# Statistics Contingency table and decision tree

Two tools that are often used in this process are the contingency table and the decision tree. What are these tools and how to they help us to make decisions under uncertainty when we are dealing with probabilities? Please offer an example of how you may use these tools to help make a business decision.

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CONTINGENCY TABLES

In statistics, contingency tables are used to record and analyze the relationship between two or more variables, most are usually categorical variables.

Suppose that we have two variables, sex (male or female) and handedness (right- or left-handed). We observe the values of both variables in a random sample of 100 people. Then a contingency table can be used to express the relationship between these two variables, as follows:

right-handed left-handed TOTAL

male 43 9 52

female 44 4 48

TOTAL 87 13 100

The figures in the right-hand column and the bottom row are called marginal totals and the figure in the bottom right-hand corner is the ...

#### Solution Summary

Statistics Contingency table and decision tree: How are they used with examples.