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Overview
7.1 Introduction
7.2 Understanding Data
7.3 Relationships in Data
7.4 Distributions
7.5 Summary
Introduction
Understanding Data
Statistical Functions
Descriptive Statistics
Histograms
Statistical Functions
AVERAGE
Finds the mean of a set of data.
=AVERAGE(range or range_name)
MEDIAN
Finds the middle number in a list of sorted data.
=MEDIAN(range or range_name)
STDEV
Finds the standard deviation of a set of data.
This is equal to the square root of the variance, which measures the
difference between the mean of the data set and the individual values.
=STDEV(range or range_name)
Analysis Toolpack
To ensure that it is an active Add-in, choose Tools > Add-ins from the
menu. Select Analysis Toolpack from the list.
Descriptive Statistics
Mean
Median
Standard deviation
Variance
Figure 7.7
Figure 7.11
Kth Largest
Gives the largest ranked data value for a specified value of k.
For k = 1, the maximum data value would be returned.
Kth Smallest
Gives the smallest ranked data value for a specified value of k.
For k = 1, the minimum data value would be returned.
PERCENTILE
Returns a value for which a desired percentile k of the specified data_set falls below.
=PERCENTILE(data_set, k)
For example, for the MSFT data, the value for which 95% of the data falls below
is
=PERCENTILE(B4:B27,0.95) = 0.108
PERCENTRANK
Returns the percentile of the data_set which falls below a given value.
=PERCENTRANK(data_set, value)
For example, the percent of the MSFT data which falls below the value 0.108 is
=PERCENTRANK(B4:B27, 0.108) = 0.95, or 95%
Histograms
Histograms (contd)
To create your own bin values, make a list of upper bounds for each
interval.
Figure 7.19
Histograms (contd)
Histograms (cont)
Relationships in Data
Trend Curves
Regression
Data Relationships
Trend Curves
Trend curves are used to graph and analyze these relationships between
data.
Linear
Exponential
Power
Moving Average
Logarithmic
Figure 7.30
We are given yearly Production values and yearly Unit Cost for
production.
Regression Analysis
R-Squared value
Standard error
Slope
Intercept
R-Squared Value
Figure 7.42
Figure 7.45
Standard Error
SLOPE function
=SLOPE(y_range, x_range)
INTERCEPT function
=INTERCEPT(y_range, x_range)
Distributions
Normal
Exponential
Uniform
Binomial
Poisson
Beta
Weibull
Normal Distribution
The parameters for this distribution are simply the value we are
interested in finding the probability for, and the mean and standard
deviation of the set of data.
This parameter can take the values True or False to determine if you
want the value returned from the cumulative distribution function or
the probability density function, respectively.
The cumulative distribution function (cdf) will find the probability that a value
in the data set is less than or equal to x.
The probability density function (pdf) will find the probability that a value is
exactly equal to x.
Figure 7.48
The probability that the actual sales for the year are 42,000 is 0.58, or
58%.
Figure 7.49
What is the probability that annual sales will be between 35,000 and
49,000?
To find this value, we will subtract the cdf values for these two bounds.
=NORMDIST(49000, 40000, 10000, True)
NORMDIST(35000, 40000, 10000, True)
If the mean of your data is 0 and the standard deviation is 1, then placing
these values in the NORMDIST function with the cumulative parameter
as True will find the resulting value from the Standard Normal
distribution.
The STANDARDIZE function will convert the x value from a data set of a
mean not equal to 0 and a standard deviation not equal to 1 into a value
which does assume a mean of 0 and a standard deviation of 1.
=STANDARDIZE(x, mean, std_dev)
Figure 7.50
Consider the same example used previously to find the probability that a
drugstores annual sales are 42,000.
Uniform Distribution
Figure 7.51
Consider any values for a and b, then use the formula to calculate the
Uniform value.
Poisson Distribution
The Poisson distribution value is the probability that the number events
which occur is either between 0 and x (cdf) or equal to x (pdf).
Figure 7.52
Exponential Distribution
Figure 7.53
Binomial Distribution
Figure 7.54
Beta Distribution
The Beta distribution has the following parameters: alpha, beta, A, and B.
Alpha and beta are determined from the data set
A and B are optional bounds on the x value for which you want the Beta
distribution value
Figure 7.55
Weibull Distribution
Figure 7.56
Summary
Additional Links
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