LECTURE NOTES FOR EXCEL

Describing Data Using Numerical Measures

Issue: Determine the mean nightly revenue for the Foster City Hotel. Objective: Use Excel to calculate the population mean revenue Data File is FosterCity.xls 1. Open the Excel file called FosterCity.xls Option 1 Use the Excel Average function. 2. Click Formulas, then Insert Function. Select Statistical in the Category drop down list. Select Average. Specify data range C2:C9. Click ok. Option 2 Use Data Analysis 3. Click Data Analysis, select Descriptive Statistics. Define data range C2:C9. Check New Worksheet ply and label it Descriptive. Check Summary Statistics. Click ok Issue: Does the WIM scale produce gross weights that are close to the POE weights? Objective: Use Excel to develop histograms for the weights from each scale and to compute the mean, median, and mode for each scale. The data file is Trucks.xls. 1. Open the data file called Trucks.xls 2. Select Data Analysis. Click Descriptive Statistics. Define Data Range and select options. Issue: Determine Percentiles and Quartiles for WIM and POE Gross Weights Objective: Use Excel to calculate 10th percentiles and 1st and 3rd quartiles for weigh-in-motion data. Data file is Trucks.xls 1. Open the data file called Trucks.xls 2. Click Formulas, then Insert Function. Select Statistical in the Category drop down list. Select Percentile. Enter data range and desired percentile. Click ok 3. Click Formulas, then Insert Function. Select Statistical in the Category drop down list. Select Quartile. Enter data range and desired quartile. Click ok Issue: Analyze the Phoenix Burger Sales Distribution Objective: Use the Excel to compute graphs and numerical measures necessary for using the empirical rule to analyze sales at Burger N Brew Data file is BurgerNBrew.xls 1. Open the data file called BurgerNBrew.xls 2. Click Data analysis then Histogram. 3. Define input range, bin range, output location. 4. Check Chart Output. Click ok 5. To compute numerical measures use Descriptive Statistics

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Probability and Sampling Distributions

A. Discrete and Continuous Probability Distributions
Issue: People who order items from catalogs can return the items for a refund. Historical return rate for one catalog has been 11 percent. Is this rate still valid? Objective: Use Excel to compute binomial probabilities based on a sample of 300 purchases. Sample Size is n=300 p = .11 Mean = np = 300(.11) = 33 44 returns were observed P(X > 44) = 1 P(X < 43) Find P(X < 43) = ? 1. Click Formulas, then Insert Function. Select Statistical in the Category drop down list. Choose Binomdist. 2. Enter required values. Note, True indicates that you want the cumulative probability False would indicate that you want the exact probability.

Issue: The distribution for the number of defects per tile made by Heritage Tile is Poisson distributed with a mean of 3 defects per tile. The manager is worried about the high variability Objective: Use Excel to generate the Poisson distribution and histogram to visually see spread in the distribution of possible defects. 1. 2. 3. 4. Enter values of x ranging from 0 to 10. Click Formulas, then Insert Function. Select Statistical in the Category drop down list. Choose Poisson. Enter the value of x (located in cell a2), the value of the mean and finally false. Generate the remaining probabilities, then create a column chart using the Insert Chart buttons

Issue: State Bank managers have studied the time customers spend at the bank on business. They plan to offer a gift certificate to any customer who is required to spend over 40 minutes on bank business. Objective: Use Excel to analyze to create histogram and determine the probability that a certificate will be given to any customer. The data file is State Bank.xls. 1. 2. 3. 4. 5. 6. 7. 8. Open Data File: State Bank.xls Create Bins (Upper Limits of each class) Click Data analysis then Histogram. Define input range, bin range, output location. Check Chart Output. Click ok To compute numerical measures use Descriptive Statistics Next, determine probability of a service time exceeding 30 seconds. Select Insert Function then Click on Statistical then select Normdist function Page 2 of 4

Prepared by Luzz Landicho, RVR-COB, DLSU-Manila

9. Enter

X =30, mean = 22.14, st dev = 6.09, and True for cumulative probability P(X <30) = .9016

Issue: The time between connect attempts averages two minutes and the distribution of time between attempts is assumed to be exponential. Objective: Use Excel to compute the probability that that the time between connect attempts will be less than 45 seconds (.75 minutes). 1. Click on Insert Function then select Statistical then EXPONDIST 2. Enter required values. Note, True indicates that you want the cumulative probability False would indicate that you want the exact probability. 3. EXPONDIST function note, that =.50 is used rather than the mean = 4. Exponential Distribution Probability Result P(X < .75) = .3127

B. SAMPLING DISTRIBUTIONS
Issue: We wish to develop a sampling distribution for the sample mean for the number of mutual fund accounts owned by each customer. Objective: Use Excel to select a random sample of size 10 from the data and develop a sampling distribution. The data file is Aims.xls 1. 2. 3. 4. 5. 6. Open File Aims.xls Click on Data Analysis then select Sampling Complete information to select a random sample of 10 members (column B) Sample of n=10 values number of mutual fund accounts owned by each customer. Sample Mean = 2.2 Repeat this process 100 times Store the sample mean in a column. Now, develop a histogram for the sample means using Excel

Estimating Population Values

Issue: The manager is interested in estimating the mean fill amount in soft-drink cans. Ideal average is 12 ounces Objective: Use Excel to help construct a confidence interval estimate for population mean fill volume. Data file is NagelBeverage.xls 1. Open File Nagel-Beverage.xls 2. First Step is to develop a histogram for the sample data. Define Bins (upper limit of each class) 3. Click on Data Analysis then Histogram 4. Define input range, bin range, output location. 5. Check Chart Output. Click ok 6. Next Click on Data Analysis then Descriptive Statistics 7. Define data range, output location and check Summary Statistics option and Confidence Level for Mean.
Prepared by Luzz Landicho, RVR-COB, DLSU-Manila

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Hypothesis Testing and Estimation for Two Population Parameters

Hypothesis Test Two Means Issue: A national car rental agency wishes to test whether SUV vehicles have different mean city mileage versus highway mileage. The premise is that mean highway mileage will exceed mean city mileage Objective: Use Excel to help test the hypothesis for the difference in population means. Data file is Mileage.xls 1. Open the file Mileage.xls. 2. The null and hypothesis to be test are:

4. 5. 6. 7.

3. Use Tools Data Analysis and Descriptive Statistics to calculate statistics from each sample Define the Input Range and select other features. Click ok. Next, Use Data Analysis t-Test: Two Samples Assuming Equal Variances Specify data ranges, hypothesized difference = 0.0, and alpha = .05

8. Resulting calculations: p value for one tailed test is .007 which is less than .05 so we reject the null hypothesis. Testing-Two Variances - Bank ATM Machines Issue: System programmers believe that the original ATM computer program will result in a higher standard deviation in transaction times than the new program Objective: Use Excel to help test a hypothesis about the standard deviation of two groups. Data file is ATM.xls 1. Open File ATM.xls 2. Click on Data Analysis and finally on F-Test for Two Sample Variances 3. Supply Variable Ranges [A1:A8; B1:B12], Significance Level [ALPHA = 0.01], and Output Range. Click on OK. 4. Since F = 11.8512 > F critical = 5.38, reject Ho and conclude that the variance for Original Software exceeds that for the new system
Prepared by Luzz Landicho, RVR-COB, DLSU-Manila

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