Lesson

Describe the distribution before choosing a story

Order the observations, compute center and spread under declared conventions, and investigate an unusual value without result driven deletion.

Updated Aug 7, 2026 Review due Nov 7, 2026
On this page
  1. Center answers a positional or balancing question
  2. Spread needs a denominator and a unit
  3. Flag the 78-day invoice
  4. Make a bounded comparison
About this lesson

Lesson details

Estimated study time
2 hr
Learning objectives (12)

Do not begin with the average. Begin with the values.

Year 1 settlement days 22 25 26 27 28 29 30 31 32 33 34 35 36 38 40 44
Year 2 settlement days 18 20 21 22 23 24 25 26 27 28 29 30 31 33 35 78

Year 2 has many shorter observations and one much longer observation. Any single center will compress that tension.

Center answers a positional or balancing question

For Year 1, the sum is 510 days and (n=16):

[ \bar{x}_1=510/16=31.875\text{ days}. ]

The middle values are 31 and 32, so the median is 31.5 days. Year 2 has a mean of 29.375 days and median of 26.5 days. The right-minus-left differences are −2.5 mean days and −5 median days.

Those are descriptive sample differences. The larger gap in medians tells us the 78-day value pulls the Year 2 mean upward; it does not tell us which center is the “correct” business result.

Spread needs a denominator and a unit

The typed calculation uses n - 1 because these are samples. Year 1 has sum of squared deviations 513.75 day²:

[ s_1^2=513.75/15=34.25\text{ day}^2, \qquad s_1=5.852349955\text{ days}. ]

Year 2 sample variance is 190.783333333 day² and sample standard deviation is 13.812434012 days. The standard deviation returns to days, but it still gives the tail substantial influence. A complete population would divide squared deviations by (N), not n - 1.

Flag the 78-day invoice

Under the declared median-of-halves convention, split the 16 ordered values into two groups of eight. The middle pair of the lower half is 22 and 23, so (Q_1=(22+23)/2=22.5). The middle pair of the upper half is 30 and 31, so (Q_3=(30+31)/2=30.5). Thus (IQR=8), the upper inner fence is 42.5 days, and 78 lies beyond it.

Open the tail investigation. The evidence supports a flag, not a cause. Trace dates, payments, disputes, terms, joins, and identifiers. Correct a verified source error; retain a valid record; or apply a predeclared exclusion rule. Never delete it because the interval gets narrower.

Make a bounded comparison

Complete the distribution comparison, then write three sentences:

  1. one about centers;
  2. one about spread and tail shape; and
  3. one naming the population and causal claims the two samples do not establish.

Depth checkpoint: use the already computed median as a tail-resistant companion to the mean, then explain both sides of the choice. It preserves a view of typical position when 78 pulls the mean, but it can hide the economically important delay represented by that same invoice. A companion summary adds a view; it does not license silent deletion.