Histograms: Summarizing Data 1. SUMMARIZING DATA Raw data, such as company records, often contains a wealth of information that would be of use in making managerial decisions. To extract this information, we must learn how to organize the data. There are several steps that can be taken to unlock the secrets that are contained in a collection of numbers. Sort the data Find the minimum and maximum of the data Find the range of the data Compute the data’s mean Group the data Plot a histogram Excel can perform all of these tasks quickly and easily.

Histograms: Summarizing Data (cont.) To do sorting, highlight the entire group of data and label cells. Click on Data, in the main menu, and then on Sort, in the pull down menu. The functions MIN and MAX, also listed under Statistical, return the smallest and largest numbers, respectively, in a set of data. The difference between the maximum and minimum values is called the range of the data. The AVERAGE and SUM functions also listed under Statistical.

Histograms: Summarizing Data (cont.) 2. GROUPING DATA The next step is to use Excel’s Histogram function to organize the data into groups or bins. Unlike the functions that we have used so far, Histogram is located in a separate Add-In module, called Analysis Tool Pack. To locate this, click on Tools in the main Excel menu, and then on Data Analysis in the pull down menu. To assemble the data into groups, by whole days, we enter a column of “bin limits say t=0, 1, 2, , 17. This will cause Histogram to count the number of data points with t  0 in the first bin; and 0 < t  1 in the second bin. The process continues until the last bin, consisting of times with 17 < t, has been counted.

Histograms: Summarizing Data (cont.)

We can get a better picture of the situation by grouping the sick leave times into bins that contain two days each. This can been done by entering 1, 3, 5, , 13 as Bin Limits. A plot of the frequencies provides a good way to visualize the data. To create a plot click on the Chart Wizard icon on Excel’s Main Menu.

Histograms: Summarizing Data (cont.) Enter the range of labels. Follow the menus and use options to format the plot. Data Analysis Practice