Anova

Basic Business Statistics
(8th Edition)
Chapter 11
Analysis of Variance
2002 Prentice-Hall, Inc.
Chap 11-1
Randomized Design Example

Factor (Training Method)
Factor
Levels
(Treatment
s)
Randomly
Assigned
Units
Dependent
Variable
(Response)
21 hrs
27 hrs
29 hrs
17 hrs
25 hrs
20 hrs
31 hrs
28 hrs
22 hrs
Chap 11-2
One-Factor Analysis of Variance F

Test
Evaluate the difference among the mean

responses of 2 or more (c ) populations
e.g.: Several types of tires, oven temperature

settings
Assumptions
Samples are randomly and independently drawn

This condition must be met
Populations are normally distributed
F test is robust to moderate departure from
normality
Populations have equal variances
Less sensitive to this requirement when
samples are of equal size from each population
Chap 11-3
Hypotheses of One-Way ANOVA
H 0 : 1 2 L c
All population means are equal
No treatment effect (no variation in means

among groups)
groups
H1 : Not all i are the same
At least one population mean is different

(others may be the same!)
There is treatment effect
Does not mean that all population means are

different
Chap 11-4
One-Factor ANOVA (No Treatment

Effect)
H 0 : 1 2 L c
The Null
Hypothesis is
True
1 2 3
Chap 11-5
One-Factor ANOVA
(Treatment Effect Present)
H 0 : 1 2 L c
1 2 3
The Null
Hypothesis is
NOT True
1 2 3
Chap 11-6
Total Variation
nj
SST ( X ij X ) 2
j 1 i 1
X ij : the i -th observation in group j

n j : the number of observations in group j
n : the total number of observations in all groups
c : the number of groups
c
X
nj
X
j 1 i 1
ij
the overall or grand mean

Chap 11-7
Total Variation
(continued)
SST X 11 X
X
2
21
L X nc c X
Response, X
X
Group 1
Group 2
Group 3
Chap 11-8
Among-Group Variation
SSA n j ( X j X )
j 1
SSA
MSA
c 1
X j : The sample mean of group j

X : The overall or grand mean
i j
Variation Due to Differences Among Groups

Chap 11-9
(continued)
SSA n1 X 1 X
n2 X 2 X
L nc X c X
Response, X
X3
X1
Group 1
Group 2
X2
Group 3
Chap 11-10
-Within Group Variation

c
nj
SSW ( X ij X j )
j 1 i 1
SSW
MSW
nc
X j : The sample mean of group j

X ij : The i -th observation in group j
Summing the variation
within each group and then
adding over all groups.
Chap 11-11
Within-Group Variation(continued)
SSW X 11 X 1 X 21 X 1 L X nc c X c
2
Response, X
X3
X1
Group 1
Group 2
X2
Group 3
Chap 11-12
Within-Group Variation
(continued)
For c = 2, this is the

SSW
MSW
pooled-variance in the
nc
t-Test.
2
2
2
(n1 1) S1 (n2 1) S 2 (nc 1) Sc
(n1 1) (n2 1) (nc 1)

If more than 2 groups,
use F Test.
For 2 groups, use t-Test.
F Test more limited.
j
Chap 11-13
One-Factor ANOVA
F Test Statistic
Test statistic:
MSA
F
MSW
MSA is mean squares among or between

variances
MSW is mean squares within or error
variances
df
1
1
Degrees of freedom
df 2 n 1
Chap 11-14
One-Factor ANOVA - Summary Table

Source of
Variation
Among
(Factor)
Within
(Error)
Total
Degrees
of
Freedom
Sum of
Squares
Mean Squares
(Variance)
F
Statistic
SSA
MSA =
SSA/(c 1 )
MSA/MS
W
nc
SSW
MSW =
SSW/(n
c)
n1
SST =
SSA +
SSW
c1
Chap 11-15
Features of One-Factor ANOVA F Statistic
The F statistic is the ratio of the among

estimate of variance and the within
estimate of variance
The ratio must always be positive

Df1 = c -1 will typically be small
Df2 = n - c will typically be large
The ratio should be closed to 1 if the null

is true
Chap 11-16
Features of One-Factor
ANOVA F Statistic
(continued)
The numerator is expected to be greater

than the denominator
The ratio will be larger than 1 if the null
is false
Chap 11-17
One-Factor ANOVA F Test Example

As production manager, you
want to see if three filling
machines have different
mean filling times.
You assign 15 similarly
trained and experienced
workers, five per machine,
to the machines.
machines
At the .05 significance level,
is there a difference in
mean filling times?
Machine1 Machine2 Machine3
25.40
26.31
24.10
23.74
25.10
23.40
21.80
23.50
22.75
21.60
20.00
22.20
19.75
20.60
20.40
Chap 11-18
One-Factor ANOVA Example: Scatter

Diagram
25.40
26.31
24.10
23.74
25.10
23.40
21.80
23.50
22.75
21.60
20.00
22.20
19.75
20.60
20.40
27
26
25
24
23
22
X 1 24.93
X 2 22.61
X 3 20.59
X 22.71
21
20
Time in Seconds
X1
X2
X
X3
19
Chap 11-19
One-Factor ANOVA
Example Computations
25.40
26.31
24.10
23.74
25.10
23.40
21.80
23.50
22.75
21.60
20.00
22.20
19.75
20.60
20.40
X 1 24.93
nj 5
X 2 22.61
c3
X 3 20.59
n 15
X 22.71
2
2
2
SSA 5 24.93 22.71 22.61 22.71 20.59 22.71
47.164
SSW 4.2592 3.112 3.682 11.0532

MSA SSA /(c -1) 47.16 / 2 23.5820
MSW SSW /(n - c ) 11.0532 /12 .9211
Chap 11-20
Summary Table
Source of
Variation
Degrees
of
Freedom
Sum of
Squares
Mean Squares
(Variance)
F
Statistic
MSA/MS
W
=25.60
Among
(Factor)
3-1=2
47.1640
23.5820
Within
(Error)
153=12
11.0532
.9211
Total
151=14
58.2172
Chap 11-21
One-Factor ANOVA
Example Solution
Test Statistic:
H0: 1 = 2 = 3
H1: Not All Equal
= .05
df1= 2
MSA
23.5820
25.6
F
MSW
.9211
df2 = 12
Decision:
Reject at = 0.05
Critical Value(s):
= 0.05
0
3.89
Conclusion:
There is evidence that at least
one i differs from the rest.
Chap 11-22
Solution in EXCEL
Use tools | data analysis | ANOVA: single

factor
EXCEL worksheet that performs the onefactor ANOVA of the example
Micros oft Excel

Works heet
Chap 11-23
The Tukey-Kramer Procedure
Tells which population means are

significantly different
f(X)
Two groups whose means

may be significantly
different
1= 2
Post hoc (a posteriori) procedure
e.g.: 1 = 2 3
Done after rejection of equal means in ANOVA
Ability for pair-wise comparisons
Compare absolute mean differences with critical

range
Chap 11-24
The Tukey-Kramer Procedure:

Example
25.40
23.40
20.00
26.31
21.80
22.20
24.10
23.50
19.75
23.74
22.75
20.60
25.10
21.60
20.40
2. Compute critical range:
Critical Range QU ( c ,n c )
1. Compute absolute mean

differences:
X 1 X 2 24.93 22.61 2.32

X 1 X 3 24.93 20.59 4.34
X 2 X 3 22.61 20.59 2.02
MSW
2
1
1
1.618
n
n
j '
j
3. All of the absolute mean differences are greater. There is a

significant difference between each pair of means at 5% level
of significance.
Chap 11-25
Randomized Blocked Design
Items are divided into blocks
Individual items in different samples are

matched
Or repeated measurements are taken
Reduced within group variation (i.e.: Remove
the effect of block before testing)
Response of each treatment group is

obtained
Chap 11-26
Randomized Blocked Design

(Example)
Factor (Training Method)
Factor
Levels
(Treatment
s)
Blocked
Experiment
Units
Dependent
Variable
(Response)
21 hrs
27 hrs
29 hrs
17 hrs
25 hrs
20 hrs
31 hrs
28 hrs
22 hrs
Chap 11-27
Randomized Block Design

(Partition of Total Variation)
Variation Due
to Treatment
SSA
Variation
among all
Observations
SST
Variation
among
Blocks
SSBL
Variation Due
to Random
Sampling
SSW
Commonly referred to
as:
Sum of Squares
Among
Among Groups
Variation referred to
Commonly
as:
Sum of Squares
among Block
Commonly referred to as:
Sum of squares error
Sum of squares
unexplained
Chap 11-28
Total Variation
c
SST X ij X
j 1 i
r the number of blocks

c the number of groups or levels
n the total number of observations n rc
X ij the value in the i -th block for the j -th treatment level
X i the mean of all values in block i
X j the mean of all values for treatment level j
df n 1
Chap 11-29
c
SSA r X j X
j 1
X j
X
i 1
ij
r
df c 1
SSA
MSA
c 1
(treatment group means)
Chap 11-30
Among-Block Variation
r
SSBL c X i X
i 1
X i
X
j 1
ij
(block means)
c
df r 1
SSBL
MSBL
r 1
Chap 11-31
Random Error
c
SSE X ij X i X j X
j 1 i 1
df r 1 c 1
SSE
MSE
r 1 c 1
Chap 11-32
Randomized Block F Test for Differences in c

Means
H 0 : 1 2 c
H1 : Not all j are equal
Test Statistic
No treatment effect
Reject
MSA
F
MSE
Degrees of Freedom
df1 c 1
df 2 r 1 c 1
FU
F
Chap 11-33
Summary Table
Source of
Variation
Degrees of
Freedom
Sum of
Squares
Mean
Squares
F
Statistic
Among
Treatmen
t
c1
SSA
MSA =
SSA/(c 1)
MSA/
MSE
SSBL
MSBL =
SSBL/(r 1)
MSBL/
MSE
Error
(r 1) c
1)
SSE
MSE =
SSE/[(r 1)(c
1)]
Total
rc 1
SST
Among
Block
r1
Chap 11-34
Randomized Block Design: Example

want to see whether three
filling machines have different
25.40
23.40
20.00
mean filling times.
26.31
21.80
22.20
You assign 15 workers with
varied experiences into five
24.10
23.50
19.75
groups of three based on
23.74
22.75
20.60
similarity of their experiences.
experiences
21.60
20.40
You assign each group of three 25.10
to the machines. At the .05
significance level, is there a
difference in mean filling
times?
Chap 11-35
Randomized Block Design Example

Computation
25.40
26.31
24.10
23.74
25.10
23.40
21.80
23.50
22.75
21.60
20.00
22.20
19.75
20.60
20.40
X 1 24.93
r 5
X 2 22.61
c3
n 15
X 3 20.59
X 22.71
2
2
2
SSA 5 24.93 22.71 22.61 22.71 20.59 22.71
47.164
SSE 8.4025
MSA SSA /(c -1) 47.16 / 2 23.5820
MSE SSE / (r -1) c 1
8.4025 / 8 1.0503
Chap 11-36
Randomized Block Design Example:

Summary Table
Source of
Variation
Degrees of
Freedom
Sum of
Squares
Mean
Squares
F
Statistic
Among
Treatment
SSA=
47.164
MSA =
23.582
23.582/1.050
3=22.452
Among
Block
SSBL=
2.6507
MSBL = .6627/1.0503
.6627
=.6039
Error
SSE=
8.4025
MSE =
1.0503
Total
14
SST=
58.2172
Chap 11-37
Randomized Block Design Example:

Solution
Test Statistic:
H0: 1 = 2 = 3
H1: Not All Equal
= .05
df1= 2
MSA
23.582
22.45
F
MSE 1.0503
df2 = 8
Decision:
Reject at = 0.05
Critical Value(s):
= 0.05
0
4.46
Conclusion:
There is evidence that at least
one i differs from the rest.
Chap 11-38
The Tukey-Kramer Procedure
Similar to the Tukey-Kramer procedure

for the completely randomized design
case
Critical
Criticalrange
Range Q
U ( c , r 1 c 1 )
MSE
r
Chap 11-39
The Tukey-Kramer Procedure: Example
25.40
26.31
24.10
23.74
25.10
23.40
21.80
23.50
22.75
21.60
20.00
22.20
19.75
20.60
20.40
1. Compute absolute mean

differences:
X 1 X 2 24.93 22.61 2.32

X 1 X 3 24.93 20.59 4.34
X 2 X 3 22.61 20.59 2.02
2. Compute Critical Range:
Critical Range QU ( c , r 1 c 1 )
MSE
1.0503
4.04
1.8516
r
5
3. All of the absolute mean differences are greater. There is a

significant difference between each pair of means at 5% level
of significance.
Chap 11-40
Two-Way ANOVA
Examines the effect of
Two factors 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

percentage of carbonation depend on
which level the line speed is set?
Chap 11-41
Two-Way ANOVA
(continued)
Assumptions
Normality
Populations are normally distributed
Homogeneity of variance
Populations have equal variances
Independence of errors
Independent random samples are

drawn
Chap 11-42
Total Variation
Partitioning
Variation Due to
Treatment A
Total Variation
SST
d.f.= n-1
Variation Due to
Treatment B
Variation Due to
Interaction
Variation Due to
Random Sampling
SSA
d.f.= r-1
SSB
d.f.= c-1
+
+
SSAB +
d.f.= (r-1)(c-1)
SSE
d.f.= rc(n-1)
Chap 11-43
Two-Way ANOVA
Total Variation Partitioning
r the number of levels of factor A
c the number of levels of factor B
n the number of values (replications) for each cell
n the total number of observations in the experiment
X ijk the value of the k -th observation for level i of
'
factor A and level j of factor B
Chap 11-44
Total Variation
r
n'
SST X ijk X
i 1 j 1 k 1
Sum of Squares Total

= total variation among all
observations around the grand mean
r
n'
X
i 1 j 1 k 1
'
ijk
n'
X
i 1 j 1 k 1
rcn
n
the overall or grand mean
ijk
Chap 11-45
Factor A Variation
r
SSA cn X i X
'
i 1
Sum of Squares Due to Factor A

= the difference among the various
levels of factor A and the grand
mean
Chap 11-46
Factor B Variation
c
SSB rn X j X
'
j 1
Sum of Squares Due to Factor B

= the difference among the various
levels of factor B and the grand mean
Chap 11-47
Interaction Variation
r
SSAB n X ij X i X j X
'
i 1 j 1
Sum of Squares Due to Interaction between A and B

= the effect of the combinations of factor A and
factor B
Chap 11-48
Random Error
r
n'
SSE X ijk X ij
i 1 j 1 k 1
Sum of Squares Error

= the differences among the observations within
each cell and the corresponding cell means
Chap 11-49
Two-Way ANOVA: The F Test Statistic

H0: 1 .= 2 . = = r .
F Test for Factor A Main Effect

MSA
F
MSE
SSA
MSA
r 1
Reject if
F > FU
SSB
MSB
c 1
Reject if
F > FU
H1: Not all i . are equal

H0: 1 = . 2 = = c F Test for Factor B Main Effect
H1: Not all . j are equal
MSB
F
MSE
H0: ij = 0 (for all i and j)

H1: ij 0
MSAB
F
MSE
F Test for Interaction Effect

SSAB
MSAB
r 1 c 1
Reject if
F > FU
Chap 11-50
Two-Way ANOVA
Summary Table
Degrees of
Freedom
Sum of
Square
s
Mean
Squares
F
Statisti
c
r1
SSA
MSA =
SSA/(r 1)
MSA/
MSE
c1
SSB
MSB =
SSB/(c 1)
MSB/
MSE
AB
(Interaction
)
(r 1)(c 1)
SSAB
MSAB =
SSAB/ [(r 1)(c 1)]
MSAB/
MSE
Error
rc n 1)
SSE
MSE =
SSE/[rc n 1)]
Total
rc n 1
SST
Source of
Variation
Factor A
(Row)
Factor B
(Column)
Chap 11-51
Features of Two-Way ANOVA

F Test
Degrees of freedom always add up
rcn-1=rc(n-1)+(c-1)+(r-1)+(c-1)(r-1)
Total=error+column+row+interaction
The denominator of the F test is always

the same but the numerator is different.
The sums of squares always add up
Total=error+column+row+interaction
Chap 11-52
Kruskal-Wallis Rank Test

for c Medians
Extension of Wilcoxon Rank-Sum Test
Tests the equality of more than two (c)

population medians
Distribution-free test procedure
Used to analyze completely randomized

experimental designs
Use 2 distribution to approximate if

each sample group size nj > 5
df = c 1
Chap 11-53
Assumptions
Independent random samples are drawn

Continuous dependent variable
Data may be ranked both within and among
samples
Populations have same variability
Populations have same shape
Robust with regard to last two conditions
Use F test in completely randomized designs

and when the more stringent assumptions hold
Chap 11-54

Procedure
Obtain ranks
In event of a tie, each of the tied values gets

its average rank
Add the ranks for data from each of the

c
T
12
j
H
3(n 1)
groups
n(n 1) j 1 n j 2
Square to obtain tj
n n1 n2 L nc
Chap 11-55

Procedure
(continued)
Compute test statistic
T
12
j
H
3(n 1)
n(n 1) j 1 n j
n n1 n2 L nc
c
n j # Of observation in j th sample
H may be approximated by chi-square
distribution with df = c 1 when each nj >5
Chap 11-56

Procedure
(continued)
Critical value for a given

Upper tail
2
U
Decision rule
Reject2 H0: M1 = M2 = = mc if test statistic
H>
Otherwise do not reject H0
Chap 11-57
Kruksal-Wallis Rank Test:

Example
want to see whether three
filling machines have different
median filling times. You
assign 15 similarly trained
and experienced workers,
five per machine, to the
machines. At the .05
significance level, is there a
difference in median filling
times?
Machine1 Machine2
Machine3
25.40
26.31
24.10
23.74
25.10
23.40
21.80
23.50
22.75
21.60
20.00
22.20
19.75
20.60
20.40
Chap 11-58
Example Solution: Step 1 Obtaining a

Ranking
Ranks
Raw Data
25.40
26.31
24.10
23.74
25.10
23.40
21.80
23.50
22.75
21.60
20.00
22.20
19.75
20.60
20.40
14
15
12
11
13
65
9
6
10
8
5
38
2
7
1
4
3
17
Chap 11-59
Example Solution: Step 2

Test Statistic Computation
T
c
12
j
3(n 1)
n(n 1) j 1 n
j
2
2
2
12
65
38
17
3(15 1)
5
5
15(15 1) 5
11.58
Chap 11-60
Kruskal-Wallis Test Example Solution

H0: M1 = M2 = M3
H1: Not all equal
= .05
df = c - 1 = 3 - 1 = 2
Critical Value(s):
= .05
0
5.991
Test Statistic:
H = 11.58
Decision:
Reject at = .05
Conclusion:
There is evidence that
population medians are
not all equal.
Chap 11-61

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Basic Business Statistics

2002 Prentice-Hall, Inc.

Randomized Design Example

2002 Prentice-Hall, Inc.

One-Factor Analysis of Variance F

Evaluate the difference among the mean

e.g.: Several types of tires, oven temperature

Samples are randomly and independently drawn

2002 Prentice-Hall, Inc.

Hypotheses of One-Way ANOVA

All population means are equal

No treatment effect (no variation in means

H1 : Not all i are the same

At least one population mean is different

There is treatment effect

Does not mean that all population means are

2002 Prentice-Hall, Inc.

One-Factor ANOVA (No Treatment

H1 : Not all i are the same

X ij : the i -th observation in group j

the overall or grand mean

X j : The sample mean of group j

Variation Due to Differences Among Groups

-Within Group Variation

X j : The sample mean of group j

For c = 2, this is the

(n1 1) (n2 1) (nc 1)

MSA is mean squares among or between

2002 Prentice-Hall, Inc.

One-Factor ANOVA - Summary Table

Features of One-Factor ANOVA F Statistic

The F statistic is the ratio of the among

The ratio must always be positive

The ratio should be closed to 1 if the null

2002 Prentice-Hall, Inc.

The numerator is expected to be greater

2002 Prentice-Hall, Inc.

One-Factor ANOVA F Test Example

Machine1 Machine2 Machine3

One-Factor ANOVA Example: Scatter

2002 Prentice-Hall, Inc.

SSA 5 24.93 22.71 22.61 22.71 20.59 22.71

SSW 4.2592 3.112 3.682 11.0532

2002 Prentice-Hall, Inc.

Use tools | data analysis | ANOVA: single

Micros oft Excel

2002 Prentice-Hall, Inc.

The Tukey-Kramer Procedure

Tells which population means are

Two groups whose means

Post hoc (a posteriori) procedure

Done after rejection of equal means in ANOVA

Ability for pair-wise comparisons

Compare absolute mean differences with critical

2002 Prentice-Hall, Inc.

The Tukey-Kramer Procedure:

1. Compute absolute mean

X 1 X 2 24.93 22.61 2.32

3. All of the absolute mean differences are greater. There is a

Randomized Blocked Design

Items are divided into blocks

Individual items in different samples are

Response of each treatment group is

2002 Prentice-Hall, Inc.