Analysis of Means by Ranks: Modification and Application in Contract Acquisition Analysis

Abstract

Analysis of Means by Ranks is a nonparametric statistical test procedure that was developed in Bakir (1989) but has rarely been applied in practice. This paper modifies and applies Analysis of Means by Ranks to a case study data involving the comparison of three contract proposals. For comparison purposes, we analyze the same data using the well-known Analysis of Variance, Analysis of Means, and the Kruskal-Wallis test. Analysis of Variance and Analysis of Means are two parametric (assume data to be samples from normal populations) test procedures whereas Kruskal-Wallis and Analysis of Means by Ranks are two nonparametric (or distribution-free) procedures. This paper shows that the parametric tests fail to detect a significant difference among three contract proposals, while the nonparametric tests do. The conclusions of the parametric tests are in doubt because a descriptive statistics analysis indicates that the required normality assumption is in doubt; the nonparametric conclusions are more trustful because the normality assumption is not required by nonparametric procedures.