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Lesson 07 Business Analytics Using Statistics

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20 views14 pages

Lesson 07 Business Analytics Using Statistics

Uploaded by

Ankit Awasthi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Lesson 7: Business Analytics Using Statistics

Overview
In this exercise, participants will delve into advanced Excel techniques, focusing
on Statistics using Excel. The goal is to simulate real-world scenarios to enhance
practical skills in data analysis. By addressing specific questions and challenges,
participants will gain proficiency in optimizing data visualization and analytical
processes.

Instructions

• Use the New_Data_Sales.xlsx dataset for your reference


• Work through all questions individually or within your group
• Divide your time evenly among the questions to ensure a comprehensive
understanding
• Utilize Excel's documentation and online resources to enhance your
problem-solving abilities

Task
As a retail business analyst, you will forecast the next quarter's sales by
analyzing past data. You will look for correlations in the data to identify factors
affecting sales success and test theories about business tactics or external
variables. This will help you use statistics effectively for sales planning and data
analytics.

Based on the above scenario, attempt the following questions:

1. Using a 3-month moving average, how has the average monthly total sales
changed over the last year at all the location 1, and what trend does this
suggest for the next quarter?

• Open the New_Data_Sales dataset and click on the Data tab


• Click on Data Analysis
• Click on Moving Average and click on OK
• Enter the Input Range as B2:B109, Interval as 3, and Output
Range as G2
• Insert a 2-D line graph taking all the moving average values
(G2:G109)
2. Is there a statistically significant difference in average sales between
products sold at different locations (for example, comparing Location ID 1
vs. Location ID 2)?

• Again click on the Data tab and then click on Data Analysis
• Click on t-Test: Two-Sample Assuming Equal Variances
• Enter the Variable 1 Range as B2:B109, Variable 2 Range as
C2:C109, Hypothesized Mean Difference as 0, Alpha as 0.05,
Output Range as P1, and click on OK

3. Does the average sale price significantly differ across different locations,
as determined by a one-way ANOVA test?

• Again click on the Data tab and then click on Data Analysis
• Click on Anova: Single Factor and click on OK
• Enter the Input Range as B2:D109, Output Range as T1, and click
on OK

4. What is the correlation coefficient between the quantity sold and total
sales of all 3 locations, and does this suggest a strong linear relationship?

• Again click on Data tab and then click on Data Analysis


• Click on Correlation and then click on OK
• Enter the Input Range as B2:E109, Output Range as AA1, and click
on OK

5. Calculate the covariance between the quantity sold and the sale price per
product. Does this indicate a positive or negative relationship in terms of
pricing strategy?

• Again click on Data tab and then click on Data Analysis


• Click on Covariance and then click on OK
• Enter the Input Range as E2:F109, Output Range as AG1, and click
on OK

Discussion Questions (Optional)


If time permits, discuss the following questions:

• How do you choose the right moving average settings in Excel for effective
data analysis?
• In what ways can Excel's ANOVA testing be applied to uncover significant
variations among groups, and how might the results influence strategic
decisions in data analysis?
Answer Key

Task 1

• Open the New_Data_Sales dataset and click on the Data tab

• Click on Data Analysis


• Click on Moving Average and click on OK

• Enter the Input Range as B2:B109, Interval as 3, and Output Range as


G2
The output will appear as below:

• Insert a 2-D line graph taking all the moving average values (G2:G109)
Through this graph you can see that from start to end, the value has increased.
Therefore, this suggests that it will increase in the next quarter as well.

Task 2

Note: Again click on Data tab and then click on Data Analysis as you have
done in the first task

• Click on t-Test: Two-Sample Assuming Equal Variances


• Enter the Variable 1 Range as B2:B109, Variable 2 Range as C2:C109,
Hypothesized Mean Difference as 0, Alpha as 0.05, Output Range as
P1, and click on OK

The output will appear as follows:


With this t-Test, you can see that the results indicate that there is no statistically
significant difference in average sales between the two locations, as the p-value
of 0.0793 exceeds the conventional threshold of 0.05.

Task 3

Note: Again click on Data tab and then click on Data Analysis

• Click on Anova: Single Factor and click on OK

• Enter the Input Range as B2:D109, Output Range as T1 and click on OK


The output will appear as below:

The one-way ANOVA test concludes that there is no statistically significant


difference in average sale prices across different locations, given the p-value of
0.1825 exceeds the conventional threshold of 0.05.
Task 4

Note: Again click on Data tab and then click on Data Analysis

• Click on Correlation and then click on OK

• Enter the Input Range as B2:E109, Output Range as AA1, and click on
OK
The output will appear as below:

The correlation coefficient of -0.424231062 indicates a moderate linear


relationship.
Task 5

Note: Again click on Data tab and then click on Data Analysis

• Click on Covariance and then click on OK

• Enter the Input Range as E2:F109, Output Range as AG1, and click on
OK
The output will appear as below:

The covariance of -91.01851852 between quantity sold and sale price per
product indicates a negative relationship, suggesting that higher sales volumes
are typically associated with lower prices.

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