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# Statistics for Managers using Microsoft Excel

6th Edition
Chapter 18

## Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

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Learning Objectives
In this chapter, you learn:

## The steps involved in choosing what statistical

methods to use to conduct a data analysis

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## The purpose of the analysis The type of variable being analyzed

Numerical Categorical

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## Do you seek to:

Describe the characteristics of the variable (possibly broken into several groups) Draw conclusions about the mean and standard deviation of the variable in a population Determine whether the mean and standard deviation of the variable differs depending on the group Determine which factors affect the value of the variable Predict the value of the variable based on the value of other variables Determine whether the values of the variable are stable over time
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## How to Describe the Characteristics of a Numerical Variable

Develop tables and charts and compute descriptive statistics to describe the variables characteristics:

## Tables and charts

Stem-and-leaf display, percentage distribution, histogram, polygon, boxplot, normal probability plot Mean, median, mode, quartiles, range, interquartile range, standard deviation, variance, and coefficient of variation

Statistics

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## How to draw conclusions about the population mean or standard deviation

Confidence interval for the mean based on the t-distribution Hypothesis test for the mean (t-test)

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## Normally distributed numerical variables

Pooled t-test if you can assume variances are equal Separate-variance t-test if you cannot assume variances are equal Both tests assume the variables are normally distributed and you can examine this assumption by developing boxplots and normal probability plots To decide if the variances are equal you can conduct an F-test for the ratio of two variances Wilcoxon rank sum test
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continued

Paired t-test

F-test

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continued

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## Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

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How to predict the value of a variable based on the value of other variables

## Simple linear regression model

Multiple regression model

## Two or more independent variables

Data taken over a period of time and you want to forecast future time periods

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## Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

How to determine whether the values of a variable are stable over time

Studying a process and have collected data over time Develop R and X charts

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## Do you seek to:

Describe the proportion of items of interest in each category (possibly broken into several groups) Draw conclusions about the proportion of items of interest in a population Determine whether the proportion of items of interest differs depending on the group Predict the proportion of items of interest based on the value of other variables Determine whether the proportion of items of interest is stable over time
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## How to draw conclusions about the proportion of items of interest

Confidence interval for proportion of items of interest Hypothesis test for the proportion of items of interest (Z-test)

## Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

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How to determine whether the proportion of items of interest differs depending on the group

## Two independent groups

Two proportion Z-test 2 -test for the difference between two proportions McNemar test 2 -test for the difference among several proportions

## More than two categories and more than two groups

2 -test of independence
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## Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

How to determine whether the proportion of items of interest is stable over time

p-chart

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## Data Analysis Tree Numerical & Categorical Variables

Possible Questions
How to describe the characteristics of the variable (possibly broken into several groups)? How to draw conclusions about the mean and standard deviation of the variable in the population?

Numerical Variables

How to determine whether the mean and standard deviation of the variable differs depending on the group? How to determine which factors affect the value of the variable? How to predict the value of the variable based on the value of other variables? How to determine whether the values of the variable are stable over time?

How to describe the proportion of items of interest in each category (possibly broken into several groups)?

## How to draw conclusions about the proportion of items of interest in a population?

Categorical Variables

How to determine whether the proportion of items of interest differs depending on the group? How to predict the proportion of items of interest based on the value of other variables? How to determine whether the proportion of items of interest is stable over time?

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## Data Analysis Tree Numerical Variables

continued
Create Tables & Charts How to describe the characteristics of the variable (possibly broken into several groups)? Stem-and-leaf display, percentage distribution, histogram, polygon, boxplot, normal probability plot

Calculate Statistics

Mean, median, mode, quartiles, range, interquartile range, standard deviation, variance, coefficient of variation

How to draw conclusions about the mean and standard deviation of the variable in the population?

Mean

## Pooled t test (both variables must be normal, variances equal)

2 independent groups

Mean Variance

Separate variance t test (both variables must be normal) Wilcoxon rank sum test (variables do not have to be normal) F-test (both variables must be normal) Paired t test (differences must be normal)

How to determine whether the mean and standard deviation of the variable differs depending on the group?

## 2 matched groups >2 independent groups

One Way Anova (variable must be normal) Kruskal-Wallis Rank Test (variable doesnt need to be normal) Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall 18-19

continued

## Two factor factorial design

One independent variable How to predict the value of the variable based on the value of other variables? Two or more Independent variables Data taken over time to forecast the future How to determine whether the values of the variable are stable over time?

## Simple linear regression

Multiple regression model Moving averages Exponential smoothing Least squares forecasting Autoregressive modeling

Develop

X and R charts

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## Data Analysis Tree Categorical Variables

continued
Summary tables How to describe the proportion of items of interest in each category (possibly broken into several groups) Bar charts Pie charts Pareto charts Side-by-side charts How to draw conclusions about the proportion of items of interest in a population Two categories & two independent groups Two categories & two matched groups How to determine whether the proportion of items of interest differs depending on the group Confidence interval for the proportion of items of interest

## Hypothesis test for the proportion of items of interest

Two proportion Z test

McNemar test

## Two categories & more than two independent groups

More than two categories & more than two groups

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## Data Analysis Tree Categorical Variables

continued

How to determine whether the proportion of items of interest is stable over time

p-chart

## Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

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Chapter Summary

Discussed how to choose the appropriate technique(s) for data analysis for both numerical and categorical variables Discussed potential questions and the associated appropriate techniques for numerical variables Discussed potential questions and the associated appropriate techniques for categorical variables

## Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

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