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DATA ANALYSIS
FOR BUSINESS DECISIONS
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DATA ANALYSIS
FOR BUSINESS DECISIONS
A Laboratory Manual
Second Edition
Andres Fortino, PhD
This publication, portions of it, or any accompanying software may not be reproduced in any
way, stored in a retrieval system of any type, or transmitted by any means, media, electronic
display or mechanical display, including, but not limited to, photocopy, recording, Internet
postings, or scanning, without prior permission in writing from the publisher.
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purchaser is to replace the book, based on defective materials or faulty workmanship, but not
based on the operation or functionality of the product.
Dedicated to Kathleen
for her patience and support
Contents
Preface xiii
Chapter 4 Histograms 31
Analysis Case 4.1 – Histograms 32
Frequency Distributions 32
Analysis Case 4.2 – Additional Case Using Titanic Data 35
Index 163
Preface
This laboratory manual was written for business analysts who
wish to increase their skills in conducting statistical analysis of data
sets to support business decision-making. Most of the exercises use
Excel, today’s most common analysis tool. They range from the most
basic descriptive statistical techniques to more advanced techniques,
such as multivariate linear regression and forecasting.
Advanced exercises cover inferential statistics for continuous
variables (t-Test) and categorical variables (Chi-square), as well as A/B
testing. The manual ends with techniques to deal with the analysis of
text data (text data mining) and tools to manage the analysis of large
data sets (Big Data) using Excel. A set of cases is provided to assist
the analyst to improving their data visualization skills.
Acknowledgments
Practical books such as this, that are full of cases, are created by many
years of trying them out on students until you get them right. It’s a
matter of keep changing the exercises and trying things out until they
seem to work, and in the end, they help people learn. I wish to thank
the legion of students who were very patient with me and helped
me perfect these cases. Both my graduate students at the NYU
School of Professional Studies and the many American Management
Association professionals who attended my AMA seminars deserve
my gratitude.
I also wish to thank my colleague, Nicole Morgenstern, for taking
a chance with me at AMA. Thank you, Nicole, for sponsoring this
work and running interference for me. My thanks to my graduate
student, Karen pey-rong Hong, who did a superb job updating all
the exercises to the latest version of Excel. The entire team of editors
and artists at Mercury Learning was terrific and has my gratitude.
A special thanks to Jim Walsh, my editor, who kept asking for more
and more and helped shape an excellent book. In the end, it paid off,
Jim. Finally, to my loving and patient wife, Kathleen, who not only
labored over the manuscript by copyediting, but provided much-
needed advice. You were always right, dear.
Dr. Andres Fortino
June 2020
1
CHAPTER
Size
Name Rows Columns Source Description
(MB)
ORDERS.csv 1.8 8,400 22 Company Office supplies orders
Community.csv 70 376,000 551 US Census 2013 ACS census file
Courses.csv 73 631,139 21 MIT edX 2013 MOOC Courses
BankComplaints.csv 306 753,324 18 US FTC Bank complaints to the
FTC
7. Using the Lab Data set and in the Analysis Case 1.1 folder, find
the file Community.csv (70 MB file with 376,000 records, 551
variables).
8. Note how long it takes to load. Add filters to the top row, and
then filter column D to a “0” value only. Note how long it takes
Excel to execute these commands due to the large number of
rows in the file. (The filter function is found in the Data ribbon.)
Figure 1.1 shows the Community.csv file opened in Excel.
4 r Data Analysis for Business Decisions 2/E
FIGURE 1.1 Exercise to demonstrate that the entire file was loaded and how long
it takes to execute a function when the data file is relatively small.
9. Using the Lab Data set and in the Analysis Case 1.1 folder, find
the file Courses.csv (73 MB file with 631,139 records, 21 vari-
ables). (The data set was made available courtesy of the Har-
vard Dataverse Project.)
10. Note how long it takes to load. Add filters to the top row. Sort
the data by column T. Note how long it takes to perform this
task. Filter column T to a “1” value only.
11. Using the Lab Data set and in the Analysis Case 1.1 folder, find
the file BankComplaints.csv (306 MB file with 753,324 records,
18 variables). The file is very large because one column con-
tains the full text of the complaints, which may run to several
paragraphs each. (The data set was made available courtesy of
the U.S. Government Department of Consumer Affairs.)
FIGURE 1.2 Exercise to demonstrate that the entire file was loaded and how long
it takes to execute a function when the data file is relatively large.
12. Note how long it takes to load. Add filters to the top row. Sort
the data by column D. Note how long it takes to perform this
task. Then, filter column H to a “Wells Fargo” value only (Fig-
ure 1.2).
13. Excel, as a tool, does not always handle large data sets well. We
will work with the large data files by sampling them and analyz-
ing the samples in Chapter 14.
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6 r Data Analysis for Business Decisions 2/E
10. When you feel reasonably sure you have a clean data file, an-
swer the following questions by using Excel:
How many men and how many women were in
the study? Sort by gender and compute a sum for
each group.
Were the tests evenly distributed over the labs?
Sort by lab type and compute subtotals by lab type.
Are the calcium levels for the males above or be-
low the average for the females in the test? Sort
by gender and use the AVG function to average
the CAMMOL columns for each sex.
11. Check your results against the following solutions (Figure 1.3).
Keep cleaning the data until you have found all the errors.
FIGURE 1.3 Analysis results computed after cleaning the data file.
CHAPTER
2
INSTALLING THE ANALYSIS
TOOLPAK
10 r Data Analysis for Business Decisions 2/E
FOOTNOTES:
I.
In our fidelity to the higher truth we need not disown our debt, in
our actual state of culture, in the twilights of experience, to these
rude helpers. They keep alive the memory and the hope of a better
day. When we flout all particular books as initial merely, we truly
express the privilege of spiritual nature, but alas, not the fact and
fortune of this low Massachusetts and Boston, of these humble
Junes and Decembers of mortal life. Our souls are not self-fed, but
do eat and drink of chemical water and wheat. Let us not forget the
genial miraculous force we have known to proceed from a book. We
go musing into the vault of day and night; no constellation shines, no
muse descends, the stars are white points, the roses brick-colored
leaves, and frogs pipe, mice cheep, and wagons creak along the
road. We return to the house and take up Plutarch or Augustine, and
read a few sentences or pages, and lo! the air swims with life,
secrets of magnanimity and grandeur invite us on every hand, life is
made up of them. Such is our debt to a book. Observe moreover that
we ought to credit literature with much more than the bare word it
gives us. I have just been reading poems which now in memory
shine with a certain steady, warm, autumnal light. That is not in their
grammatical construction which they give me. If I analyze the
sentences it eludes me, but is the genius and suggestion of the
whole. Over every true poem lingers a certain wild beauty,
immeasurable; a happiness lightsome and delicious fills the heart
and brain, as they say every man walks environed by his proper
atmosphere, extending to some distance around him. This beautiful
result must be credited to literature also in casting its account.
In looking at the library of the Present Age, we are first struck with
the fact of the immense miscellany. It can hardly be characterized by
any species of book, for every opinion, old and new, every hope and
fear, every whim and folly has an organ. It exhibits a vast carcass of
tradition every year with as much solemnity as a new revelation.
Along with these it vents books that breathe of new morning, that
seem to heave with the life of millions, books for which men and
women peak and pine; books which take the rose out of the cheek of
him that wrote them, and give him to the midnight a sad, solitary,
diseased man; which leave no man where they found him, but make
him better or worse; and which work dubiously on society and seem
to inoculate it with a venom before any healthy result appears.
In order to any complete view of the literature of the present age,
an inquiry should include what it quotes, what it writes and what it
wishes to write. In our present attempt to enumerate some traits of
the recent literature, we shall have somewhat to offer on each of
these topics, but we cannot promise to set in very exact order what
we have to say.
In the first place it has all books. It reprints the wisdom of the
world. How can the age be a bad one which gives me Plato and Paul
and Plutarch, St. Augustine, Spinoza, Chapman, Beaumont and
Fletcher, Donne and Sir Thomas Browne, beside its own riches? Our
presses groan every year with new editions of all the select pieces of
the first of mankind,—meditations, history, classifications, opinions,
epics, lyrics, which the age adopts by quoting them. If we should
designate favorite studies in which the age delights more than in the
rest of this great mass of the permanent literature of the human race,
one or two instances would be conspicuous. First; the prodigious
growth and influence of the genius of Shakspeare, in the last one
hundred and fifty years, is itself a fact of the first importance. It
almost alone has called out the genius of the German nation into an
activity which spreading from the poetic into the scientific, religious
and philosophical domains, has made theirs now at last the
paramount intellectual influence of the world, reacting with great
energy on England and America. And thus, and not by mechanical
diffusion, does an original genius work and spread himself.
The poetry and speculation of the age are marked by a certain
philosophic turn, which discriminates them from the works of earlier
times. The poet is not content to see how “Fair hangs the apple from
the rock,” “What music a sunbeam awoke in the groves,” nor of
Hardiknute, how “Stately steppes he east the way, and stately
steppes he west,” but he now revolves, What is the apple to me?
and what the birds to me? and what is Hardiknute to me? and what
am I? And this is called subjectiveness, as the eye is withdrawn from
the object and fixed on the subject or mind.
We can easily concede that a steadfast tendency of this sort
appears in modern literature. It is the new consciousness of the one
mind, which predominates in criticism. It is the uprise of the soul, and
not the decline. It is founded on that insatiable demand for unity, the
need to recognize one nature in all the variety of objects, which
always characterizes a genius of the first order. Accustomed always
to behold the presence of the universe in every part, the soul will not
condescend to look at any new part as a stranger, but saith,—“I
know all already, and what art thou? Show me thy relations to me, to
all, and I will entertain thee also.”
There is a pernicious ambiguity in the use of the term subjective.
We say, in accordance with the general view I have stated, that the
single soul feels its right to be no longer confounded with numbers,
but itself to sit in judgment on history and literature, and to summon
all facts and parties before its tribunal. And in this sense the age is
subjective.
But, in all ages, and now more, the narrow-minded have no
interest in anything but in its relation to their personality. What will
help them to be delivered from some burden, eased in some
circumstance, flattered or pardoned or enriched; what will help to
marry or to divorce them, to prolong or to sweeten life, is sure of their
interest; and nothing else. Every form under the whole heaven they
behold in this most partial light or darkness of intense selfishness,
until we hate their being. And this habit of intellectual selfishness has
acquired in our day the fine name of subjectiveness.
Nor is the distinction between these two habits to be found in the
circumstance of using the first person singular, or reciting facts and
feelings of personal history. A man may say I, and never refer to
himself as an individual; and a man may recite passages of his life
with no feeling of egotism. Nor need a man have a vicious
subjectiveness because he deals in abstract propositions.
But the criterion which discriminates these two habits in the poet’s
mind is the tendency of his composition; namely, whether it leads us
to nature, or to the person of the writer. The great always introduce
us to facts; small men introduce us always to themselves. The great
man, even whilst he relates a private fact personal to him, is really
leading us away from him to an universal experience. His own
affection is in nature, in what is, and, of course, all his
communication leads outward to it, starting from whatsoever point.
The great never with their own consent become a load on the minds
they instruct. The more they draw us to them, the farther from them
or more independent of them we are, because they have brought us
to the knowledge of somewhat deeper than both them and us. The
great never hinder us; for their activity is coincident with the sun and
moon, with the course of the rivers and of the winds, with the stream
of laborers in the street and with all the activity and well-being of the
race. The great lead us to nature, and in our age to metaphysical
nature, to the invisible awful facts, to moral abstractions, which are
not less nature than is a river or a coal-mine,—nay, they are far more
nature,—but its essence and soul.
But the weak and wicked, led also to analyze, saw nothing in
thought but luxury. Thought for the selfish became selfish. They
invited us to contemplate nature, and showed us an abominable self.
Would you know the genius of the writer? Do not enumerate his
talents or his feats, but ask thyself, What spirit is he of? Do gladness