Microsoft Office Tutorials and References
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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
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.
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