Microsoft Office Tutorials and References

In Depth Information

**Chapter 11: Rolling the Dice on Predictions and Probability**

Chapter 11

Rolling the Dice on Predictions

and Probability

In This Chapter

▶
Understanding linear and exponential trends

▶
Predicting future data from existing data

▶
Working with normal and Poisson distributions

When analyzing data, one of the most important steps is usually to

determine what model fits the data. No, I’m not talking about a model

car or model plane! This is a
mathematical model
or, put another way, a

formula
that describes the data. The question of a model is applicable for all

data that comes in X-Y pairs, such as the following:

✓
Comparisons of weight and height measurements

✓
Data on salary versus educational level

✓
Number of fish feeding in a river by time of day

✓
Number of employees calling in sick as related to day of the week

Modeling

Suppose now that you plot all the data points on a chart — a
scatter chart

in Excel terminology. What does the pattern look like? If the data is linear,

they’ll fall more or less along a straight line. If they fall along a curve rather

than a straight line, they aren’t linear and are likely to be exponential. These

two models —
linear
and
exponential
— are the two most commonly used

models, and Excel provides you with functions to work with them.