Statistics for Managers Using

Microsoft Excel

Chapter 14

A Roadmap for Analyzing Data

Dr.N.M.Mishra
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-1
 Learning Objectives

In this chapter, you learn:

 The steps involved in choosing what statistical
methods to use to conduct a data analysis

Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-2
 Good Data Analysis Requires
Choosing The Proper Technique(s)

 Choosing the proper technique(s) to use

requires the consideration of:
 The purpose of the analysis
 The type of variable being analyzed
 Numerical
 Categorical
 The assumptions about the variable you are willing to
make

Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-3
 Questions To Ask When Analyzing
Numerical Variables
 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
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-4
 How to Describe the Characteristics
of a Numerical Variable
 Develop tables and charts and compute
descriptive statistics to describe the variable’s
characteristics:
 Tables and charts
 Stem-and-leaf display, percentage distribution, histogram,
polygon, boxplot, normal probability plot
 Statistics
 Mean, median, mode, quartiles, range, interquartile range,
standard deviation, variance, and coefficient of variation

Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-5
 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)

Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-6
 How to determine whether the mean or
standard deviation differs by group
 Two independent groups studying central
tendency
 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

 Numerical variables not normally distributed
 Wilcoxon rank sum test
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-7
 How to determine whether the mean or
standard deviation differs by group
continued
 Two groups of matched items or repeated
measures studying central tendency
 Paired differences normally distributed
 Paired t-test
 Two independent groups studying variability
 Numerical variables normally distributed
 F-test

Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-8
 How to determine whether the mean or
standard deviation differs by group
continued
 Three or more independent groups and
studying central tendency
 Numerical variables normally distributed
 One Way Analysis of Variance
 Numerical variables not normally distributed
 Kruskal-Wallis Rank Test

Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-9
 How to determine which factors
affect the value of the variable
 Two factors to be examined
 Two-factor factorial design

Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-10
 How to predict the value of a variable
based on the value of other variables
 One independent variable
 Simple linear regression model
 Two or more independent variables
 Multiple regression model
 Data taken over a period of time and you want
to forecast future time periods
 Moving averages
 Exponential smoothing
 Least-squares forecasting
 Autoregressive modeling

Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-11
 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

Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-12
 Questions To Ask When Analyzing
Categorical Variables
 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

Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-13
 How to describe the proportion of
items of interest in each category
 Summary tables

 Charts
 Bar chart
 Pie chart
 Pareto chart
 Side-by-side bar charts

Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-14
 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)

Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-15
 How to determine whether the proportion of
items of interest differs depending on the group

 Categorical variable has two categories

 Two independent groups
 Two proportion Z-test
 test for the difference between two proportions
 Two groups of matched or repeated measurements
 McNemar test
 More than two independent groups
 test for the difference among several proportions
 More than two categories and more than two
groups
 test of independence

Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-16
 How To Predict The Proportion Of Items Of
Interest Based On The Value Of Other Variables

 Logistic regression

Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-17
 How to determine whether the proportion of
items of interest is stable over time

 Studying a process and data is taken over time

 Collected items of interest over time
 p-chart

Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-18
 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 How to determine whether the mean and standard deviation of the variable differs depending on the
group?
Variables
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?

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

Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-19
 Data Analysis Tree
Numerical Variables
continued
Stem-and-leaf display, percentage distribution,
Create Tables & histogram, polygon, boxplot, normal probability plot
How to describe the Charts
characteristics of the
variable (possibly broken Mean, median, mode, quartiles, range,
into several groups)? interquartile range, standard deviation, variance,
Calculate Statistics coefficient of variation

Confidence interval for mean (t or z)

How to draw conclusions Hypothesis test for mean (t or z)
about the mean and Mean
standard deviation of the
variable in the population?
Pooled
Pooled tt test
test (both
(both variables
variables must
must be
be normal,
normal, variances
variances equal)
equal)

2 independent Separate
Separate variance test (both
variance tt test both variables
variables must
must be
be normal)
normal)
groups Mean
How to determine whether Wilcoxon
Wilcoxon rank
rank sum test (variables
sum test variables do
do not
not have
have to
to be
be normal)
normal)

the mean and standard Variance

2 matched F-test (both
F-test both variables
variables must
must be
be normal)
normal)
deviation of the variable
groups
differs depending on the Paired
Paired t test
test (differences
(differences must
must be
be normal)
normal)
group? >2 independent
groups
One
One Way
Way Anova
Anova (variable
(variable must
must be
be normal)
normal)

Kruskal-Wallis
Kruskal-Wallis Rank
Rank Test
Test (variable
(variable doesn’t
doesn’t need
need to
to be
be normal)
normal)

Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-20
 Data Analysis Tree
Numerical Variables
continued

How to determine which Two factors

factors affect the value of Two factor factorial design
to be examined
the variable?

Simple linear regression

One independent
variable
How to predict the value of
the variable based on the Multiple regression model
Two or more
value of other variables? Independent variables Moving averages
Exponential smoothing
Data taken over time to Least squares forecasting
forecast the future
Autoregressive modeling

How to determine whether Studied a process and

the values of the variable Develop X and R charts
taken data over time
are stable over time?

Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-21
 Data Analysis Tree
Categorical Variables
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
How to determine
whether the proportion of
items of interest differs
depending on the group
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
continued
Summary tables
Bar charts
Pie charts
Pareto charts
Side-by-side charts
Confidence interval for the proportion of items of interest
Hypothesis test for the proportion of items of interest
Two proportion Z test
Two categories & two
independent groups χ 2 test for the difference between two proportions
Two categories & two McNemar test
matched groups
Two categories & more
than two independent χ 2 test for the difference among several proportions
groups
More than two χ 2 test of independence
categories & more than
two groups
Chap 17-22
 Data Analysis Tree
Categorical Variables
continued

How to predict the

proportion of items of Logistic Regression
interest based on the
value of other variables

Studying a process
How to determine and collected items of p-chart
whether the proportion of interest over time
items of interest is stable
over time

Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-23
 Chapter Summary
In this chapter we discussed

 How to choose the appropriate technique(s) for

data analysis for both numerical and categorical
variables
 Potential questions and the associated
appropriate techniques for numerical variables
 Potential questions and the associated
appropriate techniques for categorical variables

Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 17-24
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Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.