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Discussion

This document discusses the analysis of monthly sales data for a product across various retail stores, emphasizing the importance of identifying and handling outliers to ensure valid results. It outlines a systematic approach for verifying outliers, conducting contextual analysis, calculating descriptive statistics, visualizing data, performing statistical tests, and making informed decisions about outliers. The conclusion highlights that careful examination of outliers enhances the reliability of statistical conclusions.

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16 views2 pages

Discussion

This document discusses the analysis of monthly sales data for a product across various retail stores, emphasizing the importance of identifying and handling outliers to ensure valid results. It outlines a systematic approach for verifying outliers, conducting contextual analysis, calculating descriptive statistics, visualizing data, performing statistical tests, and making informed decisions about outliers. The conclusion highlights that careful examination of outliers enhances the reliability of statistical conclusions.

Uploaded by

waydinjosephs09
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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For this study, let's consider the large population to be the monthly sales levels of a specific

product in various retail stores across a country. The numeric measurement collected will be the
monthly sales count for each store. This data will allow us to analyze trends, seasonality, and
the overall performance of the product in different regions (Illowsky et al., 2022).

Handling Outliers

When analyzing data, it’s important to identify and handle outliers appropriately to ensure the
validity and reliability of the results. Outliers can be due to typos, faulty measurements, or
genuinely extreme values. In a sample size of 100, finding a few outliers requires careful
consideration (Field, 2013).

Statistical Course of Action

If we identify two values that are twice as big as the next highest value in the sample, the
following steps should be taken:

1. Verification: First, verify the data to ensure that the outliers are not a result of data entry
errors or typos. Cross-check with the original data source and confirm accuracy (Illowsky
et al., 2022).
2. Contextual Analysis: Understand the context of these outliers. Are they a result of
special events, promotions, or market trends that could justify such high values? For
example, a major sale or holiday season could lead to unusually high sales figures
(Illowsky et al., 2022).
3. Descriptive Statistics: Calculate descriptive statistics (mean, median, standard deviation)
with and without the outliers to understand their impact on the overall data distribution
(Moore et al., 2012).
4. Visualization: Use box plots or scatter plots to visualize the data and the position of the
outliers. This helps in identifying the spread and skewness of the data (Field, 2013).
5. Statistical Tests: Perform statistical tests such as Grubbs' test or Dixon's Q test to
formally identify outliers.
6. Decision Making: Depending on the outcome of the above steps, decide whether to
retain, transform, or remove the outliers. If they are genuine and provide valuable
insights, include them in the analysis with appropriate notation. If they are erroneous,
correct or exclude them from the analysis (Illowsky et al., 2022).

Example from Monthly Sales Data

Consider a scenario where the average monthly sales of a product are around 1000 units, but two
stores report sales of 5000 and 6000 units, while the next highest sales value is 2500 units.

1. Verification: Verify the sales figures of these two stores by checking the sales records
and confirming with the store managers (Illowsky et al., 2022).
2. Contextual Analysis: Investigate if there were any special promotions or events at these
stores during the reported months.
3. Descriptive Statistics: Calculate the mean and standard deviation with and without the
outliers to assess their impact (Field, 2013).
4. Visualization: Use a box plot to visualize the spread of sales data and the presence of
outliers.
5. Statistical Tests: Apply Grubbs' test to determine if these values are statistically
significant outliers.
6. Decision Making: If verified as genuine, include them in the analysis with a note
explaining the context. If erroneous, exclude them and recalculate the statistics (Moore et
al., 2012).

Conclusion

Handling outliers effectively ensures the robustness of your statistical analysis. Each outlier
should be carefully examined to determine its validity and impact on the study. By following a
systematic approach, you can make informed decisions that enhance the reliability of your
conclusions (Field, 2013; Illowsky et al., 2022).

Word Count: 489

References

 Discovering Statistics Using IBM SPSS Statistics (4th ed.). A. Field. (2013). SAGE
Publications.
 Illowsky, B., Dean, S., Birmajer, D., Blount, B., Boyd, S., Einsohn, M., Helmreich,
Kenyon, L., Lee, S., & Taub, J. (2022). Introductory
statistics. openstax. https://openstax.org/details/books/introductory-statistics
 Introduction to the Practice of Statistics (7th ed.). Moore, D. S., McCabe, G. P., & Craig,
B. A. (2012). W. H. Freeman.

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