Solving Problems with Statistical Analysis Tools
Chapter 2
Chapter Introduction
• Using data analysis tools to assist in problem solving – Statistical functions that determine values
– Functions that structure and analyze data
– Functions that count and total data that meets specified criteria
• Performing a “what-if” analysis to examine effects of changing specific worksheet values
• Using Goal Seek to work backward to determine input required to ensure a specific outcome
Succeeding in Business with Microsoft Office Excel 2010 2
Chapter Introduction (continued)
• Simulating possible outcomes with a set of inputs • Using custom formatting techniques • Functions covered in this chapter: AVERAGE,
AVERAGEIF, COUNTIF, LARGE, MEDIAN, MODE.SNGL, RAND, RANDBETWEEN, RANK.EQ, ROUND, SMALL, STDEV.S, SUMIF
To go to Level 1, click here To go to Level 2, click here To go to Level 3, click here
Succeeding in Business with Microsoft Office Excel 2010 3
Level 1 Objectives: Using Statistical Functions to Compare Data Values
• Understand basic concepts related to statistics
• Specify the precision of values using the ROUND function
• Copy and paste information in a worksheet using Paste Special options
• Calculate basic statistics: arithmetic mean, mode, median, standard deviation
• Manage large worksheets by freezing panes and splitting the window
Succeeding in Business with Microsoft Office Excel 2010 4
Understanding Fundamentals of Statistics
Mean Arithmetic average of a set of numbers
Median Value in the middle
Mode Occurs most frequently
Standard
deviation
How closely together the values are
dispersed from the arithmetic mean
Normal
distribution
Mean, median, and mode are the same
value
Succeeding in Business with Microsoft Office Excel 2010 5 Level 1 home
Understanding Fundamentals of Statistics
Succeeding in Business with Microsoft Office Excel 2010 6 Level 1 home
Understanding Fundamentals of Statistics
Succeeding in Business with Microsoft Office Excel 2010 7 Level 1 home
Controlling the Precision of Data Using the ROUND Function
• Changes precision of data values stored
• =ROUND (number,num_digits)
• Two different types of arguments
• Importance of adhering to function syntax when working with multiple arguments
• “Set precision as displayed” option
Succeeding in Business with Microsoft Office Excel 2010 8 Level 1 home
The ROUND Function
Succeeding in Business with Microsoft Office Excel 2010 9 Level 1 home
Controlling the Precision of Data
Succeeding in Business with Microsoft Office Excel 2010 10 Level 1 home
Using Paste Special to Copy and Paste Data
• Simplest method: Copy button and Paste button in the Clipboard group on the Home tab
Succeeding in Business with Microsoft Office Excel 2010 11 Level 1 home
Using Paste Special
Succeeding in Business with Microsoft Office Excel 2010 12 Level 1 home
Using Paste Special
Succeeding in Business with Microsoft Office Excel 2010 13
Calculating the Mean, Median, Mode, and Standard Deviation
• Contain only one type of argument – a list of values
– Constants
– Cell references
– Range of cells along a column
– Range of cells along a row
– Two-dimensional block of cells
Succeeding in Business with Microsoft Office Excel 2010 14 Level 1 home
Statistical Functions
Succeeding in Business with Microsoft Office Excel 2010 15 Level 1 home
Statistical Functions
Succeeding in Business with Microsoft Office Excel 2010 16 Level 1 home
Managing Large Worksheets by Freezing Panes and Splitting the Window
• Freezing panes
– Keeps titles displayed in top pane; allows bottom pane to be scrolled
– Both titles and values further down are displayed simultaneously
• Splitting the window
– Allows you to scroll each portion individually, top/bottom and left/right, with separate scroll bars
Succeeding in Business with Microsoft Office Excel 2010 17 Level 1 home
Freezing Panes
Succeeding in Business with Microsoft Office Excel 2010 18 Level 1 home
Comparing Current Values with Historical Values
• Use a Comparison worksheet
– Places current values and historical values on a separate worksheet in the workbook, side by side
Succeeding in Business with Microsoft Office Excel 2010 19 Level 1 home
Comparison Worksheet
Succeeding in Business with Microsoft Office Excel 2010 20 Level 1 home
Calculating the Difference Between Two Sets of Data
Succeeding in Business with Microsoft Office Excel 2010 21 Level 1 home
Calculating the Percent Difference Between Two Sets of Data
Succeeding in Business with Microsoft Office Excel 2010 22 Level 1 home
Level 1 Summary
• Application of problem-solving skills to a variety of data sets, analyzing their statistical values (mean, mode, median, and standard deviation)
• Using these statistics, comparison of different data sets to assess absolute as well as percentage changes
• Using ROUND function to modify precision of values in data sets
Succeeding in Business with Microsoft Office Excel 2010 23
Level 2 Objectives: Organizing and Evaluating Different Data Groupings
• Evaluate the rank of each value in a data set
• Determine the highest and lowest values in a data set
• Determine the number of items that meet specified criteria
• Determine a total value for items that meet specified criteria
Succeeding in Business with Microsoft Office Excel 2010 24
Determining a Rank for Each Value in a Data Set
• RANK.EQ function
– Allows a list to be sorted, then counts number of entries either above or below the value in question
• RANK.EQ (number,ref,order)
– If “order” argument is 0 or left blank, values are ranked in descending order
– If “order” argument is a positive number, values are ranked in ascending order
Succeeding in Business with Microsoft Office Excel 2010 25 Level 2 home
Succeeding in Business with Microsoft Office Excel 2010 26 Level 2 home
Determining the Highest and Lowest Values in a Data Set
• LARGE function
– Determines the nth largest value in a range
– LARGE (array,k)
• SMALL function
– Determines the nth smallest value in a range
– SMALL (array,k)
Succeeding in Business with Microsoft Office Excel 2010 27 Level 2 home
Determining Values
Succeeding in Business with Microsoft Office Excel 2010 28 Level 2 home
Determining the Number of Items that Meet Specified Criteria
• COUNTIF function
– Counts the number of items in a range that meet specified criteria
– =COUNTIF (range,criteria)
– Range argument must be a contiguous set of cells
– Criteria argument is a “test” that data must meet in order to be counted in the grouping
Succeeding in Business with Microsoft Office Excel 2010 29 Level 2 home
Types of Criteria Specified for the COUNTIF Function
Succeeding in Business with Microsoft Office Excel 2010 30 Level 2 home
Relational Operators
Succeeding in Business with Microsoft Office Excel 2010 31 Level 2 home
Wildcards
Succeeding in Business with Microsoft Office Excel 2010 32 Level 2 home
Sample Result of COUNTIF Function
Succeeding in Business with Microsoft Office Excel 2010 33 Level 2 home
Determining a Total Value for Items that Meet Specified Criteria
• Use SUMIF function to add all values in a range that meet specified criteria – =SUMIF (range,criteria,sum_range)
– Sum_range argument identifies corresponding cell range to sum if specified criteria have been met in the range established by the “range” argument
Succeeding in Business with Microsoft Office Excel 2010 34 Level 2 home
Examples of SUMIF Function
Succeeding in Business with Microsoft Office Excel 2010 35 Level 2 home
Level 2 Summary
• Tail values – highest and lowest five elements of each data set – and their relative rankings
• Summarizing analyses by counting the number of items that meet specific criteria and summing items that meet specific criteria
• Including relational operators and wildcards in functions and formulas
Succeeding in Business with Microsoft Office Excel 2010 36
Level 3 Objectives: Extending the Analysis with
What-If, Goal Seek, and Simulation
• Evaluate a large data set
• Apply custom number formats to data
• Perform what-if analyses
• Perform reverse what-if analyses using Goal Seek
• Analyze data by category by combining functions
• Simulate data to evaluate different outcomes
Succeeding in Business with Microsoft Office Excel 2010 37
Evaluating a Larger Data Set
• Separately list inputs, especially those likely to change or that you might want to explore with “what-if” scenarios
• If a large number of data inputs, place them on a separate worksheet or in a separate area on the same worksheet
Succeeding in Business with Microsoft Office Excel 2010 38 Level 3 home
Specifying a Custom Number Format
• Use to alter format of a cell without altering the value
• Format codes
– Can include up to four parts, each separated by a semicolon: one for positive numbers, one for negative numbers, one for zero values, one for text
– Consist of combinations of symbols, each with a separate meaning
Succeeding in Business with Microsoft Office Excel 2010 39 Level 3 home
Custom Number Formatting Code
Succeeding in Business with Microsoft Office Excel 2010 40 Level 3 home
Custom Number Formatting Codes
Succeeding in Business with Microsoft Office Excel 2010 41 Level 3 home
Considering Alternatives: What-if Analysis and Goal Seek
• What-if analysis
– Determines the outcome of changing one or more input values and evaluates the recalculated results
• Goal Seek tool
– Specifies the outcome you want and which input value you want to vary
– Excel automatically calculates the solution
Succeeding in Business with Microsoft Office Excel 2010 42 Level 3 home
Using Goal Seek
Succeeding in Business with Microsoft Office Excel 2010 43 Level 3 home
Using Goal Seek
Succeeding in Business with Microsoft Office Excel 2010 44 Level 3 home
Using Goal Seek
Succeeding in Business with Microsoft Office Excel 2010 45 Level 3 home
Using Goal Seek
Succeeding in Business with Microsoft Office Excel 2010 46 Level 3 home
Limitations of Goal Seek
• Allows you to vary only a single output
• Input must be a constant value, not a value derived from a formula
Succeeding in Business with Microsoft Office Excel 2010 47 Level 3 home
Combining COUNTIF and AVERAGEIF to Analyze Data in Specific Categories
Succeeding in Business with Microsoft Office Excel 2010 48 Level 3 home
Analyzing Data Through Simulation
• Analytical method that creates artificially generated data to imitate real data
• Easily calculated and recalculated to show different possible outcomes (as opposed to most probable outcome or even extreme limits)
Succeeding in Business with Microsoft Office Excel 2010 49 Level 3 home
Simulation Worksheet
Succeeding in Business with Microsoft Office Excel 2010 50 Level 3 home
Functions Used in Simulation
• Use RANDBETWEEN function to randomly assign a number between two values
– RANDBETWEEN (bottom,top)
• Use RAND function to assign a random value
– Has no arguments, but must include parentheses
• Use ROUND function to calculate probable costs
Succeeding in Business with Microsoft Office Excel 2010 51 Level 3 home
Automation Calculation
Succeeding in Business with Microsoft Office Excel 2010 52 Level 3 home
Level 3 Summary
• Performing a cost benefit analysis using a larger data set
– Specifying a custom number format
– Performing what-if analysis
– Using the Goal Seek tool
– Combining COUNTIF and AVERAGEIF functions to analyze data in categories
– Analyzing data through simulation using RAND and RANDBETWEEN functions
Succeeding in Business with Microsoft Office Excel 2010 53
Chapter Summary
• Using statistical functions to compare data values
• Organizing and evaluating different data groupings
• Extending the analysis with what-if, Goal Seek, and simulation
Succeeding in Business with Microsoft Office Excel 2010 54