1. Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 5: Discrete and Continuous Probability Distributions By Groebner, Shannon, Fry, & Smith Prentice-Hall Publishing Company Copyright, 2005

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

3. Chapter 5 Excel Examples (continued)  Creating A Binomial Table Creating A Binomial Table  Creating a Poisson Table Creating a Poisson Table  Standard Normal Distribution – Standard Normal Distribution – State Bank and Trust More Examples

4.  Exponential Distribution – Exponential Distribution – Haines Internet Services  Creating A Standard Normal Table Creating A Standard Normal Table Chapter 5 Excel Examples (continued)

5. 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 to compute binomial probabilities based on a sample of 300 purchases.

6. 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) = ? Binomial Mean – Catalog Sales

7. Click on Function Wizard – then select Statistical – then Binomdist Binomial Mean – Catalog Sales

8. Enter required values. Note, True indicates that you want the cumulative probability – False would indicate that you want the exact probability. Binomial Probability Result Binomial Probability function Binomial Mean – Catalog Sales

9. 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 to generate the Poisson distribution and histogram to visually see spread in the distribution of possible defects.

10. Enter values of x ranging from 0 to 10. Poisson Distribution – Heritage Tile

11. Click on the function button, then select Statistical and Poisson. Poisson Distribution – Heritage Tile

12. Enter the value of x (located in cell a2), the value of the mean and finally false. Poisson Distribution – Heritage Tile

13. Generate the remaining probabilities, then click on the Chart Wizard button. Poisson Distribution – Heritage Tile

14. Enter the correct range of values in the chart wizard. Poisson Distribution – Heritage Tile

15. Provide a title and label the axes as desired. Poisson Distribution – Heritage Tile

16. Complete Histogram as shown in tutorials for Chapter 2. Poisson Distribution – Heritage Tile

17. 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 to generate the Binomial table for n = 25 and p value of.01 to.50 in increments of.01

18. Sample size (n) in cell B1 P values in row 3 X values in column A Creating A Binomial Table

19. P(X =0) =.777821 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 Creating A Binomial Table

20. Values for X > 11 are all zero – can be dropped from table to save space Creating A Binomial Table

21. Expand the table to include more p values. Note, make sure your cell referencing is correct. – then copy cells Creating A Binomial Table

22. Continue this process for all p values. For different sample sizes, replace n in cell B1 Creating A Binomial Table

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

24. values in row 2 Values of X in column A Creating A Poisson Table

25. P(X = 0) for = 6.0 equals.00248 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 Creating A Poisson Table

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

27. Standard Normal Distribution- State Bank and Trust Issue: State bank managers have studied the time customers spend at the bank on business. They plan to offer a gift certificate to any customer who is required to spend over 40 minutes on bank business. Objective: Use Excel to analyze to create histogram and determine the probability that a certificate will be given to any customer. The data file is State Bank.xls.

28. Open Data File: State Bank.xls Standard Normal – State Bank and Trust

29. Create Bins (Upper Limits of each class) Standard Normal – State Bank and Trust

30. Click on Tools – Data Analysis - Histogram Standard Normal – State Bank and Trust

31. Define Data and Bin ranges and specify where you want the output to go. Check Chart Output Standard Normal – State Bank and Trust

32. Close Gaps in Histogram by selecting chart bars, right clicking and selecting Chart Object – Options – and then change Gap width to 0 Standard Normal – State Bank and Trust

33. Add labels and format horizontal axis. Next, determine probability of a service time exceeding 30 seconds. Standard Normal – State Bank and Trust

34. Select Function Wizard – Then Click on Statistical – then select Normdist function Standard Normal – State Bank and Trust

35. Enter X =30, mean = 22.14, st dev = 6.09, and True for cumulative probability P(X <30) =.9016 Standard Normal – State Bank and Trust

36. Exponential Distribution- Haines Internet Services Issue: The time between connect attempts averages two minutes and the distribution of time between attempts is assumed to be exponential. Objective: Use Excel to compute the probability that that the time between connect attempts will be less than 45 seconds (.75 minutes).

37. Click on Function Wizard – then select Statistical – then EXPONDIST Exponential Distribution – Haines Internet Services

38. Enter required values. Note, True indicates that you want the cumulative probability – False would indicate that you want the exact probability. Exponential Distribution Probability Result P(X <.75) =.3127 EXPONDIST function – note, that =.50 is used rather than the mean = Exponential Distribution – Haines Internet Services

39. Creating A Standard Normal Distribution Table Issue: The Standard Normal tables in the Appendix of this text were created using Excel. Objective: Use Excel to generate a standard normal table for z values below zero.

40. Z value integer and first decimal place. Z value second decimal place Creating the Standard Normal Table

41. Formula: ABS function is for absolute value Mean for NORMDIST function is -0.0 -.01 = -.01 Notice use of absolute cell references to allow formula to be copied across and and down to finish the table Creating the Standard Normal Table

42. Probabilities correspond to area on the standard normal table between the Z value and the mean = 0. Creating the Standard Normal Table