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You are here: Home / *FEATURES / EXPERTS / How is mean, mode, and median used in real life?

How is mean, mode, and median used in real life?

January 12, 2021 By GISuser

For many people, school subjects didn’t always seem very relevant. Not only that, many just weren’t very exciting either. Once you get to college and university it seems to suddenly change and you can find joy in many things you avoided at school.

Much of this is from peer pressure or attention span, or simply because video games and other distractions were more interesting at the time. Numeracy is a vital skill that is neglected by many.

One subject that many people don’t enjoy is mathematics. It isn’t seen as cool and most people feel they only use basic sums each day. However, you need to know these things more than you might realize. Take mean, mode, and median calculations, if you can even remember doing them. What is the purpose of these calculations?

Do we really need math in everyday life?

These days a lot of skills, and jobs are being replaced by computers and other automated systems. Humans can be extremely inventive and productive, but they can also be lazy. Those math skills that you learned in school are probably mostly forgotten. The basics of subtraction, division, multiplication, and addition are still there, the rest are likely to have been lost for most folks.

This is a shame as there are real-life applications for even the most basic math skills such as working out percentages when giving tips. Mean, mode and median may seem like some distant memory but they can be useful and are worth learning again. 

What is mean, mode, and median?

These are all to do with different variables in a set of numbers. Out of all of them, the mean is probably the one you have used or read about the most. You just didn’t realize it.

When you hear someone saying the average age of a community is X or the average goals scored per season is Y, they are talking about the Mean. When you hear about the ‘average’ they are talking about the ‘Mean’. To calculate this average, or Mean, you need to add a group of numbers together and divide by the total. For example, add the following: 5, 6, 2, 6 & 9. The total is 28. Now divide by 5 because that is the total number of figures there and you get 5.6. This is the ‘Mean’. 

What is the Median?

Now you are aware of the Mean, read about the other two calculations. The Median is the middle point in a set of figures. It differs from the average as you only calculate the middle area. A median calculator can help you do this; but to explain, look at the following numbers: 3, 6, 9, 12, 14 & 17. The two middle numbers are 9 & 12. Added together they are 21 so the Median is 10.5. 

And the Mode?

That is simply the number that appears in a list the most. In the example for Median, the number 6 appears twice where every other number appeared only once. That means the Mode is 6. 

Why does it matter?

It matters because the Median is a way to strip away outliers and get a more accurate measure of figures. This is handier than you might realize, and rightly so in business.

For instance, you may be looking to view your sales figures and see how much each customer spends online each month. You can do this by adding up all the income and then taking this total and dividing it by the number of sales. Now you have the Mean of all the purchases. Running an online business needs IT tools but understanding math is vital too.

Adding up the sales to each customer and then dividing the amount would give you the Mean of how much people spend individually each month.

However, there is a problem here. 

Why do you need Median calculations instead of Mean?

You have worked out your average individual sales and now you are planning on changing prices or adding new products that you think can target your market. Should be good right? Not necessarily. Outliers can screw with your data and set inaccurate results. Median calculations can fix this.

Say you have a thousand customers spending in the range of $20 to $30 a month each with you but you have 50 customers who spend $500 a month each. If that strange situation happened then your Mean calculations would return a spend of around $48. By putting up your prices to the 50 bucks mark you might lose many of your lower spending customers. Discarding those outliers and using the Median will give you the middle ground and make more sense. 

Summary

Yes, math might not be fun but it is useful, especially if you are running a business of any type. Of course you will use business accounting software but you should understand how to calculate manually too. It is also needed for coding, working out tips, checking exchange rates when traveling, and just making sure you got the right discount on a sale.

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Filed Under: EXPERTS, Tips Tagged With: Math






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