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  Statistical Techniques and 6 Sigma
  coeffecient of variation

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Author Topic:   coeffecient of variation
arnima
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posted 16 February 2001 07:37 AM           Edit/Delete Message   Reply w/Quote
what is the cut off value of coeffcient of variation ( %) , above which the variation is considred to be significant ???or At what coefficient of variation the data is considered to be homogenous????

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Rick Goodson
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From:Wuakesha, Wisconsin, USA
Registered: Aug 2000

posted 19 February 2001 10:35 AM     Click Here to See the Profile for Rick Goodson   Click Here to Email Rick Goodson     Edit/Delete Message   Reply w/Quote
The 'correlation coefficient' is designated by 'r' where r is:

r = (1/n)(SUM[(x-xbar)x (y-ybar)]) divided by (sigma subx)(sigma suby)

where n is the number of pairs and x & y are the values of the two variables. To test for whether the apparent correlation is significant use a 't' test where:

t (no. of sigma) = r multiplied by the square root of n

If t is greater than 3 consider there is a significant correlation


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Mark Smith
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posted 26 April 2001 03:54 PM     Click Here to See the Profile for Mark Smith     Edit/Delete Message   Reply w/Quote
Rick,

I was just scanning the forums and noticed your reply to this query. She is asking about the significance level for a coefficient of variation or CV! It is defined as STDEV/MEAN *100.

It is hard to quantify exactly where it becomes a significant value since it depends upon how much variation in whatever is being measured your business can tolerate. I would use it as a relative measure when comparing groups of data. Similar to comparing STDEV between populations. Hope this helps.

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Ken K.
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posted 27 April 2001 04:03 PM           Edit/Delete Message   Reply w/Quote
I've really never seen much use for the coefficient of variation.

Does anyone out three use it regularly? Any tips?

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dWizard
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From:Normandy, TN 37360
Registered: Mar 2001

posted 04 May 2001 11:56 AM     Click Here to See the Profile for dWizard   Click Here to Email dWizard     Edit/Delete Message   Reply w/Quote
Marc is correct.

The coefficient of variation is defined as the standard deviation divided by the mean as a percent [(s/Xbar)*100]. It is used primarily when comparing two distributions that are either:


  1. The data are different units, or
  2. The data are in the same units, but the means are far apart.

The coefficient of variation has no units. It measures relative variability, that is, variability relative to the magnitude of the data.

·what is the cut off value of coefficient of variation (%) , above which the variation is considered to be significant ???

Since CV is used based upon the above uses, CV in and of itself is not significant. Significance applies when comparing two or more variances. Typically, when determining significance for two variances of different units, some method would need to be applied to convert both variances to the same unit.

At what coefficient of variation the data is considered to be homogenous????

Coefficient of variation does not determine homogeneity.

Ken K.,

Yea, I use it some, but rarely.

Regards,
dWizard

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I was better but I got over it.

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