1. How should Analysis of Variance be used to make strategic decisions in a dynamic, competitive business environment? In what situations could your organization use Analysis of Variance? What are some examples that you are familiar with, or where ANOVA might be used by other businesses?
2. Select two non-parametric tests utilized in business decision making? Give an example of each test with an appropriate business situation.
1. ANOVA testing is used to test if the means of three or more populations are any different from each other or not. Note that for two or fewer population, a t-test or z-test should be used. ANOVA is very frequently used in strategic decision making in business environments, more so by the advent of computers and software which are inbuilt with the analysis techniques of ANOVA. Suppose that a petroleum firm supplies three different types of gasoline products in the market with different ethanol percentages, and wants to ascertain if there is any difference in the mean mileages run by the three different types. An ANOVA test can be particularly useful, followed by a Post-hoc analysis like Tukey's pairwise comparisons in ...
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