Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 7th Ed. Chapter 11: Hypothesis Tests and Estimation for Population Variances By Groebner, Shannon, Fry, & Smith Prentice-Hall Publishing Company Copyright, 2008

Chapter 11 Excel Examples Testing Two Variances - Bank ATM Machines

Testing-Two Variances - Bank ATM Machines Issue: System programmers believe that the original ATM computer program will result in a higher standard deviation in transaction times than the new program Objective: Use Excel 2007 to help test a hypothesis about the standard deviation of two groups. Data file is ATM.xls

Testing-Two Variances - Bank ATM Machines Open the file ATM.xls

Testing-Two Variances - Bank ATM Machines Select the Data tab Select Data Analysis Select F-Test Two sample for Variances OK

Testing-Two Variances - Bank ATM Machines Set Variable 1 Range to A1:A8 Set Variable 2 Range to B1:B12 Select Labels Set alpha value to 0.01 Set Output range to D1 OK

Testing-Two Variances - Bank ATM Machines Since F = 11.898 > F critical = 5.39, reject Ho and conclude that the variance for Original Software exceeds that for the new system