World Applications Of Statistics ANOVA and Nonparametric Tests - Essay Example

The variance in the data may be within the realm of chance. However, there may be other factors that are affecting his sales. By analyzing a small amount of data among a few groups, a non-parametric test can show which factor is the cause of the variance. Inferences can be drawn from ANOVA from very small sample sizes and limited data. This makes it practical to use when the cost of data collection is a consideration. While larger samples will increase the power of the test, small samples can be measured by their degree of variance and further increase the power of the test if the variance is small.

Another lesson learned was that the analysis of variance is so complex that it is impractical to perform on a calculator. There are many computer programs that calculate ANOVA such as Excel and SPSS. Today, this complex area of statistics can be performed on a limited budget with a minimum amount of computer software. The simulation demonstrated that meaningful information about a variance among groups can be tested with limited resources. The concept of using small sample sizes makes analyzing business data convenient for small-scale operations.

The knowledge that it can be done with Excel makes it even more valuable, as I am moderately proficient at using it. Another key feature of ANOVA is that it can work with ordinal or interval data. This is especially useful when gathering data through a questionnaire. In addition, ANOVA is able to measure the interaction between multiple factors.