Scatter diagram shows the relation between two set of data. Scatter diagram consist of coordination points. In a Scatter diagram each point is represented by an Independent and Dependent variable.
Independent variable : A variable whole value is not affected by anything else.
Dependent variable : A variable whose value is determined by the dependent variable.
A scatter diagram shows if there is relationship between variable and dependent variable. The more is look like there is line stronger the relationship . The dependent variable should be always in the Y- axis . The independent variable should be on the X-axis.
Variables are counted in positive and negative. Just we come with an example where we come to know meaning of Scatter diagram and it use.
Example: An Institute provide the training for ABC course for a month duration. And after completion of course. His placements track record is also very good mean above 80%. Institute proprietor is good profit with 15 students per month. If every month He got 10 students . He is not in breakeven point but average profitability. Consider He got in a month 20 students. He having excellent profit.
Proprietor wants to launch a new XYZ course. So He need to analysis quantitative and financial data with other ratio like PE, ROI etc. In A year total how many students enrolled and placed successfully . If student enrolled above average level means 15 student per month why………… If students enrolled below 15 than again Why…. If enrollment is 10 or below than He need to analysis more and do introspection. Similarly He analysis on his placed data . Than He come to know one conclusion .
Ok last entire year my profitability and performance is above average. Than He is eligible to start new course XYZ . He need to put more effort and new idea to get more profit with satisfaction level of students. Lets go through below diagram.