BSNS2120 Project on Excel
Calculations of Objective Probabilities, Expected Value and Variance
BSNS2120
J. Wang
Name ________________________
The manager in TransAm Auto Part store is concerned about the daily demand of oil
filter FS3558. He collected the records of FS3558’s daily demands in the past six years. After
summarizing the six-year data, he came up with a list of demands from 0 to 80 along with
number of days occurred in the past 6 years for each possible daily demand. He wants to
calculate objective probabilities, expected value, variance, and standard deviation with Excel.
Go to my website, www.stockton.edu/~wangji, and download the data the manager has
summarized, which is stored in an Excel worksheet named as Data-and-Template-for-ExcelProject under Cht. 14, Simulation. First 20 rows of the template are shown below. Save it on to
your disk, and use it as the template of further calculations.
A
1
2
3
4
5
6
7
B
D
E
F
G
H
Your full name:
X = daily demand in terms of units
E(X) =
8
9
10
11
C
BSNS2120 Project: Expected Value and Variance Calculations with Excel
Varianc =
Standard Deviation =
12
Daily
Demand
(units)
number of
days in the
records of
past years
13
14
15
16
17
18
19
20
0
1
2
3
4
5
6
7
0
0
0
2
1
0
4
9
Probability
Xi*P(Xi)
Xi-E(X)
[Xi-E(X)]2
[Xi-E(X)]2P(Xi)
Random variable X is defined as:
X=number of units of FS3558 demanded in a particular day in TransAm Auto Part store.
Use the downloaded spreadsheet as a template to calculate probability for each possible
value of X, expected value of X, variance of X, and standard deviation X.
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Turn in your finished Excel spreadsheet as the attachment of an e-mail to me. Your email must have the subject title as BSNS2120-Excel-Project-YourFullName; for example:
BSNS2120-Excel-Project-John-Smith.
My e-mail address is: jinchang.wang@stockton.edu .
Tips and Notes:
 Use cell address to refer to a number as far as possible, rather than the particular number.
 Cell addresses will change when being copied. If you do not want the address to change
when copying, use the absolute cell address by adding $ in front of row address and/or in
front of column address. For example:
o $D5 (Column address will remain as D no matter where the cell is copied.)
o B$4 (Row address will remain as 4 no matter where the cell is copied.)
o $C$7 (This address will remain always $C$7 no matter where it is copied.)
o C7 (Both column address and row address will change if the cell containing it is
copied to other cells.)
 Use formulas or Excel functions to let Excel do all calculations, rather than using
calculators.
o A formula or function must start with an equality sign “=”
o * for multiplication
o / for division
o ^ for power operation
o For example:
=(3+B4)*C4/12;
=G4;
=B12-$E$5;
=D45^2
=D12/$D$89
 Use Copy-Paste in Excel as far as possible.
Excel Functions you may use:
=SUM(R) Sum the values in the cells in range R. For examples:
=SUMIF(D15:D87) To calculate (the sum of those numbers in cells from D15 to D87).
=SQRT(N) Calculate square root of number N. For examples:
=SQRT(C92) To calculate (the square root of the number in cell C92).
=SQRT(39)*5 To calculate (5 times of square root of 39).
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Detailed Guidelines, in case you need them:
A
1
2
3
4
5
6
7
B
D
E
F
G
H
Your full name:
X = daily demand in terms of units
E(X) =
8
9
10
11
C
BSNS2120 Project: Expected Value and Variance Calculations with Excel
Varianc =
Standard Deviation =
12
Daily
Demand
(units)
number of
days in the
records of
past years
13
14
15
16
17
18
19
20
0
1
2
3
4
5
6
7
0
0
0
2
1
0
4
9
Probability
Xi*P(Xi)
Xi-E(X)
[Xi-E(X)]2
[Xi-E(X)]2P(Xi)
To calculate objective probabilities:
1. Fill in cell D3 with your full name.
2. For C95:
=SUM(C13:C93)
3. For D13:
=C13/$C$95
4. Copy D13 all the way down to D93
5. Copy C95 to D95. (The result in D95 must be 1.00)
To calculate the expected value of X, E(X):
6. For E13:
=B13*D13
7. Copy E13 all the way down to E93
8. Copy D95 to E95. (The resulted value in E95 would be E(X)!)
9. For D7:
=E95
To calculate the variance of X:
10. For F13:
=B13-$D$7
11. For G13:
=F13^2
12. For H13:
=G13*D13
13. Copy F13, G13, and H13 all the way down to F93, G93, and H93
14. Copy E95 to H95 (The resulted value in H95 would be the variance!)
15. For D8:
=H95
To calculate the standard deviation of X:
16. For D9:
=SQRT(D8)
17. Save your spreadsheet.
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