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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

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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

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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

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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

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Understanding Fundamentals of Statistics

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Understanding Fundamentals of Statistics

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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

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The ROUND Function

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Controlling the Precision of Data

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Using Paste Special to Copy and Paste Data

• Simplest method: Copy button and Paste button in the Clipboard group on the Home tab

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Using Paste Special

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Using Paste Special

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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

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Statistical Functions

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Statistical Functions

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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

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Freezing Panes

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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

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Comparison Worksheet

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Calculating the Difference Between Two Sets of Data

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Calculating the Percent Difference Between Two Sets of Data

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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

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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

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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

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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)

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Determining Values

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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

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Types of Criteria Specified for the COUNTIF Function

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Relational Operators

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Wildcards

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Sample Result of COUNTIF Function

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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

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Examples of SUMIF Function

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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

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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

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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

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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

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Custom Number Formatting Code

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Custom Number Formatting Codes

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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

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Using Goal Seek

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Using Goal Seek

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Using Goal Seek

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Using Goal Seek

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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

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Combining COUNTIF and AVERAGEIF to Analyze Data in Specific Categories

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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)

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Simulation Worksheet

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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

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Automation Calculation

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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

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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

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