Statistics for managers using Microsoft Excel

Cover ......Page 1
Statistics for Managers ......Page 4
About the Authors ......Page 9
Brief Contents ......Page 12
Contents ......Page 14
Preface ......Page 24
Let’s Get Started: Big Things to Learn First ......Page 33
 Using Statistics: “You Cannot Escape from Data”......Page 34
  LGS.1 A Way of Thinking......Page 35
  LGS.2 Define Your Terms!......Page 36
  LGS.3 Business Analytics: the Changing Face of Statistics......Page 37
   Statistics: An Important Part of Your Business Education......Page 38
  LGS.4 How to Use This Book......Page 39
   Key Terms ......Page 40
   EG3. What Excel Skills Does This Book Require?......Page 41
   EG4. Getting Ready to Use Excel with This Book......Page 43
   EG6. Opening and Saving Workbooks......Page 44
   EG8. Printing Worksheets......Page 45
Defining and Collecting Data ......Page 47
 Using Statistics: Beginning of the End … Or the End of the Beginning?......Page 48
 Establishing the Variable Type ......Page 49
  Nominal and Ordinal Scales ......Page 50
  Interval and Ratio Scales ......Page 51
  Data Sources ......Page 53
  Recoded Variables ......Page 54
 Types of Sampling Methods ......Page 55
  Simple Random Sample ......Page 56
  Cluster Sample ......Page 57
 Types of Survey Errors ......Page 58
  Measurement Error ......Page 59
 Think About This: New Media Surveys/Old Sampling Problems......Page 60
 Using Statistics: Beginning … Revisited......Page 61
  Key Terms......Page 62
  Chapter Review Problems......Page 63
  CardioGood Fitness......Page 64
  Learning with the Digital Cases......Page 65
  EG1.3 Collecting Data......Page 67
  EG1.5 Types of Survey Errors......Page 68
Organizing and Visualizing Data......Page 69
 Using Statistics: The Choice Is Yours......Page 70
  How to Proceed with This Chapter ......Page 71
  The Summary Table ......Page 72
  The Contingency Table ......Page 73
  The Ordered Array ......Page 76
  The Frequency Distribution ......Page 77
  Classes and Excel Bins ......Page 79
  The Relative Frequency Distribution and the Percentage Distribution ......Page 80
  The Cumulative Distribution ......Page 82
  The Bar Chart ......Page 86
  The Pie Chart ......Page 87
  The Pareto Chart ......Page 88
  The Side-by-Side Bar Chart......Page 90
  The Stem-and-Leaf Display......Page 93
  The Histogram ......Page 94
  The Percentage Polygon ......Page 95
  The Cumulative Percentage Polygon (Ogive)......Page 97
  The Scatter Plot ......Page 100
  The Time-Series Plot......Page 101
 Challenges in Visualizing Data ......Page 104
  Chartjunk ......Page 105
  Guidelines for Developing Visualizations ......Page 107
 Organizing and Visualizing Many Variables ......Page 108
  Multidimensional Contingency Tables ......Page 109
  Drill-down ......Page 110
 PivotTables and Business Analytics......Page 111
  Real-World Business Analytics and Microsoft Excel......Page 113
  Summary ......Page 114
  Key Equations......Page 115
  Chapter Review Problems......Page 116
  Managing Ashland MultiComm Services......Page 121
  Clear Mountain State Student Surveys......Page 122
  EG2.1 Organizing Categorical Data......Page 123
  EG2.2 Organizing Numerical Data......Page 125
  EG2.3 Visualizing Categorical Data......Page 127
  EG2.4 Visualizing Numerical Data......Page 129
  EG2.5 Visualizing Two Numerical Variables......Page 132
  EG2.7 Organizing and Visualizing Many Variables......Page 133
  EG2.8 PivotTables and Business Analytics......Page 134
Numerical Descriptive Measures......Page 135
 Using Statistics: More Descriptive Choices......Page 136
  The Mean ......Page 137
  The Median ......Page 139
  The Mode ......Page 140
  The Geometric Mean ......Page 141
  The Range ......Page 142
  The Variance and the Standard Deviation ......Page 143
  The Coefficient of Variation ......Page 147
  Z Scores......Page 148
  Shape: Skewness and Kurtosis ......Page 149
 Visual Explorations: Exploring Descriptive Statistics......Page 151
  Quartiles ......Page 155
  The Interquartile Range ......Page 156
  The Five-Number Summary......Page 157
  The Boxplot......Page 159
 Numerical Descriptive Measures for a Population ......Page 161
  The Population Mean ......Page 162
  The Population Variance and Standard Deviation ......Page 163
  The Empirical Rule ......Page 164
  The Chebyshev Rule ......Page 165
  The Covariance ......Page 167
  The Coefficient of Correlation ......Page 168
 Using Statistics: More Descriptive Choices, Revisited......Page 173
  Key Equations......Page 174
  Key Terms ......Page 175
  Chapter Review Problems ......Page 176
  Digital Case......Page 179
  Clear Mountain State Student Surveys......Page 180
  EG3.1 Central Tendency......Page 181
  EG3.3 Exploring Numerical Data......Page 182
  EG3.4 Numerical Descriptive Measures for a Population......Page 183
  EG3.5 The Covariance and the Coefficient of Correlation......Page 184
Basic Probability ......Page 185
 Using Statistics: Possibilities at M&R Electronics World......Page 186
 Basic Probability Concepts ......Page 187
  Events and Sample Spaces ......Page 188
  Simple Probability ......Page 189
  Joint Probability ......Page 190
  Marginal Probability ......Page 191
  General Addition Rule ......Page 192
  Computing Conditional Probabilities ......Page 195
  Decision Trees ......Page 197
  Independence ......Page 198
  Multiplication Rules ......Page 199
  Marginal Probability Using the General Multiplication Rule......Page 200
 Bayes’ Theorem ......Page 203
 Think About This: Divine Providence and Spam......Page 206
 Ethical Issues and Probability ......Page 207
 Using Statistics: Possibilities at M&R Electronics World, Revisited......Page 208
  Key Equations......Page 209
  Chapter Review Problems......Page 210
  Clear Mountain State Student Surveys......Page 212
  EG4.3 Bayes’ Theorem......Page 214
Discrete Probability Distributions......Page 215
 Using Statistics: Events of Interest at Ricknel Home Centers......Page 216
  Expected Value of a Discrete Variable ......Page 217
  Variance and Standard Deviation of a Discrete Variable ......Page 218
  Covariance ......Page 220
  Portfolio Expected Return and Portfolio Risk ......Page 222
 Binomial Distribution ......Page 226
 Poisson Distribution ......Page 233
 Hypergeometric Distribution ......Page 237
  References ......Page 240
  Key Terms......Page 241
  Chapter Review Problems......Page 242
  Managing Ashland MultiComm Services......Page 244
  Digital Case......Page 245
  EG5.2 Covariance of a Probability Distribution and Its Application in Finance......Page 246
  EG5.4 Poisson Distribution......Page 247
  EG5.5 Hypergeometric Distribution......Page 248
The Normal Distribution and Other Continuous Distributions......Page 249
 Using Statistics: Normal Downloading at MyTVLab......Page 250
 The Normal Distribution ......Page 251
  Computing Normal Probabilities ......Page 253
  Finding X Values......Page 258
 Visual Explorations: Exploring the Normal Distribution......Page 261
 Think About This: What Is Normal?......Page 262
  Comparing Data Characteristics to Theoretical Properties ......Page 264
  Constructing the Normal Probability Plot ......Page 265
 The Uniform Distribution ......Page 267
 The Exponential Distribution ......Page 270
  Summary ......Page 272
  Key Terms......Page 273
  Chapter Review Problems......Page 274
  Managing Ashland MultiComm Services......Page 275
  Clear Mountain State Student Surveys......Page 276
  EG6.3 Evaluating Normality......Page 277
  EG6.5 The Exponential Distribution......Page 278
Sampling Distributions ......Page 279
 Using Statistics: Sampling Oxford Cereals......Page 280
  The Unbiased Property of the Sample Mean ......Page 281
  Standard Error of the Mean ......Page 283
  Sampling from Normally Distributed Populations ......Page 284
  Sampling from Non-normally Distributed Populations—The Central Limit Theorem......Page 287
 Visual Explorations: Exploring Sampling Distributions......Page 289
 Sampling Distribution of the Proportion ......Page 290
 Using Statistics: Sampling Oxford Cereals, Revisited......Page 293
  Checking Your Understanding......Page 294
  Chapter Review Problems......Page 295
  Managing Ashland MultiComm Services......Page 296
  Digital Case......Page 297
  EG7.3 Sampling Distribution of the Proportion......Page 298
Confidence Interval Estimation......Page 299
 Using Statistics: Getting Estimates at Ricknel Home Centers......Page 300
 Confidence Interval Estimate for the Mean (σ Known)......Page 301
  Can You Ever Know the Population Standard Deviation? ......Page 306
  Student’s t Distribution......Page 307
  Properties of the t Distribution......Page 308
  The Concept of Degrees of Freedom ......Page 309
  The Confidence Interval Statement ......Page 310
 Confidence Interval Estimate for the Proportion ......Page 315
  Sample Size Determination for the Mean ......Page 318
  Sample Size Determination for the Proportion ......Page 320
 Application of Confidence Interval Estimation in Auditing (online)......Page 324
  Summary ......Page 325
  Checking Your Understanding......Page 326
  Chapter Review Problems......Page 327
  Managing Ashland MultiComm Services......Page 330
  Digital Case......Page 331
  Clear Mountain State Student Surveys......Page 332
  EG8.3 Confidence Interval Estimate for the Proportion......Page 333
  EG8.4 Determining Sample Size......Page 334
Fundamentals of Hypothesis Testing: One-Sample Tests......Page 335
 Using Statistics: Significant Testing at Oxford Cereals......Page 336
  The Null and Alternative Hypotheses ......Page 337
  The Critical Value of the Test Statistic ......Page 338
  Risks in Decision Making Using Hypothesis Testing ......Page 339
  Z Test for the Mean (σ Known)......Page 341
  Hypothesis Testing Using the Critical Value Approach ......Page 342
  Hypothesis Testing Using the p-Value Approach......Page 344
  Can You Ever Know the Population Standard Deviation? ......Page 347
  The Critical Value Approach ......Page 349
  Checking the Normality Assumption ......Page 351
  The Critical Value Approach ......Page 355
  The p-Value Approach......Page 356
 Z Test of Hypothesis for the Proportion......Page 359
  The Critical Value Approach ......Page 360
  The p-Value Approach......Page 361
  Statistical Significance Versus Practical Significance ......Page 363
 Power of the Test (online)......Page 364
  References ......Page 365
  Chapter Review Problems......Page 366
  Sure Value Convenience Stores......Page 369
  EG9.2 t Test of Hypothesis for the Mean (σ Unknown)......Page 370
  EG9.4 Z Test of Hypothesis for the Proportion......Page 371
Two-Sample Tests......Page 373
 Using Statistics: For North Fork, Are There Different Means to the Ends?......Page 374
  Pooled-Variance t Test for the Difference Between Two Means......Page 375
  Confidence Interval Estimate for the Difference Between Two Means ......Page 380
  t Test for the Difference Between Two Means, Assuming Unequal Variances......Page 381
 Think About This: “This Call May Be Monitored …”......Page 383
 Comparing the Means of Two Related Populations ......Page 386
  Paired t Test......Page 387
  Confidence Interval Estimate for the Mean Difference ......Page 392
  Z Test for the Difference Between Two Proportions......Page 394
  Confidence Interval Estimate for the Difference Between Two Proportions ......Page 398
 F Test for the Ratio of Two Variances......Page 400
  Summary ......Page 405
  Key Terms......Page 407
  Chapter Review Problems......Page 408
  Managing Ashland MultiComm Services......Page 410
  CardioGood Fitness......Page 411
  Clear Mountain State Student Surveys......Page 412
  EG10.1 Comparing the Means of Two Independent Populations......Page 413
  EG10.2 Comparing the Means of Two Related Populations......Page 415
  EG10.3 Comparing the Proportions of Two Independent Populations......Page 417
  EG10.4 F Test for the Ratio of Two Variances......Page 418
Analysis of Variance ......Page 419
 Using Statistics: Are There Looming Differences at Perfect Parachutes?......Page 420
  One-Way ANOVA F Test for Differences Among More Than Two Means......Page 421
  Multiple Comparisons: The Tukey-Kramer Procedure......Page 427
  ANOVA Assumptions......Page 429
  Levene Test for Homogeneity of Variance ......Page 430
 The Factorial Design: Two-Way Analysis of Variance......Page 434
  Factor and Interaction Effects ......Page 435
  Testing for Factor and Interaction Effects ......Page 437
  Multiple Comparisons: The Tukey Procedure......Page 441
  Interpreting Interaction Effects ......Page 442
  Summary ......Page 447
  Key Equations......Page 448
  Chapter Review Problems......Page 449
  Managing Ashland MultiComm Services......Page 452
  Sure Value Convenience Stores......Page 453
  Clear Mountain State Student Surveys......Page 454
  EG11.1 The Completely Randomized Design: one-Way Analysis of Variance......Page 455
  EG11.2 The Factorial Design: Two-Way Analysis of Variance......Page 457
Chi-Square and Nonparametric Tests......Page 459
 Using Statistics: Not Resorting to Guesswork About Resort Guests......Page 460
 Chi-Square Test for the Difference Between Two Proportions......Page 461
 Chi-Square Test for Differences Among More Than Two Proportions......Page 468
  The Marascuilo Procedure ......Page 471
  The Analysis of Proportions (ANOP) (online)......Page 473
 Chi-Square Test of Independence......Page 474
 Wilcoxon Rank Sum Test: A Nonparametric Method for Two Independent Populations......Page 479
 Kruskal-Wallis Rank Test: A Nonparametric Method for the One-Way ANOVA......Page 485
  Assumptions ......Page 488
 McNemar Test for the Difference Between Two Proportions (Related Samples) (online)......Page 489
  Summary ......Page 490
  References ......Page 491
  Chapter Review Problems......Page 492
  Managing Ashland MultiComm Services......Page 494
  Digital Case......Page 495
  Clear Mountain State Student Surveys......Page 496
  EG12.2 Chi-Square Test for Differences Among More Than Two Proportions......Page 498
  EG12.4 Wilcoxon Rank Sum Test: A Nonparametric Method for Two Independent Populations......Page 499
  EG12.5 Kruskal-Wallis Rank Test: A Nonparametric Method for the One-Way ANOVA......Page 500
Simple Linear  Regression......Page 501
 Using Statistics: Knowing Customers at Sunflowers Apparel......Page 502
 Types of Regression Models ......Page 503
 Determining the Simple Linear Regression Equation ......Page 505
  The Least-Squares Method......Page 506
  Predictions in Regression Analysis: Interpolation Versus Extrapolation ......Page 508
  Computing the Y Intercept, b0 and the Slope, b1......Page 509
 Visual Explorations: Exploring Simple Linear Regression Coefficients......Page 511
  Computing the Sum of Squares ......Page 514
  The Coefficient of Determination ......Page 515
  Standard Error of the Estimate ......Page 517
  Evaluating the Assumptions ......Page 519
  Residual Plots to Detect Autocorrelation ......Page 523
  The Durbin-Watson Statistic......Page 524
  t Test for the Slope......Page 527
  F Test for the Slope......Page 528
  t Test for the Correlation Coefficient......Page 530
 Estimation of Mean Values and Prediction of Individual Values ......Page 534
  The Confidence Interval Estimate for the Mean Response ......Page 535
  The Prediction Interval for an Individual Response ......Page 536
 Pitfalls in Regression ......Page 538
  Strategy for Avoiding the Pitfalls ......Page 540
 Using Statistics: Knowing Customers at Sunflowers Apparel, Revisited......Page 541
  Summary ......Page 542
  Key Equations......Page 543
  Checking Your Understanding......Page 544
  Chapter Review Problems......Page 545
  Digital Case......Page 549
  Brynne Packaging......Page 550
  EG13.2 Determining the Simple Linear Regression Equation......Page 551
  EG13.5 Residual Analysis......Page 552
  EG13.8 Estimation of Mean Values and Prediction of Individual Values......Page 553
Introduction to Multiple Regression......Page 555
 Using Statistics: The Multiple Effects of OmniPower Bars......Page 556
  Interpreting the Regression Coefficients ......Page 557
  Predicting the Dependent Variable Y......Page 560
  Coefficient of Multiple Determination......Page 562
  Test for the Significance of the Overall Multiple Regression Model ......Page 563
 Residual Analysis for the Multiple Regression Model ......Page 566
  Tests of Hypothesis ......Page 568
  Confidence Interval Estimation ......Page 569
 Testing Portions of the Multiple Regression Model ......Page 571
  Coefficients of Partial Determination ......Page 575
 Using Dummy Variables and Interaction Terms in Regression Models ......Page 576
  Dummy Variables ......Page 577
  Interactions ......Page 579
 Logistic Regression ......Page 587
  Summary ......Page 591
  Key Equations......Page 593
  Chapter Review Problems......Page 594
  Digital Case......Page 598
  EG14.1 Developing a Multiple Regression Model......Page 599
  EG14.3 Residual Analysis for the Multiple Regression Model......Page 600
  EG14.6 Using Dummy Variables and Interaction Terms in Regression Models......Page 601
  EG14.7 Logistic Regression......Page 602
Multiple Regression Model Building......Page 603
 Using Statistics: Valuing Parsimony at WHIT-DT......Page 604
 The Quadratic Regression Model ......Page 605
  Finding the Regression Coefficients and Predicting Y......Page 606
  Testing the Quadratic Effect ......Page 608
  The Coefficient of Multiple Determination ......Page 610
  The Square-Root Transformation......Page 613
  The Log Transformation ......Page 614
 Collinearity ......Page 616
 Model Building ......Page 617
  The Stepwise Regression Approach to Model Building ......Page 619
  The Best-Subsets Approach to Model Building......Page 620
  Model Validation ......Page 624
  Pitfalls in Multiple Regression ......Page 625
  Data Mining ......Page 626
  Statistical Methods in Business Analytics ......Page 627
  Data Mining Using Excel Add-ins ......Page 628
  Summary......Page 629
  Key Terms......Page 631
  Chapter Review Problems......Page 632
  Sure Value Convenience Stores......Page 634
  The Craybill Instrumentation Company Case......Page 635
  More Descriptive Choices Follow-up......Page 636
  EG15.3 Collinearity......Page 637
  EG15.4 Model Building......Page 638
Time-Series Forecasting......Page 639
 Using Statistics: Principled Forecasting......Page 640
 Component Factors of Time-Series Models......Page 641
 Smoothing an Annual Time Series ......Page 642
  Moving Averages ......Page 643
  Exponential Smoothing ......Page 645
  The Linear Trend Model ......Page 648
  The Quadratic Trend Model ......Page 650
  The Exponential Trend Model ......Page 651
  Model Selection Using First, Second, and Percentage Differences......Page 653
 Autoregressive Modeling for Trend Fitting and Forecasting ......Page 658
  Selecting an Appropriate Autoregressive Model ......Page 659
  Determining the Appropriateness of a Selected Model ......Page 661
  Performing a Residual Analysis ......Page 666
  A Comparison of Four Forecasting Methods ......Page 667
 Time-Series Forecasting of Seasonal Data......Page 669
  Least-Squares Forecasting with Monthly or Quarterly Data......Page 670
 Index Numbers (online)......Page 675
  Summary ......Page 676
  Key Equations......Page 677
  Checking Your Understanding......Page 678
  Chapter Review Problems......Page 679
  Digital Case......Page 680
  EG16.3 Smoothing an Annual Time Series......Page 681
  EG16.4 Least-Squares Trend Fitting and Forecasting......Page 682
  EG16.6 Choosing an Appropriate Forecasting Model......Page 683
  EG16.7 Time-Series Forecasting of Seasonal Data......Page 684
A Roadmap for Analyzing Data ......Page 685
 Using Statistics: Mounting Future Analyses......Page 686
  Determining Whether the Mean and/or Standard Deviation Differs Depending on the Group......Page 689
  Determining Whether the Values of a Variable Are Stable Over Time......Page 690
  Determining Whether the Proportion of Items of Interest Differs Depending on the Group ......Page 691
 Using Statistics: Mounting Future Analyses, Revisited......Page 692
 Chapter Review Problems......Page 693
Appendices......Page 696
  Rules for Algebra: Exponents and Square Roots ......Page 697
  Rules for Logarithms ......Page 698
  Summation Notation ......Page 699
  Greek Alphabet ......Page 702
  Worksheet Entries and References ......Page 703
  Entering Formulas into Worksheets ......Page 704
  Basic Worksheet Formatting ......Page 705
  Chart Formatting ......Page 707
  Selecting Cell Ranges for Charts ......Page 708
  Creating Histograms for Discrete Probability Distributions ......Page 709
  Accessing the MyMathLab Global Course Online......Page 710
  Details of Downloadable Files ......Page 711
  Getting Microsoft Excel Ready for Use (ALL)......Page 719
  Configuring Excel Security for Add-In Usage (WIN)......Page 720
  Opening PHStat (ALL)......Page 721
  Checking for the Presence of the Analysis ToolPak or Solver Add-Ins (ALL)......Page 722
  Table of Random Numbers......Page 723
  The Cumulative Standardized Normal Distribution......Page 725
  Critical Values of t......Page 727
  Critical Values of x2......Page 729
  Critical Values of F......Page 730
  Lower and Upper Critical Values, T1, of the Wilcoxon Rank Sum Test......Page 734
  Critical Values of the Studentized Range, Q......Page 735
  Critical Values, dL and dU, of the Durbin-Watson Statistic, D......Page 737
  Control Chart Factors......Page 738
  The Standardized Normal Distribution......Page 739
  Useful Keyboard Shortcuts......Page 740
  New Function Names......Page 741
  Understanding the Non-statistical Functions......Page 743
  PHStat FAQs......Page 745
  Microsoft Excel FAQs......Page 746
  FAQs for New Microsoft Excel 2013 Users......Page 747
Self-Test Solutions and Answers to Selected Even-Numbered Problems......Page 748
Index......Page 780