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# Usage of ANOVA, Non-Parametric tests

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1. Can you think of an example where the analysis of variance (ANOVA) can be used? How is ANOVA being used in the workplace, or how should it be used?

2. Analysis of variance (ANOVA) is used to determine if there is a difference between the means of different populations. This is an example from a student in Prescott Arizona.A company was trying to sell her the feed they produced by aiming that if her hens ate their feed, the hens would produce more eggs. They offered her a study to read in which they demonstrated that their feed was the best. To support this, they conducted an experiment in which they fed four different types of food, including their own, to groups of hens. They wanted to show that on average hens that ate their food produced more eggs. They used analysis of variance. Can you think of a business-related example in the financial industry? can you think of any specifically related to operations management?

2. What are the differences between one-way and two-way ANOVA?

4. What are examples in which non-parametric tests are used to analyze business related problems in general, and more specifically, problems related to marketing?

5. How should surveys be constructed to facilitate collecting data to perform non-parametric tests?

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#### Solution Preview

Can you think of an example where the analysis of variance (ANOVA) can be used? How is ANOVA being used in the workplace, or how should it be used?
Analysis of variance is used to uncover the main and interaction effects of categorical independent variables (called "factors") on an interval dependent variable. An "interaction effect" is the joint effect of two or more independent variables on the dependent variable. A "main effect" is the direct effect of an independent variable on the dependent variable. An "interaction effect" is the joint effect of two or more independent variables on the dependent variable.

There are many examples of how ANOVA can be used.

Image a situation where you have 4 sales people. Each person is told to use a slightly different technique to sell a product (i.e one person might make daily phone calls, one might visit the office...) Management wants to see which technique is the most efficient by evaluating which sales person makes the most amount of sales. The sales staff are then asked to fill out the value of the sales for their last 30 transactions. From here, an ANOVA could be conduced to see if there is a main effect between the sales technique and the sales value.

ANOVAs should be used in the workplace if they are used properly. Firstly, if experiments are used, the employees have to be randomly assigned to a specific condition - you can't base categories on elements such as age or education (since you can't assign a specific employee to be 54 years old). As well, proper documentation must be provided at each step of the research process so that conclusions could be verified to be true.

Some applications in the workforce would be to use ANOVAs to see if employees from different departments take more sick days then other departments, to see how long employees from one group take lunch break vs. other groups...

Analysis of variance (ANOVA) is used to determine if there is a difference between the means of different populations. This is an example from a student in Prescott Arizona. A company was trying to sell her the feed they produced by claiming that if her hens ate their feed, the hens would produce more eggs. They offered her a study to read in which they demonstrated that their feed was the best. To support this, they conducted an experiment in which they fed four different types of food, including their own, to groups of hens. They wanted to show that on average hens that ate their food produced more eggs. They used analysis of variance. Can you think of a business-related example in the financial industry? Can you think of any specifically related to operations management?

A business example could be made ...

#### Solution Summary

This is a two part question. The first part looks at ANOVAs, and explains where ANOVAs can be used in the workplace. It also discusses business applications, and the differences between a one-way and two-way ANOVA.

the second part looks at non-parametric tests, and how they relate to marketing.
This is a 5 page solution filled with much valuable insight and information.

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