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![Page 1: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/1.jpg)
Guide to Using Excel For Basic Statistical Applications
Guide to Using Excel For Basic Statistical Applications
To Accompany
Business Statistics: A Decision Making Approach, 6th Ed.
Chapter 13:
Introduction to Linear Regression and Correlation Analysis
By
Groebner, Shannon, Fry, & SmithPrentice-Hall Publishing Company
Copyright, 2005
![Page 2: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/2.jpg)
Chapter 13 Excel Examples
Correlation CoefficientMidwest Distribution
Regression AnalysisMidwest Distribution
• Regression AnalysisFitzpatrick and Associates
Regression Analysis for Description Car Mileage
![Page 3: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/3.jpg)
Chapter 13 Excel Examples
Regression Analysis for Prediction
Freedom HospitalResidual Analysis
Freedom Hospital
![Page 4: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/4.jpg)
Correlation Analysis - Midwest Distribution
Issue:
The company wants to analyze the relationship between salary and years with the company.
Objective:
Use Excel to help test whether a significant relations exists between salary and years with the company. Data file is Midwest.xls
![Page 5: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/5.jpg)
Open File Midwest.xls
To construct the scatter diagram see the Personal Computers tutorial in Chapter 2.
Correlation Analysis – Midwest Distribution.
![Page 6: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/6.jpg)
First click on Tools, then Data Analysis and finally on Correlation.
Correlation Analysis – Midwest Distribution.
![Page 7: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/7.jpg)
Define ranges for Variables. Click on O.K.
Correlation Analysis – Midwest Distribution.
![Page 8: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/8.jpg)
The Excel output shows the correlation between Sales and Years with Midwest.
Correlation Analysis – Midwest Distribution.
![Page 9: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/9.jpg)
Regression Analysis - Midwest DistributionRegression Analysis - Midwest Distribution
Issue:
The marketing manager wants to determine the relationship between sales and years with the company.
Objective:
Use Excel to test whether the apparent linear relationship is statistically significant. Data file is Midwest.xls
![Page 10: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/10.jpg)
Open File Midwest.xls
Regression Analysis – Midwest Distribution
![Page 11: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/11.jpg)
Click on Tools, then Data Analysis and finally Regression
Regression Analysis – Midwest Distribution
![Page 12: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/12.jpg)
Identify Data ranges for the X and Y variables. Click on O.K.
Regression Analysis – Midwest Distribution
![Page 13: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/13.jpg)
The output shows the correlation coefficient and the coefficients for the regression equation.
Regression Analysis – Midwest Distribution
![Page 14: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/14.jpg)
SSE=SSR + SSE F= MSR/MSE
MS= Mean Squares
![Page 15: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/15.jpg)
Regression Analysis - Fitzpatrick & AssociatesRegression Analysis - Fitzpatrick & Associates
Issue:
The Fitzpatrick analysts want to model the relationship between profits and number of employees.
Objective:
Use Excel to test whether the apparent linear relationship is statistically significant. Data file is Fortune 50.xls
![Page 16: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/16.jpg)
Open File Fortune 50.xls
Regression Analysis – Fitzpatrick & Associates
![Page 17: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/17.jpg)
Click on Chart Wizard button, then XY Scatter
Regression Analysis – Fitzpatrick & Associates
![Page 18: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/18.jpg)
Define Data ranges in chart wizard. Note: Excel requires the data to be in adjacent columns with the X variable on the left.
Regression Analysis – Fitzpatrick & Associates
![Page 19: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/19.jpg)
Finish steps in Chart Wizard.
Regression Analysis – Fitzpatrick & Associates
![Page 20: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/20.jpg)
To find regression model, return to Data sheet.
Regression Analysis – Fitzpatrick & Associates
![Page 21: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/21.jpg)
Click on Tools, then Data Analysis and finally Regression
Regression Analysis – Fitzpatrick & Associates
![Page 22: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/22.jpg)
Identify Data ranges for the X and Y variables. Click on O.K.
Regression Analysis – Fitzpatrick & Associates
![Page 23: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/23.jpg)
The output shows the correlation coefficient and the coefficients for the regression equation.
Regression Analysis – Fitzpatrick & Associates
![Page 24: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/24.jpg)
Regression Analysis - Car MileageRegression Analysis - Car Mileage
Issue:
Analysts want to determine the relationship between EPA highway mileage and automobile horsepower.
Objective:
Use Excel to test whether the apparent linear relationship is statistically significant. Data file is Automobiles.xls
![Page 25: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/25.jpg)
Open File Automobiles.xls
Regression Analysis – Car Mileage
![Page 26: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/26.jpg)
Click on Tools, then Data Analysis and finally Regression
Regression Analysis – Car Mileage
![Page 27: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/27.jpg)
Identify Data ranges for the X and Y variables. Click on O.K.
Regression Analysis – Car Mileage
![Page 28: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/28.jpg)
The output shows the correlation coefficient and the coefficients for the regression equation.
Regression Analysis – Car mileage
![Page 29: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/29.jpg)
Regression Analysis for Prediction - Freedom HospitalRegression Analysis for Prediction - Freedom Hospital
Issue:
The administrator has been requested by the hospital’s board of directors to develop a model that can be used to predict the total charges for a geriatric patient.
Objective:
Use Excel to develop a statistically significant prediction model. Data file is Patients.xls
![Page 30: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/30.jpg)
Open File Patients.xls
File contains values for 138 patients.
Regression Analysis for Prediction – Freedom Hospital
![Page 31: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/31.jpg)
To develop the model first click on Tools, then Data Analysis and finally on Regression.
Regression Analysis for Prediction – Freedom Hospital
![Page 32: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/32.jpg)
Define range for Variables and select the Alpha value (.05). Click on O.K.
Regression Analysis for Prediction – Freedom Hospital
![Page 33: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/33.jpg)
The Excel output shows both the correlation coefficient and the coefficients of the linear regression model.
Regression Analysis for Prediction – Freedom Hospital
![Page 34: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/34.jpg)
To determine prediction interval, return to data sheet, click on PHStat, then Regression and finally Simple Linear Regression.
Regression Analysis for Prediction – Freedom Hospital
![Page 35: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/35.jpg)
Specify the Cell Range for the X and Y variables. Then click the Confidence Interval box and specify the value for X and the Confidence Level.
Regression Analysis for Prediction – Freedom Hospital
![Page 36: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/36.jpg)
The output shows the 95% confidence interval for both the Average Value of Y and for an Individual Value of Y.
Regression Analysis for Prediction – Freedom Hospital
![Page 37: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/37.jpg)
Issue:
The administrators want to determine whether the prediction model developed is a valid use of regression analysis or whether it violates some of the necessary assumptions. Objective:
Use Excel to analyze the residuals from the model. Data file is Patients.xls
Residual Analysis - Freedom HospitalResidual Analysis - Freedom Hospital
![Page 38: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/38.jpg)
Open file Patients.xls
Residual Analysis – Freedom Hospital
![Page 39: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/39.jpg)
First click on Tools, then Data Analysis and then on Regression.
Residual Analysis – Freedom Hospital
![Page 40: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/40.jpg)
Define range for X and Y Variables and then check boxes for Residuals and Residual Plots.
Residual Analysis – Freedom Hospital
![Page 41: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/41.jpg)
At the bottom of the regression output (note the row number) the residual for each observation is given.
Residual Analysis – Freedom Hospital
![Page 42: Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 13: Introduction.](https://reader035.fdocuments.in/reader035/viewer/2022070307/551b4a40550346dd1a8b5b62/html5/thumbnails/42.jpg)
The regression output will also plot the residuals.
Residual Analysis – Freedom Hospital