,999 $210,999 $252,999 $294,999 $336,999 $378,999
Mortgage Values

Interpretation should involve a discussion of the range of values with a discussion of where the major classes
are located.

2.15

L arg est - smallest

a. w = = 214.4 -105.0 = 9.945  w = 10. The salaries in the first class are (105, 105 +
number of classes 11
10) = (105, 115). The frequency distribution follows
Cumulative
Relative Relative
Classes Frequency Frequency Frequency
(105 – <115) 1 0.04 0.04
(115 – <125) 1 0.04 0.08
(125 – <135) 2 0.08 0.16
(135 – <145) 1 0.04 0.20
(145 – <155) 1 0.04 0.24
(155 – <165) 7 0.28 0.52
(165 – <175) 4 0.16 0.68
(175 – <185) 3 0.12 0.80
(185 – <195) 2 0.08 0.88
(195 – <205) 0 0.00 0.88
(205 – <215) 3 0.12 1.00
b. The data shows 8 of the 25, or 0.32 of the salaries including 175,000
c. The data shows 18 of the 25, or 0.72 having salaries that are at most $205,000 and a least $135,000.
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2.16
5.88 - 5.58
a. w = = 0.04 which produces the following frequency distribution
8
Cumulative
Relative Relative
Classes Frequency Frequency Frequency
(5.58 – <5.62) 1 0.02 0.02
(5.62 – <5.66) 0 0.00 0.02
(5.66 – <5.70) 8 0.18 0.20
(5.70 – <5.74) 13 0.29 0.49
(5.74 – <5.78) 11 0.24 0.73
(5.78 – <5.82) 8 0.18 0.91
(5.82 – <5.86) 3 0.07 0.98
(5.86 – <5.90) 1 0.02 1.00
Graph this to produce the following histogram

b. Proportion at least 5.74% = sum of the last four frequencies = 0.24 + 0.18 + 0.07 + 0.02 = 0.51.
c. Place a point above the upper limit whose height equals the cumulative relative frequency

2.17
a.
21 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

b. The 2008 average is 782 which is less than the 2005 average of 866. This could indicate that the new
models are less appealing to automobile customers, or customers could simply have rising expectations.

2.18
a.
Classes Frequency
51 - 53 7
54 - 56 15
57 - 59 28
60 - 62 16
63 - 65 21
66 - 68 9
69 - 71 2
72 - 74 2

30
25
Frequency

20
15
10
5
0
56

62

65

74
53

59

68

71
-

-
51

54

57

60

63

66

69

72

Miles (in Thousands)

b. The tread life of at least 50% of the tires is 60,000 or more. The top 10% is greater than 66,000 and the
longest tread tire is 74,000. Additional information will vary.

c. Classes Frequency
51-52 3
25 53-54 9
20 55-56 10
Frequency

15 57-58 22
10 59-60 10
5 61-62 12
0 63-64 15
65-66 10
4

0
2

4
-5

-5

-5

-6

-6

-7
-5

-6

-6

-6

-7

-7
51

53

55

57

59

61

63

65

67

69

71

73

67-68 5
Miles (in Thousands)
69-70 2
71-72 1
73-74 1

Student will probably say that the 12 classes give better information because it allows you to see more
detail about the number of miles the tires can go.
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2.19.
a. There are n = 294 values in the data. Then using the 2 k �n guideline we would need at least k = 9 classes.
b. Using k = 9 classes, the class width is determined as follows:
High - Low 32 - 10 22
w= = = = 2.44
Classes 9 9
Rounding this up to the nearest 1.0, the class width is 3.0.
c.

Students should recognize that by rounding the class width up from 2.44 to 3.0, and by starting the lowest class
at the minimum value of 10, the 9th class is actually not needed.
d. Based on the results in part c, the frequency histogram is shown as follows:

The distribution for rounds of golf played is mound shaped and fairly symmetrical. It appears that the center is
between 19 and 22 rounds per year, but the rounds played is quite spread out around the center.

2.20

a.
23 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

b. Excluding “Other” there are 100 – 30 = 70 percent of the manufacturers. Only Lenovo and Fujitsu have
headquarters outside of the United States. There is, therefore, 5 + 3 = 8% for their market share. Therefore, the
total market share of US manufacturers excluding “other” = (70 – 8)/70 = 0.89. Therefore, the total market
share excluding “other” is 89%

2.21
a. Using the 2k > n guideline, the number of classes should be 6. There are 38 airlines in the Total column.
Solving finds that 25 = 32 and 26 = 64. Therefore, 6 classes are chosen.
b. Class width is equal to the maximum - minimum. The maximum value is 690,628 and the minimum value
is 439. The difference is 690,628 - 439 = 690,189. The class width is 690,189/6 classes = 115,031.5.
Rounding up to the nearest 1,000 passengers results in a class width of 116,000.
c.
Classes Frequency
0 < 116,000 29
116,000 < 232,000 3
232,000 < 347,000 4
347,000 < 462,000 1
462,000 < 577,000 0
577,000 < 692,000 1

d.

Based on the data from the Orlando International Airport, we see that far and away more airlines have less that
116,000 passengers at the airport,

2.22
a. The frequency distribution is:

The frequency distribution shows that over 1,100 people rated the overall service as either neutral or satisfied.
While only 83 people expressed dissatisfaction, the manager should be concerned that so many people were in
the neutral category. It looks like there is much room for improvement.
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b. The joint relative frequency distribution for “Overall Customer Satisfaction” and “Number of Visits Per
Week” is:

The people who expressed dissatisfaction with the service tended to visit 5 or fewer times per week. While 38%
of the those surveyed both expressed a neutral rating and visited the club between 1 and 4 times per week.

2.23
a. Order the observations (coffee consumption) from smallest to largest. The data array is
shown below:
3.5 3.8 4.4 4.5 4.6 4.6 4.7 4.7 4.8 4.8 5.0 5.0
5.0 5.0 5.2 5.3 5.3 5.3 5.3 5.3 5.3 5.4 5.4 5.4
5.4 5.5 5.5 5.6 5.6 5.7 5.7 5.7 5.7 5.8 5.8 5.9
5.9 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.1 6.1 6.1
6.1 6.1 6.2 6.2 6.2 6.3 6.3 6.3 6.3 6.3 6.3 6.4
6.4 6.4 6.4 6.4 6.4 6.4 6.5 6.5 6.5 6.5 6.5 6.5
6.5 6.5 6.5 6.6 6.6 6.6 6.6 6.6 6.7 6.7 6.7 6.7
6.7 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.9 6.9 7.0
7.0 7.0 7.0 7.1 7.1 7.1 7.2 7.2 7.2 7.2 7.2 7.3
7.4 7.4 7.4 7.5 7.5 7.5 7.5 7.5 7.6 7.6 7.6 7.6
7.6 7.6 7.6 7.7 7.7 7.8 7.8 7.8 7.9 7.9 7.9 7.9
8.0 8.0 8.0 8.0 8.0 8.3 8.4 8.4 8.4 8.6 8.9 10.1

b. There are n = 144 observations in the data set. Using the 2k > n guideline, the number of classes, k, would be
8. The maximum and minimum values in the data set are 10.1 and 3.5, respectively. The class width is
computed to be: w = (10.1-3.5)/8 = 0.821, which is rounded up to 0.9.
Coffee
Consumption
(kg.) Frequency
3.5 - 4.3 2
4.4 - 5.2 13
5.3 - 6.1 35
6.2 - 7.0 49
7.1 - 7.9 33
8.0 – 8.8 10
8.9 - 9.7 1
9.8 – 10.6 1

Most observations fall in the class of 5.9 – 6.6 kg of coffee.

25 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

c. The histogram can be created from the frequency distribution. The classes are shown on the horizontal axis
and the frequency on the vertical axis. The histogram is shown below.

The histogram shows the shape of the distribution. This histogram is showing that fewer people consume small
and large quantities and that most individuals consume between 5.3 and 8.0 kg of coffee, with the most
individuals consuming between 6.2 and 7.0.
d. Convert the frequency distribution into relative frequencies and cumulative relative frequencies as shown
below.
Cumulative
Consumptio Frequenc Relative Relative
n y Frequency Frequency
3.5-4.3 2 0.0139 0.0139
4.4-5.2 13 0.0903 0.1042
5.3-6.1 35 0.2431 0.3472
6.2-7.0 49 0.3403 0.6875
7.1-7.9 33 0.2292 0.9167
8.0-8.8 10 0.0694 0.9861
8.9-9.7 1 0.0069 0.9931
9.8-10.6 1 0.0069 1

8.33% (100 - 91.67) of the coffee drinkers sampled consumes 8.0 kg or more annually.

Section 2-2
2.24
a.
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b. The horizontal bar chart is shown as follows:

2.25
Step 1. Sort the data from low to high.
This is done on the problem. The lowest value is 0.7 and the highest 6.4.
Step 2. Split the values into a stem and leaf.
Stem = units place leaf = decimal place
Step 3. List all possible stems from lowest to highest.
Step 4. Itemize the leaves from lowest to highest and place next to the appropriate stems.
27 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

2.26

a.
b. The measure is the number of students at each grade level.

c. A case can be made for either a bar chart or pie chart. Pie charts are especially good at showing how the
total is divided into parts. The bar chart is best to draw attention to specific results. In this case, a
discussion might be centered on the apparent attrition that takes place in the number of students between
Freshman and Senior years.

2.27. One possible bar chart is shown as follows:

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Another way to present the same data is:

Still another possible way is called a “stacked” bar chart.

2.28
a. The pie chart for 2007 North American Sales is shown below. The categories are the types of product sold
and the appropriate measure is the percentage of total sales for each category.
29 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

b. The pie chart for 2007 United Kingdom Sales is shown below. The categories are the types of product sold
and the appropriate measure is the percentage of total sales for each category.
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c. The categories for the bar chart are the type of product sold. The measure for each category is the number
of barrels of each product sold. The bar chart makes it convenient to make comparisons across product
types and geographic region.

2.29
a. A pie chart displaying income distribution by region is shown below. The categories are the regions and
the measure is the region’s percentage of total income.

b. The bar chart displaying income distribution by region is shown below. The categories are the regions and
the measure for each category is the region’s percentage of total income.

c. Both charts clearly indicate the income distribution for Boston Properties by region. The bar chart,
however, makes it easier to compare percentages across regions. The pie chart is the format presented in
the company’s 2007 Annual Report.
31 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

2.30
a.

b.

c. Arguments exist for both the pie chart and the bar chart. Pie charts are especially good at showing how the
total is divided into parts. The bar chart is best to draw attention to specific results. In this case, it is most
likely that the historic change in profits is to be displayed. The bar chart is best at presenting time defined
data.

2.31
a.

b. Proportion of Vehicle Revenue = 1 – proportion of financial services

= 1 – 8.9/90.3
= 1 – 0.0985 = 0.9015
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2.32
a. Pie charts are typically used to show how a total is divided into parts. In this case, the total of the five ratios
is not a meaningful value. Thus, a pie chart showing each ratio as a fraction of the total would not be
meaningful. Thus a pie chart is not the most appropriate tool. A bar chart would be appropriate.
b

2.33. The bar chart is skewed below indicating that number of $1 Million houses is growing rapidly. It also
appears that that growth is exponential rather than linear.

The bar chart is skewed below indicating that number of $1 Million houses is growing rapidly. It also appears
that that growth is exponential rather than linear.

2.34
The pie chart is shown as follows:
33 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

2.35 A bar chart can be used to make the comparison. Shown below are two examples of bar charts which compare
North America to the United Kingdom.

2.36
a. The bar chart is shown below. The categories are the Global Segments and the measure for each category
is the net sales for the Global Segment.

b. The pie chart is shown below. The categories are the Global Segments and the measure is the proportion
of each segment’s 2007 total net sales.
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2.37
a. The following stem and leaf diagram was created using PhStat. The stem unit is 10 and the leaf unit is 1.

Stem-and-Leaf Display for Drive-Thru Service (Seconds)

Stem unit: 10

6 8
7 13469
8 358
9 023
10 35
11 069
12
13 048
14 567
15 66
16 2
17 8
18 1

b. The most frequent speed of service is between 70 and 79 seconds.

2.38
a. The following stem-and-leaf diagram was developed using PhStat. The stem unit is 10 and
the leaf unit is 1.
Stem-and-Leaf Display for Number of Days to Collect Payment

Stem unit: 10

2 2489
3 012334555667889
4 13578
5 566
6 056
b. Most payments are collected in the range of 30-39 days.

2.39
a. The bar graph is
35 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

b. The percent equals the individual capacity divided by the total, e.g. United  percent = (145/858 )100% =
16.90%, etc. This produces the following pie chart:

c. The percent of seat capacity of those in bankruptcy = 16.9 + 15.2 + 10.7 + 6.3 + 2.4 = 51.5%. Since this is
larger than 50%, their statement was correct.

2.40 a.

b.

Samsung
3%
iRiver
4% Other
9%
Creative
Tech Apple
4% SanDisk
SanDisk
Creative
6% Tech
Apple iRiver
74% Samsung
Other
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c. A case can be made for either a bar chart or a pie chart. Pie charts are especially good at showing how the
total is divided into parts. The bar chart is best to draw attention to specific results. In this case, a discussion
might be centered on the relative large percentage attributable to Apple.

2.41
a.

b. The shape of the data is slightly skewed to the left. The center of the data appears to be between 24 and 26.
2428
c. x = = 24.28 . This and the data indicates that the mean is larger than indicated by J.D. Power. The
50
difference is that the data set is only a sample of the data. Each sample will produce different results but
approximately equal to the population average calculated by J.D. Power.

2.42.
a. A bar chart is an appropriate graph since there are two categories, males and females. A pie chart could also
be used to display the data.
b.
37 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

2.43
a. The following are the averages for each hospital computed by summing the charges and dividing by the
number of charges:

b. The following steps are used to construct the bar chart:

Step 1: Define the categories.
The categories are the four hospital types
Step 2: Determine the appropriate measure.
The measure of interest is the average charge for outpatient gall bladder surgery.
Step 3: Develop the bar chart using computer software such as Excel or Minitab.
The bar chart is shown as follows:

Step 4: Interpret the results.

The largest average charges occurred for gall bladder surgery appears to be in University Related
hospitals and the lowest average appears to be in Religious Affiliated hospitals.
c. A pie chart is used to display the parts of a total. In this case the total charges of the four hospital types is not
a meaningful number so a pie chart showing how that total is divided among the four hospital types would not
be useful or appropriate.

2.44
a.
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b. There appears to be a linear relationship between sales and years in which the sales were made.
c. In time period between 2000 and 2001, Amazon experienced a decrease in its loses. Prior to this time,
each year produced increased loses.

2.45
a.
Health Insurance Payer

4%
3%
1%
1%
2%

5%
1%
BC
CAID
CARE
HMO
INS
OGVT
OTHR
SELF

83%
b.
Total Charges by Payer

800000
600000
400000
200000
0

BC AI
D E O
IN
S VT R LF
C AR H
M G TH SE
C O O

c. Using PHStat the stem & leaf diagram is shown as follows.

39 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

d. Excel’s pivot table can be used to develop a bar chart. The chart showed is a stacked bar chart.

Section 2-3
2.46
a.

There appears to be a curvilinear relationship between the dependent and independent variables.

b.

Having removed the extreme data points, the relationship between dependent and independent variables
seems to be linear and positive.
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2.47 Step 1: Identify the time-series variable

The variable of interest is the monthly sales.
Step 2: Layout the Horizontal and Vertical Axis
The horizontal axis will be month and the vertical axis is sales .
Step 3: Plot the values on the graph and connect the points

The sales have trended upward over the past 12 months.

2.48 Steps 1 and 2: Identify the two variables of interest

The variables are y (dependent variable) and x (independent variable)
Step 3: Establish the scales for the vertical and horizontal axes
The y variable ranges from 40 to 250 and the x variable ranges from 15.9 to 35.3
Step 4: Plot the joint values for the two variables by placing a point in the x,y space shown as follows:

There is negative linear relationship between the two variables.

41 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

2.49 The time-series variable is Year-End Dollar Value Deposits ($ in millions) measured over 8 years with a
maximum value of 1,380 (million). The horizontal axis will have 8 time periods equally spaced. The vertical axis
will start at 0 and go to a value exceeding 1,380. We will use 1,600. The vertical axis will also be divided into 200-
unit increments. The line chart of the data is shown below.

The line chart shows that Year-End Deposits have been increasing since 1997, but have increased more sharply since
2002 and leveled off between 2006 and 2007.

2.50
a.

b. The relationship appears to be linear and positive.

c. Note on the line plot that the Years starts at 2 years and stops at 12 years: a range of 10 years. Also the
sales increase from 50 to 300 $K: a range of 250. This suggests that 250/10 = 25 $K average increase per
one year increase.

2.51
a.

b. The relationship appears to be curvilinear.

c. The largest difference in sales occurred between 2006 and 2007. That difference was 14.835 – 10.711 =
4.124 $billions.
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2.52.

The line chart illustrates that over the nine year period between 1996 and 2004, video game sales in the U.S. have
grown quite steadily from a just below $4 billion to over $7 billion.

2.53
a. The time-series variable is diluted net earnings per common share measured over 10 years with a maximum
value of $2.66. The horizontal axis will have 10 time periods equally spaced. The vertical axis will start at 0
and go to a value exceeding $2.66. We will use $3.00. The vertical axis will also be divided into $0.50-unit
increments. The line chart of the data is shown below.

b. The time-series variable is dividends per common share measured over 10 years with a maximum value of
$1.03. The horizontal axis will have 10 time periods equally spaced. The vertical axis will start at 0 and go to a
value exceeding $1.03. We will use $1.20. The vertical axis will also be divided into $0.20-unit increments.
The line chart of the data is shown below.
43 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

c. One variable is Diluted Net Earnings per Common Share and the other variable is Dividends per Common
Share. The variable dividends per common share is the dependent (y) variable. The maximum value for each
variable is $2.66 for Diluted Net Earnings and $1.03 for Dividends. The XY Scatter Plot is shown below.

There is a relatively strong positive relationship between the two variables, which is as one would expect. That
is, one might expect to see the two variables move in the same direction.

2.54
a.

b. In the interval 1999 – 2002, there appears to be a curvilinear relationship. Whereas in the interval 2002 –
2005, the relationship seems to be linear.
c. The most recent data indicate that the relationship is linear. Devoid of additional, cooperating data, a
linear relationship would be used to project the companies’ profits in the year 2006.

2.55.

Based on the scatter diagram, it appears that there is a positive linear relationship between home and road
attendance. However, the relationship is not perfect.
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2.56
a.

Since 1995, there has been a very steep growth in the number of private jets in fractional ownership status.

2.57. Step 1: Identify the two variables of interest

In this situation, there are two variables, fuel consumption per hour, the dependent variable, and
passenger capacity, the independent variable.
Step 2 Identify the dependent and independent variables.
The analyst is attempting to predict passenger capacity using fuel consumption per hour.
Therefore, the capacity is the dependent variable and the fuel consumption per hour is the
independent variable.
Step 3: Establish the scales for the vertical and horizontal axes
The y variable (fuel consumption) ranges from 631 to 3,529 and the x variable (passenger
capacity) ranges from 78 to 405.
Step 4: Plot the joint values for the two variables by placing a point in the x,y space shown as follows:

Based on the scatter diagram we see there is a strong positive linear relationship between passenger
capacity and fuel consumption per hour.
45 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

2.58.

The graph illustrates a general pattern in the bread sales. Higher sales tend to occur for all types of bread
on Saturdays, Mondays and Thursdays with Fridays typically the lowest.

2.59
a. Step 1: Identify the time-series variable
The variable of interest is annual average price of gasoline in California
Step 2: Layout the Horizontal and Vertical Axis
The horizontal axis will be the year and the vertical axis is average price (See Step 3)
Step 3: Plot the values on the graph and connect the points

Gasoline prices have trended upward over the 36 year period with some short periods of decline. However,
prices rises have been very steep since 1999.
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b. Adding the inflation adjusted prices to the graph does not require that we use a different scale. The
results of adding the second time-series is shown as follows:

c. The graph in part b. shows an interesting result. That is, although the price of gasoline has risen quite
steadily since 1970, when the value of the dollar is taken into account, the overall trend has been more
level. In fact, the highest prices (when the inflation index is considered) occurred in 1980 and 1981 at the
equivalent of slightly more than $2.50. This exceeds the prices during the 2000-2005 years. Thus, while
gasoline prices were high in California in 2005, it is not the worst that has occurred in that state.

2.60
a.

b. The relationship appears to be linear and positive.

c. The average equals the sum divided by the number of data points = 6830/15 = 455.33.
47 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

2.61
a.

b. Both relationships seem to be linear in nature.

c. This occurred in 1998, 1999, and 2001.

2.62
a.

b.

Note: you must convert the sales data into tens of thousands which is obtained by (Sales X 100), e.g., 6.76
million becomes 6.76(100) = 676 (tens of thousands). This is done to produce comparable Y axes for the two
line plots.

c. It appears from the line plots that the monthly sales have been fluctuating greatly during this period, dipping
in January, heading back up during the summer months and then declining again. Median sales price has shown
a steady minor decline during the period.
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Chapter Exercises
2.63 A relative frequency distribution deals with the percentage of the total observations that fall into each class
rather than the number that fall into each class. Sometimes decision makers are more interested in
percentages than numbers. Politicians, for instance, are often more interested in the percentage of voters
that will vote for them (more than 50%) than the total number of votes they will get. Relative frequencies
are also valuable when comparing distributions from two populations that have different total numbers.

2.64 Thinking in terms of the types of data discussed in chapter 1, that is nominal, ordinal, interval and ratio, bar
charts are visual representations of frequency distributions constructed from nominal or ordinal data.

2.65 Pie charts are effectively used when the data set is made up of parts of a whole, and therefore each part can be
converted to a percentage. For instance, if the data involves a budget, a pie chart can represent the
percentage of budget each category represents. Or, if the data involves total company sales, a pie chart can
be used to represent the percentage contribution to sales for each major product line.

2.66 A line chart is an effective tool to represent the relation between a dependent and an independent variable when
values of the independent variable form a natural increasing sequence. In many cases this means the
independent variable is a measure of time and the data is time-series data. With a scatter plot the values of
the independent variable are determined randomly and not according to a preset sequence.

2.67
a.

b. It appears that there is a positive linear relationship between the attendance and the year. However, there
does appear to be a sharp decline in the last five years. It could be evidence of a normal cycle since a
similar decline occurred in 1990/91 which was followed by a steady climb in attendance for six of the next
seven years.

2.68
a. Using the 2 k �n guideline:
2k  48 = 26  48
To determine the class width, (17.5 – 0.3)/6 = 2.87 so round up to 3 to make it easier.

Classes Frequency
0.1 to 3 27
3.1 to 6.0 9
6.1 to 9.0 6
9.1 to 12 4
12.1 to 15.0 0
15.1 to 18.0 2
49 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

b.

c.

d.
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2.69
a.

b. Student answers will vary but should include identifying that both private and public college tuition costs
have more than doubled in the 20 years of data.

2.70 a.

b. In both cases there appears to be a linear decline in the percentage of men receiving the specific degree
and an incline in the percentage of women receiving the specific degree.

2.71
a. The frequencies can be calculated by multiplying the relative frequency times the sample size of 1,000.
Class Length (Inches) Frequency Relative Frequency
8 < 10 220 0.22
10 < 12 150 0.15
12 < 14 250 0.25
14 < 16 240 0.24
16 < 18 60 0.06
18 < 20 50 0.05
20 < 22 30 0.03

Frequency Distribution of Walleyes

300

250

200

150

100

50

0
10 12 14 16 18 20 22
< < < < < < <
8 10 12 14 16 18 20
51 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data
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b. The histogram is probably a better representation of the fish length data.

Pie Chart of Walleyes
20 <22
3%

18 <20
5%
8 <10
16 <18 22%
6%

14 <16
24%
10 <12
15%

12 <14
25%

2.72
a. Based upon the following table the percent of class that hold at least 120 seconds (2 minutes) is
0.0311 + 0.0244 + 0.0171 + 0.0301 = 0.1029
Classes (in seconds) Number Rel. Freq.
< 15 456 0.0899
15 < 30 718 0.1415
30 < 45 891 0.1756
45 < 60 823 0.1622
60 < 75 610 0.1202
75 < 90 449 0.0885
90 < 105 385 0.0759
105 < 120 221 0.0435
120 < 150 158 0.0311
150 < 180 124 0.0244
180 < 240 87 0.0171
> 240 153 0.0301

b. The number of people who have to wait 120 seconds (2 minutes) or more is
158 + 124 + 87 + 153 = 522 * $30 = $15,660 month.
53 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

2.73
a. The independent variable is hours and the dependent variable is sales

Scatter Plot of Hours and Sales

$60,000
$50,000
$40,000
Sales $30,000
$20,000
$10,000
$-
0 50 0 0 0 0 0 0
10 15 20 25 30 35
Hours

b. It appears that there is a positive linear relationship between hours worked and weekly sales. It appears
that the more hours worked the greater the sales. No stores seem to be substantially different in terms of
the general relationship between hours and sales.

2.74
a.

The relationship between diesel prices in CA versus the national average seems to be that CA prices are
unanimously higher than the national average and has the structural relationship to the weeks the prices were
recorded. That relationship seems to be curvilinear in nature.
b. The time the average diesel price became larger than $3 per gallon ($3.149) was during the 50th week.
c. The smallest price occurred in week 16 and highest price in week 50. So there was 50 - 16 = 34 weeks in
which the prices rose 3.149 – 1.973 = 1.176. That is an average rise of 1.176/34 = 0.0346 dollar/week
increase. The difference between $4.00 and $3.149 is 0.851. This means that the number of weeks required to
reach $4.00 would be 0.851/0.0346 = 24.6  25 weeks. Thus, the week in which $4.00 is achieved should be
the 75th (50 + 25) week.
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2.75

2.76
a. Using the 2 k �n
2k > 100 so 27 = 128

Determine the width: (310496 – 70464)/7 = 24,290. Round to 35,000

Classes Frequency
70,000 - 104,999 43
105,000 - 139,999 34
140,000 - 174,999 13
175,000 - 179,999 1
175,000 - 209,999 4
210,000 - 244,999 2
280,000 - 314,999 3
55 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

b.
Cumulative
Frequenc Relative Relative
Classes y Frequency Frequency
70,000 - 104,999 43 0.43 0.43
105,000 - 139,999 34 0.34 0.77
140,000 - 174,999 13 0.13 0.90
175,000 - 179,999 1 0.01 0.91
175,000 - 209,999 4 0.04 0.95
210,000 - 244,999 2 0.02 0.97
280,000 - 314,999 3 0.03 1.00

c. Using four classes

Distribution with 4 classes appears to be more skewed than when 7 classes are used. Less detail is
available.
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Cumulative Frequency Ogive

Ogive

1.2
Cumulative Relative Frequency

0.8

0.6

0.4

0.2

0
70000 - 131000 131001 - 192000 192001 - 253000 253001 - 314000
Median Price Classes

2.77

a.
Inventory has been trending slightly up over the five years, but appears to be highly seasonal with predictable
highs at certain points each year.

b.

This bar chart is effective for showing the growth in total annual inventory over the five years. However,
students should keep in mind that the sum of monthly inventory does not equate to how much inventory the
store had on hand at the end of the year. Students might question why the store would graph the total
inventory
57 Chapter 2 | Graphs, Charts, and Tables—Describing Your Data

2.78
a.

b. Notice that the class interval with no observations is the 7th class which has boundaries of $2.45 and $2.55.
Since the numbers are averages taken across the United States, it is possible that the sampling technique,
simply from randomness, didn’t select prices in that range. Another possible explanation is that there are
retailers in certain locations that generally charge ten cents a gallon more. It is a commonly held belief that
California retailers charge more than the national average. This could be the reason. It bears further
investigation.