Statistics for Managers Using

Microsoft Excel
7th Edition
Lets Get Started

Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-1

Learning Objectives
In this chapter you learn:
That the volume of data that exists in the world makes learning
about statistics critically important
That statistics is a way of thinking that can help you make
better decisions
What business analytics is and how these techniques
represent an opportunity for you
How the DCOVA framework for applying statistics can help you
solve business problems
How to make best use of this book
How to prepare for using Microsoft Excel with this book

Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-2

In Todays Business World You

Cannot Escape From Data

In todays digital world ever increasing amounts

of data are gathered, stored, reported on, and
available for further study.

You hear the word data everywhere.

Data are facts about the world and are

constantly reported as numbers by an ever
increasing number of sources.

Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-3

Each Business Person Faces A Choice Of

How To Deal With This Explosion Of Data

They can ignore it and hope for the best.

They can count on other peoples summaries of

data and hope they are correct.

They can develop their own capability and

insight into data by learning about statistics and
its application to business.

Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-4

Statistics Is Evolving So Businesses Can

Use The Vast Amount Of Data Available
The emerging field of Business Analytics makes
extensive use of:

Data
Statistical and quantitative analysis
Explanatory & predictive models
Fact based management

to drive decisions and actions.

Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-5

To Properly Apply Statistics You Should Follow A

Framework To Minimize Possible Errors

In this book we will use DCOVA

Define the data you want to study in order to

solve a problem or meet an objective
Collect the data from appropriate sources
Organize the data collected by developing
tables
Visualize the data by developing charts
Analyze the data collected to reach
conclusions and present results

Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-6

Using The DCOVA Framework

Helps You To Apply Statistics To:

Summarize & visualize business data

Reach conclusions from those data

Make reliable forecasts about business

activities

Improve business processes

Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-7

Developing Operational Definitions Is

Crucial To Avoid Confusion / Errors
DCOVA

An operational definition is a clear and precise

statement that provides a common understanding
of meaning

In the absence of an operational definition

miscommunications and errors are likely to occur.

Arriving at operational definition(s) is a key part of

the Define step of DCOVA

Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-8

Operational Definitions Of Terms

DCOVA
VARIABLE
A characteristic of an item or individual.
DATA
The set of individual values associated with a variable.
STATISTICS
The methods that help transform data into useful
information for decision makers.
Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-9

Are These Numbers Useful In

Making Decisions

A survey of 1,179 adults 18 and over reported

that 54% thought that 15 seconds was an
acceptable online ad length before seeing free
content.

A survey of more than 3,000 full-time traditionalage students found that the students spent 51%
of their time on socializing, recreation, and other
activities; 9% of their time attending class/lab;
and 7% of their time studying.

Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-10

Without Statistics You Cant

Determine if the numbers in these studies are

useful information

Validate claims of causality

See patterns that large amounts of data

sometimes reveal

Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-11

Two Different Branches Of

Statistics Are Used In Business
Statistics
The branch of mathematics that transforms data into
useful information for decision makers.

Descriptive Statistics

Inferential Statistics

Collecting, summarizing,
presenting and analyzing data

Using data collected from a

small group to draw conclusions
about a larger group

Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-12

Business Analytics: The

Changing Face Of Statistics

Use statistical methods to analyze and explore

data to uncover unforeseen relationships.

Use management science methods to develop

models that impact an organizations strategy,
planning, and operations.

Use information systems methods to collect and

process data sets of all sizes, including very
large data sets that would otherwise be hard to
examine efficiently.

Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-13

Business Analytics Has Already Been Applied In

Many Business Decision-Making Contexts

Human resource managers (HR) understanding

relationships between HR drivers, key business
outcomes, employee skills, capabilities, and motivation.

Financial analysts determining why certain trends occur

to predict future financial environments.

Marketers driving loyalty programs and customer

marketing decisions to drive sales.

Supply chain managers planning and forecasting based

on product distribution and optimizing sales distribution
based on key inventory measures.

Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-14

The Growth Of Big Data Spurs The Use

Of Business Analytics

Big Data is still a fuzzy concept.

Very large data sets are arising because of the

automatic collection of high volumes of data at
very fast rates.

Older statistical techniques are often times

impractical with big data.

Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-15

How To Use This Book

The Using Statistics scenario at the beginning and

end of each chapter provide

A real business situation that the chapters topics can help

address
Context which is an important part of the learning process

Downloadable example Excel worksheets are

provided throughout each chapter
Numerous case studies are provided so you can

Apply what you have learned

Enhance your analytical & communication skills

Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-16

Microsoft Excel Is The Primary Data

Analysis Application In Microsoft Office

Excel uses worksheets (spreadsheets) to both store data

and present analysis results
A worksheet has rows and columns
The intersection of a specific row and column is called a
cell and is where data is stored
Standard business practice is to store the data
associated with a variable in a column
Excel saves files that it calls workbooks
A workbook is a collection of worksheets and chart
sheets
An excel file is typically saved in an .xlsx or .xls format

Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-17

How Can I Use Excel With This

Book

Excel can be used to learn and apply the statistical

methods discussed in this book
Excel can be used by utilizing the Excel add-in
PHStat

Excel can also be used via In-Depth Excel

PHStat is available free for users of this book

PHStat simplifies the task of operating Excel
In-Depth Excel instructions use templates for a specific
statistical solution

The Excel Guides explain how to use either method

Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-18

Computing Skills Needed For

This Book
Basic Computing Skills
Identification of Excel
application window objects

Specifics
Title bar, minimize/resize/close buttons, scroll bars,
formula bar, workbook area, cell pointer.
Office Ribbon parts: tab, group, gallery, launcher
button
Shortcut (popup) menu

Knowledge of mouse
operations

Click (also called select), check and clear, doubleclick,

right-click, drag/drag-and-drop

Identification of dialog box

Objects

Command button, list box, drop-down list, edit box,

option button, check box

Basic Microsoft Office Skills

Excel data entry

Specifics
Organizing worksheet data in columns, entering
numerical and categorical data

File operations

Open, save, print

Worksheet operations

Create, copy

Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-19

Excel Skills Needed For The InDepth Excel Approach

Skill
Formula skills

Specifics
Concept of a formula, cell references
absolute and relative cell references, how to
enter a formula, how to enter an array
formula

Workbook presentation

How to apply format changes that affect the

display of worksheet cell contents

Chart formatting correction

How to correct the formatting of charts that

Excel improperly creates

Discrete histogram creation

How to create a properly formatted

histogram for a discrete probability
distribution

Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-20

Chapter Summary
In this chapter we have seen:
That the volume of data that exists in the world makes learning
about statistics critically important
That statistics is a way of thinking that can help you make
better decisions
What business analytics is and how these techniques
represent an opportunity for you
How the DCOVA framework for applying statistics can help you
solve business problems
How to make best use of this book
How to prepare for using Microsoft Excel with this book

Statistics for Managers Using Microsoft Excel 7e Copyright 2014 Pearson Education, Inc.

Chap LGS-21

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or
transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or
otherwise, without the prior written permission of the publisher.
Printed in the United States of America.