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 Brief Contents
Preface xii
1 Introduction to Data Analysis and Decision Making 1
Part 1 Exploring Data 19
2 Describing the Distribution of a Single Variable 21
3 Finding Relationships among Variables 85
Part 2 Probability and Decision Making under Uncertainty 153
4 Probability and Probability Distributions 155
5 Normal, Binomial, Poisson, and Exponential Distributions 209
6 Decision Making under Uncertainty 273
Part 3 Statistical Inference 349
7 Sampling and Sampling Distributions 351
8 Confidence Interval Estimation 387
9 Hypothesis Testing 455
Part 4 Regression Analysis and Time Series Forecasting 527
10 Regression Analysis: Estimating Relationships 529
11 Regression Analysis: Statistical Inference 601
12 Time Series Analysis and Forecasting 669
Part 5 Optimization and Simulation Modeling 743
13 Introduction to Optimization Modeling 745
14 Optimization Models 811
15 Introduction to Simulation Modeling 917
16 Simulation Models 987
Part 6 Online Bonus Material
2 Using the Advanced Filter and Database Functions 2-1
17 Importing Data into Excel 17-1
Appendix A Statistical Reporting A-1
References 1055
Index 1059

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 Contents
Preface xii 2.7 Excel Tables for Filtering, Sorting, and
Summarizing 66
1 Introduction to Data Analysis and
2.7.1 Filtering 70
Decision Making 1
2.8 Conclusion 75
1.1 Introduction 2
CASE 2.1 Correct Interpretation of Means 81
1.2 An Overview of the Book 4
CASE 2.2 The Dow Jones Industrial Average 82
1.2.1 The Methods 4
CASE 2.3 Home and Condo Prices 83
1.2.2 The Software 7
1.3 Modeling and Models 11 3 Finding Relationships among Variables 85
1.3.1 Graphical Models 11 3.1 Introduction 87
1.3.2 Algebraic Models 12 3.2 Relationships among Categorical Variables 88
1.3.3 Spreadsheet Models 12 3.3 Relationships among Categorical Variables
1.3.4 A Seven-Step Modeling Process 14 and a Numerical Variable 92
1.4 Conclusion 16 3.3.1 Stacked and Unstacked Formats 93
CASE 1.1 Entertainment on a Cruise Ship 17 3.4 Relationships among Numerical Variables 101
3.4.1 Scatterplots 102
3.4.2 Correlation and Covariance 106
PART 1 E XPLORING DATA 19 3.5 Pivot Tables 114
3.6 An Extended Example 137
2 Describing the Distribution of a
Single Variable 21 3.7 Conclusion 144
CASE 3.1 Customer Arrivals at Bank98 149
2.1 Introduction 23
CASE 3.2 Saving, Spending, and Social
2.2 Basic Concepts 24
Climbing 150
2.2.1 Populations and Samples 24
CASE 3.3 Churn in the Cellular Phone
2.2.2 Data Sets, Variables, and Observations 25
Market 151
2.2.3 Types of Data 27
2.3 Descriptive Measures for Categorical P ROBABILITY AND D ECISION
Variables 30 PART 2 M AKING UNDER
2.4 Descriptive Measures for Numerical U NCERTAINTY 153
Variables 33
2.4.1 Numerical Summary Measures 34 4 Probability and Probability Distributions 155
2.4.2 Numerical Summary Measures with 4.1 Introduction 156
StatTools 43 4.2 Probability Essentials 158
2.4.3 Charts for Numerical Variables 48 4.2.1 Rule of Complements 159
2.5 Time Series Data 57 4.2.2 Addition Rule 159
2.6 Outliers and Missing Values 64 4.2.3 Conditional Probability and the
2.6.1 Outliers 64 Multiplication Rule 160
2.6.2 Missing Values 65 4.2.4 Probabilistic Independence 162

vi

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 4.2.5 Equally Likely Events 163 5.8 Conclusion 261
4.2.6 Subjective Versus Objective CASE 5.1 EuroWatch Company 269
Probabilities 163 CASE 5.2 Cashing in on the Lottery 270
4.3 Distribution of a Single Random Variable 166
4.3.1 Conditional Mean and Variance 170 6 Decision Making under Uncertainty 273
4.4 An Introduction to Simulation 173 6.1 Introduction 274
4.5 Distribution of Two Random Variables: Scenario 6.2 Elements of Decision Analysis 276
Approach 177 6.2.1 Payoff Tables 276
4.6 Distribution of Two Random Variables: Joint 6.2.2 Possible Decision Criteria 277
Probability Approach 183 6.2.3 Expected Monetary Value (EMV) 278
4.6.1 How to Assess Joint Probability 6.2.4 Sensitivity Analysis 280
Distributions 187 6.2.5 Decision Trees 280
4.7 Independent Random Variables 189 6.2.6 Risk Profiles 282
4.8 Weighted Sums of Random Variables 193 6.3 The PrecisionTree Add-In 290
4.9 Conclusion 200 6.4 Bayes’ Rule 303
CASE 4.1 Simpson’s Paradox 208 6.5 Multistage Decision Problems 307
5 Normal, Binomial, Poisson, and Exponential 6.5.1 The Value of Information 311
Distributions 209 6.6 Incorporating Attitudes Toward Risk 323
5.1 Introduction 211 6.6.1 Utility Functions 324
5.2 The Normal Distribution 211 6.6.2 Exponential Utility 324
5.2.1 Continuous Distributions and 6.6.3 Certainty Equivalents 328
Density Functions 211 6.6.4 Is Expected Utility Maximization
5.2.2 The Normal Density 213 Used? 330
5.2.3 Standardizing: Z-Values 214 6.7 Conclusion 331
5.2.4 Normal Tables and Z-Values 216 CASE 6.1 Jogger Shoe Company 345
5.2.5 Normal Calculations in Excel 217 CASE 6.2 Westhouser Parer Company 346
5.2.6 Empirical Rules Revisited 220 CASE 6.3 Biotechnical Engineering 347
5.3 Applications of the Normal Distribution 221
5.4 The Binomial Distribution 233
5.4.1 Mean and Standard Deviation of the
Binomial Distribution 236 PART 3 S TATISTICAL I NFERENCE 349
5.4.2 The Binomial Distribution in the
Context of Sampling 236 7 Sampling and Sampling Distributions 351
5.4.3 The Normal Approximation to the 7.1 Introduction 352
Binomial 237 7.2 Sampling Terminology 353
5.5 Applications of the Binomial Distribution 238 7.3 Methods for Selecting Random Samples 354
5.6 The Poisson and Exponential Distributions 250 7.3.1 Simple Random Sampling 354
5.6.1 The Poisson Distribution 250 7.3.2 Systematic Sampling 360
5.6.2 The Exponential Distribution 252 7.3.3 Stratified Sampling 361
5.7 Fitting a Probability Distribution to Data with 7.3.4 Cluster Sampling 364
@RISK 255 7.3.5 Multistage Sampling Schemes 365

Contents vii

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 7.4 An Introduction to Estimation 366 9.2 Concepts in Hypothesis Testing 457
7.4.1 Sources of Estimation Error 367 9.2.1 Null and Alternative Hypotheses 458
7.4.2 Key Terms in Sampling 368 9.2.2 One-Tailed Versus Two-Tailed Tests 459
7.4.3 Sampling Distribution of the Sample 9.2.3 Types of Errors 459
Mean 369 9.2.4 Significance Level and Rejection
7.4.4 The Central Limit Theorem 374 Region 460
7.4.5 Sample Size Determination 379 9.2.5 Significance from p -values 461
7.4.6 Summary of Key Ideas for Simple Random 9.2.6 Type II Errors and Power 462
Sampling 380 9.2.7 Hypothesis Tests and Confidence
7.5 Conclusion 382 Intervals 463
CASE 7.1 Sampling from DVD Movie Renters 386 9.2.8 Practical Versus Statistical Significance 463
9.3 Hypothesis Tests for a Population Mean 464
8 Confidence Interval Estimation 387 9.4 Hypothesis Tests for Other Parameters 472
8.1 Introduction 388 9.4.1 Hypothesis Tests for a Population
8.2 Sampling Distributions 390 Proportion 472
8.2.1 The t Distribution 390 9.4.2 Hypothesis Tests for Differences between
8.2.2 Other Sampling Distributions 393 Population Means 475
8.3 Confidence Interval for a Mean 394 9.4.3 Hypothesis Test for Equal Population
8.4 Confidence Interval for a Total 400 Variances 485
8.5 Confidence Interval for a Proportion 403 9.4.4 Hypothesis Tests for Differences between
8.6 Confidence Interval for a Standard Population Proportions 486
Deviation 409 9.5 Tests for Normality 494
8.7 Confidence Interval for the Difference 9.6 Chi-Square Test for Independence 500
between Means 412 9.7 One-Way ANOVA 505
8.7.1 Independent Samples 413 9.8 Conclusion 513
8.7.2 Paired Samples 421 CASE 9.1 Regression Toward the Mean 519
8.8. Confidence Interval for the Difference between CASE 9.2 Baseball Statistics 520
Proportions 427 CASE 9.3 The Wichita Anti–Drunk Driving
8.9. Controlling Confidence Interval Length 433 Advertising Campaign 521
8.9.1 Sample Size for Estimation of the CASE 9.4 Deciding Whether to Switch to a
Mean 434 New Toothpaste Dispenser 523
8.9.2 Sample Size for Estimation of CASE 9.5 Removing Vioxx from the Market 526
Other Parameters 436
8.10 Conclusion 441
CASE 8.1 Harrigan University Admissions 449
CASE 8.2 Employee Retention at D&Y 450 R EGRESSION A NALYSIS
CASE 8.3 Delivery Times at SnowPea PART 4 AND T IME S ERIES
Restaurant 451 F ORECASTING 527
CASE 8.4 The Bodfish Lot Cruise 452
10 Regression Analysis: Estimating
9 Hypothesis Testing 455 Relationships 529
9.1 Introduction 456 10.1 Introduction 531

viii Contents

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 10.2 Scatterplots: Graphing Relationships 533 11.4 Multicollinearity 616
10.2.1 Linear Versus Nonlinear Relationships 538 11.5 Include/Exclude Decisions 620
10.2.2 Outliers 538 11.6 Stepwise Regression 625
10.2.3 Unequal Variance 539 11.7 The Partial F Test 630
10.2.4 No Relationship 540 11.8 Outliers 638
10.3 Correlations: Indicators of Linear 11.9 Violations of Regression Assumptions 644
Relationships 540 11.9.1 Nonconstant Error Variance 644
10.4 Simple Linear Regression 542 11.9.2 Nonnormality of Residuals 645
10.4.1 Least Squares Estimation 542 11.9.3 Autocorrelated Residuals 645
10.4.2 Standard Error of Estimate 549 11.10 Prediction 648
10.4.3 The Percentage of Variation 11.11 Conclusion 653
Explained: R2 550 CASE 11.1 The Artsy Corporation 663
10.5 Multiple Regression 553 CASE 11.2 Heating Oil at Dupree Fuels
10.5.1 Interpretation of Regression Coefficients 554 Company 665
10.5.2 Interpretation of Standard Error of CASE 11.3 Developing a Flexible Budget at
Estimate and R2 556 the Gunderson Plant 666
10.6 Modeling Possibilities 560 CASE 11.4 Forecasting Overhead at Wagner
10.6.1 Dummy Variables 560 Printers 667
10.6.2 Interaction Variables 566
10.6.3 Nonlinear Transformations 571 12 Time Series Analysis and Forecasting 669
10.7 Validation of the Fit 586 12.1 Introduction 671
10.8 Conclusion 588 12.2 Forecasting Methods: An Overview 671
CASE 10.1 Quantity Discounts at the Firm 12.2.1 Extrapolation Methods 672
Chair Company 596 12.2.2 Econometric Models 672
CASE 10.2 Housing Price Structure in 12.2.3 Combining Forecasts 673
Mid City 597 12.2.4 Components of Time Series
CASE 10.3 Demand for French Bread at Data 673
Howie’s Bakery 598 12.2.5 Measures of Accuracy 676
CASE 10.4 Investing for Retirement 599 12.3 Testing for Randomness 678
12.3.1 The Runs Test 681
11 Regression Analysis: Statistical Inference 601 12.3.2 Autocorrelation 683
11.1 Introduction 603 12.4 Regression-Based Trend Models 687
11.2 The Statistical Model 603 12.4.1 Linear Trend 687
11.3 Inferences about the Regression 12.4.2 Exponential Trend 690
Coefficients 607 12.5 The Random Walk Model 695
11.3.1 Sampling Distribution of the Regression 12.6 Autoregression Models 699
Coefficients 608 12.7 Moving Averages 704
11.3.2 Hypothesis Tests for the Regression 12.8 Exponential Smoothing 710
Coefficients and p-Values 610 12.8.1 Simple Exponential Smoothing 710
11.3.3 A Test for the Overall Fit: The ANOVA 12.8.2 Holt’s Model for Trend 715
Table 611 12.9 Seasonal Models 720

Contents ix

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 12.9.1 Winters’ Exponential Smoothing 14 Optimization Models 811
Model 721 14.1 Introduction 812
12.9.2 Deseasonalizing: The Ratio-to-Moving- 14.2 Worker Scheduling Models 813
Averages Method 725 14.3 Blending Models 821
12.9.3 Estimating Seasonality with Regression 729 14.4 Logistics Models 828
12.10 Conclusion 735 14.4.1 Transportation Models 828
CASE 12.1 Arrivals at the Credit Union 740 14.4.2 Other Logistics Models 837
CASE 12.2 Forecasting Weekly Sales at 14.5 Aggregate Planning Models 848
Amanta 741
14.6 Financial Models 857
14.7 Integer Programming Models 868
14.7.1 Capital Budgeting Models 869
O PTIMIZATION AND
PART 5 14.7.2 Fixed-Cost Models 875
S IMULATION M ODELING 743
14.7.3 Set-Covering Models 883
13 Introduction to Optimization Modeling 745 14.8 Nonlinear Programming Models 891
13.1 Introduction 746 14.8.1 Basic Ideas of Nonlinear
13.2 Introduction to Optimization 747 Optimization 891
13.3 A Two-Variable Product Mix Model 748 14.8.2 Managerial Economics Models 891
13.4 Sensitivity Analysis 761 14.8.3 Portfolio Optimization Models 896
13.4.1 Solver’s Sensitivity Report 761 14.9 Conclusion 905
13.4.2 SolverTable Add-In 765 CASE 14.1 Giant Motor Company 912
13.4.3 Comparison of Solver’s Sensitivity Report CASE 14.2 GMS Stock Hedging 914
and SolverTable 770
13.5 Properties of Linear Models 772 15 Introduction to Simulation Modeling 917
13.5.1 Proportionality 773 15.1 Introduction 918
13.5.2 Additivity 773 15.2 Probability Distributions for Input
13.5.3 Divisibility 773 Variables 920
13.5.4 Discussion of Linear Properties 773 15.2.1 Types of Probability Distributions 921
13.5.5 Linear Models and Scaling 774 15.2.2 Common Probability Distributions 925
13.6 Infeasibility and Unboundedness 775 15.2.3 Using @RISK to Explore Probability
13.6.1 Infeasibility 775 Distributions 929
13.6.2 Unboundedness 775 15.3 Simulation and the Flaw of
13.6.3 Comparison of Infeasibility and Averages 939
Unboundedness 776 15.4 Simulation with Built-In Excel Tools 942
13.7 A Larger Product Mix Model 778 15.5 Introduction to the @RISK Add-in 953
13.8 A Multiperiod Production Model 786 15.5.1 @RISK Features 953
13.9 A Comparison of Algebraic and Spreadsheet 15.5.2 Loading @RISK 954
Models 796 15.5.3 @RISK Models with a Single Random
13.10 A Decision Support System 796 Input Variable 954
13.11 Conclusion 799 15.5.4 Some Limitations of @RISK 963
CASE 13.1 Shelby Shelving 807 15.5.5 @RISK Models with Several Random
CASE 13.2 Sonoma Valley Wines 809 Input Variables 964

x Contents

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 15.6 The Effects of Input Distributions on
PART 6 O NLINE B ONUS M ATERIAL
Results 969
15.6.1 Effect of the Shape of the Input 2 Using the Advanced Filter and
Distribution(s) 969 Database Functions 2-1
15.6.2 Effect of Correlated Input
Variables 972 17 Importing Data into Excel 17-1
15.7 Conclusion 978 17.1 Introduction 17-3
CASE 15.1 Ski Jacket Production 985 17.2 Rearranging Excel Data 17-4
CASE 15.2 Ebony Bath Soap 986 17.3 Importing Text Data 17-8
17.4 Importing Relational Database
16 Simulation Models 987 Data 17-14
16.1 Introduction 989 17.4.1 A Brief Introduction to Relational
Databases 17-14
16.2 Operations Models 989
17.4.2 Using Microsoft Query 17-15
16.2.1 Bidding for Contracts 989
17.4.3 SQL Statements 17-28
16.2.2 Warranty Costs 993
17.5 Web Queries 17-30
16.2.3 Drug Production with Uncertain
Yield 998 17.6 Cleansing Data 17-34
16.3 Financial Models 1004 17.7 Conclusion 17-42
CASE 17.1 EduToys, Inc. 17-46
16.3.1 Financial Planning Models 1004
16.3.2 Cash Balance Models 1009 Appendix A: Statistical Reporting A-1
16.3.3 Investment Models 1014 A.1 Introduction A-1
16.4 Marketing Models 1020 A.2 Suggestions for Good Statistical
16.4.1 Models of Customer Loyalty 1020 Reporting A-2
16.4.2 Marketing and Sales Models 1030 A.2.1 Planning A-2
16.5 Simulating Games of Chance 1036 A.2.2 Developing a Report A-3
16.5.1 Simulating the Game of Craps 1036 A.2.3 Be Clear A-4
16.5.2 Simulating the NCAA Basketball A.2.4 Be Concise A-5
Tournament 1039 A.2.5 Be Precise A-5
16.6 An Automated Template for @RISK A.3 Examples of Statistical Reports A-6
Models 1044 A.4 Conclusion A-18
16.7 Conclusion 1045
CASE 16.1 College Fund Investment 1053
References 1055
CASE 16.2 Bond Investment Strategy 1054 Index 1059

Contents xi

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 Preface
With today’s technology, companies are able to 1. Integrated coverage and applications.
collect tremendous amounts of data with relative The book provides a unified approach to
ease. Indeed, many companies now have more data business-related problems by integrating
than they can handle. However, the data are usually methods and applications that have been
meaningless until they are analyzed for trends, traditionally taught in separate courses,
patterns, relationships, and other useful information. specifically statistics and management
This book illustrates in a practical way a variety of science.
methods, from simple to complex, to help you ana- 2. Practical in approach. The book emphasizes
lyze data sets and uncover important information. In realistic business examples and the processes
many business contexts, data analysis is only the managers actually use to analyze business
first step in the solution of a problem. Acting on the problems. The emphasis is not on abstract
solution and the information it provides to make theory or computational methods.
good decisions is a critical next step. Therefore,
3. Spreadsheet-based. The book provides
there is a heavy emphasis throughout this book on
students with the skills to analyze business
analytical methods that are useful in decision mak-
problems with tools they have access to and
ing. Again, the methods vary considerably, but the
will use in their careers. To this end, we have
objective is always the same—to equip you with
adopted Excel and commercial spreadsheet
decision-making tools that you can apply in your
add-ins.
business careers.
We recognize that the majority of students in
this type of course are not majoring in a quantitative Integrated coverage and applications
area. They are typically business majors in finance,
marketing, operations management, or some other In the past, many business schools, including ours at
business discipline who will need to analyze data and Indiana University, have offered a required statistics
make quantitative-based decisions in their jobs. We course, a required decision-making course, and a
offer a hands-on, example-based approach and required management science course—or some subset
introduce fundamental concepts as they are needed. of these. One current trend, however, is to have only
Our vehicle is spreadsheet software—specifically, one required course that covers the basics of statistics,
Microsoft Excel. This is a package that most students some regression analysis, some decision making
already know and will undoubtedly use in their under uncertainty, some linear programming, some
careers. Our MBA students at Indiana University are simulation, and possibly others. Essentially, we fac-
so turned on by the required course that is based on ulty in the quantitative area get one opportunity to
this book that almost all of them (mostly finance and teach all business students, so we attempt to cover a
marketing majors) take at least one of our follow-up variety of useful quantitative methods. We are not nec-
elective courses in spreadsheet modeling. We are essarily arguing that this trend is ideal, but rather that
convinced that students see value in quantitative it is a reflection of the reality at our university and,
analysis when the course is taught in a practical and we suspect, at many others. After several years of
example-based approach. teaching this course, we have found it to be a great
opportunity to attract students to the subject and more
advanced study.
The book is also integrative in another important
Rationale for writing this book aspect. It not only integrates a number of analytical
Data Analysis and Decision Making is different from methods, but it also applies them to a wide variety
the many fine textbooks written for statistics and man- of business problems—that is, it analyzes realistic
agement science. Our rationale for writing this book is examples from many business disciplines. We include
based on three fundamental objectives. examples, problems, and cases that deal with portfolio

xii

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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
 optimization, workforce scheduling, market share What we hope to accomplish
analysis, capital budgeting, new product analysis, and
in this book
many others.
Condensing the ideas in the above paragraphs, we
hope to:
Practical in approach
■ Reverse negative student attitudes about
We want this book to be very example-based and prac- statistics and quantitative methods by making
tical. We strongly believe that students learn best by these topics real, accessible, and interesting;
working through examples, and they appreciate the ■ Give students lots of hands-on experience with
material most when the examples are realistic and inter-
real problems and challenge them to develop
esting. Therefore, our approach in the book differs in
their intuition, logic, and problem-solving skills;
two important ways from many competitors. First, there
■ Expose students to real problems in many
is just enough conceptual development to give students
an understanding and appreciation for the issues raised business disciplines and show them how these
in the examples. We often introduce important con- problems can be analyzed with quantitative
cepts, such as multicollinearity in regression, in the methods;
context of examples, rather than discussing them in the ■ Develop spreadsheet skills, including
abstract. Our experience is that students gain greater experience with powerful spreadsheet add-ins,
intuition and understanding of the concepts and appli- that add immediate value in students’ other
cations through this approach. courses and their future careers.
Second, we place virtually no emphasis on hand
calculations. We believe it is more important for
New in the fourth edition
students to understand why they are conducting an
analysis and what it means than to emphasize the There are two major changes in this edition.
tedious calculations associated with many analytical ■ We have completely rewritten and reorganized
techniques. Therefore, we illustrate how powerful
Chapters 2 and 3. Chapter 2 now focuses on
software can be used to create graphical and numeri-
the description of one variable at a time, and
cal outputs in a matter of seconds, freeing the
Chapter 3 focuses on relationships between
rest of the time for in-depth interpretation of the
variables. We believe this reorganization is
output, sensitivity analysis, and alternative modeling
more logical. In addition, both of these
approaches. In our own courses, we move directly
chapters have more coverage of categorical
into a discussion of examples, where we focus
variables, and they have new examples with
almost exclusively on interpretation and modeling
more interesting data sets.
issues and let the software perform the number
■ We have made major changes in the problems,
crunching.
particularly in Chapters 2 and 3. Many of
the problems in previous editions were either
Spreadsheet-based teaching uninteresting or outdated, so in most cases
We are strongly committed to teaching spreadsheet- we deleted or updated such problems, and we
based, example-driven courses, regardless of whether added a number of brand-new problems. We
the basic area is data analysis or management science. also created a file, essentially a database of prob-
We have found tremendous enthusiasm for this lems, that is available to instructors. This file,
approach, both from students and from faculty around Problem Database.xlsx, indicates the context
the world who have used our books. Students learn of each of the problems, and it also shows the
and remember more, and they appreciate the material correspondence between problems in this edition
more. In addition, instructors typically enjoy teaching and problems in the previous edition.
more, and they usually receive immediate reinforce-
Besides these two major changes, there are a number
ment through better teaching evaluations. We were
of smaller changes, including the following:
among the first to move to spreadsheet-based teaching
almost two decades ago, and we have never regretted ■ Due to the length of the book, we decided to
the move. delete the old Chapter 4 (Getting the Right

Preface xiii

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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
 Data) from the printed book and make DecisionTools® add-in. The textbook Web site for
it available online as Chapter 17. This Data Analysis and Decision Making provides a link to the
chapter, now called “Importing Data into powerful DecisionTools® Suite by Palisade Corporation.
Excel,” has been completely rewritten, This suite includes seven separate add-ins, the first three
and its section on Excel tables is now in of which we use extensively:
Chapter 2. (The old Chapters 5–17 were
renumbered 4–16.) ■ @RISK, an add-in for simulation
■ The book is still based on Excel 2007, but ■ StatTools, an add-in for statistical data
where it applies, notes about changes in Excel analysis
2010 have been added. Specifically, there is a ■ PrecisionTree, a graphical-based add-in for
small section on the new slicers for pivot creating and analyzing decision trees
tables, and there are several mentions of the ■ TopRank, an add-in for performing what-if
new statistical functions (although the old
analyses
functions still work).
■ RISKOptimizer, an add-in for performing
■ Each chapter now has 10–20 “Conceptual
optimization on simulation models
Questions” in the end-of-chapter section.
There were a few “Conceptual Exercises” in ■ NeuralTools®, an add-in for finding complex,
some chapters in previous editions, but the new nonlinear relationships
versions are more numerous, consistent, and ■ EvolverTM, an add-in for performing optimiza-
relevant. tion on complex “nonsmooth” models
■ The first two linear programming (LP) Online access to the DecisionTools® Suite, avail-
examples in Chapter 13 (the old Chapter 14) able with new copies of the book, is an academic ver-
have been replaced by two product mix sion, slightly scaled down from the professional version
models, where the second is an extension of that sells for hundreds of dollars and is used by many
the first. Our thinking was that the previous leading companies. It functions for two years when
diet-themed model was overly complex as a properly installed, and it puts only modest limitations on
first LP example. the size of data sets or models that can be analyzed.
■ Several of the chapter-opening vignettes have (Visit www.kelley.iu.edu/albrightbooks for specific
been replaced by newer and more interesting details on these limitations.) We use @RISK and
ones. PrecisionTree extensively in the chapters on simulation
■ There are now many short “fundamental and decision making under uncertainty, and we use
insights” throughout the chapters. We hope StatTools throughout all of the data analysis chapters.
these allow the students to step back from the SolverTable add-in. We also include SolverTable,
details and see the really important ideas. a supplement to Excel’s built-in Solver for optimiza-
tion. If you have ever had difficulty understanding
Solver’s sensitivity reports, you will appreciate
Software SolverTable. It works like Excel’s data tables, except
that for each input (or pair of inputs), the add-in runs
This book is based entirely on Microsoft Excel, the
Solver and reports the optimal output values.
spreadsheet package that has become the standard
SolverTable is used extensively in the optimization
analytical tool in business. Excel is an extremely
chapters. The version of SolverTable included in this
powerful package, and one of our goals is to convert
book has been revised for Excel 2007. (Although
casual users into power users who can take full
SolverTable is available on this textbook’s Web site, it
advantage of its features. If we accomplish no more
is also available for free from the first author’s Web site,
than this, we will be providing a valuable skill for the
www.kelley.iu.edu/albrightbooks.)
business world. However, Excel has some limitations.
Therefore, this book includes several Excel add-ins
that greatly enhance Excel’s capabilities. As a group,
these add-ins comprise what is arguably the most
Possible sequences of topics
impressive assortment of spreadsheet-based software Although we use the book for our own required one-
accompanying any book on the market. semester course, there is admittedly more material

xiv Preface

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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
 than can be covered adequately in one semester. We Student ancillaries
have tried to make the book as modular as possible,
allowing an instructor to cover, say, simulation Textbook Web Site
before optimization or vice versa, or to omit either Every new student edition of this book comes with an
of these topics. The one exception is statistics. Due Instant Access Code (bound inside the book). The code
to the natural progression of statistical topics, the provides access to the Data Analysis and Decision
basic topics in the early chapters should be covered Making, 4e textbook Web site that links to all of the
before the more advanced topics (regression and following files and tools:
time series analysis) in the later chapters. With this
in mind, there are several possible ways to cover the ■ DecisionTools® Suite software by Palisade
topics. Corporation (described earlier)
■ Excel files for the examples in the chapters
■ For a one-semester required course, with no (usually two versions of each—a template, or
statistics prerequisite (or where MBA students data-only version, and a finished version)
have forgotten whatever statistics they learned
■ Data files required for the problems and cases
years ago): If data analysis is the primary focus
of the course, then Chapters 2–5, 7–11, and ■ Excel Tutorial.xlsx, which contains a useful
possibly the online Chapter 17 (all statistics tutorial for getting up to speed in Excel 2007
and probability topics) should be covered. Students who do not have a new book can purchase
Depending on the time remaining, any of the access to the textbook Web site at www.
topics in Chapters 6 (decision making under CengageBrain.com.
uncertainty), 12 (time series analysis), 13–14
(optimization), or 15–16 (simulation) can be
covered in practically any order. Student Solutions
■ For a one-semester required course, with a Student Solutions to many of the odd-numbered prob-
statistics prerequisite: Assuming that students lems (indicated in the text with a colored box on the
know the basic elements of statistics (up problem number) are available in Excel format.
through hypothesis testing, say), the material Students can purchase access to Student Solutions
in Chapters 2–5 and 7–9 can be reviewed files on www.CengageBrain.com. (ISBN-10: 1-111-
quickly, primarily to illustrate how Excel and 52905-1; ISBN-13: 978-1-111-52905-5).
add-ins can be used to do the number
crunching. Then the instructor can choose
among any of the topics in Chapters 6, 10–11, Instructor ancillaries
12, 13–14, or 15–16 (in practically any order)
Adopting instructors can obtain the Instructors’ Reso-
to fill the remainder of the course.
urce CD (IRCD) from your regional Cengage Learning
■ For a two-semester required sequence: Given Sales Representative. The IRCD includes:
the luxury of spreading the topics over two
■ Problem Database.xlsx file (contains informa-
semesters, the entire book can be covered.
The statistics topics in Chapters 2–5 and 7–9 tion about all problems in the book and the
should be covered in order before other correspondence between them and those in the
statistical topics (regression and time series previous edition)
analysis), but the remaining chapters can be ■ Example files for all examples in the book,
covered in practically any order. including annotated versions with addi-
tional explanations and a few extra examples
that extend the examples in the book
Custom publishing ■ Solution files (in Excel format) for all of the
If you want to use only a subset of the text, or add problems and cases in the book and solution
chapters from the authors’ other texts or your own shells (templates) for selected problems in the
materials, you can do so through Cengage Learning modeling chapters
Custom Publishing. Contact your local Cengage ■ PowerPoint® presentation files for all of the
Learning representative for more details. examples in the book

Preface xv

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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
 ■ Test Bank in Word format and now also in We also extend our sincere appreciation to the
ExamView® Testing Software (new to this reviewers who provided feedback on the authors’ pro-
edition). posed changes that resulted in this fourth edition:
The book’s password-protected instructor Web site, Henry F. Ander, Arizona State University
www.cengage.com/decisionsciences/albright, includes James D. Behel, Harding University
the above items (Test Bank in Word format only), as
Dan Brooks, Arizona State University
well as software updates, errata, additional problems
and solutions, and additional resources for both stu- Robert H. Burgess, Georgia Institute of Technology
dents and faculty. The first author also maintains his George Cunningham III, Northwestern State University
own Web site at www.kelley.iu.edu/albrightbooks. Rex Cutshall, Indiana University
Robert M. Escudero, Pepperdine University
Acknowledgments Theodore S. Glickman, George Washington University
The authors would like to thank several people who John Gray, The Ohio State University
helped make this book a reality. First, the authors are Joe Hahn, Pepperdine University
indebted to Peter Kolesar, Mark Broadie, Lawrence Max Peter Hoefer, Pace University
Lapin, and William Whisler for contributing some of
Tim James, Arizona State University
the excellent case studies that appear throughout the
book. Teresa Jostes, Capital University
There are more people who helped to produce Jeffrey Keisler, University of Massachusetts – Boston
this book than we can list here. However, there are a David Kelton, University of Cincinnati
few special people whom we were happy (and lucky)
Shreevardhan Lele, University of Maryland
to have on our team. First, we would like to thank our
editor Charles McCormick. Charles stepped into this Ray Nelson, Brigham Young University
project after two editions had already been published, William Pearce, Geneva College
but the transition has been smooth and rewarding. Thomas R. Sexton, Stony Brook University
We appreciate his tireless efforts to make the book a
Malcolm T. Whitehead, Northwestern State University
continued success.
We are also grateful to many of the professionals Laura A. Wilson-Gentry, University of Baltimore
who worked behind the scenes to make this book a Jay Zagorsky, Boston University
success: Adam Marsh, Marketing Manager; Laura
S. Christian Albright
Ansara, Senior Developmental Editor; Nora Heink,
Editorial Assistant; Tim Bailey, Senior Content Project Wayne L. Winston
Manager; Stacy Shirley, Senior Art Director; and
Christopher J. Zappe
Gunjan Chandola, Senior Project Manager at MPS
Limited. May 2010

xvi Preface

Copyright 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
 CHAPTER

1 Introduction to Data Analysis and

Decision Making

George Doyle/Jupiter Images

HOTTEST NEW JOBS: STATISTICS AND
MATHEMATICS

M uch of this book, as the title implies, is about data analysis.The term
data analysis has long been synonymous with the term statistics, but
in today’s world, with massive amounts of data available in business and
many other fields such as health and science, data analysis goes beyond the
more narrowly focused area of traditional statistics. But regardless of what
we call it, data analysis is currently a hot topic and promises to get even
hotter in the future.The data analysis skills you learn here, and possibly in
follow-up quantitative courses, might just land you a very interesting and
lucrative job.
This is exactly the message in a recent New York Times article,“For
Today’s Graduate, Just One Word: Statistics,” by Steve Lohr. (A similar article,
“Math Will Rock Your World,” by Stephen Baker, was the cover story for

Copyright 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
 BusinessWeek. Both articles are available online by searching for their titles.) The statistics
article begins by chronicling a Harvard anthropology and archaeology graduate, Carrie
Grimes, who began her career by mapping the locations of Mayan artifacts in places like
Honduras. As she states,“People think of field archaeology as Indiana Jones, but much of
what you really do is data analysis.” Since then, Grimes has leveraged her data analysis
skills to get a job with Google, where she and many other people with a quantitative
background are analyzing huge amounts of data to improve the company’s search engine.
As the chief economist at Google, Hal Varian, states,“I keep saying that the sexy job in
the next 10 years will be statisticians.And I’m not kidding.” The salaries for statisticians
with doctoral degrees currently start at $125,000, and they will probably continue to
increase. (The math article indicates that mathematicians are also in great demand.)
Why is this trend occurring? The reason is the explosion of digital data—data
from sensor signals, surveillance tapes,Web clicks, bar scans, public records, financial
transactions, and more. In years past, statisticians typically analyzed relatively small
data sets, such as opinion polls with about 1000 responses.Today’s massive data
sets require new statistical methods, new computer software, and most importantly
for you, more young people trained in these methods and the corresponding
software. Several particular areas mentioned in the articles include (1) improving
Internet search and online advertising, (2) unraveling gene sequencing information
for cancer research, (3) analyzing sensor and location data for optimal handling of
food shipments, and (4) the recent Netflix contest for improving the company’s
recommendation system.
The statistics article mentions three specific organizations in need of data analysts—
and lots of them.The first is government, where there is an increasing need to sift through
mounds of data as a first step toward dealing with long-term economic needs and key policy
priorities.The second is IBM, which created a Business Analytics and Optimization Services
group in April 2009.This group will use the more than 200 mathematicians, statisticians,
and data analysts already employed by the company, but IBM intends to retrain or hire
4000 more analysts to meet its needs.The third is Google, which needs more data analysts
to improve its search engine.You may think that today’s search engines are unbelievably
efficient, but Google knows they can be improved.As Ms. Grimes states,“Even an improve-
ment of a percent or two can be huge, when you do things over the millions and billions
of times we do things at Google.”
Of course, these three organizations are not the only organizations that need to
hire more skilled people to perform data analysis and other analytical procedures. It is a
need faced by all large organizations.Various recent technologies, the most prominent by
far being the Web, have given organizations the ability to gather massive amounts of data
easily. Now they need people to make sense of it all and use it to their competitive
advantage. ■

1.1 INTRODUCTION
We are living in the age of technology. This has two important implications for everyone
entering the business world. First, technology has made it possible to collect huge amounts
of data. Retailers collect point-of-sale data on products and customers every time a trans-
action occurs; credit agencies have all sorts of data on people who have or would like
to obtain credit; investment companies have a limitless supply of data on the historical
patterns of stocks, bonds, and other securities; and government agencies have data on
economic trends, the environment, social welfare, consumer product safety, and virtually

2 Chapter 1 Introduction to Data Analysis and Decision Making

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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
 everything else imaginable. It has become relatively easy to collect the data. As a result,
data are plentiful. However, as many organizations are now beginning to discover, it is
quite a challenge to analyze and make sense of all the data they have collected.
A second important implication of technology is that it has given many more people
the power and responsibility to analyze data and make decisions on the basis of quantita-
tive analysis. People entering the business world can no longer pass all of the quantitative
analysis to the “quant jocks,” the technical specialists who have traditionally done the
number crunching. The vast majority of employees now have a desktop or laptop computer
at their disposal, access to relevant data, and training in easy-to-use software, particularly
spreadsheet and database software. For these employees, statistics and other quantitative
methods are no longer forgotten topics they once learned in college. Quantitative analysis
is now an integral part of their daily jobs.
A large amount of data already exists, and it will only increase in the future. Many
companies already complain of swimming in a sea of data. However, enlightened compa-
nies are seeing this expansion as a source of competitive advantage. By using quantitative
methods to uncover the information in the data and then acting on this information—again
guided by quantitative analysis—they are able to gain advantages that their less enlight-
ened competitors are not able to gain. Several pertinent examples of this follow.
■ Direct marketers analyze enormous customer databases to see which customers are
likely to respond to various products and types of promotions. Marketers can then
target different classes of customers in different ways to maximize profits—and give
their customers what they want.
■ Hotels and airlines also analyze enormous customer databases to see what their
customers want and are willing to pay for. By doing this, they have been able to
devise very clever pricing strategies, where different customers pay different prices
for the same accommodations. For example, a business traveler typically makes a
plane reservation closer to the time of travel than a vacationer. The airlines know this.
Therefore, they reserve seats for these business travelers and charge them a higher
price for the same seats. The airlines profit from clever pricing strategies, and the
customers are happy.
■ Financial planning services have a virtually unlimited supply of data about security
prices, and they have customers with widely differing preferences for various
types of investments. Trying to find a match of investments to customers is a very
challenging problem. However, customers can easily take their business elsewhere
if good decisions are not made on their behalf. Therefore, financial planners are
under extreme competitive pressure to analyze masses of data so that they can make
informed decisions for their customers.1
■ We all know about the pressures U.S. manufacturing companies have faced from
foreign competition in the past couple of decades. The automobile companies,
for example, have had to change the way they produce and market automobiles
to stay in business. They have had to improve quality and cut costs by orders of
magnitude. Although the struggle continues, much of the success they have had
can be attributed to data analysis and wise decision making. Starting on the shop
floor and moving up through the organization, these companies now measure
almost everything, analyze these measurements, and then act on the results of their
analysis.

1For a great overview of how quantitative techniques have been used in the financial world, read the book The
Quants, by Scott Patterson (Random House, 2010). It describes how quantitative models made millions for a lot
of bright young analysts, but it also describes the dangers of relying totally on quantitative models, at least in the
complex and global world of finance.

1.1 Introduction 3

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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
 We talk about companies analyzing data and making decisions. However, companies don’t
really do this; people do it. And who will these people be in the future? They will be you! We
know from experience that students in all areas of business, at both the undergraduate and
graduate level, will soon be required to describe large complex data sets, run regression
analyses, make quantitative forecasts, create optimization models, and run simulations. You
are the person who will soon be analyzing data and making important decisions to help your
company gain a competitive advantage. And if you are not willing or able to do so, there will
be plenty of other technically trained people who will be more than happy to replace you.
Our goal in this book is to teach you how to use a variety of quantitative methods to
analyze data and make decisions. We will do so in a very hands-on way. We will discuss
a number of quantitative methods and illustrate their use in a large variety of realistic
business situations. As you will see, this book includes many examples from finance,
marketing, operations, accounting, and other areas of business. To analyze these examples,
we will take advantage of the Microsoft Excel spreadsheet software, together with a number
of powerful Excel add-ins. In each example we will provide step-by-step details of the
method and its implementation in Excel.
This is not a “theory” book. It is also not a book where you can lean comfortably back
in your chair, prop your legs up on a table, and read about how other people use quantita-
tive methods. It is a “get your hands dirty” book, where you will learn best by actively
following the examples throughout the book at your own PC. In short, you will learn by
doing. By the time you have finished, you will have acquired some very useful skills for
today’s business world.

1.2 AN OVERVIEW OF THE BOOK

This book is packed with quantitative methods and examples, probably more than can
be covered in any single course. Therefore, we purposely intend to keep this introductory
chapter brief so that you can get on with the analysis. Nevertheless, it is useful to
introduce the methods you will be learning and the tools you will be using. In this section
we provide an overview of the methods covered in this book and the software that is used
to implement them. Then in the next section we present a brief discussion of models and
the modeling process. Our primary purpose at this point is to stimulate your interest in
what is to follow.

1.2.1 The Methods

This book is rather unique in that it combines topics from two separate fields: statistics
and management science. In a nutshell, statistics is the study of data analysis, whereas
management science is the study of model building, optimization, and decision making. In
the academic arena these two fields have traditionally been separated, sometimes widely.
Indeed, they are often housed in separate academic departments. However, from a user’s
standpoint it makes little sense to separate them. Both are useful in accomplishing what the
title of this book promises: data analysis and decision making.
Therefore, we do not distinguish between the statistics and the management science
parts of this book. Instead, we view the entire book as a collection of useful quantitative
methods that can be used to analyze data and help make business decisions. In addition, our
choice of software helps to integrate the various topics. By using a single package, Excel,
together with a number of add-ins, you will see that the methods of statistics and manage-
ment science are similar in many important respects. Most importantly, their combination
gives you the power and flexibility to solve a wide range of business problems.

4 Chapter 1 Introduction to Data Analysis and Decision Making

Copyright 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
 Three important themes run through this book. Two of them are in the title: data analysis
and decision making. The third is dealing with uncertainty.2 Each of these themes has
subthemes. Data analysis includes data description, data inference, and the search for rela-
tionships in data. Decision making includes optimization techniques for problems with no
uncertainty, decision analysis for problems with uncertainty, and structured sensitivity
analysis. Dealing with uncertainty includes measuring uncertainty and modeling uncertainty
explicitly. There are obvious overlaps between these themes and subthemes. When you make
inferences from data and search for relationships in data, you must deal with uncertainty.
When you use decision trees to help make decisions, you must deal with uncertainty. When
you use simulation models to help make decisions, you must deal with uncertainty, and then
you often make inferences from the simulated data.
Figure 1.1 shows where you will find these themes and subthemes in the remaining
chapters of this book. In the next few paragraphs we discuss the book’s contents in more
detail.

Themes Subthemes Chapters Where Emphasized

Figure 1.1
Themes and 2, 3, 10, 12
Subthemes
7−9, 11

3, 10−12

13, 14

6, 13−16

4−12, 15−16

4−6, 10−12, 15−16

We begin in Chapters 2 and 3 by illustrating a number of ways to summarize the infor-

mation in data sets. These include graphical and tabular summaries, as well as numerical
summary measures such as means, medians, and standard deviations. The material in these
two chapters is elementary from a mathematical point of view, but it is extremely important.
As we stated at the beginning of this chapter, organizations are now able to collect huge
amounts of raw data, but what does it all mean? Although there are very sophisticated
methods for analyzing data sets, some of which we cover in later chapters, the “simple”
methods in Chapters 2 and 3 are crucial for obtaining an initial understanding of the data.
Fortunately, Excel and available add-ins now make what was once a very tedious task quite
easy. For example, Excel’s pivot table tool for “slicing and dicing” data is an analyst’s

2 The fact that the uncertainty theme did not find its way into the title of this book does not detract from its impor-
tance. We just wanted to keep the title reasonably short!

1.2 An Overview of the Book 5

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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
Another random document with
no related content on Scribd:
"I'm going to shut you up, if you don't do it yourself," Vicenzo
promised. He secured Ranjit beside Joachim and then started tying
Henry's wrists to the pipe.
"Be careful what you do to the sweeper, Vicenzo," Henry begged.
"Ranjit was telling me how dangerous it is. If anything causes the
velocity to drop, we'll fall on Saturn."
"You think I'm stupid? That's the way with anything in an orbit. The
closer to a planet, the faster you've got to go. Bring the girl, Aziz."

CHAPTER III
Morna struggled and kicked the spacesuits while Vicenzo tied her
next to Henry. Aziz said, "You think there's really a chance of us
fallin'? I'd hate to plop in all that methane."
"No," said Vicenzo. "Old man, where's the control room? We're
moving this whole station with the two ships clamped on."
"Hadn't we oughta put some water in our tanks, in case we gotta
scram quick?" Aziz asked. "They're about empty."
Ranjit chuckled. "You'll have to wait four hours to tank up. I just got
the heater going a while ago. There's an SG ship due in soon. You
better give up."
"You're lying in strings!" Vicenzo said. "You must have fuel for the
sweeper's motors. Where's the control room?"
"I ain't saying."
"He'll tell," Aziz gloated, raising his knife.
"We can find it quicker," Vicenzo said and turned away. Aziz followed
him through the door.
"What?" Joachim muttered. "Where? The gangsters!" He stared
around the compartment and cried, "There is one! Henry is a
gangster! You are also, Ranjit! I have long suspected that the
destruction of the Rings of Saturn could only be the work of
gangsters! No one—Morna! Are you injured?"
"No," Morna blubbered. "Stay away from me, Henry!" One of her
wings of black and yellow hair had fallen over her face.
"Sorry," Henry said, blushing and moving his legs. "I didn't notice
which way I was drifting."
Joachim said, "Where are the other gangsters? Have they gone to
steal my ship? It is rented! The SPRS would never recover if we had
to pay for the ship!"
"Let's figure some way to get loose," Ranjit suggested. "Those
fellows won't find the control room out there. No motors, anyhow, but
all they've got to do is wait till enough fuel melts and use their ship to
move the sweeper. Think how that'd look on my record."
"You said an SG ship would be here in a few minutes," Morna
objected.
"I was just telling them that. There's no ship due for two days."
"You actually told a falsehood?" Morna gasped.
Ranjit said, "When you get to be my age, you'll find you can do lots
of things they didn't teach in school. How'd you clinch up with two
fellows like them, Henry? They're space happy, both of them. Didn't
you have no education?"
"Not much," Henry said. "Me and my parents were shipwrecked in
the Asteroids when I was only ten. Mother tried to teach me Honesty,
and Morality, and all the rest, but it didn't take very well. We were
there eight years before we were picked up. They put me in school,
then, with a bunch of kids. I didn't like it, so I skipped and worked in
the mines on Titan. Then I got mixed up with Vicenzo and Aziz. This
is the first job I've pulled with them."
"At least you changed your mind and tried to stop it," Ranjit said,
tugging at his bonds.
"The snips!" Henry exclaimed. "There's a pair of snips in my side
pocket. Maybe you can reach them, Ranjit, if I—No, they're on the
wrong side. Morna, will you try to get them if I can put my, uh, pocket
next to your hand?"
"Stay away from me," Morna said.
"You've got to." Henry braced his feet against the deck and pushed,
bending his knees as his weightless body flew into the air. He
twisted, and the side of his left leg struck the ceiling. Shoving with his
toe, he forced his contorted body back toward the pipe. "There!" he
grunted. "Can you reach them?"
Morna said, "I don't know. My wrists are tied so tight." Her hand
touched Henry's hip and sent him swinging in the opposite direction.
His legs stopped across Ranjit's chest. The old man lowered his
head and butted Henry back toward Morna.
"Oh, get out of my face!" Morna complained.

Henry lay against the ceiling with his legs bent, his back bowed, and
his left elbow pressed against his lower ribs. Morna's hand fluttered
at his pocket. "I've got—No, it's a screwdriver," she said. "Now, I've
got the snips!"
"Don't drop them," Henry pleaded. He thrust his feet back to the
deck. "Try to cut the line around my wrist. Ow! That's my hand!"
"Be brave!" Morna jeered nervously. "Now it's under the cord. I cut
one!"
Henry twisted his wrist in the loosened cord and pulled his left hand
free. He said, "Thanks. Give me the snips."
Morna said, "Promise to cut me down first. I don't want to be tied
with you loose."
Henry snatched the snips from her and cut the line binding his right
hand. Morna said, "Gangster trick."
"Hurry up, Henry," Ranjit said. "Those fellows will be coming back."
Henry released Ranjit and Joachim. "Cut me loose!" Morna yelled.
"Not so loud," Henry said, freeing her. "Go up in the control room,
Ranjit. You told me you still had flywheel steering. If it won't hurt you,
you can make them think you're decelerating. It'll confuse them, at
least."
"Yeah," Ranjit chuckled, "that's a bright idea. I was about to think of it
myself."
Henry said, "Morna, you go with Ranjit. Joachim, you stay with me,
and we'll waylay them. We'll find something for weapons."
Ranjit pulled the sandwich bunk down on its rods, crouched on the
bunk, and pushed open the overhead hatch. Joachim said, "I do not
intend to engage in a brawl with gangsters. Come, Morna, let us take
our chances in our own ship. We—"
"I hear them out there!" Henry said.
Joachim squeaked, bounded to the bunk, and sprang through the
hatch. "Bet he bumped his head," Ranjit hoped. "Up you go, Morna.
Strap yourself to a couch."
Morna climbed on the bunk and through the hatch. Ranjit followed,
"It's a trick," Morna said. "He'll be alone with his gangster friends."
"There's a set of spanner wrenches right there in the net," Ranjit
said, pointing. "There's a roll of wire over yonder." He closed the
hatch.

Henry raised the bunk back to the ceiling. He fumbled in the

accumulation behind the netting, throwing out a case of canned
beans, a one-volume encyclopedia, a bundle of papers, and a
broken clock. He found the wrenches and selected a large one half a
meter long. He searched again, pulled out a coil of electric cable,
and stuffed it under his belt. Jumping across the compartment, he
clung to the net above the door.
Vicenzo and Aziz had not turned off their loudspeakers. "Nothing but
tanks and ladderchutes," Vicenzo was saying. "There has to be a
control room somewhere."
Aziz said, "Maybe there's another door behind all the junk in there. I'll
get it outta the old man."
As Vicenzo's spacesuited figure appeared below in the doorway,
Henry swung his arm. The spanner clanged against the back of
Vicenzo's helmet. The man tumbled across the compartment into the
netting. The rocket launcher whirled from his hands, struck the
ceiling, and bounced to the deck.
Slashing upward with his knife, Aziz twisted into the compartment.
Henry met the thrust with the spanner and knocked the knife from
the squat man's hand. Aziz bellowed, "Ya greasy cube! I'll squash
ya!"
Aziz swung his gauntleted fist. Henry struck Aziz across the arm with
the spanner, denting the metal of the spacesuit. Vicenzo jerked his
head from a box and roared, "Get him! He busted my skull!"
Henry jumped from the net to the corner beside the desk. The two
men slowly stalked him. Vicenzo had his knife, and Aziz
experimentally flexed his metal-sheathed hands.
"We're going to fix you, Henry," Vicenzo promised. "You're just a little
smarter than you should be."
"He ain't smart atall," Aziz growled. "What for did ya want to turn
cube, Henry? I told ya yer name'd be in ever' yap, if ya stuck with us.
Now, nobody'll know ya when I get done."
Henry debated with himself, trying to decide if the situation justified a
falsehood. He said, "Get away while you can! Ranjit says he'll crash
this sweeper before he'll let you steal it! He's in the control room
now."
Aziz stopped and glanced around. "Ya think he will?" he asked.
"No," Vicenzo said. He circled to Henry's left.
Henry raised the spanner and kept his eyes on Vicenzo's knife. Aziz
moved to Henry's right. The deck seemed to tilt. Henry clutched a
leg of the desk to keep from falling.
Vicenzo and Aziz, waving their arms, leaned at an increasingly acute
angle. Their boots broke from the magnetic deck. They fell slowly,
accelerating at about two meters per second, and dropped into the
netted wall which had become the floor.
Henry dangled below what was now the ceiling. Objects fell from the
net beside him. Tools, machine parts, books, and canned food slowly
showered down on Vicenzo and Aziz, who thrashed and swore in the
growing junk heap.
"We're deceleratin'!" Aziz yelled. "That old man really is gonna kill us!
We'll crash on Saturn!"
"That hatch over the bunk!" Vicenzo said as he tried to stand. "That's
where they went! The control room!" A box of cans emptied over his
helmet.
"We're fallin'!" Aziz yelled. "It's forcin' us to the front of the station!
Let's get out!" He stumbled through the litter toward the airvalve
which was now up one wall.
Vicenzo said, "Look out that window! The stars are streaking! He's
just spinning the sweeper! It's centrifugal force!"
"It's deceleration!" Aziz insisted, jumping at the airvalve. The
dismantled teletype slipped from its clamps and fell on the man's
head. He slid back down the wall.
Beside Henry, the net broke loose. A slow, miscellaneous rain,
including two sandwich bunks and part of a spaceship landing leg,
fell on Vicenzo and Aziz. Henry felt the desk slipping. He dropped on
his feet in the clutter. The desk clattered down beside him.
Stumbling and staggering, Henry reached Vicenzo, who struggled
under a bunk, a plastic packing case, part of a pump, and a bundle
of tubing. Henry took the electric cable from his belt and formed a
loop. He drew the loop tight around Vicenzo's arms. Vicenzo pushed
the case off his legs and tried to stand. Henry flipped the cable
around and around Vicenzo and bound his arms to his sides.
"Get him, Aziz!" Vicenzo called in rage. Henry tied Vicenzo's feet
together and cut off the remaining cable with his snips.
Aziz had grasped the frame of the airvalve and was trying to slide
the door open. Henry selected a battered oxygen tank from the
heap, lifted it in both hands, and hurled it. The missile caught Aziz
across the back of his spacesuit. He fell into the jumbled equipment
on the floor. Quickly, Henry repeated his looping and tying
operations. Then he sat on an empty trunk and tried to slow his rapid
breathing.
"Le'me go, Henry!" Aziz demanded, somewhat dazed. "We're fallin'!"
Henry opened the switch on the spacesuit's loudspeaker.
The bunk in the wall that had been the ceiling unfolded, and Ranjit's
wrinkled face peeped through the exposed hatch. "What a mess!" he
chuckled. "Things wasn't fastened down like they should of been. Of
course, it never needed to be before. I never knowed—"
"How are you standing the gravity?" Henry panted.
"It's just two-tenths G," Ranjit said. "Hang on, and I'll take us back to
no weight. This old sweeper's spinning like a top."
Ranjit's head withdrew. Henry tried to find a handhold in the pile of
material. His feet left the tangle. Accompanied by assorted items,
including the bound figures of Vicenzo and Aziz, he floated in the air.
Twisting, Henry placed his feet on the magnetized deck. Objects
containing steel settled around him. He pulled Vicenzo and Aziz
down, and, as Vicenzo began to curse in ancient terms, silenced his
loudspeaker also.
Joachim appeared clutching his stomach. "I shall wait in my ship for
the fuel," he gagged, dodging a floating chest, "away from this
criminal madhouse!"
Morna and Ranjit dropped into the compartment. Ranjit kicked aside
a crate and said, "Good, Henry. I guess you saved our lives, or mine
anyhow. Those fellows would have passed me beyond if they had
accelerated the sweeper, and you sure kept them from stealing it."
"He did all right for a gangster," said Morna on her way to the door.
"Wait, Morna, please," said Henry. He blushed a bright red. "Won't,
won't I ever see you again?"
"Why would I want to see a gangster again?"
Ranjit said, "He's not much of a gangster, and he changed his mind.
Of course, those two will tell about his part in this, and Joachim's
sure to report it. SG will ship you to Earth, Henry, for Revision, but
that won't be too bad, just a sort of school, and you're good as
Revised already, the way you acted."
Henry looked at Morna. "I'd like to go to Earth," he said.
"Tell you what," Ranjit said. "It'll be three hours before there's enough
fuel for Joachim's ship. Why don't you two go up to the dome and
see the sights, and forget all this? We'll be passing into the Shadow
in about ten minutes, and you'll see one of the prettiest things there
is, Saturn from the dark side. The atmosphere looks like a gold
rainbow above the Rings."
Morna stared at the deck. The corners of her mouth curved upward.
She said, "I'm sorry I slapped you, Henry."
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