STATISTICS IN BUSINESS

DECISION
Presentation on
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REQUISITES OF GOOD
MEASURE OF LOCATION
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What is location or central tendency ?

Central tendency is defined as “the statistical

measure that identifies a single value as
representative of an entire distribution.It
aims to provide an accurate description of the
entire data. It is the single value that is most
typical/representative of the collected data.
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types of central tendency or location

The central tendency of the dataset can be found out
using the three important measures namely 
mean, median and mode.
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mean

The mean represents the average value of the

dataset. It can be calculated as the sum of all the
values in the dataset divided by the number of
values. In general, it is considered as the
arithmetic mean.
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median

Median is the middle value of the dataset in

which the dataset is arranged in the ascending
order or in descending order. When the dataset
contains an even number of values, then the
median value of the dataset can be found by
taking the mean of the middle two values
z mode

The mode represents the frequently

occurring value in the dataset. Sometimes
the dataset may contain multiple modes
and in some cases, it does not contain
any mode at all.
 Requisites
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a) Rigidly defined
In some cases would considerably affected the value of the average. If the
average is rigidly defined. This instability in it’s value would be no more, and itwould
always be a definite figure.

b) Based on all observation

To ensure that is should represent the entire data set, it’s value should be calculated by taking into
consideration the entire data set.
c) Easy to understand and calculate

The value of an average should be computed by using a simple method without reducing it’s
accuracy and other advantages.

d) Algebraic treatment
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It should have capable of farther algebraic treatment. In other wards, an ideal average is one which
can be used for further statistical calculation.

e) Mathematical formula

Usually it defined in a form of mathematical formula. There are different formulas for finding
average of different types of
Problems.
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Thank you