One of the most dreaded courses during my under-graduation is Probability, Statistics & Queuing Theory. We called it PSQT. I struggled to understand the significance and concept of this course as I could barely concentrate in the class. We had a professor, who is probably a genius, but the moment he started the class, I would magically fall in to one of my after-noon naps. When I woke up, we are either in the middle of an elaborate t-test or going thru intricacies of a Markovian queue.
This was all 11 years ago. Later in life, I have embraced the world of probability & statistics. I still fear queues. May be I will get there one day. 😉
A good understanding of statistics & probability theory is necessary if you want to model complex real-life problems using Excel or similar tools. Naturally, Excel has several functions, features & supported add-ins to help you in this area.
Today, I want to share some of this with you. This article is broken down in to 3 parts.
- Learning Statistics & Probability using Excel
- Downloadable Excel Workbooks to understand
- Full blown models & simulations in Excel
#1 – Learning Statistics & Probability Concepts using Excel
Using Excel RAND functions
Excel has several powerful functions (formulas) to generate random numbers, random data. You can combine these functions to generate data that has certain parameters – like a give mean, standard deviation or follows a certain type of distribution.
Go thru Using Excel’s Random Functions for a detailed overview these techniques.
Simulating Dice Throws in Excel
One of the fundamental ways to learn about Probability is to look at dice throws. A dice has 6 faces and on each throw, any of the 6 faces turning up is equally likely. So, we say, each face has 1/6th probability of showing up. If you want to simulate this in Excel, you can use the formula RANDBETWEEN like this, =RANDBETWEEN(1,6). On each run, this formula would throw up a random number between 1 & 6 (including both).
For more, Simulating Dice Throws in Excel
Shuffling a List of Values in Excel
Understanding permutations and combinations is essential when it comes to modeling many real-world problems. Using Excel’s RAND, VLOOKUP and SMALL formulas we can generate a random permutation of a given list of values (in other words – we can shuffle the list).
To learn this read, Shuffling a list of values in Excel
Generate Frequency Distribution from Data
Often, when you are analyzing data, you need to understand how the data is distributed. Again, Excel has just the right function for this sort of thing. FREQUENCY(). In this simple tutorial, learn how to use Excel’s FREQUENCY formula to generate frequency distribution of given data.
Read Frequency Distributions in Excel
Trend Analysis & Forecasting using Excel
One of the most common applications of statistics is trend analysis & forecasting. Again, Excel shines with a lot of powerful formulas, built-in features and charting tools to help you understand the data & predict future based on that.
Since this is a big topic, we have covered it in 3 parts –
Part 1- Introduction to Trend Analysis & Forecasting: In this, we will learn what is trend analysis & forecasting. We will see manual forecasting technique in Excel. We will use Excel charts to depict our analysis and results.
Part 2 – Trend Analysis & Forecasting using Excel Functions
In this second part, we learn about Excel’s functions like LINEST, TREND, FORECAST, SLOPE, INTERCEPT, LOGEST and GROWTH. These powerful formulas can process lots of data and extract the trend information dynamically.
Part 3 – Trend Analysis & Forecasting using Charts & Macros
In the final part, we talk about how to use Excel chart’s trend analysis & forecasting features to estimate the trend & predict future values based on the data.
We also learn how to use Macros (VBA) to augment Excel chart’s trend-lines with useful information.
Visualizing Distribution of data with Box Plots
Box plots are an excellent way to understand the distribution of data. Unfortunately, there is no direct option to make a box plot from given data in Excel. That is where, this tutorial comes handy.
Learn how to create box plots in Excel.
#2 Downloadable Excel Workbooks
Learn Basic Statistics & Gaussian Distribution using this Excel Workbook
Glen, one of our long time readers shared this file with me. It lets you perform statistical analysis, quality control analysis, visualize Gaussian distribution based on the data you enter.
Click here to download the workbook.
Thanks Glen.
More Downloadable Workbooks
Almost all of the links in this page will take you to detailed articles on Chandoo.org, where you can also find downloadable workbook with examples. So just click thru and learn. 🙂
#3 Full blown models & simulations in Excel
A full blown model lets you learn various statistical concepts, Excel features and how to bring them all together to mimic a real-life situation.
Simulating Deal or No Deal game in Excel
In this simulation of Deal or No Deal, a popular television game, we use basic probability, permutations and Excel formulas features. You will learn how to assign random values to the suit-cases, how to use circular references, how to calculate the banker’s offer.
Simulation of Deal or No Deal game in Excel
Generating Housie / Bingo Tickets in Excel
Housie (Bingo) is a popular recreational game where the tickets contain 15 numbers between 1 to 90, arranged in 10 columns (3×10 grid). First column has numbers between 1 to 9, second column has 10 to 19 so on..
Generating a bingo ticket in Excel is a nice exercise in statistics, permutations and Excel formulas.
Learn from Bingo / Housie Tickets in Excel
Data Tables & Monte Carlo Simulations in Excel
Excel has powerful features to let us do complex simulations of real world situations. One such feature is called as data table.
The Data Table allows a set of what if questions to be posed and answered simply, and is useful in sensitivity analysis, variance analysis and even Monte Carlo (Stochastic) analysis of real life model within Excel.
The case of Blue Sky Mining Company
To help you learn about data tables, Monte Carlo simulations, we have put together a fictional mining company – Blue Sky co. and analyzed its performance under various assumptions & simulations.
To learn about this, visit Data Tables & Monte-Carlo Simulations page.
Modeling & Scheduling a FIFO (First In First Out) Queue in Excel
FIFO queues are very common in life. You can see them at Airports, coffee shops, Apple stores; Except at Airports it is FIFOUYC (FIFO Unless You are Crew).
In this article, we model & schedule a FIFO queue using Excel.
More Full Blown Models & Simulations in Excel
For more examples, check out these links.
- One more example of Data Table & Linest
- Simulating 3D dancing pendulums in Excel
- Simulating Monopoly Board Game in Excel
Do you use Statistical Concepts for your work?
As a small business owner, a good portion of my work involves statistical analysis, forecasting and simulation. I run estimates for our website traffic, revenues. I run statistical tests (split tests etc.) to optimize our sales pages, website. I estimate when my kids wake up from their nap (based on past experience) and plan my work accordingly. Thankfully, for the last part, I do not use Excel 😀
What about you? Do you use statistical concepts for your work? What are the things you use and how does Excel help you in that? What are your favorite formulas, features and tips? Please share using comments.
Special thanks to Hui & Glen
Many thanks to Hui, our resident Excel ninja for writing many of the articles on statistics, simulation, forecasting & trend analysis.
Special thanks to Glen for sharing the analyze-this file with us.
Say thanks to them if you enjoyed this.
13 Responses to “Using pivot tables to find out non performing customers”
To avoid the helper column and the macro, I would transpose the data into the format shown above (Name, Year, Sales). Now I can show more than one year, I can summarize - I can do many more things with it. ASAP Utilities (http://www.asap-utilities.com) has a new experimental feature that can easily transpose the table into the correct format. Much easier in my opinion.
David
Of course with alternative data structure, we can easily setup a slicer based solution so that everything works like clockwork with even less work.
David, I was just about to post the same!
In Contextures site, I remember there's a post on how to do that. Clearly, the way data is layed out on the very beginning is critical to get the best results, and even you may thinkg the original layout is the best way, it is clearly not. And that kind of mistakes are the ones I love ! because it teaches and trains you to avoid them, and how to think on the data structure the next time.
Eventually, you get to that place when you "see" the structure on the moment the client tells you the request, and then, you realized you had an ephiphany, that glorious moment when data is no longer a mistery to you!!!
Rgds,
Chandoo,
If the goal is to see the list of customers who have not business from yearX, I would change the helper column formula to :
=IF(selYear="all",sum(C4:M4),sum(offset(C4:M4,,selyear-2002,1,columns(C4:M4)-selyear+2002)))This formula will sum the sales from Selected Year to 2012.
JMarc
If you are already using a helper column and the combox box runs a macro after it changes, why not just adjust the macro and filter the source data?
Regards
I gotta say, it seems like you are giving 10 answers to 10 questions when your client REALLY wants to know is: "What is the last year "this" customer row had a non-zero Sales QTY?... You're missing the forest for the trees...
Change the helper column to:
=IFERROR(INDEX(tblSales[[#Headers],[Customer name]:[Sales 2012]],0,MATCH(9.99999999999999E+307,tblSales[[#This Row],[Customer name]:[Sales 2012]],1)),"NO SALES")
And yes, since I'm matching off of them for value, I would change the headers to straight "2002" instead of "Sales 2002" but you sort the table on the helper column and then and there you can answer all of your questions.
Hi thanks for this. Just can't figure out how you get the combo box to control the pivot table. Can you please advise?
Cheers
@Kevin.. You are welcome. To insert a combo box, go to Developer ribbon > Insert > form controls > combo box.
For more on various form controls and how to use them, please read this: http://chandoo.org/wp/2011/03/30/form-controls/
Thanks Chandoo. But I know how to insert a combobox, I was more referring to how does in control the year in the pivot table? Or is this obvious? I note that if I select the Selected Year from the PivotTable Field List it says "the field has no itens" whereas this would normally allow you to change the year??
Thanks again
worked it out thanks...
when =data!Q2 changes it changes the value in column N:N and then when you do a refreshall the pivottable vlaues get updated
Still not sure why PivotTable Field List says “the field has no itens"?? I created my own pivot table and could not repeat that.
Hi, I put the sales data in range(F5:P19) and added a column D with the title 'Last sales in year'. After that, in column D for each customer, the simple formula
=2000+MATCH(1000000,E5:P5)
will provide the last year in which that particular customer had any sales, which can than easily be managed by autofilter.
Somewhat longer but perhaps a bit more solid (with the column titles in row 4):
=RIGHT(INDEX($F$4:$P$19,1,MATCH(1000000,F5:P5)),4)
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