Page 136 - DCOM203_DMGT204_QUANTITATIVE_TECHNIQUES_I

Unit 7: Measures of Dispersion

State the merits and demerits of mean deviation Notes
Explain the concept of standard deviation
Describe coefficient of variation

Introduction

A measure of central tendency summarizes the distribution of a variable into a single figure
which can be regarded as its representative. This measure alone, however, is not sufficient to
describe a distribution because there may be a situation where two or more different distributions
have the same central value. Conversely, it is possible that the pattern of distribution in two or
more situations is same but the values of their central tendency are different. Hence, it is necessary
to define some additional summary measures to adequately represent the characteristics of a
distribution. One such measure is known as the measure of dispersion or the measure of variation.
7.1 Definitions

The concept of dispersion is related to the extent of scatter or variability in observations. The
variability, in an observation, is often measured as its deviation from a central value. A suitable
average of all such deviations is called the measure of dispersion.
Some important definitions of dispersion are given below:
“Dispersion is the measure of variation of the items.” — A.L. Bowley

“Dispersion is the measure of extent to which individual items vary.” — L.R. Connor
“The measure of the scatteredness of the mass of figures in a series about an average is called the
measure of variation or dispersion.” — Simpson and Kafka

“The degree to which numerical data tend to spread about an average value is called variation
or dispersion of the data.” — Spiegel

Did u know?
1. Measures of central tendency are known as the averages of first order.
2. Measures of dispersion are known as the averages of second order.

Self Assessment

Fill in the blanks:

1. A measure of central tendency summarizes the distribution of a variable into a single
figure which can be regarded as its ...............................
2. It is possible that the pattern of distribution in two or more situations is ....................... but
the values of their central tendency are ..................................
3. The concept of ..............................is related to the extent of scatter or variability in
observations.
4. Measures of central tendency are known as the ..................................
5. Dispersion are also known as the ....................................

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