Statistics for Managers Using Microsoft Excel / Edition 8

by David Levine, David Stephan, Kathryn Szabat

Overview

KEY BENEFIT: Analyzing the Data Applicable to Business

This text is the gold standard for learning how to use Microsoft Excel^® in business statistics, helping students gain the understanding they need to be successful in their careers. The authors present statistics in the context of specific business fields; full chapters on business analytics further prepare students for success in their professions. Current data throughout the text lets students practice analyzing the types of data they will see in their professions. The friendly writing style include tips throughout to encourage learning.

KEY TOPICS: First Things First; Defining and Collecting Data; Organizing and Visualizing Variables; Numerical Descriptive Measures; Basic Probability; Discrete Probability Distributions; The Normal Distribution and Other Continuous Distributions; Sampling Distributions; Confidence Interval Estimation; Fundamentals of Hypothesis Testing: One-Sample Tests; Two-Sample Tests; Analysis of Variance; Chi-Square and Nonparametric Tests; Simple Linear Regression; Introduction to Multiple Regression; Multiple Regression Model Building; Time-Series Forecasting; Getting Ready to Analyze Data in the Future; Statistical Applications in Quality Management (online); Decision Making (online); Basic Math Concepts and Symbols; Important Excel and Minitab Skills; Skills and Concepts; Online Resources; Configuring Microsoft Excel; Tables; Software FAQs

MARKET: For anyone interested in business statistics.

Product Details

ISBN-13:	9780134173054
Publisher:	Pearson Education
Publication date:	01/21/2016
Edition description:	Older Edition
Pages:	736
Product dimensions:	11.00(w) x 8.70(h) x 1.10(d)

About the Author

David M. Levine is Professor Emeritus of Statistics and Computer Information Systems at Baruch College (City University of New York). He received B.B.A. and M.B.A. degrees in statistics from City College of New York and a Ph.D. from New York University in industrial engineering and operations research. He is nationally recognized as a leading innovator in statistics education and is the co-author of 14 books, including such best-selling statistics textbooks as Statistics for Managers Using Microsoft Excel, Basic Business Statistics: Concepts and Applications, Business Statistics: A First Course, and Applied Statistics for Engineers and Scientists Using Microsoft Excel and Minitab.

He also is the co-author of Even You Can Learn Statistics: A Guide for Everyone Who Has Ever Been Afraid of Statistics, currently in its second edition, Six Sigma for Green Belts and Champions and Design for Six Sigma for Green Belts and Champions, and the author of Statistics for Six Sigma Green Belts, all published by FT Press, a Pearson imprint, and Quality Management, third edition, McGraw-Hill/Irwin. He is also the author of Video Review of Statistics and Video Review of Probability, both published by Video Aided Instruction, and the statistics module of the MBA primer published by Cengage Learning. He has published articles in various journals, including Psychometrika, The American Statistician, Communications in Statistics, Decision Sciences Journal of Innovative Education, Multivariate Behavioral Research, Journal of Systems Management, Quality Progress, and The American Anthropologist, and he has given numerous talks at the Decision Sciences Institute (DSI), American Statistical Association (ASA), and Making Statistics More Effective in Schools and Business (MSMESB) conferences. Levine has also received several awards for outstanding teaching and curriculum development from Baruch College.

David F. Stephan is an independent instructional technologist. He was an Instructor/Lecturer of Computer Information Systems at Baruch College (City University of New York) for over 20 years and also served as an Assistant to the Provost and to the Dean of the School of Business & Public Administration for computing. He pioneered the use of computer classrooms for business teaching, devised interdisciplinary multimedia tools, and created techniques for teaching computer applications in a business context. He also conducted the first large-scale controlled experiment to show the benefit of teaching Microsoft Excel in a business case context to undergraduate students.

An avid developer, he created multimedia courseware while serving as the Assistant Director of a Fund for the Improvement of Postsecondary Education (FIPSE) project at Baruch College. Stephan is also the originator of PHStat, the Pearson Education statistical add-in for Microsoft Excel and a co-author of Even You Can Learn Statistics: A Guide for Everyone Who Has Ever Been Afraid of Statistics and Practical Statistics by Example Using Microsoft Excel and Minitab. He is currently developing ways to extend the instructional materials that he and his co-authors develop to mobile and cloud computing platforms as well as develop social-media facilitated means to support learning in introductory business statistics courses.

Stephan received a B.A. in geology from Franklin and Marshall College and a M.S. in computer methodology from Baruch College (City University of New York).

Kathryn A. Szabat is Associate Professor and Chair of Business Systems and Analytics at LaSalle University. She teaches undergraduate and graduate courses in business statistics and operations management. She also teaches as Visiting Professor at the Ecole Superieure de Commerce et de Management (ESCEM) in France.

Szabat’s research has been published in International Journal of Applied Decision Sciences, Accounting Education, Journal of Applied Business and Economics, Journal of Healthcare Management, and Journal of Management Studies. Scholarly chapters have appeared in Managing Adaptability, Intervention, and People in Enterprise Information Systems; Managing, Trade, Economies and International Business; Encyclopedia of Statistics in Behavioral Science; and Statistical Methods in Longitudinal Research.

Szabat has provided statistical advice to numerous business, non-business, and academic communities. Her more recent involvement has been in the areas of education, medicine, and nonprofit capacity building.

Szabat received a B.S. in mathematics from State University of New York at Albany and M.S. and Ph.D. degrees in statistics, with a cognate in operations research, from the Wharton School of the University of Pennsylvania.

Read an Excerpt

Educational Philosophy

In our many years of teaching introductory statistics courses, we have continually searched for ways to improve the teaching of these courses. Our vision for teaching these introductory business statistics courses has been shaped by active participation in a series of Making Statistics More Effective in Schools of Business, Decision Sciences Institute, and American Statistical Association conferences as well as the reality of serving a diverse group of students at large universities. Over the years, our vision has come to include these principles:

1. Students need a frame of reference when learning statistics, especially since statistics is not their major. That frame of reference for business students should be the functional areas of business—that is, accounting, economics and finance, information systems, management, and marketing. Each statistical topic needs to be presented in an applied context related to at least one of these functional areas.
2. Virtually all the students taking introductory business statistics courses are majoring in areas other than statistics. Introductory courses should focus on underlying principles that non-statistics majors will find useful.
3. The use of spreadsheet and/or statistical software should be integrated into all aspects of an introductory statistics course. In the workplace, spreadsheet software (and sometimes statistical software) is usually available on a decision maker's desktop. Our teaching approach needs to recognize this reality, and we need to make our courses more consistent with the workplace environment.
4. Textbooks that use software must provide enoughinstructions that students can effectively use the software, without the software (and instruction) dominating the course.
5. The focus in teaching each topic should be on the application of the topic to a functional area of business, the interpretation of results, the presentation of assumptions, the evaluation of the assumptions, and the discussion of what should be done if the assumptions are violated. These points are particularly important in regression and forecasting and in hypothesis testing. Although the illustration of some computations is inevitable, the focus on computations should be minimized.
6. Both classroom examples and homework exercises should relate to actual or realistic data as much as possible. Students should work with data sets, both small and large, and be encouraged to look beyond the statistical analysis of data to the interpretation of results in a managerial context.
7. Introductory courses should avoid an overconcentration on one topic area (such as hypothesis testing) and instead provide breadth of coverage of a variety of statistical topics. This will help students avoid the "I can't see the forest from the trees" syndrome.

Features of This Text

When planning this textbook, we focused on how desktop productivity tools, such as spreadsheets, have altered managers' decision-making processes. Whereas managers once had to turn to a Management Information Systems Department to obtain customized summaries of corporate data, today an increasing number of managers use spreadsheet applications as the means to retrieve and directly analyze the data they need. In this context, employers now are beginning to desire, if not demand, that their college-educated, entry-level employees have more than just a cursory awareness of spreadsheet applications. These changes, along with the realization that current spreadsheet applications can assist in performing the types of analyses once done only by specialized statistical software packages, led us to develop Statistics for Managers Using Microsoft Excel.

Therefore, we take the position that using Microsoft Excel can play a valuable role in learning statistics. Our focus emphasizes analyzing data, interpreting the output from Microsoft Excel, and explaining how to use this software while reducing the emphasis on doing computations. Therefore, we have included a great deal of Excel output and integrated this output into the fabric of the text. For example, in the coverage of tables and charts in Chapter 2, the focus is on the interpretation of various charts, not on their construction by hand. In our coverage of hypothesis testing in Chapters 7 through 10, extensive Excel output has been included so that the p-value approach can be used. In our coverage of simple linear regression in Chapter 11, we assume that Microsoft Excel will be used, and thus the focus is on the interpretation of the output, and not on hand calculations (which have been placed in a separate section of the chapter).

New to This Edition

This new third edition of Statistics for Managers Using Microsoft Excel has been enhanced in a number of important areas.

COVERAGE OF EXCEL

A major thrust of this revision is to refine the presentation of the Microsoft Excel-related material. To that end, this edition contains the following enhancements:

• Excel output for interpretation has been integrated directly into the examples. Results for many of the examples are now presented as screen shots from actual Excel worksheets.
• Simple-to-use Excel instructions are conveniently located after the discussion of a statistical topic. These instructions allow readers to generate statistical results quickly through the extensive use of PHStat2 (see below) and the wizards and add-ins that comprise Microsoft Excel. Sets of instructions are highlighted with a color tint for easy reference and are typically a page or less in length.
• Detailed instructions for implementing worksheet solutions are presented in end of chapter "Excel Handbook" sections. Those who want to learn about Microsoft Excel or those who cannot or choose not to use PHStat2 can use these instructions to generate statistical results. This way, the detailed instructions are there for those who want them, but those who do not can easily skip the instructions. (All will find the Handbooks helpful for understanding how PHStat2 generates its results.)
• New or streamlined Excel instructions for a variety of methods including producing dot scale diagrams, histograms, multiple polygons, and stepwise regression.
• PHStat2, the latest version of PHStat, Prentice Hall's statistical add-in for Microsoft Excel for Windows. PHStat2 contains a number of new or enhanced procedures and now includes a full help system for easy reference.

APPLICATIONS

• Updated and improved Using Statistics business scenarios—Each chapter begins with a Using Statistics example that shows how statistics can be used in one of the functional areas of business—accounting, finance, management, marketing or information systems. This scenario is used throughout the chapter to provide an applied context for the concepts.
• Hundreds of new applied examples and exercises with data from the Wall Street Journal, USA Today, and other sources have been added to the text.
• Visual Explorations—Included on the CD-ROM that accompanies this textbook. Visual Explorations in Statistics is a Microsoft Excel add-in that allows students to interactively explore important statistical concepts in descriptive statistics, probability, the normal distribution, and regression analysis. For example, in descriptive statistics, students observe the effect of changes in the data on the average, median, quartiles, and standard deviation. In sampling distributions, students use simulation to explore the effect of sample size on a probability distribution. With the normal distribution, students see the effect of changes in the mean and standard deviation on the areas under the normal curve. In regression analysis, students have the opportunity of fitting a line and observing how changes in the slope and intercept affect the goodness of fit of the fitted line.
• Using Microsoft Office sections. Located at the end of selected chapters, this feature discusses ways in which users can share data between Microsoft Excel and other components of Microsoft Office, including Microsoft Word and Microsoft PowerPoint, and the web browser Internet Explorer. Detailed, step-by-step instructions explain how to incorporate an Excel worksheet or chart in a Word document or a PowerPoint presentation, as well as how to save Excel worksheets and charts as html World Wide Web pages and how to retrieve and import data from the World Wide Web using Internet Explorer.

EXERCISES

• Answers to most of the even-numbered exercises are provided at the end of the book.
• Report Writing exercises allow students to place the results of an analysis in a business context by incorporating Microsoft Office techniques such as pasting Microsoft Excel tables and charts into a Microsoft Word document and PowerPoint presentation.
• Internet Exercises, located on the book's web site, allow students to explore data sources available on the World Wide Web.
• Case Studies and Team Projects—Detailed case studies are included at the ends of many chapters. The Springville Herald case is included at the end of most chapters as an integrating theme. A Team Project relating to mutual funds is also included at the end of most chapters as an integrating theme.

CONTENT CHANGES IN THE THIRD EDITION

• Chapter 1 ("Introduction and Data Collection") contains additional chapter review problems on accessing the Internet and a new Using Statistics example involving an Internet company.
• The Excel Primer has been reorganized and updated for Excel 2000.
• Chapter 2 ("Presenting Data in Tables and Charts") contains an updated Using Statistics example, new graphical excellence examples, a section on the scatter diagram, and a section on placing Microsoft Excel worksheet data and charts in Microsoft Word documents.
• Chapter 3 ("Descriptive Statistics") contains an updated Using Statistics example, additional integration of Excel output, coverage of the correlation coefficient, coverage of the geometric mean (which finance students especially need), a Visual Explorations module on descriptive statistics, and placing Microsoft Excel worksheet data and charts in PowerPoint presentations.
• Chapter 4 ("Basic Probability and Discrete Probability Distributions") changes the Using Statistics binomial example to an accounting information system, moves covariance so that it follows expected value, and uses an example with a negative covariance.
• Chapter 5 ("The Normal Distribution and Sampling Distributions") changes the Using Statistics example to an Internet example, uses only the cumulative normal table, integrates Excel output into the normal distribution section and contains Visual Explorations modules for the normal distribution and sampling distributions.
• Chapter 6 ("Confidence Interval Estimation") adds one-sided confidence intervals to the section on auditing and moves the finite population correction factor to the CD-ROM.
• Chapter 7 ("Fundamentals of Hypothesis Testing: One-Sample Tests") adds computer output to all sections and combines sections 7.2 and 7.3 so that p-values are not covered in a separate section.
• Chapter 8 ("Two-Sample Tests with Numerical Data") changes the Using Statistics example to one related to marketing and provides additional emphasis on p-values, adds the confidence interval estimate for the difference between two means, and discusses the t test for the difference between the means when the variances are not equal.
• Chapter 9 ("Analysis of Variance") changes the Using Statistics example, adds computer output, and provides additional emphasis on p-values.
• Chapter 10 ("Tests for Two or More Samples with Categorical Data") adds the confidence interval estimate for the difference between two proportions.
• Chapter 11 ("Simple Linear Regression") adds more coverage of PHStat, contains a Visual Explorations module on regression, and includes a section on saving Microsoft Excel worksheets and charts as web pages.
• Chapter 12 ("Multiple Regression") changes the Using Statistics example to a marketing problem, includes additional discussion of interaction terms in multiple regression, and adds new PHStat2 features to the section on stepwise regression and confidence intervals for the mean response.
• Chapter 13 ("Time-Series Analysis") changes the Using Statistics example, adds a section on index numbers that appears on the CD-ROM, and includes a section on how to retrieve and import data from the World Wide Web using Internet Explorer.
• Chapter 14 ("Decision Making") has been moved after the regression and time series forecasting chapters.
• Chapter 15 ("Statistical Applications in Quality and Productivity Management") has been moved after the regression and time series chapters and adds a section on process capability.

SUPPLEMENT PACKAGE

The supplement package that accompanies this text includes the following:

• Instructor's Solution Manual—This manual includes extra detail in the problem solutions and many Excel solutions.
• Student Solutions Manual—This manual provides detailed solutions to virtually all the even-numbered exercises.
• Test Item File—This supplement includes extra Excel-based test questions.
• Instructor's CD/ROM—The instructor's CD-ROM contains PowerPoint slides, the Instructor's Solutions Manual and Test Item File, and Prentice Hall's Custom Test Manager.
• PHStat2—This is a statistical add-in for Microsoft Excel for Windows. The data files for the examples and exercises are contained on the CDROM that accompanies the text.
• MyPHLIP Web site—This site contains additional problems, teaching tips, tips for students, current events exercises, practice exams, and links to other sites that contain statistical data.

ABOUT THE WORLD WIDE WEB

The text has a home page on the World Wide Web.

This site incorporates the features of MyPHLIP (Prentice Hall's Learning on the Internet Partnership), a robust Web site that contains many resources for both faculty members and students. A partial list of the features includes:

• Teaching tips
• Links to other sites that provide data appropriate for statistics courses
• Student tips
• Sample Exams
• Current Event exercises
• Internet Exercises

Table of Contents

First Things First

USING STATISTICS: “The Price of Admission”

FTF.1 Think Differently About Statistics

FTF.2 Business Analytics: The Changing Face of Statistics

FTF.3 Getting Started Learning Statistics

FTF.4 Preparing to Use Microsoft Excel for Statistics

REFERENCES

KEY TERMS

EXCEL GUIDE

1. Defining and Collecting Data

USING STATISTICS: Defining Moments

1.1 Defining Variables

1.2 Collecting Data

1.3 Types of Sampling Methods

1.4 Data Preparation

1.5 Types of Survey Errors

CONSIDER THIS: New Media Surveys/Old Sampling Problems

SUMMARY

REFERENCES

KEY TERMS

USING STATISTICS: Defining Moments, Revisited

CHECKING YOUR UNDERSTANDING

CHAPTER REVIEW PROBLEMS

CASES FOR CHAPTER

Managing Ashland MultiComm Services

CardioGood Fitness

Clear Mountain State Student Survey

Learning with the Digital Cases

CHAPTER 1 EXCEL GUIDE

2. Organizing and Visualizing Variables

USING STATISTICS: “The Choice is Yours”

2.1 Organizing Categorical Variables

2.2 Organizing Numerical Variables

2.3 Visualizing Categorical Variables

2.4 Visualizing Numerical Variables

2.5 Visualizing Two Numerical Variables

2.6 Organizing and Visualizing a Mix of Variables

2.7 The Challenge in Organizing and Visualizing Variables

USING STATISTICS: The Choice is Yours, Revisited

SUMMARY

REFERENCES

KEY EQUATIONS

KEY TERMS

CHECKING YOUR UNDERSTANDING

CHAPTER REVIEW PROBLEMS

CASES FOR CHAPTER

Managing Ashland MultiComm Services

Digital Case

CardioGood Fitness

The Choice is Yours Follow-Up

Clear Mountain State Student Survey

CHAPTER 2 EXCEL GUIDE

3. Numerical Descriptive Measures

USING STATISTICS: More Descriptive Choices

3.1 Central Tendency

3.2 Variation and Shape

3.3 Exploring Numerical Data

3.4 Numerical Descriptive Measures for a Population

3.5 The Covariance and the Coefficient of Correlation

3.6 Statistics: Pitfalls and Ethical Issues

SUMMARY

REFERENCES

KEY EQUATIONS

KEY TERMS

CHECKING YOUR UNDERSTANDING

CHAPTER REVIEW PROBLEMS

CASES FOR CHAPTER

Managing Ashland MultiComm Services

Digital Case

CardioGood Fitness

More Descriptive Choices Follow-up

Clear Mountain State Student Survey

CHAPTER 3 EXCEL GUIDE

4. Basic Probability

USING STATISTICS: Possibilities at M&R Electronics World

4.1 Basic Probability Concepts

4.2 Conditional Probability

4.3 Ethical Issues and Probability

4.4 Bayes’ Theorem

CONSIDER THIS: Divine Providence and Spam

4.5 Counting Rules

USING STATISTICS: Possibilities at M&R Electronics World, Revisited

SUMMARY

REFERENCES

KEY EQUATIONS

KEY TERMS

CHECKING YOUR UNDERSTANDING

CHAPTER REVIEW PROBLEMS

CASES DIGITAL CASE

CardioGood Fitness

The Choice is Yours Follow-Up

Clear Mountain State Student Survey

CHAPTER 4 EXCEL GUIDE

5. Discrete Probability Distributions

USING STATISTICS: Events of Interest at Ricknel Home Centers

5.1 The Probability Distribution for a Discrete Variable

5.2 Binomial Distribution

5.3 Poisson Distribution

5.4 Covariance of a Probability Distribution and its Application in Finance

5.5 Hypergeometric Distribution

SUMMARY

REFERENCES

KEY EQUATIONS

KEY TERMS

CHECKING YOUR UNDERSTANDING

CHAPTER REVIEW PROBLEMS

CASES FOR CHAPTER

Managing Ashland MultiComm Services

Digital Case

CHAPTER 5 EXCEL GUIDE

6. The Normal Distribution and Other Continuous Distributions

USING STATISTICS: Normal Load Times at MyTVLab

6.1 Continuous Probability Distributions

6.2 The Normal Distribution

6.3 Evaluating Normality

6.4 The Uniform Distribution

6.5 The Exponential Distribution

6.6 The Normal Approximation to the Binomial Distribution

SUMMARY

REFERENCES

KEY EQUATIONS

KEY TERMS

CHECKING YOUR UNDERSTANDING

CHAPTER REVIEW PROBLEMS

CASES FOR CHAPTER

Managing Ashland MultiComm Services

CardioGood Fitness

More Descriptive Choices Follow-up

Clear Mountain State Student Survey

Digital Case

CHAPTER 6 EXCEL GUIDE

7. Sampling Distributions

USING STATISTICS: Sampling Oxford Cereals

7.1 Sampling Distributions

7.2 Sampling Distribution of the Mean

7.3 Sampling Distribution of the Proportion

SUMMARY

KEY EQUATIONS

KEY TERMS

CHECKING YOUR UNDERSTANDING

CHAPTER REVIEW PROBLEMS

CASES FOR CHAPTER

Managing Ashland Multicomm Services

Digital Case

CHAPTER 7 EXCEL GUIDE

8. Confidence Interval Estimation

USING STATISTICS: Getting Estimates at Ricknel Home Centers

8.1 Confidence Interval Estimate for the Mean (Known)

8.2 Confidence Interval Estimate for the Mean (Unknown)

8.3 Confidence Interval Estimate for the Proportion

8.4 Determining Sample Size

8.5 Confidence Interval Estimation and Ethical Issues

8.6 Application of Confidence Interval Estimation in Auditing

8.7 Estimation and Sample Size Estimation for Finite Populations

8.8 Bootstrapping

USING STATISTICS: Getting Estimates . . . , Revisited

SUMMARY

REFERENCES

KEY EQUATIONS

KEY TERMS

CHECKING YOUR UNDERSTANDING

CHAPTER REVIEW PROBLEMS

CASES FOR CHAPTER

Managing Ashland MultiComm Services

Digital Case

Sure Value Convenience Stores

CardioGood Fitness

More Descriptive Choices Follow-Up

Clear Mountain State Student Survey

CHAPTER 8 EXCEL GUIDE

9. Fundamentals of Hypothesis Testing: One-Sample Tests

USING STATISTICS: Significant Testing at Oxford Cereals

9.1 Fundamentals of Hypothesis-Testing Methodology

9.2 t Test of Hypothesis for the Mean (Unknown)

9.3 One-Tail Tests

9.4 Z Test of Hypothesis for the Proportion

9.5 Potential Hypothesis-Testing Pitfalls and Ethical Issues

9.6 Power of the Test

USING STATISTICS: Significant Testing . . ., Revisited

SUMMARY

REFERENCES

KEY EQUATIONS

KEY TERMS

CHECKING YOUR UNDERSTANDING

CHAPTER REVIEW PROBLEMS

CASES FOR CHAPTER

Managing Ashland MultiComm Services

Digital Case

Sure Value Convenience Stores

CHAPTER 9 EXCEL GUIDE

10. Two-Sample Tests

USING STATISTICS: Differing Means for Selling Streaming Media Players at Arlingtons?

10.1 Comparing the Means of Two Independent Populations

10.2 Comparing the Means of Two Related Populations

10.3 Comparing the Proportions of Two Independent Populations

10.4 F Test for the Ratio of Two Variances

10.5 Effect Size

USING STATISTICS: Differing Means for Selling...Revisited

SUMMARY

REFERENCES

KEY TERMS

CHAPTER REVIEW PROBLEMS

CASES FOR CHAPTER

Managing Ashland MultiComm Services

Digital Case

Sure Value Convenience Stores

CardioGood Fitness

More Descriptive Choices Follow-Up

Clear Mountain State Student Survey

CHAPTER 10 EXCEL GUIDE

11. Analysis of Variance

USING STATISTICS: The Means to Find Differences at Arlingtons

11.1 The Completely Randomized Design: One-Way ANOVA

11.2 The Factorial Design: Two-Way ANOVA

11.3 The Randomized Block Design

11.4 Fixed Effects, Random Effects, and Mixed Effects Models

USING STATISTICS: The Means to Find Differences at Arlingtons Revisited

SUMMARY

REFERENCES

KEY EQUATIONS

KEY TERMS

CHECKING YOUR UNDERSTANDING

CHAPTER REVIEW PROBLEMS

CASES FOR CHAPTER

Managing Ashland MultiComm Services Phase

Phase

Digital Case

Sure Value Convenience Stores

CardioGood Fitness

More Descriptive Choices Follow-Up

Clear Mountain State Student Survey

CHAPTER 11 EXCEL GUIDE

12. Chi-Square and Nonparametric Tests

USING STATISTICS: Avoiding Guesswork about Resort Guests

12.1 Chi-Square Test for the Difference Between Two Proportions

12.2 Chi-Square Test for Differences Among More Than Two Proportions

12.3 Chi-Square Test of Independence

12.4 Wilcoxon Rank Sum Test: A Nonparametric Method for Two Independent Populations

12.5 Kruskal-Wallis Rank Test: A Nonparametric Method for the One-Way ANOVA

12.6 McNemar Test for the Difference Between Two Proportions (Related Samples)

12.7 Chi-Square Test for the Variance or Standard Deviation

USING STATISTICS: Avoiding Guesswork..., Revisited

SUMMARY

REFERENCES

KEY EQUATIONS

KEY TERMS

CHECKING YOUR UNDERSTANDING

CHAPTER REVIEW PROBLEMS

CASES FOR CHAPTER

Managing Ashland MultiComm Services

Digital Case

Sure Value Convenience Stores

CardioGood Fitness

More Descriptive Choices Follow-Up

Clear Mountain State Student Survey

CHAPTER 12 EXCEL GUIDE

13. Simple Linear Regression

USING STATISTICS: Knowing Customers at Sunflowers Apparel

13.1 Types of Regression Models

13.2 Determining the Simple Linear Regression Equation

13.3 Measures of Variation

13.4 Assumptions of Regression

13.5 Residual Analysis

13.6 Measuring Autocorrelation: The Durbin-Watson Statistic

13.7 Inferences About the Slopeand Correlation Coefficient

13.8 Estimation of Mean Values and Prediction of Individual Values

13.9 Potential Pitfalls in Regression

USING STATISTICS: Knowing Customers...,Revisited

SUMMARY

REFERENCES

KEY EQUATIONS

KEY TERMS

CHECKING YOUR UNDERSTANDING

CHAPTER REVIEW PROBLEMS

CASES FOR CHAPTER

Managing Ashland MultiComm Services

Digital Case

Brynne Packaging

CHAPTER 13 EXCEL GUIDE

14. Introduction to Multiple Regression

USING STATISTICS: The Multiple Effects of OmniPower Bars

14.1 Developing a Multiple Regression Model

14.2 r2, Adjusted r2, and the Overall F Test

14.3 Residual Analysis for the Multiple Regression Model

14.4 Inferences Concerning the Population Regression Coefficients

14.5 Testing Portions of the Multiple Regression Model

14.6 Using Dummy Variables and Interaction Terms in Regression Models

14.7 Logistic Regression

USING STATISTICS: The Multiple Effects . . ., Revisited

SUMMARY

REFERENCES

KEY EQUATIONS

KEY TERMS

CHECKING YOUR UNDERSTANDING

CHAPTER REVIEW PROBLEMS

CASES FOR CHAPTER

Managing Ashland MultiComm Services

Digital Case

CHAPTER 14 EXCEL GUIDE

15. Multiple Regression Model Building

USING STATISTICS: Valuing Parsimony at WSTA-TV

15.1 Quadratic Regression Model

15.2 Using Transformations in Regression Models

15.3 Collinearity

15.4 Model Building

15.5 Pitfalls in Multiple Regression and Ethical Issues

SUMMARY

REFERENCES

KEY EQUATIONS

KEY TERMS

CHECKING YOUR UNDERSTANDING

CHAPTER REVIEW PROBLEMS

CASES FOR CHAPTER

The Mountain States Potato Company

Sure Value Convenience Stores

Digital Case

The Craybill Instrumentation Company Case

More Descriptive Choices Follow-Up

CHAPTER 15 EXCEL GUIDE

16. Time-Series Forecasting

USING STATISTICS: Principled Forecasting

16.1 The Importance of Business Forecasting

16.2 Component Factors of Time-Series Models

16.3 Smoothing an Annual Time Series

16.4 Least-Squares Trend Fitting and Forecasting

16.5 Autoregressive Modeling for Trend Fitting and Forecasting

16.6 Choosing an Appropriate Forecasting Model

16.7 Time-Series Forecasting of Seasonal Data

16.8 Index Numbers

Consider This

USING STATISTICS: Principled Forecasting, Revisited

SUMMARY

REFERENCES

KEY EQUATIONS

KEY TERMS

CHECKING YOUR UNDERSTANDING

CHAPTER REVIEW PROBLEMS

CASES FOR CHAPTER

Managing Ashland MultiComm Services

Digital Case

CHAPTER 16 EXCEL GUIDE

17. Getting Ready to Analyze Data in the Future

USING STATISTICS: Mounting Future Analyses

17.1 Analyzing Numerical Variables

17.2 Analyzing Categorical Variables

17.3 Introduction to Business Analytics

USING STATISTICS: Back to Arlingtons for the Future

17.4 Descriptive Analytics

17.5 Predictive Analytics

USING STATISTICS: The Future to be Visited

REFERENCES

CHAPTER REVIEW PROBLEMS

CHAPTER 17 EXCEL GUIDE

18. Statistical Applications in Quality Management (online)

USING STATISTICS: Finding Quality at the Beachcomber

18.1 The Theory of Control Charts

18.2 Control Chart for the Proportion: The p Chart

18.3 The Red Bead Experiment: Understanding Process Variability

18.4 Control Chart for an Area of Opportunity: The c Chart

18.5 Control Charts for the Range and the Mean

18.6 Process Capability

18.7 Total Quality Managementice

18.8 Six Sigma

USING STATISTICS: Finding Quality at the Beachcomber, Revisited

SUMMARY

REFERENCES

KEY EQUATIONS

KEY TERMS

CHAPTER REVIEW PROBLEMS

THE HARNSWELL SEWING MACHINE COMPANY CASE

MANAGING ASHLAND MULTICOMM SERVICES

CHAPTER 18 EXCEL GUIDE

19. Decision Making (online)

USING STATISTICS: Reliable Decision Making

19.1 Payoff Tables and Decision Trees

19.2 Criteria for Decision Making

19.3 Decision Making with Sample Information

19.4 Utility

CONSIDER THIS: Risky Business

USING STATISTICS: Reliable Decision-Making, Revisited

SUMMARY 19.23

REFERENCES 19.23

KEY EQUATIONS 19.23

KEY TERMS 19.23

CHAPTER 19 EXCEL GUIDE 19.27

Appendices

A. Basic Math Concepts and Symbols

A.1 Rules for Arithmetic Operations

A.2 Rules for Algebra: Exponents and Square Roots

A.3 Rules for Logarithms

A.4 Summation Notation

A.5 Statistical Symbols

A.6 Greek Alphabet

B. Important Excel and Minitab Skills and Concepts

B.1 Which Excel Do You Use?

B.2 Basic Operations

B.2 Formulas and Cell References

B.4 Entering a Formula

B.5 Formatting Cell Contents

B.6 Formatting Charts

B.7 Selecting Cell Ranges for Charts

B.8 Deleting the “Extra” Histogram Bar

B.9 Creating Histograms for Discrete Probability Distributions

C. Online Resources

C.1 About the Online Resources for This Book

C.2 Accessing the Online Resources

C.3 Details Online Resources

C.4 PHStat

D. Configuring Microsoft Excel

D.1 Getting Microsoft Excel Ready for Use

D.2 Checking for the Presence of the Analysis ToolPak or Solver Add-Ins

D.3 Configuring Microsoft Windows Excel Security Settings

D.4 Opening Pearson-Supplied Add-Ins

E. Tables

E.1 Table of Random Numbers

E.2 The Cumulative Standardized Normal Distribution

E.3 Critical Values of t

E.4 Critical Values of

E.5 Critical Values of F

E.6 Lower and Upper Critical Values, T1, of the Wilcoxon Rank Sum Test

E.7 Critical Values of the Studentized Range, Q

E.8 Critical Values, dI and dU, of the Durbin–Watson Statistic, D (Critical Values Are One-Sided)

E.9 Control Chart Factors

E.10 The Standardized Normal Distribution online

F. Useful Excel Knowledge

F.1 Useful Keyboard Shortcuts

F.2 Verifying Formulas and Worksheets

F.3 New Function Names

F.4 Understanding the Nonstatistical Functions

G. Software FAQs

G.1 PHStat FAQs

G.2 Microsoft Excel FAQs

Self-Test Solutions and Answers to Selected Even-Numbered Problems

Index

Preface

Educational Philosophy

In our many years of teaching introductory statistics courses, we have continually searched for ways to improve the teaching of these courses. Our vision for teaching these introductory business statistics courses has been shaped by active participation in a series of Making Statistics More Effective in Schools of Business, Decision Sciences Institute, and American Statistical Association conferences as well as the reality of serving a diverse group of students at large universities. Over the years, our vision has come to include these principles:

1. Students need a frame of reference when learning statistics, especially since statistics is not their major. That frame of reference for business students should be the functional areas of business—that is, accounting, economics and finance, information systems, management, and marketing. Each statistical topic needs to be presented in an applied context related to at least one of these functional areas.
2. Virtually all the students taking introductory business statistics courses are majoring in areas other than statistics. Introductory courses should focus on underlying principles that non-statistics majors will find useful.
3. The use of spreadsheet and/or statistical software should be integrated into all aspects of an introductory statistics course. In the workplace, spreadsheet software (and sometimes statistical software) is usually available on a decision maker's desktop. Our teaching approach needs to recognize this reality, and we need to make our courses more consistent with the workplace environment.
4. Textbooks that use software must provide enoughinstructions that students can effectively use the software, without the software (and instruction) dominating the course.
5. The focus in teaching each topic should be on the application of the topic to a functional area of business, the interpretation of results, the presentation of assumptions, the evaluation of the assumptions, and the discussion of what should be done if the assumptions are violated. These points are particularly important in regression and forecasting and in hypothesis testing. Although the illustration of some computations is inevitable, the focus on computations should be minimized.
6. Both classroom examples and homework exercises should relate to actual or realistic data as much as possible. Students should work with data sets, both small and large, and be encouraged to look beyond the statistical analysis of data to the interpretation of results in a managerial context.
7. Introductory courses should avoid an overconcentration on one topic area (such as hypothesis testing) and instead provide breadth of coverage of a variety of statistical topics. This will help students avoid the "I can't see the forest from the trees" syndrome.

Features of This Text

When planning this textbook, we focused on how desktop productivity tools, such as spreadsheets, have altered managers' decision-making processes. Whereas managers once had to turn to a Management Information Systems Department to obtain customized summaries of corporate data, today an increasing number of managers use spreadsheet applications as the means to retrieve and directly analyze the data they need. In this context, employers now are beginning to desire, if not demand, that their college-educated, entry-level employees have more than just a cursory awareness of spreadsheet applications. These changes, along with the realization that current spreadsheet applications can assist in performing the types of analyses once done only by specialized statistical software packages, led us to develop Statistics for Managers Using Microsoft Excel.

Therefore, we take the position that using Microsoft Excel can play a valuable role in learning statistics. Our focus emphasizes analyzing data, interpreting the output from Microsoft Excel, and explaining how to use this software while reducing the emphasis on doing computations. Therefore, we have included a great deal of Excel output and integrated this output into the fabric of the text. For example, in the coverage of tables and charts in Chapter 2, the focus is on the interpretation of various charts, not on their construction by hand. In our coverage of hypothesis testing in Chapters 7 through 10, extensive Excel output has been included so that the p-value approach can be used. In our coverage of simple linear regression in Chapter 11, we assume that Microsoft Excel will be used, and thus the focus is on the interpretation of the output, and not on hand calculations (which have been placed in a separate section of the chapter).

New to This Edition

This new third edition of Statistics for Managers Using Microsoft Excel has been enhanced in a number of important areas.

COVERAGE OF EXCEL

A major thrust of this revision is to refine the presentation of the Microsoft Excel-related material. To that end, this edition contains the following enhancements:

• Excel output for interpretation has been integrated directly into the examples. Results for many of the examples are now presented as screen shots from actual Excel worksheets.
• Simple-to-use Excel instructions are conveniently located after the discussion of a statistical topic. These instructions allow readers to generate statistical results quickly through the extensive use of PHStat2 (see below) and the wizards and add-ins that comprise Microsoft Excel. Sets of instructions are highlighted with a color tint for easy reference and are typically a page or less in length.
• Detailed instructions for implementing worksheet solutions are presented in end of chapter "Excel Handbook" sections. Those who want to learn about Microsoft Excel or those who cannot or choose not to use PHStat2 can use these instructions to generate statistical results. This way, the detailed instructions are there for those who want them, but those who do not can easily skip the instructions. (All will find the Handbooks helpful for understanding how PHStat2 generates its results.)
• New or streamlined Excel instructions for a variety of methods including producing dot scale diagrams, histograms, multiple polygons, and stepwise regression.
• PHStat2, the latest version of PHStat, Prentice Hall's statistical add-in for Microsoft Excel for Windows. PHStat2 contains a number of new or enhanced procedures and now includes a full help system for easy reference.

APPLICATIONS

• Updated and improved Using Statistics business scenarios—Each chapter begins with a Using Statistics example that shows how statistics can be used in one of the functional areas of business—accounting, finance, management, marketing or information systems. This scenario is used throughout the chapter to provide an applied context for the concepts.
• Hundreds of new applied examples and exercises with data from the Wall Street Journal, USA Today, and other sources have been added to the text.
• Visual Explorations—Included on the CD-ROM that accompanies this textbook. Visual Explorations in Statistics is a Microsoft Excel add-in that allows students to interactively explore important statistical concepts in descriptive statistics, probability, the normal distribution, and regression analysis. For example, in descriptive statistics, students observe the effect of changes in the data on the average, median, quartiles, and standard deviation. In sampling distributions, students use simulation to explore the effect of sample size on a probability distribution. With the normal distribution, students see the effect of changes in the mean and standard deviation on the areas under the normal curve. In regression analysis, students have the opportunity of fitting a line and observing how changes in the slope and intercept affect the goodness of fit of the fitted line.
• Using Microsoft Office sections. Located at the end of selected chapters, this feature discusses ways in which users can share data between Microsoft Excel and other components of Microsoft Office, including Microsoft Word and Microsoft PowerPoint, and the web browser Internet Explorer. Detailed, step-by-step instructions explain how to incorporate an Excel worksheet or chart in a Word document or a PowerPoint presentation, as well as how to save Excel worksheets and charts as html World Wide Web pages and how to retrieve and import data from the World Wide Web using Internet Explorer.

EXERCISES

• Answers to most of the even-numbered exercises are provided at the end of the book.
• Report Writing exercises allow students to place the results of an analysis in a business context by incorporating Microsoft Office techniques such as pasting Microsoft Excel tables and charts into a Microsoft Word document and PowerPoint presentation.
• Internet Exercises, located on the book's web site, allow students to explore data sources available on the World Wide Web.
• Case Studies and Team Projects—Detailed case studies are included at the ends of many chapters. The Springville Herald case is included at the end of most chapters as an integrating theme. A Team Project relating to mutual funds is also included at the end of most chapters as an integrating theme.

CONTENT CHANGES IN THE THIRD EDITION

• Chapter 1 ("Introduction and Data Collection") contains additional chapter review problems on accessing the Internet and a new Using Statistics example involving an Internet company.
• The Excel Primer has been reorganized and updated for Excel 2000.
• Chapter 2 ("Presenting Data in Tables and Charts") contains an updated Using Statistics example, new graphical excellence examples, a section on the scatter diagram, and a section on placing Microsoft Excel worksheet data and charts in Microsoft Word documents.
• Chapter 3 ("Descriptive Statistics") contains an updated Using Statistics example, additional integration of Excel output, coverage of the correlation coefficient, coverage of the geometric mean (which finance students especially need), a Visual Explorations module on descriptive statistics, and placing Microsoft Excel worksheet data and charts in PowerPoint presentations.
• Chapter 4 ("Basic Probability and Discrete Probability Distributions") changes the Using Statistics binomial example to an accounting information system, moves covariance so that it follows expected value, and uses an example with a negative covariance.
• Chapter 5 ("The Normal Distribution and Sampling Distributions") changes the Using Statistics example to an Internet example, uses only the cumulative normal table, integrates Excel output into the normal distribution section and contains Visual Explorations modules for the normal distribution and sampling distributions.
• Chapter 6 ("Confidence Interval Estimation") adds one-sided confidence intervals to the section on auditing and moves the finite population correction factor to the CD-ROM.
• Chapter 7 ("Fundamentals of Hypothesis Testing: One-Sample Tests") adds computer output to all sections and combines sections 7.2 and 7.3 so that p-values are not covered in a separate section.
• Chapter 8 ("Two-Sample Tests with Numerical Data") changes the Using Statistics example to one related to marketing and provides additional emphasis on p-values, adds the confidence interval estimate for the difference between two means, and discusses the t test for the difference between the means when the variances are not equal.
• Chapter 9 ("Analysis of Variance") changes the Using Statistics example, adds computer output, and provides additional emphasis on p-values.
• Chapter 10 ("Tests for Two or More Samples with Categorical Data") adds the confidence interval estimate for the difference between two proportions.
• Chapter 11 ("Simple Linear Regression") adds more coverage of PHStat, contains a Visual Explorations module on regression, and includes a section on saving Microsoft Excel worksheets and charts as web pages.
• Chapter 12 ("Multiple Regression") changes the Using Statistics example to a marketing problem, includes additional discussion of interaction terms in multiple regression, and adds new PHStat2 features to the section on stepwise regression and confidence intervals for the mean response.
• Chapter 13 ("Time-Series Analysis") changes the Using Statistics example, adds a section on index numbers that appears on the CD-ROM, and includes a section on how to retrieve and import data from the World Wide Web using Internet Explorer.
• Chapter 14 ("Decision Making") has been moved after the regression and time series forecasting chapters.
• Chapter 15 ("Statistical Applications in Quality and Productivity Management") has been moved after the regression and time series chapters and adds a section on process capability.

SUPPLEMENT PACKAGE

The supplement package that accompanies this text includes the following:

• Instructor's Solution Manual—This manual includes extra detail in the problem solutions and many Excel solutions.
• Student Solutions Manual—This manual provides detailed solutions to virtually all the even-numbered exercises.
• Test Item File—This supplement includes extra Excel-based test questions.
• Instructor's CD/ROM—The instructor's CD-ROM contains PowerPoint slides, the Instructor's Solutions Manual and Test Item File, and Prentice Hall's Custom Test Manager.
• PHStat2—This is a statistical add-in for Microsoft Excel for Windows. The data files for the examples and exercises are contained on the CDROM that accompanies the text.
• MyPHLIP Web site—This site contains additional problems, teaching tips, tips for students, current events exercises, practice exams, and links to other sites that contain statistical data.

ABOUT THE WORLD WIDE WEB

The text has a home page on the World Wide Web.

This site incorporates the features of MyPHLIP (Prentice Hall's Learning on the Internet Partnership), a robust Web site that contains many resources for both faculty members and students. A partial list of the features includes:

• Teaching tips
• Links to other sites that provide data appropriate for statistics courses
• Student tips
• Sample Exams
• Current Event exercises
• Internet Exercises

Editorial Reviews

Updated edition of Microsoft's textbook for teaching Excel spreadsheet software for use in statistics applications. Topics include summarizing and describing numerical data, presenting data in tables and charts, basic probability and discrete probability distributions, fundamentals of hypothesis testing, regression, and time-series forecasting. The diskette contains Excel workbooks for all examples discussed in the text. Annotation c. by Book News, Inc., Portland, Or.

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