2-11 ANOVA Analysis of Variance

ANOVA
Analysis Of Variance
MQPM
© 2001 ConceptFlow 1
Module Objectives
By the end of this module, the participant will be able to:

• Understand how ANOVA works
• Interpret an ANOVA table
• Determine significant effects
• Perform a residual analysis
• Determine if data is normal
• Test groups of data for equal variances
• Run main effects plots
MQPM
Why Learn ANOVA?
ANOVA
• Performs hypothesis testing for two or more means
• Evaluates several PIVs
• Handles multiple levels
• Shows sources of process variation
• Generates an underlying variability estimate
MQPM
What Is ANOVA?
• Hypothesis Test for MEANS

• Uses two components of variance
• within variance (no change)
• between variance (after a change)
• Uses the F-distribution to test the variance components
• Comprehensive test for significance
• Backbone test statistic for subsequent complex analysis
MQPM
When To Use ANOVA
Variables Road Map

Variables Data
1 Sample 2 Samples More Than 2 Samples
1 Sample 2 Sample Paired Tukey's

ANOVA
t-test t-test Comparisons Quick Test
1 Mean 2 Means 2+ Means
ANOVA is used to test two or more means

MQPM
Process Variation
• All processes are influenced by other factors

• Is variation due to a real factor effect or are the differences just
random variation?
• t-tests are tools that offer some help, but are limited to testing two
means
• Finding factors that are sources of variation are key to process
improvement
ANOVA allows concurrent testing of several means

MQPM
The Process Revealed
Overall, next-day delivery of client overnight packages is running

94.56%. After a team Cause and Effect meeting, it is suspected that
there are difference in vendors. Four vendors are currently used. Data is
collected for the last 10 weeks and is grouped by the vendor
Day Vendor A Vendor B Vendor C Vendor D
Y = 94.56 1 91.4 99.3 92.8 94.4
2 94.6 93.7 96.4 92.8
s = 2.353 3 92.6 99.1 96.0 90.8
4 95.0 99.0 94.0 93.2
5 92.2 92.8 92.8 95.2
6 97.0 96.7 95.6 93.2
7 89.4 94.5 96.8 92.0
8 95.4 97.2 94.0
9 93.4 95.2
10 96.6
MQPM
Process Variation: Real Or Random?
Is there a real difference in vendor?

MQPM
The ANOVA Hypothesis Test
• Ho: …n
• Ha: at least one mean is different
• p-value will be used to evaluate the hypothesis
The null is no difference in means. The alternative is one

or more is different
MQPM
Descriptive Analysis
Is there a REAL difference

in process performance
among the four vendors?
MQPM
Looking For Variation
Examining the Box Plot:

• Means between vendors are shifting
• Variance within a vendor
MQPM
Sources Of Variation
n
wee
t
B e V Vendor B
V Vendor C
Total
Within
Variation
V Vendor A V Vendor D
ANOVA reveals significant mean shifts by analyzing within,

between and total process variance
MQPM
The ANOVA Table
MQPM
The ANOVA Table Sources Of Variation
Between
Within
Sources
of
Variation
MQPM
The ANOVA Table Degrees Of Freedom
Between
Within
Sources
of
Variation
Degrees of
Freedom per
Source
MQPM
The ANOVA Table Sum of Squares
Between
Within
Sources Sum of
of Squares of
Variation Residuals per
Source
Degrees of
Freedom per
Source
MQPM
Summarizing The Variance
SSTotal  SSBetween  SS Within
  yij  y..  
k n k k n
2
  ni  yi.  y..
2

   yij  yi.  2
i 1 j 1 i 1 i 1 j 1
182.69  49.70  132.99
All process variation is accounted for

MQPM
Analyzing The Variation
Source SS %
SSBetween 49.70 27.2%
SSWithin 132.99 72.8%
SSTotal 182.69
Does this make sense?
The within and between variation must be properly allocated

across the sources
MQPM
The ANOVA Table Mean Squares
Between
Within
Sources Sum of
of Squares of
Source
Degrees of Estimate of
Freedom per Source
Source Variance
SS/df
MQPM
Mean Square Estimate Of Within Variance
The average source within variance is obtained by dividing the source

by the degrees of freedom
SS Within
MS Within  where df = N – k
df N = total number of samples
k = number of factors
132.99
MS Within   4.43 df = 34 – 4 = 30
30
MQPM
Mean Square Estimate Of Between Variance
The average source between variance is obtained by dividing the

source by the degrees of freedom
SSBetween
MSBetween  where df = k – 1
df
Four vendors: df = 4 – 1 = 3
49.70
MSBetween   16.56
3
MQPM
The ANOVA Table F-Ratio
Between
Within
Sources Sum of F ratio

of Squares of
MSB/MSW
Source
Degrees of Estimate of
Freedom per Source
Source Variance
SS/df
MQPM
Significance Of Sources
Within variance Between variance

 2Within  MS Within 2
Between  MSBetween
The test to use to look for a statistically significant difference between

two variances is the F test
2
Between 16.56
F 2   3.74
 Within 4.43
MQPM
The ANOVA Table P-Value
Between
Within
Sources Sum of F ratio

of Squares of
MSB/MSW
Source
Degrees of Estimate of Probability of

Freedom per Source obtaining F
Source Variance ratio under
the null
SS/df
hypothesis
MQPM
ANOVA Table Exercise
Fill in the missing information
Analysis of Variance for Invoices

Source DF SS MS F P
Consumer 3 13.00 4.33
Commercial 20.00 10.00 0.0012
Error 75
Total 80 183.00
MQPM
ANOVA In Minitab TM
MQPM
Setting Up The Data In Minitab TM
Open worksheet VENDOR YIELD.MTW
Sorted data is in columns C1-C4.

Stacked data is in column C5-T and C6
MQPM
Prerequisites For ANOVA
• Every subgroup has a normal distribution

• Subgroups have statistically equal variances
• Residuals are independent and normally distributed about the mean
MQPM
Testing Data For Normality
p=0.919 p=0.188
p=0.365 p=0.910
All subgroups have a normal distribution

MQPM
Testing Data For Equal Variances
Tool Bar Menu > Stat > ANOVA > Test for Equal Variances
Bartlett’s Test is for normal data
Levine’s Test is for non-normal data
T e st fo r E qu al V a ria n c e s for Yi eld
95%Confidence IntervalsforSigmas Factor Levels

VendorA
Bartlett's Test
Test Statistic: 3.900
P-Value : 0.272
VendorB
Levene's Test
VendorC
Test Statistic: 2.405
P-Value : 0.087
VendorD
0 1 2 3 4 5 6 7 8
P=0.272 indicates variances are equal

MQPM
Running A Main Effects Plot
Tool Bar Menu > Stat > ANOVA > Main Effects Plot
MQPM
The Main Effects Plot
The plot shows the output vs. the factor

MQPM
Running A One Way ANOVA
Tool Bar Menu > Stat > ANOVA > One Way…
MQPM
The One Way ANOVA
p < 0.05: source is

significant!
The ANOVA table values are identical to the ones we

manually calculated*
MQPM
© 2001 ConceptFlow
* P-value rounded 34
The One Way ANOVA Graphs
MQPM
Residuals Versus The Order Of The Data
Residuals vs. order should be scattered with no pattern

MQPM
Residuals Versus The Fitted Values
Residuals vs. fits should not have patterns or extreme outliers

MQPM
Residuals And Fits
Will calculate residuals with respect to factor means

MQPM
Fitted Value Chart
Minitab Calculations
TM
Manual Calculations
94.56
93.76 96.44 95.20 93.20
-0.80 1.88 0.64 -1.36
Vendor A A Vendor B C Vendor C A Vendor D
91.4 -2.4 99.3 2.9 92.8 -2.4 94.4
94.6 0.8 93.7 -2.7 96.4 1.2 92.8
92.6 -1.2 99.1 2.7 96.0 0.8 90.8
95.0 1.2 99.0 2.6 94.0 -1.2 93.2
92.2 -1.6 92.8 -3.6 92.8 -2.4 95.2
97.0 3.2 96.7 0.3 95.6 0.4 93.2
89.4 -4.4 94.5 -1.9 96.8 1.6 92.0
95.4 1.6 97.2 2.0 94.0
93.4 -0.4 95.2 0.0
96.6 2.8
MQPM
Normal Probability Plot Of The Residuals
The plot should be a straight, tight diagonal line

MQPM
Histogram Of The Residuals
The histogram should have a normal shape

MQPM
Boxplot Of Response
The Boxplot should have few outliers

MQPM
Dotplot Of Response
The Dotplot should have few outliers

MQPM
Sample Size For ANOVA
MQPM
Tool Bar Menu > Stat > Power and Sample Size > ANOVA
• Determine the sample needed to detect a mean shift of 3.2 on a
process with a variance of 4 when conducting a single variable test
at 3 different settings. Use an alpha of 5% and beta of 20%
MQPM
MQPM
Continued
Process variance and number of variable (factor) levels must be

known or estimated for sample size calculation
MQPM
Business Process ANOVA Exercise
• Invoices are processed in 4 different regions of the country. We want

to know if there is a difference in processing speeds in any region of
the country. We know that the underlying variability of processing
speeds is one standard deviation = 30 minutes
• If we want to detect a 10 minute difference, how many samples do we
need to collect?
MQPM
Key Learning Points
•
•
•
•
•
•
MQPM
Objectives Review
By the end of this module, the participant will be able to:

• Understand how ANOVA works
• Interpret an ANOVA table
• Determine significant effects
• Perform a residual analysis
• Determine if data is normal
• Test groups of data for equal variances
• Run main effects plots
MQPM
Appendix
MQPM
Decomposing The Data
MQPM
Summation Notation
Used as shorthand for addition of terms in a well defined manner

4
 y j  y1  y 2  y 3  y 4
j1
 is just the sum of all the elements of interest

MQPM
Summation Exercise
Given Find
Reading Group 1 n
1 9.8 1)  yj  ?
2 12.0 j1
3 17.3 n
4
5
10.0
10.4
 yj
2) j1 What is
6 12.5 ? this value
72.00 n called?
What is the value of “n” for

this set of data?
n is the number of observations, nj is the number of

observations for factor j
MQPM
Finding The Factor Mean
Group the data by source (factor) and calculate the factor means
93.76 96.44 95.20 ? Factor Mean
Day Vendor A Vendor B Vendor C Vendor D n
1 91.4 99.3 92.8 94.4  y ij
j 1
2
3
94.6
92.6
93.7
99.1
96.4
96.0
92.8
90.8 i. y 
4 95.0 99.0 94.0 93.2
n
5 92.2 92.8 92.8 95.2 y1.  93.76 n1  10
6 97.0 96.7 95.6 93.2
7 89.4 94.5 96.8 92.0 y 2.  96.44 n2  7
8 95.4 97.2 94.0 y 3.  95.20 n3  9
9 93.4 95.2
10 96.6 y 4.  ? n4  ?
Note: decimal places in all tables are kept to a

minimum for clarity. All calculations use four
decimal places
MQPM
Double Summation Notation
Used as shorthand for addition of nested terms in a well defined manner
2 4
  y ij  y11  y12  y13  y14
i 1 j 1
 y 21  y 22  y 23  y 24
 is just the nested sum of all the elements of interest

MQPM
Double Summation Exercise
Given Find
Reading Group 1 Group 2 k n
1
2
9.8
12.0
12.7
13.6   y ij
3 17.3 16.4 i 1 j 1
4 10.0 14.3
5 10.4 13.0
6 12.5 12.0
What are the values of “k” and

“n” for this set of data?
The k index refers to number of factors

MQPM
Finding The Grand Mean From Factor Means
Group the data by source (factor) and calculate the overall (grand)
mean
94.56 Grand Mean y..
93.76 96.44 95.20 93.20 Factor Mean y
i.
Day Vendor A Vendor B Vendor C Vendor D
1 91.4 99.3 92.8 94.4 k ni
2 94.6 93.7 96.4 92.8  
j 1 i 1
yij
3 92.6 99.1 96.0 90.8
y..  k
4 95.0 99.0 94.0 93.2
5 92.2 92.8 92.8 95.2 
j 1
nj
6 97.0 96.7 95.6 93.2
7 89.4 94.5 96.8 92.0
8 95.4 97.2 94.0 For this data set,
9 93.4 95.2 what are the values
10 96.6 of k and n?
MQPM
Determining The Factor Contributions
94.56 Grand Mean

93.76 96.44 95.20 93.20 Factor Mean
-0.80 1.88 0.64 -1.36 Factor Contribution
Vendor A Vendor B Vendor C Vendor D
91.4 99.3 92.8 94.4
94.6 93.7 96.4 92.8 -0.80 = 93.76 – 94.56
92.6 99.1 96.0 90.8
95.0 99.0 94.0 93.2
92.2
97.0
92.8
96.7
92.8
95.6
95.2
93.2 i i  y  y..
89.4 94.5 96.8 92.0
95.4 97.2 94.0 For this data set, there
are 4 values of factor
93.4 95.2
contribution
96.6
What would it mean if the factor contributions were all zero?

MQPM
Graphical View Of Factor Contributions, 
B C
y A D
A factor contribution is the subgroup average

from the grand mean
MQPM
Understanding Overall Residuals
Overall residual is the

difference from observation
and GRAND mean
y
An overall residual is with respect to grand mean

MQPM
Determining The Overall Residuals
Determining the overall residual for each observation

94.56 Grand Mean
93.76 96.44 95.20 93.20 Factor Mean
Vendor A  Vendor B  Vendor C  Vendor D 
91.4 -3.2 99.3 4.7 92.8 -1.8 94.4
94.6 0.0 93.7 -0.9 96.4 1.8 92.8
92.6 -2.0 99.1 4.5 96.0 1.4 90.8 -3.2 = 91.4 – 94.56
95.0 0.4 99.0 4.4 94.0 -0.6 93.2
92.2 -2.4 92.8 -1.8 92.8 -1.8 95.2
97.0
89.4
2.4
-5.2
96.7
94.5
2.1
-0.1
95.6
96.8
1.0
2.2
93.2
92.0   y y
ij ij
95.4 0.8 97.2 2.6 94.0
93.4 -1.2 95.2 0.6
What is the sum of the residuals?

MQPM
Overall Residuals Exercise
Calculate the overall residuals for Vendor D

94.56 Grand Mean
93.76 96.44 95.20 93.20 Factor Mean
Vendor A  Vendor B  Vendor C  Vendor D 
91.4 -3.2 99.3 4.7 92.8 -1.8 94.4
94.6 0.0 93.7 -0.9 96.4 1.8 92.8
92.6
95.0
-2.0
0.4
99.1
99.0
4.5
4.4
96.0
94.0
1.4
-0.6
90.8
93.2   y ij  y
ij
92.2 -2.4 92.8 -1.8 92.8 -1.8 95.2
97.0 2.4 96.7 2.1 95.6 1.0 93.2
89.4 -5.2 94.5 -0.1 96.8 2.2 92.0
95.4 0.8 97.2 2.6 94.0
93.4 -1.2 95.2 0.6
96.6 2.0
Complete this column
MQPM
Understanding Within Residuals
A within residual is the

difference from observation
y and FACTOR mean
A within residual is with respect to factor mean

MQPM
Determining The Within Residuals
Determining the within residuals

94.56 Grand Mean
93.76 96.44 95.20 93.20 Factor Mean
Vendor A  A Vendor B C Vendor C A Vendor D D
91.4 -2.4 99.3 2.9 92.8 -2.4 94.4
94.6 0.8 93.7 -2.7 96.4 1.2 92.8
92.6 -1.2 99.1 2.7 96.0 0.8 90.8 -2.4 = 91.4 – 93.76
95.0 1.2 99.0 2.6 94.0 -1.2 93.2
 ij  y ij  y i
92.2 -1.6 92.8 -3.6 92.8 -2.4 95.2
97.0 3.2 96.7 0.3 95.6 0.4 93.2
89.4 -4.4 94.5 -1.9 96.8 1.6 92.0
95.4 1.6 97.2 2.0 94.0
93.4 -0.4 95.2 0.0
96.6 2.8
What is the sum of the within residuals?

MQPM
Within Residuals Exercise
Calculate the within residuals for Vendor D

94.56 Grand Mean
93.76 96.44 95.20 93.20 Factor Mean
Vendor A A Vendor B C Vendor C A Vendor D  D
91.4 -2.4 99.3 2.9 92.8 -2.4 94.4
94.6 0.8 93.7 -2.7 96.4 1.2 92.8
92.6 -1.2 99.1 2.7 96.0 0.8 90.8
95.0 1.2 99.0 2.6 94.0 -1.2 93.2
92.2
97.0
-1.6
3.2
92.8
96.7
-3.6
0.3
92.8
95.6
-2.4
0.4
95.2
93.2
 ij  y ij  y i
89.4 -4.4 94.5 -1.9 96.8 1.6 92.0
95.4 1.6 97.2 2.0 94.0
93.4 -0.4 95.2 0.0
96.6 2.8
MQPM
Summary Of Data Decomposing
Data needed for ANOVA

• Grand mean (y…)
• Factor means (yj.)
• Factor contribution (i)
• Within residuals (ij )
• Number of factors (k)
• Number of observations per factor (ni)
MQPM
Analyzing The ANOVA Data
MQPM
Working With The ANOVA Data
ANOVA data analysis will determine

• Total process variance
• Within factor variance
• Variation due to noise
• Technology focus
• Between factor variance
• Variation due to factor change
• Process focus
MQPM
Total Process Variation
Total process variance is the sum of the squares of the overall residuals
k n
SS Total    ( y ij  y..) 2
i 1 j 1
SSTotal is all the variation (noise) around the mean

of the process
MQPM
Determining The SSTotal Variation
Source Y Residual Res2 Source Y Residual Res2

Vendor A 91.4 -3.16 9.996 Vendor C 92.8 -1.76 3.104
Vendor A 94.6 0.04 0.001 Vendor C 96.4 1.84 3.379
Vendor A 92.6 -1.96 3.848 Vendor C 96.0 1.44 2.069
Vendor A 95.0 0.44 0.192 Vendor C 94.0 -0.56 0.316
Vendor A 92.2 -2.36 5.578 Vendor C 92.8 -1.76 3.104 k n
Vendor A 97.0 2.44 5.945 Vendor C 95.6 1.04 1.078 SSTotal    ( yij  y..)2
Vendor A 89.4 -5.16 26.643 Vendor C 96.8 2.24 5.010
i1 j1
Vendor A 95.4 0.84 0.703 Vendor C 97.2 2.64 6.961
Vendor A 93.4 -1.16 1.350 Vendor C 95.2 0.64 0.407
Vendor A 96.6 2.04 4.155 Vendor D 94.4 -0.16 0.026
Vendor B 99.3 4.74 22.451 Vendor D 92.8 -1.76 3.104
Vendor B 93.7 -0.89 0.794 Vendor D 90.8 -3.76 14.150
Vendor B 99.1 4.50 20.261 Vendor D 93.2 -1.36 1.854
Vendor B 99.0 4.41 19.450 Vendor D 95.2 0.64 0.407
Vendor B 92.8 -1.71 2.936 Vendor D 93.2 -1.36 1.854
Vendor B 96.7 2.16 4.682 Vendor D 92.0 -2.56 6.562
Vendor B 94.5 -0.04 0.002 Vendor D 94.0 -0.56 0.316
128.99 53.70
SS Total  128.99  53.70  182.69

MQPM
Within Process Variation
Within process variance is the sum of the squares of the within residuals
k n
SS Within    ( yij  yi.)2
i 1 j 1
SSWithin is all the variation (noise) within each subgroup

MQPM
Determining The SSWithin Factor Variation
2 2 2 2
A A B B C C D D
-2.4 5.570 -2.9 8.165 2.4 5.760 -1.2 1.440
0.8 0.706 2.8 7.685 -1.2 1.440 0.4 0.160
-1.2 1.346 -2.6 6.866 -0.8 0.640 2.4 5.760 k n
1.2 1.538 -2.5 6.397 1.2 1.440 0.0 0.000 SS Within    ( y ij  y i .) 2
-1.6 2.434 3.6 12.920 2.4 5.760 -2.0 4.000 i 1 j 1
3.2 10.498 -0.3 0.080 -0.4 0.160 0.0 0.000
-4.4 19.010 1.9 3.699 -1.6 2.560 1.2 1.440
1.6 2.690 SSB 45.812 -2 4.000 -0.8 0.640
-0.4 0.130 0 0.000 SSD 13.440
2.8 8.066 SSC 21.760
SSA 51.984
SS Within  51.98  45.81  21.76  13.44  132.99
MQPM
Between Factor Variation
• Between process variance is the sum of the squares of the factor

contribution residual
• Derived using the Central Limit Theorem
• Standard error of the mean (SEM)
2 2
s 
y n
MQPM
Deriving Factor Variation
The estimate of the variance, , is related to the sample variance for
each source
2  2
2 2
s  Solving for  2
  s n
y n y
Variance due to factor contribution
2
s 
kj1 y .  y..
j
2
y k 1
MQPM
Between Process Variation
The between process variance is the sum of the squares of the sample-
size-weighted contribution factors squared
 
k k
2 2
SSBetween   s  ni   ni  yi.  y..
i 1 yi i 1
SSBetween is the variation due to factor change

MQPM
Determining The SSBetween Variation
Factor Contribution
Residual from Grand Sy2 n Sy2*n
 
Mean k 2
-0.80 0.643 10 6.43 SSBetween   ni  yi.  y..
i 1
1.88 3.539 7 24.77
0.64 0.407 9 3.67
-1.36 1.854 8 14.84
SSBetween  6.43  24.77  3.67  14.84  49.70
The between variation is due to the factor level changes

MQPM
Finding A KPIV
Calc/ProbabilityDistributions/F
Probability F- ratio > 3.74 = 1 – 0.9786 = 0.0214

Reject null hypothesis: at least one mean is different
MQPM
Class Exercise
MQPM
On-Time Delivery Problem
• A multi-vari study shows that

trucking company may be
significant to on-time delivery
• Seven trucking companies
are randomly called to the
warehouse to pick up
shipments to customers
• You have collected delivery
data in an Excel™
spreadsheet named
ON TIME.XLS
• Is there a significance in late
deliveries among trucking
companies?
• Be prepared to explain your
results
MQPM
ANOVA Table Exercise Solution
Analysis of Variance for Invoices

Source DF SS MS F P
Consumer 3 13.00 4.33 2.17 0.0986
Commercial 2 20.00 10.00 5.00 0.0012
Error 75 150.00 2.00
Total 80 183.00
MQPM

2-11 ANOVA Analysis of Variance

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2-11 ANOVA Analysis of Variance

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ANOVA

By the end of this module, the participant will be able to:

• Hypothesis Test for MEANS

Variables Road Map

1 Sample 2 Samples More Than 2 Samples

1 Sample 2 Sample Paired Tukey's

1 Mean 2 Means 2+ Means

ANOVA is used to test two or more means

• All processes are influenced by other factors

ANOVA allows concurrent testing of several means

Overall, next-day delivery of client overnight packages is running

Is there a real difference in vendor?

The null is no difference in means. The alternative is one

Is there a REAL difference

Examining the Box Plot:

ANOVA reveals significant mean shifts by analyzing within,

SSTotal  SSBetween  SS Within

182.69  49.70  132.99

All process variation is accounted for

Does this make sense?

The within and between variation must be properly allocated

The average source within variance is obtained by dividing the source

The average source between variance is obtained by dividing the

Sources Sum of F ratio

Within variance Between variance

The test to use to look for a statistically significant difference between

Sources Sum of F ratio

Degrees of Estimate of Probability of

Fill in the missing information

Analysis of Variance for Invoices

Open worksheet VENDOR YIELD.MTW

Sorted data is in columns C1-C4.

• Every subgroup has a normal distribution

All subgroups have a normal distribution

T e st fo r E qu al V a ria n c e s for Yi eld

95%Confidence IntervalsforSigmas Factor Levels

P=0.272 indicates variances are equal

The plot shows the output vs. the factor

p < 0.05: source is

The ANOVA table values are identical to the ones we

Residuals vs. order should be scattered with no pattern

Residuals vs. fits should not have patterns or extreme outliers

Will calculate residuals with respect to factor means

The plot should be a straight, tight diagonal line

The histogram should have a normal shape

The Boxplot should have few outliers

The Dotplot should have few outliers

Process variance and number of variable (factor) levels must be

• Invoices are processed in 4 different regions of the country. We want

By the end of this module, the participant will be able to:

Used as shorthand for addition of terms in a well defined manner

 is just the sum of all the elements of interest

What is the value of “n” for

n is the number of observations, nj is the number of

Note: decimal places in all tables are kept to a

Used as shorthand for addition of nested terms in a well defined manner

 is just the nested sum of all the elements of interest

What are the values of “k” and

The k index refers to number of factors

94.56 Grand Mean

What would it mean if the factor contributions were all zero?

A factor contribution is the subgroup average

Overall residual is the

An overall residual is with respect to grand mean