201 data analysis

Question 1

(+)/(-) of using pie charts

Answer 1

(+) help businesses to make decisions

(-) doesn’t show increases/ decreases of proportions over time- trends not shown/ data cannot be extrapolated.-do not show relationships such as the impact of advertising spend on sales revenue, - additional info needed to support data presented in pie charts.

Question 2

(+)/(-) of using bar charts

Answer 2

(+) data presented clearly/useful to summarise a large amount of data in a visual format. Key values can be highlighted very quickly
(-) bar charts can oversimplify data and further explanations may be needed to give an accurate analysis of the data. Data can also be manipulated to show false results and patterns.

Question 3

(+)/(-) of using histograms

Answer 3

(+) shows the shape of the distribution for a large set of data-> useful when displaying data which has chronological categories or numerical groupings.

(-) cannot be used for exact values as the data is grouped into intervals.-> effectiveness of data decreases when the range of data is too wide.

Question 4

what are index numbers

Answer 4

used to make numerical data easier to understand.using index numbers allows data to be standardised over time so that the data is easily comparable.
eg. in the year 2000 , the average weekly sales for a business selling ice-creams was £400. use the year 2000 as the ‘base index number’, which is most often chosen as 100. To convert a value into an index number, we use the following formula:

index=. value
—————x 100 = 400/400 x100=100
base year

In 2010 the average weekly sales had increased to £465 :
465
——- x 100= 116.25
400

Question 5

(+)/(-) of using index numbers

Answer 5

(+) useful in business- managers concerned with the way in which values such as prices paid for raw materials, numbers of employees and customers, sales, output, productivity and profits etc. may change over time.