1. Guide to Using Excel 2007 For Basic Statistical Applications
To Accompany
Business Statistics: A Decision Making Approach, 8th Ed.
Chapter 5:
Introduction to Discrete Probability Distributions By
Groebner, Shannon, Fry, & Smith
Prentice-Hall Publishing Company
Copyright, 2011

2. Chapter 5 Excel Examples
Binomial Mean Catalog Sales
Poisson Distribution – Heritage Tile
More Examples

3. Binomial Mean- Catalog Sales
Issue: People who order items from catalogs can return the items for a refund. Historical return rate for one catalog has been 11 percent. Is this rate still valid?
Objective: Use Excel 2007 to compute binomial probabilities based on a sample of 300 purchases.

4. Binomial Mean – Catalog Sales
Situation:
Sample Size is n=300
p = .11
Mean = np = 300(.11) = 33
44 returns were observed
P(X > 44) = 1 – P(X < 43)
Find P(X < 43) = ?

5. Binomial Mean – Catalog Sales
Select Formulas tab
Select More Functions
Select Statistical
Select BINOMDIST

6. Binomial Mean – Catalog Sales
Enter values:
Note:
True = cumulative probability.
False = exact probability
Binomial Probability Result

7. Poisson Distribution Heritage Title
Issue: The distribution for the number of defects per tile made by Heritage Tile is Poisson distributed with a mean of 3 defects per tile. The manager is worried about the high variability
Objective: Use Excel 2007 to generate the Poisson distribution and histogram to visually see spread in the distribution of possible defects.

8. Poisson Distribution – Heritage Tile
Enter values zero through 10

9. Poisson Distribution – Heritage Tile
Select Formulas, More Functions, Statistical and
POISSON

10. Poisson Distribution – Heritage Tile
Enter:
a1, 3, false

11. Poisson Distribution – Heritage Tile
Notice that I had pre-selected Cell B1.
When I pressed enter the Poisson Probability was loaded into that cell.
Simply copy and paste Cell B1 into cells B2 : B11

12. Poisson Distribution – Heritage Tile
Select the Insert tab
Select Column
Select the chart type that you want

13. Poisson Distribution – Heritage Tile
Format the chart as per Chapter 2

14. Creating A Binomial Table
Issue: The binomial tables in this text contain specific probabilities for certain values of n and p. You may need to have more extensive tables.
Objective: Use Excel 2007 to generate the Binomial table for n = 25 and p value of .01 to .50 in increments of .01

15. Creating A Binomial Table
Sample size in Cell B1
p-values in Row 2
x-values in Column B

16. Creating A Binomial Table
P(x =0) = for n = 25, p = .01
Notice the use of absolute cell referencing – this allows you to copy the function across and down to complete this section of the binomial table

17. Creating A Binomial Table
Copy the contents (formula) of Cell C3 over the entire table

18. Creating A Binomial Table
Clear all Cells with a value of Zero

19. Creating A Binomial Table
Repeat for the next set of values for p: 0.11, 0.12 … 0.20
Simply change the contents of Row 2.
Continue this for all possible values of p.
For different sample sizes (n) change Cell B1 and Row B

20. Creating A Poisson Table
Issue: The Poisson tables in this text contain specific probabilities for certain values of λt . You may need to have more extensive tables.
Objective: Use Excel 2007 to generate the Poisson Table table for λt = 6.0 to 7.0 in increments of .10

21. Creating A Poisson Table
λt values in row 2
Values of x in column A

22. Creating A Poisson Table
P(x = 0) for λt = 6.0 equals
Notice the use of absolute cell referencing this allows you to copy the function across and down to complete this section of the binomial table

23. Creating A Poisson Table
Continue this process for other λt values as desired. As λt increases, the possible values for x will have to increase.