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    Ken Black QA ch08

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    Rushabh Vora
    Know the difference between point and interval estimation. Estimate a population mean from a sample mean when s is unknown. Estimate the population variance from a sampling variance. Know the minimum sample size necessary to achieve given statistical goals.

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    Ken Black QA ch08

    Uploaded by

    Rushabh Vora
    152 views43 pages
    Know the difference between point and interval estimation. Estimate a population mean from a sample mean when s is unknown. Estimate the population variance from a sampling variance. Know the minimum sample size necessary to achieve given statistical goals.

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    Know the difference between point and interval estimation. Estimate a population mean from a sample mean when s is unknown. Estimate the population variance from a sampling variance. Know the minimum sample size necessary to achieve given statistical goals.

    Copyright:

    Attribution Non-Commercial (BY-NC)
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    Download as ppt, pdf, or txt
    152 views43 pages

    Ken Black QA ch08

    Uploaded by

    Rushabh Vora
    Know the difference between point and interval estimation. Estimate a population mean from a sample mean when s is unknown. Estimate the population variance from a sampling variance. Know the minimum sample size necessary to achieve given statistical goals.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 43

    Business Statistics, 5th ed.

    by Ken Black
    Chapter 8
    Discrete Distributions

    Statistical Inference:
    Estimation for
    Single Populations

    PowerPoint presentations prepared by Lloyd Jaisingh,


    Morehead State University

    Learning Objectives
    Know the difference between point and interval
    estimation.
    Estimate a population mean from a sample mean
    when s is known.
    Estimate a population mean from a sample mean
    when s is unknown.
    Estimate a population proportion from a sample
    proportion.
    Estimate the population variance from a sample
    variance.
    Estimate the minimum sample size necessary to
    achieve given statistical goals.

    Statistical Estimation
    Point estimate -- the single value of a statistic
    calculated from a sample which is used to
    estimate a population parameter
    Interval Estimate -- a range of values calculated
    from a sample statistic(s) and standardized
    statistics, such as the z
    Selection of the standardized statistic is
    determined by the sampling distribution.
    Selection of critical values of the standardized
    statistic is determined by the desired level of
    confidence.

    100(1 - )%Confidence Interval to


    Estimate when s is Known
    x
    x
    n

    Point estimate

    x z / 2

    Interval
    Estimate

    s
    n

    or
    x z / 2

    s
    n

    x z / 2

    s
    n

    Distribution of Sample Means


    for (1-)% Confidence

    z
    Z

    22

    Zz

    22

    Distribution of Sample Means


    for (1-)% Confidence

    .5

    .5

    z
    Z

    22

    z
    22

    Distribution of Sample Means


    for (1-)% Confidence

    1
    2

    1
    2

    z
    Z

    22

    Z2
    2

    Distribution of Sample Means


    for 95% Confidence

    .025

    .025
    95%
    .4750

    .4750

    Z
    -1.96

    1.96

    95% Confidence Interval for


    x 510, s 46, n 85, z / 2 1.96
    x z / 2

    x z / 2

    n
    n
    46
    46
    510 1.96
    510 1.96
    85
    85
    510 9.78 510 9.78
    500.22 519.78

    95% Confidence Intervals for


    95%

    X
    X
    X
    X

    X
    X

    95% Confidence Intervals for


    Is our interval,
    95%

    X
    X
    X
    X

    X
    X

    500.22
    519.78, in the
    red?

    Demonstration Problem 8.1


    x 10.455, s 7.7, n 44.
    90% confidence z / 2 1.645
    x z / 2

    x z / 2

    n
    n
    7.7
    7.7
    10.455 1.645
    10.455 1.645
    44
    44
    10.455 1.910 10.455 1.910
    8.545 12.365

    Demonstration Problem 8.2


    x 34 .30 , s 8, N = 800 , and n 50 .
    98 % confidence z 2.33
    s N n
    s N n
    x z / 2
    x z / 2
    n N 1
    n N 1
    8 800 50
    8 800 50
    34.30 2.33
    34.30 2.33
    50 800 1
    50 800 1
    34.30 2.554 34.30 2.554
    31.75 36.85

    Confidence Interval to Estimate


    when n is Large and s is Unknown

    x z

    /2

    s
    n

    /2

    s
    x z
    n

    or
    x z

    /2

    s
    n

    Car Rental Firm Example


    x 85 .5, S 19 .3, and n 110 .
    99 % confidence z 2.575
    s
    xz

    n
    19.3
    85.5 2.575

    110
    85.5 4.7
    80.8

    s
    xz
    n
    19.3
    85.5 2.575
    110
    85.5 4.7
    90.2

    Z Values for Some of the More


    Common Levels of Confidence
    Confidence
    Level

    z/2 Value

    90%

    1.645

    95%

    1.96

    98%

    2.33

    99%

    2.575

    Estimating the Mean of a Normal


    Population: Unknown s
    The population has a normal distribution.
    The value of the population standard
    deviation is unknown.
    z distribution is not appropriate for these
    conditions
    t distribution is appropriate

    The t Distribution
    Developed by British statistician, William
    Gosset
    A family of distributions -- a unique
    distribution for each value of its parameter,
    degrees of freedom (d.f.)
    Symmetric, Unimodal, Mean = 0, Flatter
    than a z
    x

    t formula t
    s
    n

    Comparison of Selected t Distributions


    to the Standard Normal
    Standard Normal
    t (d.f. = 25)
    t (d.f. = 5)
    t (d.f. = 1)

    -3

    -2

    -1

    Table of Critical Values of t


    df
    1
    2
    3
    4
    5

    t0.100 t0.050 t0.025 t0.010 t0.005


    3.078
    1.886
    1.638
    1.533
    1.476

    6.314
    2.920
    2.353
    2.132
    2.015

    12.706
    4.303
    3.182
    2.776
    2.571

    31.821
    6.965
    4.541
    3.747
    3.365

    63.656
    9.925
    5.841
    4.604
    4.032

    1.714

    25

    1.319
    1.318
    1.316

    1.708

    2.069
    2.064
    2.060

    2.500
    2.492
    2.485

    2.807
    2.797
    2.787

    29
    30

    1.311
    1.310

    1.699
    1.697

    2.045
    2.042

    2.462
    2.457

    2.756
    2.750

    40
    60
    120

    1.303
    1.296
    1.289
    1.282

    1.684
    1.671
    1.658
    1.645

    2.021
    2.000
    1.980
    1.960

    2.423
    2.390
    2.358
    2.327

    2.704
    2.660
    2.617
    2.576

    23

    24

    1.711

    With df = 24 and = 0.05,


    t = 1.711.

    Confidence Intervals for of a Normal


    Population: Unknown s
    x t / 2,n 1

    s
    n

    or
    x t / 2,n 1
    df n 1

    s
    s
    x t / 2,n 1
    n
    n

    Solution for Demonstration Problem 8.3


    x 2.14 , s 1.29 , n 14 , df n 1 13

    1 .99

    0.005
    2
    2
    t .005,13 3.012
    s
    x t / 2, n 1

    n
    1.29
    2.14 3.012

    14
    2.14 1.04
    1.10

    s
    x t / 2, n 1
    n
    1.29
    2.14 3.012
    14
    2.14 1.04
    3.18

    MINITAB Solution for Demonstration


    Problem 8.3

    Comp Time: Excel Normal View

    Comp Time: Excel Formula View


    B

    Comp Time Data

    21

    17

    20

    16

    29

    12

    4
    5

    11

    21

    25

    15

    16

    =B7+B13*B9

    n=

    Mean =

    S=

    9
    10

    Std Error =

    11

    0.1

    12

    df =

    =B6-1

    13
    14

    t=

    15

    =COUNT(A2:F4)
    =AVERAGE(A2:F4)
    =STDEV(A2:F4)
    =B8/SQRT(B6)

    =TINV(B11,B12)
    =B7-B13*B9

    Confidence Interval to Estimate


    the Population Proportion
    p z / 2

    p q
    p p z / 2
    n

    where :
    p = sample proportion
    q = 1 - p
    p = population proportion
    n = sample size

    p q
    n

    Solution for Demonstration Problem 8.5


    x 34

    0.16
    n 212
    q = 1 - p 1 0.16 0.84
    90% Confidence z 1.645
    n 212, x 34, p

    p z / 2
    0.16 1.645

    p q
    p p z / 2
    n

    p q
    n

    (0.16)(0.84)
    (0.16)(0.84)
    p 0.16 1.645
    212
    212
    0.16 0.04 p 0.16 0.04
    0.12 p 0.20

    Population Variance
    Variance is an inverse measure of the groups
    homogeneity.
    Variance is an important indicator of total quality
    in standardized products and services. Managers
    improve processes to reduce variance.
    Variance is a measure of financial risk. Variance of
    rates of return help managers assess financial and
    capital investment alternatives.
    Variability is a reality in global markets.
    Productivity, wages, and costs of living vary
    between regions and nations.

    Estimating the Population Variance


    Population Parameter s

    Estimator
    of
    s

    (
    x

    x
    )
    2
    s
    n 1

    formula for Single Variance


    2

    (n 1) s 2

    s2

    degrees of freedom n - 1

    Confidence Interval for s2

    n 1s

    /2

    n 1s

    1 / 2

    df n 1
    1 level of confidence

    Selected 2 Distributions
    df = 3
    df = 5
    df = 10

    2 Table
    df
    0.975
    0.950
    1 9.82068E-04 3.93219E-03
    2
    0.0506357
    0.102586
    3
    0.2157949
    0.351846
    4
    0.484419
    0.710724
    5
    0.831209
    1.145477
    6
    1.237342
    1.63538
    7
    1.689864
    2.16735
    8
    2.179725
    2.73263
    9
    2.700389
    3.32512
    10
    3.24696
    3.94030

    0.100
    2.70554
    4.60518
    6.25139
    7.77943
    9.23635
    10.6446
    12.0170
    13.3616
    14.6837
    15.9872

    0.050
    3.84146
    5.99148
    7.81472
    9.48773
    11.07048
    12.5916
    14.0671
    15.5073
    16.9190
    18.3070

    0.025
    5.02390
    7.37778
    9.34840
    11.14326
    12.83249
    14.4494
    16.0128
    17.5345
    19.0228
    20.4832

    df = 5

    0.10

    0
    20
    21
    22
    23
    24
    25

    9.59077
    10.28291
    10.9823
    11.6885
    12.4011
    13.1197

    10.8508
    11.5913
    12.3380
    13.0905
    13.8484
    14.6114

    28.4120
    29.6151
    30.8133
    32.0069
    33.1962
    34.3816

    31.4104
    32.6706
    33.9245
    35.1725
    36.4150
    37.6525

    34.1696
    35.4789
    36.7807
    38.0756
    39.3641
    40.6465

    70
    80
    90
    100

    48.7575
    57.1532
    65.6466
    74.2219

    51.7393
    60.3915
    69.1260
    77.9294

    85.5270
    96.5782
    107.5650
    118.4980

    90.5313
    101.8795
    113.1452
    124.3421

    95.0231
    106.6285
    118.1359
    129.5613

    10

    15

    20

    9.23635
    With df = 5 and =
    0.10, 2 = 9.23635

    Two Table Values of 2


    df = 7

    .05
    .95
    .05
    0

    2.16735

    10

    12

    14

    16

    18

    20

    14.0671

    df
    1
    2
    3
    4
    5
    6
    7
    8
    9
    10

    0.950
    3.93219E-03
    0.102586
    0.351846
    0.710724
    1.145477
    1.63538
    2.16735
    2.73263
    3.32512
    3.94030

    0.050
    3.84146
    5.99148
    7.81472
    9.48773
    11.07048
    12.5916
    14.0671
    15.5073
    16.9190
    18.3070

    20
    21
    22
    23
    24
    25

    10.8508
    11.5913
    12.3380
    13.0905
    13.8484
    14.6114

    31.4104
    32.6706
    33.9245
    35.1725
    36.4150
    37.6525

    90% Confidence Interval for s2


    s 2 .0022125, n 8, df n 1 7, .10

    2 / 2 02.1/ 2 .205 14.0671


    12 / 2 120.1/ 2 .295 2.16735
    ______________________________________
    (n 1) s 2

    2 / 2

    s 2

    (n 1) s 2

    12 / 2

    (8 1).0022125
    (8 1).0022125
    s 2
    14.0671
    2.16735
    .001101 s 2 .007146

    Solution for Demonstration Problem 8.6


    s 2 1.2544, n 25, df n 1 24, .05

    /2

    2
    1 / 2

    2
    0.05 / 2

    2
    1 0.05 / 2

    n 1s 2

    2
    .025

    39.3641
    2
    .975

    s
    0.7648 s

    n 1s 2

    /2

    25 1(1.2544)

    12.4011

    39.3641

    1 / 2

    25 1(1.2544)

    12.4011

    2.4277

    Determining Sample Size


    when Estimating
    z formula

    Error of Estimation E x
    (tolerable error)
    2
    Estimated Sample Size

    zs
    n
    E
    2

    Estimated s

    1
    range
    4

    z s

    Sample Size When Estimating : Example


    E 1, s 4
    90% confidence z 1.645

    z s
    n
    E
    2

    (1.645) 2 ( 4) 2

    12
    43.30 or 44

    Solution for Demonstration Problem 8.7


    E 2, range 25
    95% confidence z 1.96
    1
    1
    estimated s : range 25 6.25
    4
    4

    zs
    E
    2

    (1.96) 2 (6.25) 2

    22
    37.52 or 38

    Determining Sample Size


    when Estimating p
    z
    formula

    p p
    pq
    n

    Error of Estimation (tolerable


    error)

    E p p

    Estimated Sample
    Size
    n

    z 2 pq

    Solution for Demonstration Problem 8.8


    E 0.03
    98% Confidence Z 2.33
    estimated P 0.40
    Q 1 P 0.60
    z 2 pq
    n
    E2
    (2.33) 2 (0.40)(0.60)

    (.003) 2
    1,447.7 or 1,448

    Determining Sample Size when


    Estimating p with No Prior Information
    p

    pq

    0.5

    0.25

    z = 1.96
    E = 0.05

    400
    350
    300

    0.4

    0.24

    0.3

    0.21

    250
    n 200
    150

    0.2

    0.16

    0.1

    0.09

    100
    50
    0
    0

    z
    n
    E

    1
    4
    2

    0.1

    0.2

    0.3

    0.4

    0.5
    P

    0.6

    0.7

    0.8

    0.9

    Example: Determining n when


    Estimating p with No Prior Information
    E 0.05
    90% Confidence z 1.645
    with no prior estimate of p, use p 0.50
    q 1 p 0.50
    2

    pq
    z
    n
    E
    2

    (1.645) 2 (0.50)(0.50)

    (.05) 2
    270.6 or 271

    Copyright 2008 John Wiley & Sons, Inc.


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