Excel 2016 for business statistics a guide to solving practical problems

Excel for Statistics Thomas J Quirk Excel 2016 for Business Statistics A Guide to Solving Practical Problems Excel for Statistics Excel for Statistics is a series of textbooks that explain how to use Excel to solve statistics problems in various fields of study Professors, students, and practitioners will find these books teach how to make Excel work best in their respective field Applications include any discipline that uses data and can benefit from the power and simplicity of Excel Books cover all the steps for running statistical analyses in Excel 2016, Excel 2013, Excel 2010 and Excel 2007 The approach also teaches critical statistics skills, making the books particularly applicable for statistics courses taught outside of mathematics or statistics departments Series editor: Thomas J Quirk The following books are in this series: T.J Quirk, Excel 2016 for Business Statistics: A Guide to Solving Practical Problems, Excel for Statistics Springer International Publishing Switzerland 2016 T.J Quirk, Excel 2016 for Engineering Statistics: A Guide to Solving Practical Problems, Excel for Statistics Springer International Publishing Switzerland 2016 T.J Quirk, M Quirk, H.F Horton, Excel 2016 for Biological and Life Sciences Statistics: A Guide to Solving Practical Problems, Excel for Statistics Springer International Publishing Switzerland 2016 T.J Quirk, M Quirk, H.F Horton, Excel 2016 for Physical Sciences Statistics: A Guide to Solving Practical Problems, Excel for Statistics Springer International Publishing Switzerland 2016 T.J Quirk, E Rhiney, Excel 2016 for Marketing Statistics: A Guide to Solving Practical Problems, Excel for Statistics Springer International Publishing Switzerland 2016 T.J Quirk Excel 2016 for Educational and Psychological Statistics: A Guide to Solving Practical Problems, Excel for Statistics Springer International Publishing Switzerland 2016 T.J Quirk, Excel 2016 for Social Science Statistics: A Guide to Solving Practical Problems, Excel for Statistics Springer International Publishing Switzerland 2016 T.J Quirk, S Cummings, Excel 2016 for Health Services Management Statistics: A Guide to Solving Practical Problems Excel for Statistics Springer International Publishing Switzerland 2016 T.J Quirk, J Palmer-Schuyler, Excel 2016 for Human Resource Management Statistics: A Guide to Solving Practical Problems, Excel for Statistics Springer International Publishing Switzerland 2016 T.J Quirk, M Quirk, H.F Horton Excel 2016 for Environmental Sciences Statistics: A Guide to Solving Practical Problems, Excel for Statistics Springer International Publishing Switzerland 2016 T.J Quirk, J Palmer-Schuyler, Excel 2013 for Human Resource Management Statistics: A Guide to Solving Practical Problems, Excel for Statistics Springer International Publishing Switzerland 2016 T.J Quirk, S Cummings, Excel 2013 for Health Services Management Statistics: A Guide to Solving Practical Problems, Excel for Statistics Springer International Publishing Switzerland 2016 T.J Quirk, M Quirk, H.F Horton, Excel 2013 for Physical Sciences Statistics: A Guide to Solving Practical Problems, Excel for Statistics Springer International Publishing Switzerland 2016 T.J Quirk Excel 2013 for Educational and Psychological Statistics: A Guide to Solving Practical Problems, Excel for Statistics Springer International Publishing Switzerland 2015 T.J Quirk, M Quirk, H.F Horton, Excel 2013 for Biological and Life Sciences Statistics: A Guide to Solving Practical Problems, Excel for Statistics Springer International Publishing Switzerland 2015 T.J Quirk, Excel 2013 for Social Science Statistics: A Guide to Solving Practical Problems, Excel for Statistics Springer International Publishing Switzerland 2015 T.J Quirk, Excel 2013 for Business Statistics: A Guide to Solving Practical Problems, Excel for Statistics Springer International Publishing Switzerland 2015 T.J Quirk Excel 2013 for Engineering Statistics: A Guide to Solving Practical Problems, Excel for Statistics Springer International Publishing Switzerland 2015 Additional Statistics books by Dr Tom Quirk that have been published by Springer T.J Quirk, Excel 2010 for Engineering Statistics: A Guide to Solving Practical Problems, Springer International Publishing Switzerland 2014 T.J Quirk, S Cummings, Excel 2010 for Health Services Management Statistics: A Guide to Solving Practical Problems, Springer International Publishing Switzerland 2014 T.J Quirk, M Quirk, H Horton, Excel 2010 for Physical Sciences Statistics: A Guide to Solving Practical Problems, Springer International Publishing Switzerland 2013 T.J Quirk, M Quirk, H.F Horton, Excel 2010 for Biological and Life Sciences Statistics: A Guide to Solving Practical Problems, Springer Science+Business Media New York 2013 T.J Quirk, M Quirk, H.F Horton, Excel 2007 for Biological and Life Sciences Statistics: A Guide to Solving Practical Problems, Springer Science+Business Media New York 2013 T.J Quirk, Excel 2010 for Social Science Statistics: A Guide to Solving Practical Problems, Springer Science+Business Media New York 2012 T.J Quirk, Excel 2010 for Educational and Psychological Statistics: A Guide to Solving Practical Problems, Springer Science+Business Media New York 2012 T.J Quirk, Excel 2007 for Business Statistics: A Guide to Solving Practical Problems, Springer Science+Business Media New York 2012 T.J Quirk, Excel 2007 for Social Science Statistics: A Guide to Solving Practical Problems, Springer Science+Business Media New York 2012 T.J Quirk, Excel 2007 for Educational and Psychological Statistics: A Guide to Solving Practical Problems, Springer Science+Business Media New York 2012 T.J Quirk, Excel 2010 for Business Statistics: A Guide to Solving Practical Problems, Springer Science+Business Media 2011 More information about this series at http://www.springer.com/series/13491 Thomas J Quirk Excel 2016 for Business Statistics A Guide to Solving Practical Problems Thomas J Quirk Webster University St Louis, MO, USA Excel for Statistics ISBN 978-3-319-38958-5 ISBN 978-3-319-38959-2 DOI 10.1007/978-3-319-38959-2 (eBook) Library of Congress Control Number: 2016941173 © Springer International Publishing Switzerland 2016 This work is subject to copyright All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made Printed on acid-free paper This Springer imprint is published by Springer Nature The registered company is Springer International Publishing AG Switzerland This book is dedicated to the more than 3,000 students I have taught at Webster University’s campuses in St Louis, London, and Vienna; the students at Principia College in Elsah, Illinois; and the students at the Cooperative State University of Baden-Wuerttemberg in Heidenheim, Germany These students taught me a great deal about the art of teaching I salute them all, and I thank them for helping me to become a better teacher Thomas J Quirk Preface Excel 2016 for Business Statistics: A Guide to Solving Practical Problems is intended for anyone looking to learn the basics of applying Excel’s powerful statistical tools to their business courses or work activities If understanding statistics isn’t your strongest suit, if you are not especially mathematically inclined, or if you are wary of computers, then this is the right book for you Here you’ll learn how to use key statistical tests using Excel without being overpowered by the underlying statistical theory This book clearly and methodically shows and explains how to create and use these statistical tests to solve practical problems in business Excel is an easily available computer program for students, instructors, and managers It is also an effective teaching and learning tool for quantitative analyses in business courses The powerful numerical computational ability and the graphical functions available in Excel make learning statistics much easier than in years past However, this is the first book to show Excel’s capabilities to more effectively teach business statistics; it also focuses exclusively on this topic in an effort to render the subject matter not only applicable and practical but also easy to comprehend and apply Unique features of this book: • You will be told each step of the way, not only how to use Excel but also why you are doing each step so that you can understand what you are doing and not merely learn how to use statistical tests by rote • Includes specific objectives embedded in the text for each concept, so you can know the purpose of the Excel steps • Includes 167 color screenshots so that you can be sure you are performing the Excel steps correctly • This book is a tool that can be used either by itself or along with any good statistics book • Practical examples and problems are taken from business vii viii Preface • Statistical theory and formulas are explained in clear language without bogging you down in mathematical fine points • You will learn both how to write statistical formulas using Excel and how to use Excel’s drop-down menus that will create the formulas for you • This book does not come with a CD of Excel files which you can upload to your computer Instead, you’ll be shown how to create each Excel file yourself In a work situation, your colleagues will not give you an Excel file; you will be expected to create your own This book will give you ample practice in developing this important skill • Each chapter presents the steps needed to solve a practical business problem using Excel In addition, there are three practice problems at the end of each chapter so you can test your new knowledge of statistics The answers to these problems appear in Appendix A • A “Practice Test” is given in Appendix B to test your knowledge at the end of the book The answers to these practical business problems appear in Appendix C This book is appropriate for use in any course in business statistics (at both undergraduate and graduate levels) as well as for managers who want to improve the usefulness of their Excel skills St Louis, MO, USA Thomas J Quirk Acknowledgments Excel 2016 for Business Statistics: A Guide to Solving Practical Problems is the result of inspiration from three important people: my two daughters and my wife Jennifer Quirk McLaughlin invited me to visit her MBA classes several times at the University of Witwatersrand in Johannesburg, South Africa These visits to a firstrate MBA program convinced me there was a need for a book to teach students how to solve practical problems using Excel Meghan Quirk-Horton’s dogged dedication to learning the many statistical techniques needed to complete her Ph.D dissertation illustrated the need for a statistics book that would make this daunting task more user-friendly And Lynne Buckley-Quirk was the number-one cheerleader for this project from the beginning, always encouraging me and helping me remain dedicated to completing it Marc Strauss, our editor at Springer, caught the spirit of this idea in our first phone conversation and shepherded this book through the idea stages until it reached its final form His encouragement and support were vital to this book seeing the light of day We thank him for being such an outstanding product champion throughout this process And Christine Crigler at Springer did her usual first-rate job in coordinating the editing and production of this book; she is always a pleasure to work with Thomas J Quirk ix Appendices Appendix C: Answers to Practice Test Practice Test Answer: Chapter (see Fig C.1) Fig C.1 Practice Test Answer to Chap Problem 229 230 Practice Test Answer: Chapter (see Fig C.2) Fig C.2 Practice Test Answer to Chap Problem Appendices Appendices Practice Test Answer: Chapter (see Fig C.3) Fig C.3 Practice Test Answer to Chap Problem 231 232 Practice Test Answer: Chapter (see Fig C.4) Fig C.4 Practice Test Answer to Chap Problem Appendices Appendices Practice Test Answer: Chapter (see Fig C.5) Fig C.5 Practice Test Answer to Chap Problem 233 234 Practice Test Answer: Chapter (see Fig C.6) Fig C.6 Practice Test Answer to Chap Problem Appendices Appendices 235 Practice Test Answer: Chapter 6: (continued) r ¼ À:64 (note the negative correlation!) y-intercepts ¼ a ¼ 17:553 slope ¼ b ¼ À0:007 (note the negative slope which tells you the correlation is negative!) Y ¼ a þ bX Y ¼ 17:553 À 0:007X Y ¼ 17:553 0:0071500ị Y ẳ 17:553 10:5 Y ẳ 7:1kg weight loss Practice Test Answer: Chapter (see Fig C.7) Fig C.7 Practice Test Answer to Chap Problem 236 Appendices Practice Test Answer: Chapter (continued) 10 11 Multiple correlation ¼ :84 a ¼ y-intercept ¼ 0:8482 b1 ¼ 0:1916 b2 ẳ 0:7922 Y ẳ a ỵ b1 X ỵ b2 X Y ẳ 0:8482 ỵ 0:1916X1 ỵ 0:7922X2 Y ẳ 0:8482 ỵ 0:191610ị ỵ 0:79223ị Y ẳ 0:8482 ỵ 1:916 ỵ 2:377 Yẳ5 ỵ0:74 ỵ0:72 ỵ0:52 The better predictor of PERFORMANCE RATING was EXPERIENCE ðr ¼ :74Þ The two predictors combined predicted PERFORMANCE RATING much better at Rxy ¼ :84 Appendices Practice Test Answer: Chapter (see Fig C.8) Fig C.8 Practice Test Answer to Chap Problem 237 238 Appendices Practice Test Answer: Chapter (continued) f g h i j k l m n o p MSb ¼ 1143:18 and MSw ¼ 15:58 F ¼ 73:40 Mean Group B ¼ 23.10, and Mean Group D ¼ 38.50 critical F ¼ 2.84 Results: Since 73.40 is greater than the critical F of 2.84, we reject the null hypothesis and accept the research hypothesis Conclusion: There was a significant difference in the amount of food eaten by the kittens in the four flavors of kitten food Null hypothesis: μB ¼ μD Research hypothesis: μB 6¼ μD df ¼ nTOTAL À k ¼ 44 À ¼ 40 critical t ¼ 1.96 Result: Since the absolute value of À 9.11 is greater than the critical t of 1.96, we reject the null hypothesis and accept the research hypothesis Conclusion: The kittens ate significantly more of Flavor D than Flavor B (38.50 vs 23.10) Appendices 239 Appendix D: Statistical Formulas X ¼ ΣX n Mean sffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi À Á2 Σ XÀX STDEV ¼ S ¼ nÀ1 Standard Deviation Standard error of the mean S s:e ¼ SX ¼ pffiffiffi n Confidence interval about the mean X Ỉ t SX S where SX ¼ pffiffiffi n t¼ One-group t-test XÀμ SX S where SX ¼ pffiffiffi n Two-group t-test (a) when both groups have a sample size greater than 30 t¼ where SX1 ÀX2 X1 À X SX1 X2 s S1 S2 ẳ ỵ n1 n2 and where df ẳ n1 ỵ n2 (b) when one or both groups have a sample size less than 30 t¼ where SX1 ÀX2 X1 À X SX1 X2 s   n1 1ịS1 ỵ n2 1ịS2 1 ẳ ỵ n1 n2 n1 ỵ n2 and where df ẳ n1 þ n2 À 240 Correlation Appendices ÁÀ Á XÀX YÀY r¼ Sx Sy where Sx ¼ standard deviation of X and where Sy ¼ standard deviation of Y n1 Simple linear regression Yẳaỵb X where a ¼ y-intercept and b ¼ slope of the line Multiple regression equation Y ẳ a ỵ b1 X1 ỵ b X ỵ b X ỵ etc where a ¼ y-intercept One-way ANOVA F-test F ¼ MSb =MSW ANOVA t-test X1 À X2 s:e:ANOVA sffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi  ffi 1 where s:e:ANOVA ẳ MSw ỵ n1 n2 and where df ¼ nTOTAL À k where nTOTAL ¼ n1 þ n2 þ n3 þ etc: and where k ¼ the number of groups ANOVA t ¼ Appendices Appendix E: t-Table Critical t-values needed for rejection of the null hypothesis (see Fig E.1) Fig E.1 Critical t-values Needed for Rejection of the Null Hypothesis 241 Index A Absolute value of a number, 66–67 Analysis of Variance ANOVA t-test formula, 169 degrees of freedom, 172 Excel commands, 4, 27, 173–175 formula, 167–168 interpreting the Summary Table, 169 s.e formula for ANOVA t-test, 169–170 ANOVA See Analysis of Variance ANOVA t-test See Analysis of Variance Average function See Mean C Centering information within cells, 6–7 Chart adding the regression equation, 139–142 changing the width and height, 5–6 creating a chart, 118–129 drawing the regression line onto the chart, 118–129 moving the chart, 126 printing the spreadsheet, 13–15 reducing the scale, 128 scatter chart, 120 titles, 120–122, 124 Column width (changing), 5–6 Confidence interval about the mean 95% confident, 38–41, 46, 68, 69 drawing a picture, 45, 89 formula, 48–58 lower limit, 38–40, 42, 44–47, 53, 62, 64 upper limit, 38–42, 44–47, 53, 62, 64 Correlation formula, 107–114 negative correlation, 107, 109, 110, 137, 142, 202, 235 positive correlation, 107–109, 113, 117, 142, 158 steps for computing, 112–114 CORREL function See Correlation COUNT function, 9, 53 Critical t-value, 59, 172, 173, 241 D Data Analysis ToolPak, 130–133, 165 Data/Sort commands, 26 Degrees of freedom, 85–88, 90, 98, 172, 176, 177, 179, 181, 211, 212, 214, 216, 228 F Fill/Series/Columns commands, 4–5 step value/stop value commands, 5, 22 Formatting numbers currency format, 15–18, 60, 63, 64 decimal format, 135, 168 H Home/Fill/Series commands, Hypothesis testing decision rule, 53 null hypothesis, 49–60, 62, 63 rating scale hypotheses, 50–52 research hypothesis, 49–63 © Springer International Publishing Switzerland 2016 T.J Quirk, Excel 2016 for Business Statistics, Excel for Statistics, DOI 10.1007/978-3-319-38959-2 243 244 Hypothesis testing (cont.) stating the conclusion, 55, 57, 58 stating the result, 58 steps for hypothesis testing, 52 M Mean, 1–20 formula, Multiple correlation correlation matrix, 156–158, 160, 162, 164 Excel commands, 4, 27, 173 Multiple regression correlation matrix, 156–158, 160, 162, 164 equation, 149 Excel commands, 156–158 predicting Y, 149 N Naming a range of cells, 8–9 Null hypothesis See Hypothesis testing O One-group t-test for the mean absolute value of a number, 66–67 formula, 65 hypothesis testing, 65–69 s.e formula, 65 steps for hypothesis testing, 65–69 P Page Layout/Scale to Fit commands, 30 Population mean, 37–40, 49, 50, 65, 67, 83, 84, 90, 165, 169–171, 173, 175 Printing a spreadsheet entire worksheet, 142–144 part of the worksheet, 142 printing a worksheet to fit onto one page, 35 R RAND() See Random number generator Random number generator Index duplicate frame numbers, 24–28, 34, 35 frame numbers, 21–24 sorting duplicate frame numbers, 26–29, 34, 35 Regression, 119–127, 129, 130, 133–142, 144–149, 151–156, 162, 163, 225, 226 Regression equation adding it to the chart, 139–141 formula, 118–127 negative correlation, 107, 109, 110, 137, 142 predicting Y from x, 149 slope, b, 137 writing the regression equation using the Summary Output, 133–138, 142, 144 y-intercept, a, 137 Regression line, 119–127, 137–142, 145–148, 225 Research hypothesis See Hypothesis testing S Sample size COUNT function, 9, 53 Saving a spreadsheet, 12–13 Scale to Fit commands See Standard error of the mean Standard deviation formula, Standard error of the mean formula, STDEV See Standard deviation T T-table, 241 Two-group t-test basic table, 83 degrees of freedom, 85–86 drawing a picture of the means, 89 formula, 90–96 Formula #1, 90–96 Formula #2, 97–102 hypothesis testing, 82–90 s.e formula, 90, 98 steps in hypothesis testing, 82–90 ... Practical Problems, Excel for Statistics Springer International Publishing Switzerland 2015 T.J Quirk, Excel 2013 for Business Statistics: A Guide to Solving Practical Problems, Excel for Statistics. .. International Publishing Switzerland 2016 T.J Quirk Excel 2016 for Educational and Psychological Statistics: A Guide to Solving Practical Problems, Excel for Statistics Springer International Publishing... Solving Practical Problems, Excel for Statistics Springer International Publishing Switzerland 2016 T.J Quirk, Excel 2016 for Engineering Statistics: A Guide to Solving Practical Problems, Excel for