Histogram

A histogram is a type of bar chart that represents the distribution of numerical data. In business intelligence and data analytics, a histogram is used to give a visual snapshot of where data points fall within certain ranges or intervals. Each bar in a histogram represents the frequency (how often something happens) or probability (how likely something is to happen) of data points within a specific range, known as a bin.

For example, a retailer might use a histogram to look at the number of sales transactions within different price ranges. High bars in low-price ranges could indicate that more customers are buying cheaper items, while lower bars in high-price ranges might suggest fewer high-ticket purchases. This visualization helps businesses quickly grasp patterns and anomalies in large data sets, such as identifying common purchase amounts or spotting unusual spikes in specific price brackets.

Histograms are particularly helpful for spotting trends, understanding the spread of data, and making decisions based on statistical analysis. They turn complex data sets into simple visuals, making it easier for business leaders to see what’s happening and take action based on those insights. It’s a foundational tool for anyone working with data because it simplifies complex information into a form that’s easy to understand and communicate.