Statistics for Managers

Using Microsoft Excel

5th Edition

Chapter 11
Analysis of Variance

Statistics for Managers Using Microsoft Excel, 5e 2008 Prentice-Hall, Inc. Chap 11-1
 Learning Objectives
After completing this chapter, you should be able to:
Recognize situations in which to use analysis of variance
(ANOVA)
Understand different analysis of variance designs
Evaluate assumptions of the model
Perform a single-factor ANOVA and interpret the results
Conduct and interpret a Tukey-Kramer post-analysis to
determine which means are different
Analyze two-factor analysis of variance tests
Conduct and interpret a Tukey-Kramer post-analysis procedure
to determine which factors are different
Statistics for Managers Using Microsoft Excel, 5e Chap 11-2
 General ANOVA Analysis
Investigator controls one or more independent variables
Called factors or treatment variables
One factor contains three or more levels or groups or
categories/classifications
Other factors contains two or more levels or groups or
categories/classifications
Experimental design: the plan used to test the hypothesis

Statistics for Managers Using Microsoft Excel, 5e Chap 11-3

 One-Factor ANOVA

Also known as Completely Randomized

Design and One-way ANOVA
Experimental units (subjects) are assigned
randomly to treatments
Subjects are assumed homogeneous
Only one factor or independent variable
With three or more treatment levels
Analyzed by one-factor analysis of variance

Statistics for Managers Using Microsoft Excel, 5e Chap 11-4

 One-Factor Analysis of Variance

Evaluates the difference among the means of three or more

groups
Examples: Accident rates for 1st, 2nd, and 3rd shift
Expected mileage for five brands of tires

Assumptions
Populations are normally distributed
(test with Box plot or Normal Probability Plot)
Populations have equal variances
(use Levenes Test for Homogeneity of Variance)
Samples are randomly and independently drawn

Statistics for Managers Using Microsoft Excel, 5e Chap 11-5

 Why Analysis of Variance?

We could compare the means in pairs using a t test for

difference of means
Each t test contains Type 1 error
The total Type 1 error with k pairs of means is 1- (1 - ) k
If there are 5 means and you use = .05
Must perform 10 comparisons
Type I error is 1 (.95) 10 = .40
40% of the time you will reject the null hypothesis of equal
means in favor of the alternative even when the null is true!

Statistics for Managers Using Microsoft Excel, 5e Chap 11-6

 Hypotheses: One-Factor ANOVA

H0 : 1 2 3 c
All population means are equal
i.e., no treatment effect (no variation in means among groups)

H1 : Not all of the population means are the same
At least one population mean is different
i.e., there is a treatment (groups) effect
Does not mean that all population means are different (at
least one of the means is different from the others)

Statistics for Managers Using Microsoft Excel, 5e Chap 11-7

 Hypotheses: One-Factor
ANOVA
H0 : 1 2 3 c
H1 : Not all j are the same

All Means are the same:

The Null Hypothesis is True
(No Group Effect)

1 2 3
Statistics for Managers Using Microsoft Excel, 5e Chap 11-8
 Hypotheses: One-Factor
ANOVA

H 0 : 1 2 3 c At least one mean is different:

The Null Hypothesis is NOT true
H1 : Not all j are the same
(Treatment Effect is present)

or

1 2 3 1 2 3
Statistics for Managers Using Microsoft Excel, 5e Chap 11-9
 One-Factor ANOVA Table
Source of df SS MS P-value F-Ratio
Variation (Variance)
Between c-1 SSA MSA P(X=F) MSA
F
Groups MSW
Within n-c SSW MSW
Groups
Total n-1 SST =
SSA+SSW

c = number of groups
n = sum of the sample sizes from all groups
df = degrees of freedom

Statistics for Managers Using Microsoft Excel, 5e Chap 11-10

 One-Factor ANOVA
Test Statistic
H0: 1= 2 = = c
H1: At least two population means are different
Test statistic
MSA
F
MSW
MSA is mean squares among variances
MSW is mean squares within variances
Degrees of freedom
df1 = c 1 (c = number of groups)
df2 = n c (n = sum of all sample sizes)
Statistics for Managers Using Microsoft Excel, 5e Chap 11-11
 One-Factor ANOVA
Test Statistic
The F statistic is the ratio of the among variance to the
within variance
The ratio must always be positive
df1 = c -1 will typically be small
df2 = n - c will typically be large

Decision Rule:
Reject H0 if F > FU, = .05
otherwise do not reject H0
0 Do not Reject H0
reject H0
FU

Statistics for Managers Using Microsoft Excel, 5e Chap 11-12

 One-Factor ANOVA
F Test Example
You want to see if three different Club 1 Club 2 Club 3
golf clubs yield different 254 234 200
distances. You randomly select 263 218 222
five measurements from trials on 241 235 197
an automated driving machine 237 227 206
for each club. At the .05 251 216 204
significance level, is there a
difference in mean driving
distance?

Statistics for Managers Using Microsoft Excel, 5e Chap 11-13

 One-Way ANOVA
Example
Distance
270
Club 1 Club 2 Club 3 260
254 234 200 X 1
250
263 218 222
241 235 197 240

237 227 206 230
X2
251 216 204 220
X
210
X3
x1 249.2 x 2 226.0 x 3 205.8
200
x 227.0
190 1 2 3
Club
Statistics for Managers Using Microsoft Excel, 5e Chap 11-14
 ANOVA -- Single Factor:
Excel Output
EXCEL: Tools | Data Analysis | ANOVA: Single Factor
SUMMARY
Groups Count Sum Average Variance
Club 1 5 1246 249.2 108.2
Club 2 5 1130 226 77.5
Club 3 5 1029 205.8 94.2
ANOVA
Source of
SS df MS F P-value F crit
Variation
Between
4716.4 2 2358.2 25.275 4.99E-05 3.89
Groups
Within
1119.6 12 93.3
Groups
Total 5836.0 14

Statistics for Managers Using Microsoft Excel, 5e Chap 11-15

 One-Factor ANOVA Example
Solution
H0: 1 = 2 = 3
H1: i not all equal

= .05
p-value: 4.99E-05
Decision:
Reject H0 at = 0.05 There is evidence that
Conclusion: at least one i differs
from the rest

Statistics for Managers Using Microsoft Excel, 5e Chap 11-16

 The Tukey-Kramer Procedure
Tells which population means are significantly different
e.g.: 1 = 2 3
Done after rejection of equal means in ANOVA
Allows pair-wise comparisons
Compare absolute mean differences with critical
range

1= 2 3 x

Statistics for Managers Using Microsoft Excel, 5e Chap 11-17

 Tukey-Kramer Critical Range

MSW 1 1
Critical Range QU
2 n j n j'

where:
QU = Value from Studentized Range Distribution with c
and n - c degrees of freedom for the desired level
of (see appendix E.9 table)
MSW = Mean Square Within
nj and nj = Sample sizes from groups j and j

Statistics for Managers Using Microsoft Excel, 5e Chap 11-18

 The Tukey-Kramer Procedure:
Example
1. PhStat computes the absolute
Club 1 Club 2 Club 3 mean differences:
254 234 200
x1 x 2 249.2 226.0 23.2
263 218 222
241 235 197 x1 x 3 249.2 205.8 43.4
237 227 206
251 216 204 x 2 x 3 226.0 205.8 20.2

2. You find a QU value from the table in appendix E.9 with

c = 3 (across the table) and n c = 15 3 = 12 degrees of freedom
(down the table) for the desired level of ( = .05 used here):

QU 3.77

Statistics for Managers Using Microsoft Excel, 5e Chap 11-19

 The Tukey-Kramer Procedure:
Example (continued)
3. PhStat computes the Critical Range:
MSW 1 1 93.3 1 1
Critical Range QU 3.77 16.285

2 n j n j' 2 5 5

4. Compare:
5. All of the absolute mean differences x x 23.2
1 2
are greater than critical range.
Therefore there is a significant x1 x 3 43.4
difference between each pair of
means at 5% level of significance. x 2 x 3 20.2
PhStat does all the calculations for you
but you must input the Q value
Statistics for Managers Using Microsoft Excel, 5e Chap 11-20
 Tukey-Kramer in PHStat

Statistics for Managers Using Microsoft Excel, 5e Chap 11-21

 ANOVA Assumptions
Levenes Test
Tests the assumption that the variances of each
group are equal.
First, define the null and alternative hypotheses:
H0: 21 = 22 = =2c
H1: Not all 2j are equal
Second, compute the absolute value of the difference
between each value and the median of each group.
Third, perform a one-way ANOVA on these absolute
differences.

Statistics for Managers Using Microsoft Excel, 5e Chap 11-22

 Two-Factor ANOVA

Examines the effect of

Two factors of interest on the dependent
variable
e.g., Percent carbonation and line speed on soft
drink bottling process
Interaction between the different levels of these
two factors
e.g., Does the effect of one particular carbonation
level depend on which level the line speed is set?

Statistics for Managers Using Microsoft Excel, 5e Chap 11-23

 Two-Factor ANOVA

Assumptions

Populations are normally distributed

Populations have equal variances
Independent random samples are selected

Statistics for Managers Using Microsoft Excel, 5e Chap 11-24

 Two-Factor ANOVA
Sources of Variation
Two Factors of interest: A and B
r = number of levels of factor A
c = number of levels of factor B
n/ = number of replications for each cell
n = total number of observations in all cells
(n = rcn/)
Xijk = value of the kth observation of level i
of factor A and level j of factor B

Statistics for Managers Using Microsoft Excel, 5e Chap 11-25

 Two-Factor ANOVA Summary Table
With Replication
Source of Degrees of Sum of Mean F
p-value
Variation Freedom Squares Squares Statistic

Sample
MSA = MSA/ f (FA)
Factor A r1 SSA
SSA/(r 1) MSE
(Row)
Columns MSB = MSB/
c1 SSB f (FB)
Factor B SSB/(c 1) MSE

MSAB/
Interaction MSAB = MSE f (FA&B)
(r 1)(c 1) SSAB
(AB) SSAB/ [(r 1)(c 1)]

Within MSE =
rc n 1) SSE
Error SSE/[rc n 1)]
Total rc n 1 SST

Statistics for Managers Using Microsoft Excel, 5e Chap 11-26

 Two-Factor ANOVA
With Replication
As production manager, Box Machine1 Machine2 Machine3
you want to see if 3 filling 1 25.40 23.40 20.00
machines have different 26.40 24.40 21.00
mean filling times when 2 26.31 21.80 22.20
used with 5 types of boxes. 25.90 23.00 22.00
At the .05 level, is there a 3 24.10 23.50 19.75
difference in machines, in 24.40 22.40 19.00
boxes? Is there an
4 23.74 22.75 20.60
interaction?
25.40 23.40 20.00
5 25.10 21.60 20.40
26.20 22.90 21.90
Statistics for Managers Using Microsoft Excel, 5e Chap 11-28
 Summary Table

Source of Degrees of Sum of Mean F P-Value

Variation Freedom Squares Square
Sample
5-1=4 7.4714 1.8678 3.6868 .0277
(Boxes)
Columns
3-1=2 106.298 53.149 104.908 1.52E-09
(Machines)
Interaction (5-1)(3-1) = 8 9.7032 1.2129 2.3941 .0690

Within 53(2-1)=15 7.5994 .5066

(Error)
Total 352 -1 = 29 131.0720
Statistics for Managers Using Microsoft Excel, 5e Chap 11-29
 The Tukey-Kramer Procedure:
With Replication Factor A
MSW
critical range Qr ,rc ( n ' 1)
cn '
1. No Macro - compute by formula only
2. MSW (Within) from ANOVA Printout
3. Q from Table E.9 in the Book page 860
alpha = .05 or .01
r is the number of levels of factor A (across table)
rc(n-1) (down the table)
c is the number of levels of factor B
n is the number of replications
Statistics for Managers Using Microsoft Excel, 5e Chap 11-30
 The Tukey-Kramer Procedure:
With Replication Factor B
MSW
critical range Qc ,rc ( n ' 1)
rn'
1. No Macro compute by formula only
2. MSW (Within) from ANOVA Printout
3. Q from Table E.9 in the Book page 860
alpha = .05 or .01
c is the number of levels of factor B (across
table)
rc(n-1) (down the table)
r is the number of levels of factor A
n isfor
Statistics the number
Managers Usingof replications
Microsoft Excel, 5e Chap 11-31
 Chapter Summary
Described one-factor analysis of variance
ANOVA assumptions

ANOVA test for difference in c means

The Tukey-Kramer procedure for multiple comparisons

Described two-factor analysis of variance

Examined effects of multiple factors

Examined interaction between factors for the model with replicated

observations
The Tukey-Kramer procedure for multiple comparisons for both
factor A and factor B for the model with replication

Statistics for Managers Using Microsoft Excel, 5e Chap 11-32