Applied Statistics For The Six Sigma Green Belt PDF

Applied Statistics
for the Six Sigma

Green Belt
Bhisham C. Gupta
H. Fred Walker
ASQ Quality Press

Milwaukee, Wisconsin
American Society for Quality, Quality Press, Milwaukee 53203
© 2005 by American Society for Quality
All rights reserved. Published 2005
Printed in the United States of America
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Library of Congress Cataloging-in-Publication Data
Gupta, Bhisham C., 1942–
Applied statistics for the Six Sigma Green Belt / Bhisham C. Gupta,
H. Fred Walker.— 1st ed.
p. cm.
Includes bibliographical references and index.
ISBN 0-87389-642-4 (hardcover : alk. paper)
1. Six sigma (Quality control standard) 2. Production management.
3. Quality control. I. Walker, H. Fred, 1963– II. Title.
TS156.G8673 2005
658.4'013—dc22 2004029760
ISBN 0-87389-642-4
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Introduction
W
henever a process is not producing products or services at a desired
level of quality, an investigation is launched to better understand
and improve the process. In many instances such investigations are
launched to rapidly identify and correct underlying problems as part of a
problem solving methodology—one such methodology is commonly known
as “root cause analysis.” Many problem-solving methodologies, such as root
cause analysis, rely on the study of numerical (quantitative) or non-numeri-
cal (qualitative) data as a means of discovering the true cause to one or more
problems negatively impacting product or service quality. The problem-
solving methodologies, however, are all too commonly used to investigate
problems that need a quick solution and thus are not afforded the time or
resources needed for a particularly detailed or in-depth analysis. Further,
problem-solving methodologies are also all too commonly used to investi-
gate problems without sufficient analysis of a series of costs associated with
a given problem as they relate to lost profit or opportunity, human resources
needed to investigate the problem, and so forth. Let us not have the wrong
impression of problem-solving methodologies such as root cause analysis!
Each of these methodologies has a proper place in quality and process
improvement; however, the scope or size of the problem needs also to be
considered. In this context, when problems are smaller and are easier to
understand, we can effectively use less rigorous, complicated, and thorough
problem-solving methodologies. When problems become large, complex,
and expensive, a more detailed and robust problem-solving methodology is
needed, and that problem-solving methodology is Six Sigma. While it is
beyond the intended scope of this book to discuss, in detail, the Six Sigma
methodology as an approach to problem solving, it is the explicit intent of
this book to describe the concepts and application of tools and techniques
used to support the Six Sigma methodology. Next we give a brief description
of the topics discussed in the book, followed by where in the Six Sigma
methodology you can expect to use these tools and techniques.
In Chapter 1 we introduce the concept of Six Sigma from both statistical
and quality perspectives. We briefly describe what we need for converting
data into information. In statistical applications we come across various
xxiv
Introduction xxv
types of data that require specific analyses that depend upon the types of data
we are working with. It is therefore important to distinguish between differ-
ent types of data.
In Chapter 2 we discuss and provide examples for different types of data.
In addition, terminology such as population and sample are introduced.
In Chapter 3 we introduce several graphical methods found in descriptive
statistics. These graphical methods are some of the basic tools of statistical
quality control (SQC). These methods are also very helpful in understanding
the pertinent information contained in very large and complex datasets.
In Chapter 4 we learn about the numerical methods of descriptive statis-
tics. Numerical methods that are applicable to both sample as well as popula-
tion data provide us with quantitative or numerical measures. Such measures
further enlighten us about the information contained in the data.
In Chapter 5 we proceed to study the basic concepts of probability theo-
ry and see how probability theory relates to applied statistics. We also intro-
duce the random experiment and define sample space and events. In addition,
we study certain rules of probability and conditional probability.
In Chapter 6 we introduce the concept of a random variable, which is a
vehicle used to assign some numerical values to all the possible outcomes of
a random experiment. We also study probability distributions and define
mean and standard deviation of random variables. Specifically, we study
some special probability distributions of discrete random variables such as
Bernoulli, binomial, hypergeometric, and Poisson distributions, which are
encountered frequently in many statistical applications. Finally, we discuss
under what conditions (e.g., the Poisson process) these probability models
are applicable.
In Chapter 7 we continue studying probability distributions of random
variables. We introduce the continuous random variable and study its proba-
bility distribution. We specifically examine uniform, normal, exponential,
and Weibull continuous probability distributions. The normal distribution is
the backbone of statistics and is extensively used in achieving Six Sigma
quality characteristics. The exponential and Weibull distributions form an
important part of reliability theory. The hazard or failure rate function is also
introduced.
Having discussed probability distributions of data as they apply to dis-
crete and continuous random variables in Chapters 6 and 7, in Chapter 8 we
expand our study to the probability distributions of sample statistics. In par-
ticular, we study the probability distribution of the sample mean and sample
proportion. We then study Student’s t, chi-square, and F distributions. These
distributions are an essential part of inferential statistics and, therefore, of
applied statistics.
Estimation is an important component of inferential statistics. In Chapter
9 we discuss point estimation and interval estimation of population mean and
of difference between two population means, both when sample size is large
and when it is small. Then we study point estimation and interval estimation
of population proportion and of difference between two population propor-
tions when the sample size is large. Finally, we study the estimation of a pop-
ulation variance, standard deviation, ratio of two population variances, and
ratio of two population standard deviations.
xxvi Introduction
Table 1 Applied statistics and the Six Sigma methodology.

Six Sigma Phase Tool or Technique Where in this book?
Define Descriptive Statistics Chapter 2
Graphical Methods Chapter 3
Numerical Descriptions Chapter 4
Measure Sampling Chapter 8
Point & Interval Estimation Chapter 9
Analyze Probability Chapter 5
Discrete & Continuous Distributions Chapters 6 & 7
Hypothesis Testing Chapters 10
Improve
Control
In Chapter 10 we study another component of inferential statistics,

which is the testing of statistical hypotheses. The primary aim of statistical
hypotheses is to either refute or support the existing theory, which is, in other
words, what is believed to be true based upon the information contained in
sample data. This further enhances good procedures. In this chapter we dis-
cuss the techniques of testing statistical hypotheses for one population mean
and for differences between two population means, both when sample sizes
are large and when they are small. We also discuss techniques of testing
hypotheses for one population proportion and for differences between two
population proportions when sample sizes are large. Finally, we discuss test-
ing of statistical hypotheses for one population variance and for ratio of two
population variances under the assumption that the populations are normal.
The results of Chapter 9 and this chapter are frequently used in statistical
quality control (SQC) and design of experiments (DOE).
In Chapter 11 we consider computer-based tools for applied statistical
support. Computing resources were purposefully included at the end of the
book so as to encourage readers not to rely on computers until after they have
gained a mastery of the statistical content presented in the preceding chapters.
But where in the Six Sigma methodology do we use these tools and tech-
niques? The answer is throughout the methodology! Let’s take a closer look.
The information contained in Table 1 will help us better relate specific tools
and techniques to phases of the Six Sigma methodology as they relate to the
intended scope and purpose of this book—a basic level of applied statistics.
Additional topics will be discussed in later books in this series. As topics are
discussed in later books, these topics will be added to content of Table 1 and
readers can use the table to help associate specific tools to the Six Sigma
methodology.
The array of topics as they relate to the Six Sigma methodology is help-
ful in understanding where you may use these tools and techniques. It is
important to note however, that any of these tools and techniques may come
into play in more than one phase of the Six Sigma methodology, and in fact,
should be expected to do so. What is presented in Table 1 is a first point in
the methodology you may expect to use these tools and techniques. From
here it’s time to get started! Enjoy!
Preface
A
pplied Statistics for the Six Sigma Green Belt was written as a desk
reference and instructional aid for individuals involved with Six
Sigma project teams. As Six Sigma team members, green belts will
help select appropriate statistical tools, collect data for those tools, and assist
with data interpretation within the context of the Six Sigma methodology.
Composed of steps or phases titled Define, Measure, Analyze, Improve,
and Control (DMAIC), the Six Sigma methodology calls for the use of many
more statistical tools than is reasonable to address in one large book.
Accordingly, the intent of this book is to provide Green Belts with the bene-
fit of a thorough discussion relating to the underlying concepts of “basic sta-
tistics.” More advanced topics of a statistical nature will be discussed in three
other books that, together with this book, will comprise a four-book series.
The other books in the series will discuss statistical quality control, intro-
ductory design of experiments and regression analysis, and advanced design
of experiments.
While it is beyond the scope of this book and series to cover the DMAIC
methodology specifically, we do focus this book and series on concepts,
applications, and interpretations of the statistical tools used during, and as part
of, the DMAIC methodology. Of particular interest in this book, and indeed
the other books in this series, is an applied approach to the topics covered
while providing a detailed discussion of the underlying concepts. This level
of detail in providing the underlying concepts is particularly important for
individuals lacking a recent study of applied statistics as well as for individu-
als who may never have had any formal education or training in statistics.
In fact, one very controversial aspect of Six Sigma training is that, in
many cases, this training is targeted at the Six Sigma Black Belt and is all too
commonly delivered to large groups of people with the assumption that all
trainees have a fluent command of the underlying statistical concepts and
theory. In practice this assumption commonly leads to a good deal of con-
cern and discomfort for trainees who quickly find it difficult to keep up with
and successfully complete black belt–level training. This concern and dis-
comfort becomes even more serious when individuals involved with Six
xx
Preface xxi
Sigma training are expected to pass a written and/or computer-based exami-

nation that so commonly accompanies this type of training.
So if you are beginning to learn about Six Sigma and are either prepar-
ing for training or are supporting a Six Sigma team, the question is: How do
I get up to speed with applied statistics as quickly as possible so I can get the
most from training or add the most value to my Six Sigma team? The answer
to this question is simple and straightforward—get access to a book that pro-
vides a thorough and systematic discussion of applied statistics, a book that
uses the plain language of application rather than abstract theory, and a book
that emphasizes learning by examples. Applied Statistics for the Six Sigma
Green Belt has been designed to be just that book.
This book was organized so as to expose readers to applied statistics in
a thorough and systematic manner. We begin by discussing concepts that are
the easiest to understand and that will provide you with a solid foundation
upon which to build further knowledge. As we proceed with our discussion,
and as the complexity of the statistical tools increases, we fully intend that
our readers will be able to follow the discussion by understanding that the
use of any given statistical tool, in many cases, enables us to use additional
and more powerful statistical tools. The order of presentation of these tools
in our discussion then will help you understand how these tools relate to,
mutually support, and interact with one another. We will continue this logic
of the order in which we present topics in the remaining books in this series.
Getting the most benefit from this book, and in fact from the complete series
of books, is consistent with how many of us learn most effectively—start at
the beginning with less complex topics, proceed with our discussion of new
and more powerful statistical tools once we learn the “basics,” be sure to
cover all the statistical tools needed to support Six Sigma, and emphasize
examples and applications throughout the discussion.
So let us take a look together at Applied Statistics for the Six Sigma
Green Belt. What you will learn is that statistics aren’t mysterious, they
aren’t scary, and they aren’t overly difficult to understand. As in learning any
topic, once you learn the “basics” it is easy to build on that knowledge—try-
ing to start without a knowledge of the basics, however, is generally the
beginning of a difficult situation!
Contents
List of Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii

List of Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xviii
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xx
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxii
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxiv
Chapter 1 Setting the Context for Six Sigma . . . . . . . . . . . . . . . . 1

1.1 Six Sigma Defined as a Statistical Concept . . . . . . . . . . . . . . . 1
1.2 Now, Six Sigma Explained as a Statistical Concept . . . . . . . . . 2
1.3 Six Sigma as a Comprehensive Approach and Methodology
for Problem Solving and Process Improvement . . . . . . . . . . . . 3
1.4 Understanding the Role of the Six Sigma Green Belt as
Part of the Bigger Picture . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.5 Converting Data into Useful Information . . . . . . . . . . . . . . . . . 6
Chapter 2 Getting Started with Statistics. . . . . . . . . . . . . . . . . . . 9
2.1 What Is Statistics? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.2 Populations and Samples . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.3 Classification of Various Types of Data . . . . . . . . . . . . . . . . . . 11
2.3.1 Nominal Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.3.2 Ordinal Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.3.3 Interval Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.3.4 Ratio Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Chapter 3 Describing Data Graphically . . . . . . . . . . . . . . . . . . . . 15
3.1 Frequency Distribution Table . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.1.1 Qualitative Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.1.2 Quantitative Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.2 Graphical Representation of a Data Set . . . . . . . . . . . . . . . . . . 20
3.2.1 Dot Plot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.2.2 Pie Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.2.3 Bar Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.2.4 Histograms and Related Graphs . . . . . . . . . . . . . . . . . . . 27
vii
viii Contents
3.2.5 Line Graph . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

3.2.6 Stem and Leaf Diagram . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.2.7 Measure of Association . . . . . . . . . . . . . . . . . . . . . . . . . 39
Chapter 4 Describing Data Numerically. . . . . . . . . . . . . . . . . . . . 45
4.1 Numerical Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.2 Measures of Centrality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.2.1 Mean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.2.2 Median . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.2.3 Mode . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.3 Measures of Dispersion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.3.1 Range . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.3.2 Variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.3.3 Standard Deviation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.3.4 Coefficient of Variation . . . . . . . . . . . . . . . . . . . . . . . . . 57
4.4 Measures of Central Tendency and Dispersion for
Grouped Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
4.4.1 Mean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
4.4.2 Median . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
4.4.3 Mode . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
4.4.4 Variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
4.5 Empirical Rule (Normal Distribution) . . . . . . . . . . . . . . . . . . . 60
4.6 Certain Other Measures of Location and Dispersion . . . . . . . . . 63
4.6.1 Percentiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
4.6.2 Quartiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
4.6.3 Interquartile Range . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
4.7 Box Whisker Plot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
4.7.1 Construction of a Box Plot . . . . . . . . . . . . . . . . . . . . . . 66
4.7.2 How to Use the Box Plot . . . . . . . . . . . . . . . . . . . . . . . . 67
Chapter 5 Probability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
5.1 Probability and Applied Statistics . . . . . . . . . . . . . . . . . . . . . . 71
5.2 The Random Experiment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
5.3 Sample Space, Simple Events, and Events of Random
Experiments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
5.4 Representation of Sample Space and Events Using Diagrams . . 75
5.4.1 Tree Diagram . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
5.4.2 Permutation and Combination . . . . . . . . . . . . . . . . . . . . 77
5.5 Defining Probability Using Relative Frequency . . . . . . . . . . . . 83
5.6 Axioms of Probability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
5.7 Conditional Probability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Chapter 6 Discrete Random Variables and Their Probability
Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
6.1 Discrete Random Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
6.2 Mean and Standard Deviation of a Discrete Random
Variable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
6.2.1 Interpretation of the Mean and the Standard
Deviation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Contents ix
6.3 The Bernoulli Trials and the Binomial Distribution . . . . . . . . . 101

6.3.1 Mean and Standard Deviation of a Bernoulli
Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
6.3.2 The Binomial Distribution . . . . . . . . . . . . . . . . . . . . . . . 102
6.3.3 Binomial Probability Tables . . . . . . . . . . . . . . . . . . . . . . 105
6.4 The Hypergeometric Distribution . . . . . . . . . . . . . . . . . . . . . . 107
6.4.1 Mean and Standard Deviation of a Hypergeometric
Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
6.5 The Poisson Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Chapter 7 Continuous Random Variables and Their
Probability Distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
7.1 Continuous Random Variables . . . . . . . . . . . . . . . . . . . . . . . . . 115
7.2 The Uniform Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
7.2.1 Mean and Standard Deviation of the Uniform
Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
7.3 The Normal Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
7.3.1 Standard Normal Distribution Table . . . . . . . . . . . . . . . . 123
7.4 The Exponential Distribution . . . . . . . . . . . . . . . . . . . . . . . . . 129
7.4.1 Mean and Standard Deviation of an Exponential
Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
7.4.2 Distribution Function F(x) of the Exponential
Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
7.5 The Weibull Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
7.5.1 Mean and Variance of the Weibull Distribution . . . . . . . . 133
7.5.2 Distribution Function F(t) of Weibull . . . . . . . . . . . . . . . 133
Chapter 8 Sampling Distributions . . . . . . . . . . . . . . . . . . . . . . . . 137
8.1 Sampling Distribution of Sample Mean . . . . . . . . . . . . . . . . . . 138
8.2 The Central Limit Theorem . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
8.2.1 Sampling Distribution of Sample Proportion . . . . . . . . . . 147
8.3 Chi-Square Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
8.4 The Student’s t-Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . 153
8.5 Snedecor’s F-Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
8.6 The Poisson Approximation to the Binomial Distribution . . . . . 158
8.7 The Normal Approximation to the Binomial Distribution . . . . . 159
Chapter 9 Point and Interval Estimation . . . . . . . . . . . . . . . . . . . 165
9.1 Point Estimation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
9.1.1 Properties of Point Estimators . . . . . . . . . . . . . . . . . . . . 167
9.2 Interval Estimation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
9.2.1 Interpretation of a Confidence Interval . . . . . . . . . . . . . . 172
9.3 Confidence Intervals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
9.3.1 Confidence Interval for Population Mean When
the Sample Size Is Large . . . . . . . . . . . . . . . . . . . . . . . . 173
9.3.2 Confidence Interval for Population Mean When
the Sample Size Is Small . . . . . . . . . . . . . . . . . . . . . . . . 177
9.4 Confidence Interval for the Difference between Two
Population Means . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
x Contents
9.4.1 Large Sample Confidence Interval for the

Difference between Two Population Means . . . . . . . . . . 180
9.4.2 Small Sample Confidence Interval for the
Difference between Two Population Means . . . . . . . . . . 183
9.5 Confidence Intervals for Population Proportions When
Sample Sizes Are Large . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
9.5.1 Confidence Interval for p the Population Proportion . . . . 188
9.5.2 Confidence Interval for the Difference of
Two Population Proportions . . . . . . . . . . . . . . . . . . . . . . 189
9.6 Determination of Sample Size . . . . . . . . . . . . . . . . . . . . . . . . . 192
9.7 Confidence Interval for Population Variances . . . . . . . . . . . . . . 195
9.7.1 Confidence Interval for a Population Variance . . . . . . . . . 196
Chapter 10 Hypothesis Testing . . . . . . . . . . . . . . . . . . . . . . . . . . 201
10.1 Basic Concepts of Testing Statistical Hypotheses . . . . . . . . . . . 201
10.2 Testing Statistical Hypotheses about One Population Mean
When Sample Size Is Large . . . . . . . . . . . . . . . . . . . . . . . . . . 208
10.2.1 Population Variance Is Known . . . . . . . . . . . . . . . . . . . 208
10.2.2 Population Variance Is Unknown . . . . . . . . . . . . . . . . . 213
10.3 Testing Statistical Hypotheses about the Difference Between
Two Population Means When the Sample Sizes Are Large . . . . 216
10.3.1 Population Variances Are Known . . . . . . . . . . . . . . . . . 216
10.3.2 Population Variances Are Unknown . . . . . . . . . . . . . . . 219
10.4 Testing Statistical Hypotheses about One Population Mean
When Sample Size Is Small . . . . . . . . . . . . . . . . . . . . . . . . . . 222
10.4.1 Population Variance Is Known . . . . . . . . . . . . . . . . . . . 223
10.4.2 Population Variance Is Unknown . . . . . . . . . . . . . . . . . 226
10.5 Testing Statistical Hypotheses about the Difference Between
Two Population Means When Sample Sizes Are Small . . . . . . . 229
10.5.1 Population Variances 12 and 22 Are Known . . . . . . . . 230
10.5.2 Population Variances 12 and 22 Are Unknown
But 12 22 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . 232
and 12 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235
10.6 Paired t-Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237
10.7 Testing Statistical Hypotheses about Population Proportions . . . 240
10.7.1 Testing of Statistical Hypotheses about One
Population Proportion When Sample Size Is
Large . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240
10.7.2 Testing of Statistical Hypotheses about the
Difference Between Two Population Proportions
When Sample Sizes Are Large . . . . . . . . . . . . . . . . . . . 242
10.8 Testing Statistical Hypotheses about Population Variances . . . . 244
10.8.1 Testing Statistical Hypotheses about One
Population Variance . . . . . . . . . . . . . . . . . . . . . . . . . . . 245
10.8.2 Testing Statistical Hypotheses about the Two
Population Variances . . . . . . . . . . . . . . . . . . . . . . . . . . 247
10.9 An Alternative Technique for Testing of Statistical Hypotheses
Using Confidence Intervals . . . . . . . . . . . . . . . . . . . . . . . . . . . 250
Contents xi
Chapter 11 Computing Resources to Support Applied

Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255
11.1 Using MINITAB, Version 14 . . . . . . . . . . . . . . . . . . . . . . . . . 255
11.1.1 Getting Started . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256
11.1.2 Calculating Descriptive Statistics . . . . . . . . . . . . . . . . . 258
11.1.3 Probability Distributions . . . . . . . . . . . . . . . . . . . . . . . 269
11.1.4 Estimation and Testing of Hypotheses about
Population Mean and Proportion . . . . . . . . . . . . . . . . . 273
11.1.5 Estimation and Testing of Hypotheses about Two
Population Means and Proportions . . . . . . . . . . . . . . . . 276
11.1.7 Testing Normality . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282
11.2 Using JMP, Version 5.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284
11.2.1 Getting Started with JMP . . . . . . . . . . . . . . . . . . . . . . . 284
11.2.2 Calculating Descriptive Statistics . . . . . . . . . . . . . . . . . 286
11.2.3 Estimation and Testing of Hypotheses about One
Population Mean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295
11.2.5 Normality Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301
11.3 Web-based Computing Resources . . . . . . . . . . . . . . . . . . . . . . 303
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311
Table I Binomial probabilities . . . . . . . . . . . . . . . . . . . . . . . 312
Table II Poisson probabilities . . . . . . . . . . . . . . . . . . . . . . . . 315
Table III Standard normal distribution . . . . . . . . . . . . . . . . . . 317
Table IV Critical values of χ2 with degrees of freedom . . . . 318
Table V Critical values of t with degrees of freedom . . . . . . 320
Table VI Critical values of F with numerator and
denominator degrees of freedom 1, 2
respectively ( 0.10) 321
Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329
About the Authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333
1
Setting the Context
for Six Sigma
I
t is important to begin our discussion of applied statistics by recognizing
that Six Sigma (6) has come to refer simultaneously to two related but
different ideas. The first idea is that of the technical definition as a statis-
tical concept—this technical definition will be provided and explained in
sections 1.1 and 1.2, respectively. The second idea is that of a comprehensive
approach and methodology for problem solving and process improvement—
this comprehensive approach and methodology will be briefly outlined in
section 1.3; however, a thorough discussion of the 6 approach and method-
ology is beyond the scope of this book. The remainder of the chapter will be
devoted to describing how the green belt contributes to 6 efforts (section
1.4) and how the green belt goes about the task of converting data into use-
ful information (section 1.5).
1.1 Six Sigma Defined as a Statistical Concept

Six Sigma is a measure of process quality wherein the distance between a
target value and the upper or lower specification limit is at least six standard
deviations. The most widely publicized consequence of a 6 process is that
there are 3.4 defects per million opportunities (DPMO). DPMO is defined
not as a count of defects alone, but rather as a ratio of defects compared to
the number of opportunities for defects to occur.
Since most operators, service providers, technicians, engineers, and
managers are trained to think in terms of counting total defects, the concept
of comparing defects to opportunities for defects to occur is counterintuitive.
In fact, determining what constitutes an “opportunity” for a defect to occur
has, in some circles, become controversial. Now combining these ideas of
3.4 DPMO, that defects are compared to opportunities for those defects to
occur and that the definition of an opportunity is not universally agreed upon,
means we have a statistical concept (i.e., 6) that is difficult for a great many
people to understand—even for professionals with advanced levels of statis-
tical training and education!
1
2 Chapter One
Not to worry! We can readily understand the meaning of this 6 concept

if we avoid the unnecessary rigor of a theoretical discussion and focus on its
application.
1.2 Now, Six Sigma Explained

as a Statistical Concept
In its purest statistical form, 6 refers to six standard deviations and
describes the variability of a process in what is commonly referred to as a
“measure of dispersion.” In this case, three standard deviations would be
located above some “measure of location” such as a mean or average, and
three standard deviations would be located below the same measure of loca-
tion, as illustrated in Figure 1.1.
As you can see from Figure 1.1, the standard deviations are combined to
form the boundaries of what is referred to as a “normal” distribution—this
normal distribution is also commonly referred to as the “bell-shaped” curve.
It is important to note that a much more detailed discussion of the topics
identified above, and related topics, will be provided where they are appro-
priate later in this book. For now, let us continue with our explanation of 6.
As was stated above, 6 refers to a defect rate equivalent to 3.4
DPMO—this is where understanding the term and concept of 6 can become
unnecessarily difficult. And while some people take great satisfaction in
being able to explain 6 at an excruciating level of technical detail, such
detail is not necessary to grasp a general understanding of the concept.
To avoid an unnecessary level of complexity, while still being able to
understand the concept, let us think of 6 as illustrated in Figure 1.2.
In Figure 1.2 we can readily see there is a normal or bell-shaped distribu-
tion. What makes the distribution interesting is that the width of the distribu-
tion that describes variability is quite narrow compared to some limits, for
example, specification limits. These specification limits are generally provided
µ − 3 σ µ µ +3 σ
Figure 1.1 The normal distribution.

Setting the Context for Six Sigma 3
LSL 0 +-1.5 σ USL
Cpk=1.5 Cp=2
3.4 DPMO Cp=2 Cpk=1.5 3.4 DPMO

Cp=Cpk=2
−6 σ −5 σ −4 σ −3 σ −2 σ −1σ 0 +1σ +2 σ +3 σ +4 σ +5 σ +6 σ
6 σ to LSL 6 σ to USL
Figure 1.2 Six Sigma (Motorola definition).
by customers in the form of tolerances and describe the values for which prod-
ucts or services must conform to be considered “good” or acceptable.
There is more to this explanation, however. Again, looking at Figure 1.2
we see that because the width of the distribution is so much smaller than the
width of the limits that it is possible for the location of the distribution to
move around, or vary, within the limits. This movement or natural variation
is inherent in any process, and so anticipating the movement is exactly what
we want to be able to do! In fact, we want as much room as possible for the
distribution to move within the limits so we do not risk the distribution mov-
ing outside these limits.
Now someone may ask, “Why would the distribution move around with-
in the limits?” and “How much movement would we expect?” Both are inter-
esting questions, and both questions help us better understand this concept
called 6 as it refers to quality.
When a process is operating, whether that process involves manufactur-
ing operations or service delivery, variation within that process is to be
expected. Variation occurs both in terms of the measures of dispersion (i.e.,
the width of a process) and measures of location (i.e., where the center of that
process lies). During normal operation we would expect the location of a
process (described numerically by the measure of location) to vary or move
/ 1.5 standard deviations. Herein lies explanation of 6.
Our goal is to reduce the variability of any process as compared to the
process limits to a point where there is room for a / 1.5 standard devia-
tion move, accounting for the natural variability of the process while con-
taining all that variability within the limits. Such a case is referred to as a 6
level of quality, wherein no more than 3.4 DPMO would be expected to fall
outside the limits.
1.3 Six Sigma as a Comprehensive Approach

and Methodology for Problem Solving
and Process Improvement
Having been mystified or confused about the technical definition of 6,
many people never fully develop an understanding that 6 is really referring
4 Chapter One
Commitment made to implement Six Sigma
Champion team
formed
Potential projects
identified and
evaluated
Begin/Charter
projects with Yes No Discontinue
Do projects
DMAIC meet criteria? consideration of
methodology project
Define phase
Measure phase
No
Is phase review
Analyze phase successfully
completed?
Improve phase
Yes
Control phase
Complete projects
with DMAIC
methodology
Verify financial Have financial Reconsider

No
payback criteria payback project
have been met criteria been selection criteria
met?
Yes
Complete project involvement and documentation
Figure 1.3 Current Six Sigma implementation flow chart.

more to a comprehensive approach and methodology for problem solving

and process improvement than to a statistical concept. Developing such an
understanding is necessary sooner, rather than later, because implementation
of 6 is based on the use of a wide variety of tools and techniques—some
statistical in nature and some not—where they are appropriate to support
each of several phases in the methodology.
While originally developed as a phased approach to problem solving and
process improvement, 6 started as a sequential progression of phases titled
Measure, Analyze, Improve, and Control (MAIC). Six Sigma was later
expanded to include a Define phase, as it became apparent more attention
was needed to identify, understand, and adequately describe problems or
opportunities. In what is now known as the DMAIC approach and method-
ology, 6 continues to be improved upon, and the addition of new phases as
formal components of the methodology is being discussed in various venues.
In its current form of implementation, however, Six Sigma is practiced as
identified in Figure 1.3.
However, as 6 evolves, it is clear that several levels of stakeholders,
participants, and team members will be needed to apply the tools and tech-
niques as they are called for within the methodology. And as a percentage of
the total number of people involved with 6 efforts, green belts will contin-
ue to represent one of the largest groups of stakeholders, participants, and
team members.
1.4 Understanding the Role of the Six Sigma

Green Belt as Part of the Bigger Picture
Green belts constitute one of the largest contributors to 6 efforts, as high-
lighted in Figure 1.4.
As seen in Figure 1.4, green belts are close to process operations and
work directly with shop floor operators and service delivery personnel.
Green belts most commonly collect data, make initial interpretations, and
begin to formulate recommendations that are fed to black belts. Black belts
then perform more thorough analyses, generally with additional data and
input from other sources, and make recommendations to master black belts
and project champions.
The flow of involvement and responsibilities described above is the
essence of how 6 has been implemented to date. What is interesting,
though, is not how 6 has been implemented to date, but how the imple-
mentation of 6 is changing. A current trend consistent with administration
of quality and certain management functions is to push responsibility to
lower levels within organizations. How this applies to implementation of 6
is that greater responsibility for problem or opportunity identification, data
collection, analysis, and corrective action is being levied on green belts.
To support that trend, many consultants providing 6 training now
include green belts and black belts in the same classes. This means that, in
many cases, green belts receive training on all the tools and techniques, as
do black belts, and the expectation is that green belts will assume more
6 Chapter One
6σ Master Black Belts
6σ Black Belts
6σ Green Belts
Process operators and service

delivery personnel
Figure 1.4 Six Sigma support personnel.
responsibility for day-to-day operation of 6 efforts. So we see a redefini-

tion of responsibilities wherein the green belts no longer simply collect data
as prescribed by black belts, but rather green belts are rapidly being tasked
with collecting data and, more importantly, converting that data into useful
information.
1.5 Converting Data into Useful Information

What does this mean, “converting data into useful information”? It implies
that data and information are somehow different things—they are! Data rep-
resent raw facts. Raw facts by themselves do not convey to us much mean-
ing. Consider Table 1.1.
Table 1.1 Process step completion times.

24 22 29 27 29
21 26 20 28 24
28 25 27 24 31
30 29 24 26 23
20 23 27 25 26
Table 1.1 has several rows and columns of numbers. These numbers cor-
respond to measurements of the average time to complete a process step. As
a collection of numbers, the data in Table 1.1 do not help us understand much
about the process. To really understand the process, we need to convert the
data into information, and to convert the data we use appropriate tools and
Table 1.2 Descriptive statistics.

Mean 25.52
Std Dev 3.0430248
Std Err Mean 0.608605
upper 95% Mean 26.776099
lower 95% Mean 24.263901
N 25
17.5 20 22.5 25 27.5 30 32.5
Figure 1.5 Histogram.
techniques. In this case we can use simple descriptive statistics to help us

quantify certain parameters and we can use graphics to help us visually con-
vert the data into information, as shown in Table 1.2 and Figure 1.5, respec-
tively.
Table 1.2 indicates the mean (or average) is 25.52 and the standard devi-
ation is 3.0430248. Now the data have been processed to give us a pair of
quantitative values, we can better understand the process. Figure 1.5 indicates
that the data appear to be distributed in a manner that looks like the normal
distribution—a bell-shaped curve. And while we do gain some understanding
of any given process by converting data into information such as the mean and
standard deviation, we generally also gain very useful information by pre-
senting the same data graphically. And so begins the job of the 6 green
belt—converting data into information.
As a final thought in this chapter, it is worth noting that not all informa-
tion is “useful” information. You will read about many tools and techniques
in the following chapters. It is important to note that these tools and tech-
niques are what we call “blind to mistakes and misinterpretations.” This is to
say that the tools and techniques will not tell you whether the information
you create is good or bad. Nor will the tools and techniques give you guid-
ance on how to interpret the information—for that you will have to learn the
lessons contained in this book and be careful what information to use, how
to use that information, and when.
2
Getting Started with Statistics
H
aving established a context for Six Sigma (6) in Chapter 1, it is time
to move forward with a discussion of selected statistical topics as
they relate to 6. More specifically, in this chapter we will examine
what is meant by the term statistics, differentiate between samples and pop-
ulations, learn how to classify types of data, and then begin to look at what
is meant by the term descriptive statistics.
2.1 What Is Statistics?

The term statistics is commonly used in two senses. In the first sense, we use
the term statistics in our day-to-day communication when we refer to col-
lections of numbers or facts. What follows are several examples of statistics:
1. In 1980, the salaries of CEOs from 10 selected companies
ranged from $200,000 to $500,000.
2. On average, the starting salary of engineers is 40% higher than
for technicians.
3. This year our company is expected to produce one million units
of production.
4. In 2002, the customer service department responded to its
highest level of inquiries ever.
5. The operating budget for our Cleveland, Ohio, facility is 50%
larger than the operating budgets for the rest of our 10 facilities
combined.
6. Our company is doing more work in repair services than in
direct manufacturing.
7. The demand for our services is lower when the economy is
recessional.
9
10 Chapter Two
8. The R&D budget of our pharmaceutical division is higher than

the R&D budget of our biomedical division.
9. The number of years our products are expected to be useful is
decreasing.
10. In 1998, more than 30% of the services we offered were
financially related.
In the second sense, we define statistics as a scientific subject that pro-
vides the techniques of collecting, organizing, summarizing, analyzing, and
interpreting information as input to make appropriate decisions. Accordingly,
the subject of statistics may be divided into two parts:
• Descriptive statistics
• Inferential statistics
Descriptive statistics uses techniques to organize, summarize, present,
and interpret a data set to draw conclusions that do not go beyond the bound-
aries of the data set. In inferential statistics, varieties of techniques are used
to generalize results obtained from a sample to the population and evaluate
their reliabilities. In this book we shall discuss descriptive as well as infer-
ential statistics.
Before we study descriptive and inferential statistics in more detail, it is
important that we discuss key terminology and definitions we will need to
support our discussions.
2.2 Populations and Samples

In our day-to-day life we think of a population as a collection of things, such
as all the people with whom we work or all the people working within a par-
ticular type of industry or business. In statistics, however, when referring to a
population, we may mean the group of people who share the same profession-
al responsibilities, the group of people who work at a specific site or facility,
or simply a set of numbers. We may, therefore, define a population as follows:
Definition 2.1 A population is a collection of all conceivable indi-

viduals, elements, numbers or entities which possess a characteristic
of interest.
For example, if we are interested in the ability of employees of a certain

company with a specific job title or classification to perform specific job func-
tions, the population may be defined as all employees working at the compa-
ny of interest across all of the sites and locations of that company with the
specific job title. If, however, we are interested in the ability of employees
with a specific job title or classification to perform specific job functions at a
particular location, the population may be defined as all employees with the
specific job title working only at the selected site or location. Populations,
therefore, are shaped by the point or level of interest.
Getting Started with Statistics 11
Populations can be finite or infinite. A population where all the elements

are easily identifiable is considered finite and a population where all the ele-
ments are not easily identifiable is considered infinite. For example, a batch
or lot of production is normally considered a finite population, whereas all
the production that may be produced from a certain manufacturing line
would normally be considered infinite.
It is important to note that in statistical applications the term infinite is
used in the relative sense. For instance, if we are interested in studying the
products produced or service delivery iterations occurring over a given peri-
od of time, the population may be considered finite or infinite depending
upon one’s frame of reference.
In any given statistical application, to study each element of a population
is not only time consuming and expensive but also impossible. For example,
if we are interested in studying the average life of a particular kind of elec-
tric bulb manufactured by a company, then obviously we cannot study the
whole population without destroying each bulb of that particular kind man-
ufactured by that company. Simply put, in almost all studies we end up
studying only a small portion, called a sample, of the population. More for-
mally we define a sample as follows:
Definition 2.2 A portion of a population selected for study is called

a sample.
The population from which a sample is selected is called a sampled pop-

ulation and the population being studied is called the target population.
Normally these two populations coincide with each other, since every effort
is made to ensure the sampled population is the same as the target popula-
tion. However, situations do arise when the sampled population does not
cover the whole target population. In such cases conclusions made about the
sampled population are not usually applicable for the target population.
In almost all statistical studies, conclusions about a population are made
based upon the information drawn from a sample. One must keep in mind that
such conclusions are valid only if the sample selected is a representative sam-
ple, that is, the sample possesses all the characteristics of the population that
is under investigation. One way to achieve this goal is by taking a random
sample. A sample is called a random sample if each element of the population
has the same chance of being included in the sample. There are several tech-
niques of selecting a random sample, but the concept that each element of the
population has the same chance of being included in a sample forms the basis
of all random sampling. In volume II of this series of books, we will dedicate
one full chapter to study four techniques of random sampling, namely, simple
random sampling, systematic random sampling, stratified random sampling,
and cluster random sampling.
2.3 Classification of Various Types of Data

In our professional lives we daily collect a large amount of non-numerical
and/or numerical data. For example, we may collect data concerning customer
12 Chapter Two
satisfaction, thoughts of employees, or perceptions of suppliers, or we may

track the number of employees in various departments of a company, weekly
production volume in units produced, or sales dollars per unit of time. All the
data we collect, however, cannot be treated the same way as there are differ-
ences in types of data. Accordingly, statistical data can normally be divided
into two major categories:
• Qualitative
• Quantitative
Each of these categories can be further subdivided into two subcate-

gories. The two subcategories of qualitative data are nominal and ordinal,
and the two subcategories of quantitative data are interval and ratio. We may
summarize this classification of statistical data as shown in Figure 2.1.
Statistical Data
Qualitative Quantitative
Nominal Ordinal Interval Ratio
Figure 2.1 Classifications of statistical data.
The classification of data as nominal, ordinal, interval, and ratio is

arranged in order of strength. In other words, nominal data is the weakest
and ratio data is the strongest in terms of the amount of information they can
provide.
2.3.1 Nominal Data

As mentioned above, nominal data contains the least amount of information.
Numbers representing nominal data are merely symbols used to label cate-
gories of a population. For example, production part numbers with a 2003
prefix are nominal data wherein the 2003 prefix indicates only that the parts
were produced in 2003 (in this case, the year 2003 serves as the category). No
arithmetic operation such as addition, subtraction, multiplication, or division
can be performed on numbers representing nominal data. For example, simi-
lar categories are used to represent the year in which the parts were produced,
such as 2000, 2001, and 2002. Adding the first two numbers and comparing
with the third number makes no sense. Other examples of nominal data are ID
numbers of workers, account numbers used by finance/accounting depart-
ments, zip codes, and telephone numbers.
2.3.2 Ordinal Data

Ordinal data are stronger than nominal data. When the ordering of categories
becomes important, the data collected is called ordinal. Using ordinal data,
Getting Started with Statistics 13
certain companies can be ranked according to the quality of their product;

according to annual revenues of the companies; or the severity of burn
injuries so that 1 represents very serious injury, 2 serious, 3 moderate, and 4
minor. No arithmetic operations can be performed on ordinal data.
Some other examples of ordinal data are represented by geographical
regions designated as A, B, C, and D for shipping purposes, preference of
vendors who can be called upon for service, and skill ratings of certain work-
ers of a company.
2.3.3 Interval Data

Interval data is numerical data, stronger than nominal and ordinal data but
weaker than ratio data. Typical examples of interval are temperature, flow
rate, and index number of hardness of a metal. Arithmetic operations addition
and subtractions are applicable, but multiplication and division are not appli-
cable. For example, the temperatures of three consecutive parts A, B, and C
during a selected step in a manufacturing process is 22°F, 28°F, and 23.5°F
respectively. We can say the temperature difference between parts A and B is
different from the difference between parts B and C. We can say that part B
is warmer than part A and that part C is warmer than part A but cooler than
part B. However, it would be meaningless to say that part B is nearly 20%
warmer than part A and nearly 15% warmer than part C. Moreover, in inter-
val data zero does not have the conventional meaning; it is just an arbitrary
point on the scale of measurement. For instance, 0°F and 0°C have different
meanings and are arbitrary points on different scales of measurements.
2.3.4 Ratio Data

Ratio data have the potential to produce the most meaningful information of
all the data types. All arithmetic operations are applicable on this type of
data. Examples of ratio data are height, weight, length of rods, diameter of a
ball bearing, RPM of a motor, number of employees in a company, and
hourly wages.
3
Describing Data Graphically
I
n Chapter 2 we introduced descriptive statistics. In this and the next chap-
ter we take a detailed look at the various methods that come under the
umbrella of descriptive statistics.
Commonly, practitioners applying statistics in a professional environment
become overwhelmed with large data sets they have collected. Occasionally,
practitioners even have difficulties understanding data sets because either too
many or too few factors are included/not included in the data sets that influence
a response variable of interest. In other cases, practitioners may doubt whether
the proper statistical technique was used to collect data. Consequently, the
information present in a selected data set may be biased or incomplete.
To avoid the situations described above, it is important to stay focused
on the purpose or need for collecting the data. By staying focused on the
purpose or need, it is much easier to ensure the use of appropriate data col-
lection techniques and the selection of appropriate factors. Descriptive sta-
tistics are commonly used in applied statistics to help us understand the
information contained in large and complex data sets. Next, we continue our
discussion of descriptive statistics by considering an important tool called
the frequency distribution table.
3.1 Frequency Distribution Table

Graphical methods allow us to visualize characteristics of the data, as well as
to summarize pertinent information contained in the data. The frequency dis-
tribution table is a powerful tool that helps summarize both quantitative and
qualitative data, enabling us to prepare additional types of graphics discussed
in this chapter.
3.1.1 Qualitative Data

A frequency distribution table for qualitative data consists of two or more cat-
egories along with the data points that belong to each category. The number
15
16 Chapter Three
of data points that belong to any particular category is called the frequency of
that category. For illustration, let us consider the following example.
Example 3.1 Consider a random sample of 110 small to midsize compa-
nies located in the midwestern United States. Classify them according to
their annual revenues (in millions of dollars).
Solution: We can classify the annual revenues into five categories:
Category 1—Annual revenue is under $250 million.
Category 2—Annual revenue is at least $250 million but less
than $500 million.
than $750 million.
than $1,000 million.
Category 5—Annual revenue is over $1,000 million.
The data collected are given in Table 3.1.
After tallying the data, we find that of the 110 companies, 30 belong in
the first category, 25 in the second category, 20 in the third category, 15 in
the fourth category, and 20 in the fifth category. The frequency distribution
table for these data is shown in Table 3.2.
Notes:
1. While preparing the frequency distribution table, we must
ensure that no data point belongs to more than one category and
that no data point is omitted from the count. In other words,
each data point must belong to only one category.
2. The total frequency is always equal to the total number of data
points in the data set. In the above example, the total frequency
is equal to 110.
Definition 3.1 A variable is a characteristic of the data under con-

sideration. For example, in the Example 3.1 data, a company’s annu-
al revenues are under consideration, so revenue is a variable.
The information provided in frequency distribution Table 3.1 can be

expanded if we include two more columns: a column of relative frequencies
and a column of cumulative frequencies. The column of relative frequencies is
Table 3.1 Annual revenues of 110 small to midsize companies in midwestern United
States.
1 4 3 5 3 4 1 2 3 4 3 1 5 3 4 2 1 1 4 5 5 3 5 2 1 2 1 2 3 3 2 1 5 3 2 1
1 1 2 2 4 5 5 3 3 1 1 2 1 4 1 1 1 4 4 5 2 4 1 4 4 2 4 3 1 1 4 4 1 1 21 5
3 1 1 2 5 2 3 1 1 2 1 1 2 2 5 3 2 2 5 2 5 3 5 5 3 2 3 5 2 3 5 5 2 3 2 5
Describing Data Graphically 17
Table 3.2 Frequency distribution table for 110 small to midsize companies in the
midwestern United States.
Category number Tally Category/Class frequency

1 ///// ///// ///// ///// ///// ///// 130
2 ///// ///// ///// ///// ///// 125
3 ///// ///// ///// ///// 120
4 ///// ///// ///// 115
5 ///// ///// ///// ///// 120
Total 110
Table 3.3 Complete frequency distribution table for the 110 small to midsize
companies in the midwestern United States.
Category Relative Cumulative

number Tally Frequency frequency Percentage frequency
1 ///// ///// ///// /////
///// ///// 30 30/110 27.27 30
2 ///// ///// ///// /////
///// 25 25/110 22.73 55
3 ///// ///// ///// ///// 20 20/110 18.18 75
4 ///// ///// ///// 15 15/110 13.64 90
5 ///// ///// ///// ///// 20 20/110 18.64 110
Total 110 1 100%
obtained by dividing the frequency of each class by the total frequency. The
column of the cumulative frequencies is obtained by adding the frequency of
each class to the frequencies of all the preceding classes so that the last entry
in this column is equal to the total frequency. Some practitioners like to use a
column of percentages instead of the relative frequency column or both. The
percentage column is easy to obtain, that is, just multiply each entry in the rel-
ative frequency column by 100. For example, the expanded (or complete) ver-
sion of Table 3.2 is as shown in Table 3.3.
Sometimes a data set is such that it consists of only a few distinct obser-
vations, which occur repeatedly. This kind of data is normally treated in the
same way as the categorical data. The categories are represented by the dis-
tinct observations. We illustrate this scenario with the following example.
Example 3.2 The following data show the number of coronary artery
bypass graft surgeries performed at a hospital in 24 hour periods during the
past 50 days. Bypass surgeries are usually performed when a patient has
multiple blockages or when the left main coronary artery is blocked.
1 2 1 5 4 2 3 1 5 4 3 4 6 2 3 3 2 2 3 5 2 5 3 43
1 3 2 2 4 2 6 1 2 6 6 1 4 5 4 1 4 2 1 2 5 2 24 3
Construct a complete frequency distribution table for these data.
18 Chapter Three
Table 3.4 Complete frequency distribution table for the data in example 3.2.
Category Relative Cumulative

number Tally Frequency frequency Percentage frequency
1 ///// /// 18 8/50 16 8
2 ///// ///// /// 13 13/50 26 21
3 ///// ///// 10 10/50 20 31
4 ///// //// 19 9/50 18 40
5 ///// / 16 6/50 12 46
6 //// 14 4/50 18 50
Total 50 1 100%
Solution: In this example the variable of interest is the number of bypass

surgeries performed at a hospital in a period of 24 hours. Now, following the
discussion in Example 3.1, we can see the frequency distribution table for the
data in this example in Table 3.4.
The frequency distribution table in Table 3.4 is usually called a single-
valued frequency distribution table.
Interpretation of a Frequency Distribution Table In Table 3.4 the entries in

row 2, for example, refer to category 2. Entries in row 2 and in column 1
indicate that the number of bypass surgeries performed in 24 hours is two.
Entries in column 2 count the number of days when two bypass surgeries are
performed. Column 3 indicates that on 13 days two bypass surgeries are per-
formed. Column 4 indicates the proportion of days (13 out of 50) on which
two bypass surgeries are performed. Column 5 indicates that on 26% of the
days two bypass surgeries are performed. Column 6 indicates that on 21 days
the number of bypass surgeries performed is one or two.
3.1.2 Quantitative Data

In the preceding section we studied frequency distribution tables for qualita-
tive data. In this section we will discuss frequency distribution tables for
quantitative data.
Let x1, x2, - - -, xn be a set of quantitative data. We would like to construct
a frequency distribution table for this data set. In order to prepare such a table
we need to go through the following steps.
Step 1 Find the range of the data that is defined as
Range (R) largest data point smallest data point (3.1)
Step 2 Divide the data set into an appropriate number of classes/categories.
The appropriate number of classes/categories is commonly defined as the
variable m, which is determined in one of two ways: (1) As a rule of thumb
where m is between 5 and 20 classes or categories such that the average num-
ber of data points in each class or category is about six or seven, or (2) we
may use Sturge’s formula:
m 1 3.3 log n (3.2)
Where n is the total number of data points in a given data set.
Step 3 Determine the width of classes as follows:
Class width R/m (3.3)
Step 4 Finally, prepare the frequency distribution table by assigning each
data point to an appropriate class or category. While assigning these data
points to a class, we must be particularly careful to ensure that each data
point is assigned to only one class and that the whole set is included in the
table. It is also important that the class on the lowest end of the scale must
be started with a number less than or equal to the smallest data point and that
the class on the highest end of the scale must end with a number greater than
or equal to the largest data point in the data set.
Notes:
1. Quite often when we determine the class width, the number
obtained by dividing R with m is not an easy number to work
with. In such cases we should always round this number up,
preferably to a whole number. Never round it down.
2. If we use Sturge’s formula to find the number of classes, then
usually the value of m is not a whole number. In that case one
must round it up or down to a whole number since the number
of classes can only be a whole number.
Example 3.3 The following data define the lengths (in millimeters) of 40
randomly selected rods manufactured by a company
145 140 120 110 135 150 130 132 137 115
142 115 130 124 139 133 118 127 144 143
131 120 117 129 148 130 121 136 133 147
147 128 142 147 152 122 120 145 126 151
Prepare a frequency distribution table for these data.
Solution: Following the steps described above, we have
1. Range (R) 152 110 42
2. Number of classes 1 3.3 log 40 6.29, which, by
rounding becomes 6.
3. Class width R/m 42/6 7
The six classes we use to prepare the frequency distribution table are 110
to under 117, 117 to under 124, 124 to under 131, 131 to under 138, 138 to
under 145, and 145 to 152.
Note that in the case of quantitative data, each class is defined by two
numbers. The smaller of the two numbers is usually called the lower limit
20 Chapter Three
Table 3.5 Frequency table for the data on rod lengths.
Relative Cumulative
Classes Tally Frequency frequency Percentage frequency
[110–117) /// 3 3/40 7.5 3
[117–124) ///// // 7 7/40 17.5 10
[124–131) ///// /// 8 8/40 20.0 18
[131–138) ///// // 7 7/40 17.5 25
[138–145) ///// / 6 6/40 15.0 31
[145–152] ///// //// 9 9/40 22.5 40
Total 40 1 100%
and the larger is called the upper limit. Note that except for the last class, the
upper limit does not belong to the class. This means, for example, the data
point 117 will be assigned to class 2 and not class 1. This way no two class-
es have any common point, which ensures each data point will belong to only
one class. For simplification we will use mathematical notations to denote
the above classes as
[110–117), [117–124), [124–131), [131–138), [138–145), [145–152]
where customarily the symbol [ implies that the end point belongs to the class
and ) implies that the end point does not belong to the class. Then the fre-
quency distribution table for the data in this example is as shown in Table 3.5.
Once data are placed in a frequency distribution table, the data are
grouped data. Once the data are grouped, it is not possible to retrieve the
original data; it is important to note that when grouping data some informa-
tion will be lost. As we shall see in the next chapter, by using grouped data,
we cannot expect to get as accurate a result as we might expect by using
ungrouped data. In the next chapter we will also see that in order to calculate
certain quantities, such as the mean and variance, using grouped data we
need to define another quantity, the class mark or class midpoint, which is
defined as the average of the upper and the lower limit. For example, the mid-
point of class 1 in the above example is:
Midpoint of class 1 (110 117)/2 113.5 (3.4)
3.2 Graphical Representation of a Data Set

Graphical representation of a data set is a powerful tool that provides us with
good visual and instantaneous information that helps us analyze the data.
3.2.1 Dot Plot

A dot plot is one of the easiest graphs to construct. In a dot plot each obser-
vation is plotted on a real line. For illustration we consider the following
example.
DOT PLOT
DESCRIPTION A graphical tool used to provide visual
information about the distribution of a single
variable.
USE Used to assess the distribution of a single

variable. Two side-by-side dot plots can be
used to compare the distribution of two
different data sets. Pioneer statisticians
used Dot Plots to compare the results of
different experiments when other
sophisticated techniques to analyze data
were not available.
TYPE OF DATA Numerical (quantitative) data.
DESIGN/APPLICATION Data may have unusually large range or

CONSIDERATIONS may be concentrated only at few points.
SPECIAL COMMENTS/CONCERNS Simplest graph to study, particularly in small

quantitative data sets. Does not provide
particularly sound information for analysis.
RELATED TOOLS A similar graph for studying two variables

simultaneously is a scatter plot.
Example 3.4 The following data gives the number of defective motors
received in 20 shipments.
8 12 10 16 6 25 21 15 17 5
26 21 29 8 10 21 10 17 15 13
Construct a dot plot for this data.
Solution: To construct a dot plot first draw a horizontal line, the scale of
which begins at the smallest observation (5 in this case) or smaller and ends
with the largest observation (29 in this case) or larger (see Figure 3.1).
Dot plots usually are more useful when the sample size is small. A dot
plot gives us, for example, information about how far the data are scattered
and where most of the observations are concentrated. For instance, in the
above example, we see that the minimum number of defective motors and the
maximum number of defective motors received in any shipment was 5 and
29, respectively. Also, we can see that 75% of the time, the number of defec-
tive motors was between 8 and 21 for the shipment, and so on.
4 8 12 16 20 24 28 30
Defective Motors
Figure 3.1 Dot plot for the data on defective motors that are received in 20
shipments.
22 Chapter Three
3.2.2 Pie Chart
PIE CHART
DESCRIPTION A graphical tool to study a population when
it is divided into different categories. Each
category is represented by a slice of the pie
with angle at the center of the pie
proportional to the frequency of the
corresponding category.
USE Used to study budget distributions,

demographic data, or to study various
aspects in manufacturing processes such
as the percentage of different sizes of parts
in inventory or parts produced at different
plants or in different shifts etc.
TYPE OF DATA Categorical (qualitative) data.
DESIGN/APPLICATION Pie Chart shows how the total quantity

CONSIDERATIONS (population) is divided and allocated to
different categories.
SPECIAL COMMENTS/CONCERNS A simple visual technique to summarize a

categorical data set.
RELATED TOOLS Bar chart.
Pie charts are commonly used to represent categories of a population that are
created by a characteristic of interest of that population. Examples include
allocation of federal budget by sector, revenues of a large manufacturing com-
pany by region, and technicians in a large corporation by qualification, that is,
high school diploma, associate degree, undergraduate degree, or graduate
degree, and so on. The pie chart helps us better understand at a glance the
composition of the population with respect to the characteristic of interest.
To construct a pie chart, divide a circle into slices such that each slice
represents a category proportional to the size of that category. Remember, the
total angle of the circle is 360 degrees. The angle of a slice corresponding to
a given category is determined as follows:
Angle of a slice (Relative frequency of the given category) 360.
We illustrate the construction of a pie chart using the data in example 3.5.
Example 3.5 In a manufacturing operation we are interested in better
understanding defect rates as a function of our various process steps. The
inspection points are initial cutoff, turning, drilling, and assembly. These
data are shown in Table 3.6. Construct a pie chart for these data.
Solution: The pie chart for these data is constructed by dividing the circle
into four slices. The angle of each slice is given in the last column of Table
3.6. The pie chart appears in Figure 3.2.
Table 3.6 Understanding defect rates as a function of various process steps.
Process steps Frequency Relative frequency Angle size

Initial cutoff 86 86/361 85.75
Turning 182 182/361 181.50
Drilling 83 83/361 82.75
Assembly 10 10/361 10.00
Total 361 1.000 360.00
Assembly
2.8%
Initial cutoff
Drilling 23.8%
23.0%
Turning
50.1%
Figure 3.2 Pie chart for defects associated with manufacturing process steps.
Clearly the pie chart in Figure 3.2 gives us a better understanding at a

glance about the rate of defects occurring at different process steps.
3.2.3 Bar Chart

Bar charts are commonly used to study one or more populations classified
into various categories, such as by sector, by region, or over different periods.
For example, we may want to know more about the sales of our company by
sector, by region, or over different periods. A bar chart is constructed by cre-
ating categories represented by intervals of equal length on a horizontal axis,
or x-axis. Within each category we indicate observations as a frequency of the
corresponding category, which is represented by a bar of length proportional
24 Chapter Three
BAR CHART
DESCRIPTION A graphical tool in which frequency of each
category of qualitative data is represented
by a bar of height proportional to the
corresponding category.
USE Provides a visual display of qualitative data.

It is also used to compare two or more sets
of qualitative data.
TYPE OF DATA Categorical (qualitative) data.
DESIGN/APPLICATION Units used in each category must be

CONSIDERATIONS identical. For example, comparing parts
manufactured by different companies must
have identical specifications. Categories
must be isolated from each other.
SPECIAL COMMENTS/CONCERNS A bar chart can be presented vertically or

horizontally. It differs from the Pie Chart in
the sense that it can be used to compare
two or more populations whereas the Pie
Chart can be used only to study one
population.
RELATED TOOLS The Pareto Chart, which is a powerful tool in

SQC, is a special case of the Bar Chart.
to the frequency. We illustrate the construction of a bar chart in the examples

that follow.
Example 3.6 The following data give the annual revenues (in millions of
dollars) of a company over a period of five years (1998–2003).
78 92 95 94 102
Construct a bar chart for these data.
Solution: We construct a bar chart that is shown in Figure 3.3.
Example 3.7 A company that manufactures auto parts is interested in
studying the types of defects that occur in parts produced at a particular
plant. The following data show the types of defects that occurred over a cer-
tain period.
BACABAEDCABCDCAEABAB
CEDCAEADBCBABEDBDBEA
CABCECBABE
Construct a bar chart for the types of defects found in the auto parts.
Solution: To construct a bar chart, we first need to prepare a frequency dis-
tribution table. The data in this example are qualitative, and the categories are
the types of defects, namely, A, B, C, D, and E. The frequency distribution
table is shown in Table 3.7.
100
80
60
40
20
0
1998 1999 2000 2001 2002
Figure 3.3 Bar graph for annual revenues of a company over the period of five
years.
Table 3.7 Frequency distribution table for the data in Example 3.7.
Relative Cumulative
Categproes Tally Frequency frequency frequency
A ///// ///// //// 14 14/50 14
B ///// ///// /// 13 13/50 27
C ///// //// 9 9/50 36
D ///// // 7 7/50 43
E ///// // 7 7/50 50
Total 50 1.00
To construct the bar chart we label the intervals of equal length on the x-
axis with the types of defects and then indicate the frequency of observations
associated with the defect within that interval. The observations are taken to
be equal to the frequency of the corresponding categories. The desired bar
graph appears in Figure 3.4, which shows that the defects of type A occur
most frequently, type B occur second most frequently, type C occur third
most frequently, and so on.
Example 3.8 The following data give the frequency defect types in
Example 3.7, as auto parts manufactured over the same period in two plants
that have the same manufacturing capacity.
Defect Type A B C D E Total

Plant I 14 13 9 7 7 50
Plant II 12 18 12 5 5 52
26 Chapter Three
Construct a bar chart comparing the types of defects occurring in auto

parts manufactured in the two plants.
Solution: The bar chart for the data in this example appears in Figure 3.5.
Bar charts as shown in Figure 3.5 are commonly used to compare two or
more populations. We can visually observe that defect types B, C, and E
occur less frequently and that defect types A and D occur more frequently in
Plant I than in Plant II.
14
12
10
Frequency
Frequency
0
A B C D E
Defect
Defect type
type
Figure 3.4 Bar graph for the data in Example 3.7.
20
15
10
0
P1 P2 P1 P2 P1 P2 P1 P2 P1 P2
A B C D E
Defect type
Figure 3.5 Bar charts for types of defects in auto parts manufactured in Plant I (P1)
and Plant II (P2).
HISTOGRAM
DESCRIPTION A graphical tool consisting of bars
representing the frequencies or relative
frequencies of classes or categories of
quantitative data. The height of each bar is
equal to the frequency or relative frequency
of the corresponding class.
USE Used to asses visually the probability

distribution of the quantitative data.
DESIGN/APPLICATION To verify the normality assumption to see if

CONSIDERATIONS we need any transformation for the data to
meet the normality condition.
SPECIAL COMMENTS/CONCERNS The information provided by a histogram

is valid when the data set is sufficiently
large. Each bar should be of the same
width and there should not be any gap
between bars.
RELATED TOOLS Frequency polygon, stem and leaf diagram.
3.2.4 Histograms and Related Graphs

Histograms are popular graphs used to represent quantitative data graphi-
cally. Histograms usually provide us useful information about a data set, for
example, information about trends, patterns, location/center of the data, and
dispersion of the data. Such information is not particularly apparent from
raw data.
Construction of a histogram involves two major steps:
Step 1 Prepare a frequency distribution table for the given data.
Step 2 Use the frequency distribution table prepared in step 1
to construct the histogram. From here the steps involved in
constructing a histogram are exactly the same as steps taken
to construct a bar chart except that in a histogram there is
no gap between the intervals marked on the x-axis. We
illustrate the construction of a histogram with the following
example.
Note that a histogram is called a frequency histogram or a relative fre-
quency histogram depending upon whether the heights of rectangles erected
over the intervals marked on the x-axis are proportional to the frequencies or
to the relative frequencies. In both types of histograms the width of rectan-
gles is equal to the class width. In fact, the only difference between the two
histograms is that the scales used on the y-axes are different. This point
should become clear from the following example.
28 Chapter Three
Example 3.9 The following data give the survival time (in hours) of 50
parts involved in a field test under extreme operating conditions:
60 100 130 100 115 30 60 145 75 80 89 57 64 92 87 110 180 195 175 179
159 155 146 157 167 174 87 67 73 109 123 135 129 141 154 166 179 37 49
68 74 89 87 109 119 125 56 39 49 190
a. Construct a frequency distribution table for the above data.

b. Construct frequency and relative frequency histograms for the
above data.
Solution:
a.
1. Find the range of the data.
R 195 – 30 165
2. Determine the number of classes.
m 1 3.3 log 50
6.57
By rounding it we consider the number of classes to be equal to 7.
3. Compute the class width.
Class width R/m 165/7 23.57
By rounding up this number we have class width equal to 24. As noted
earlier, we always round up the class width to a whole number or to any
other number that may be easy to work with. Note that if we round down
the class width, then some of the observations may be left out of our count
and not belong to any class. Consequently the total frequency will be less
than n. The frequency distribution table for the data in this example is as
shown in Table 3.8.
Table 3.8 Frequency distribution table for the survival time of parts.
Relative Cumulative
Classes Tally Frequency frequency frequency
[30–54) ///// 5 5/50 5
[54–78) ///// ///// 10 11/50 16
[78–102) ///// //// 9 8/50 24
[102–126) ///// // 7 7/50 31
[126–150) ///// / 6 6/50 37
[150–174) ///// / 6 6/50 43
[174–198] ///// // 7 7/50 50
Total 50 1
10
Frequency
30 54 78 102 126 150 174 198
Data
Figure 3.6 Frequency histogram for survival time of parts under extreme operating
conditions.
b. Having completed the frequency distribution table, now we are

ready to construct the histograms. To construct the frequency
histogram, we mark the classes on the x-axis and the
frequencies on the y-axis. Remember that when we mark the
classes on the x-axis we must make sure there is no gap
between the classes. Then on each class marked on the x-axis,
place a rectangle where the height of each rectangle is
proportional to the frequency of the corresponding class. The
frequency histogram for the data with a frequency distribution
given in Table 3.8 is shown in Figure 3.6.
To construct the relative frequency histogram, just change the scale on
the y-axis in Figure 3.6 so that instead of plotting the frequencies, we can
plot relative frequencies. The resulting graph shown in Figure 3.7 will be the
relative frequency histogram for the data, with a relative frequency distribu-
tion given in Table 3.8.
As described earlier, it is interesting to note that the two histograms
shown in Figures 3.6 and 3.7 are identical except for the scale on the y-axis.
It is important to remember that quite often we encounter data where the
last few observations are very sparse, so that the last few classes have hard-
ly any observations in them. For instance, in Example 3.9, it could happen
that there are few parts that survived 200 or more hours. In such cases we
usually keep the last class open at the upper end and include all sparse obser-
vations in that class. For example, if in Example 3.9 some sparse observa-
tions were present, then the last class in Table 3.9 would become [174– ).
Similarly, if that kind of scenario occurs at the lower end, we keep the lower
30 Chapter Three
10/50
Relative frequency
5/50
0.0
30 54 78 102 126 150 174 198
Data
Figure 3.7 Relative frequency histogram for survival time of parts under extreme
operating conditions.
10
Frequency
30 54 78 102 126 150 174 198

Data
Figure 3.8 Frequency polygon for the data in Example 3.9.
end of class one open and include all the sparse observations that may be
present in the data in class 1.
Another graph that becomes the basis of probability distributions that we
will study in later chapters is called the frequency polygon or relative fre-
quency polygon, depending upon which histogram is used to construct this
graph.
To construct the frequency or relative frequency polygon, first mark the
midpoints on the top ends of the rectangles of the corresponding histogram
10/50
Relative frequency
5/50
30 54 78 102 126 150 174 198

Data
Figure 3.9 Relative frequency polygon for the data in Example 3.9.
f (x)
Figure 3.10 A typical frequency distribution curve.
and then simply join these midpoints. Note that we include classes with zero
frequencies at the lower as well as at the upper end of the histogram so that
we can connect the polygon with the x-axis. The curves obtained by joining
the midpoints are called the frequency or relative frequency polygons as the
case may be. The frequency polygon and the relative frequency polygon for
the data in Example 3.9 are shown in Figure 3.8 and Figure 3.9 respectively.
Sometimes a data set consists of a very large number of observations,
and that results in having a large number of classes of very small widths. In
such cases frequency polygons or relative frequency polygons become
smooth curves. For example, Figure 3.10 shows one such smooth curve.
Such curves are usually called frequency distribution curves and repre-
sent the probability distributions of continuous random variables. We will
study probability distributions of continuous random variables in Chapter 7.
Our comments on this topic indicate the importance of the histogram, as they
eventually become the basis of probability distributions.
32 Chapter Three
Figure 3.11 Three types of frequency distribution curves.
50
40
Cumulative frequency
30
20
10
30 54 78 102 126 150 174 198
Data
Figure 3.12 Cumulative frequency histogram for the data in Example 3.9.
The shape of the frequency distribution curve depends on the shape of

its corresponding histogram, which, in turn, depends on the given set of
data. The shape of a frequency distribution curve can be of any type, but in
general we have three types of frequency distribution curves, shown in
Figure 3.11.
Cumulative Frequency Histogram If we now use cumulative frequencies

instead of simple frequencies or relative frequencies, we get what is known
as a cumulative frequency histogram. The cumulative frequency histogram
for the data in Example 3.9 on survival time of part is shown in Figure
3.12.
Now, if we add another class with zero frequency only at the lower end
of the cumulative frequency histogram and join the end points, instead of the
midpoints, we get an ogive curve. We show the ogive curve for the survival
data in Example 3.9 in Figure 3.13.
50
40
Cumulative frequency
30
20
10
6 30 54 78 102 126 150 174 198
Data
Figure 3.13 Ogive curve for the survival data in Example 3.9.
3.2.5 Line Graph
LINE GRAPH
DESCRIPTION A graphical tool used to display a time
series data.
USE Used to assess the trend or trends in a

quantitative data that might occur over time.
It may be used to study the effect of one or
more factors on a response variable.
DESIGN/APPLICATION Any trends in the data may violate the

CONSIDERATIONS conditions of the underlying model.
SPECIAL COMMENTS/CONCERNS The results displayed by the line graph

should be verified by using numerical
methods.
RELATED TOOLS Control charts, frequency polygon.
A line graph, also known as time series graph, is commonly used to study
any changes that take place over time in the variable of interest. In a line
graph, time is marked on the horizontal axis or x-axis and the variable on the
vertical axis or y-axis. For illustration we use the data in Example 3.10.
34 Chapter Three
Example 3.10 The following data give the number of lawn mowers sold by
a garden shop in one year:
Month Jan. Feb. Mar. April May June July Aug. Sept. Oct. Nov. Dec.
LMS 2 1 4 10 57 62 64 68 40 15 10 5
Prepare a line graph for the above data.

Solution: To prepare the line graph, plot the above data using x-axis for the
months and the y-axis for the lawn mowers sold and then join the plotted
points with a freehand curve. The line graph for the data in this example is
shown in Figure 3.14.
From the line graph in Figure 3.14 we can see that the sale of lawn mow-
ers is seasonal, since more mowers are sold in the summer months. Another
point worth noting is that a good number of lawn mowers are sold in
September when summer is winding down. This may be explained by the
fact that many stores offer sales to clear out such items when the season is
about to end. Any mower sales during the winter months may be because of
discounted price, or the store may be located where winters are mild and
there is still a need for mowers, but at a much lesser frequency.
3.2.6 Stem and Leaf Diagram

A stem and leaf diagram is a powerful tool that is used to summarize quan-
titative data. The stem and leaf diagram has numerous advantages over the
frequency distribution table and the frequency histogram. One major advan-
tage of the stem and leaf diagram over the frequency distribution table is that
from a frequency distribution table we cannot retrieve the original data, but
from a stem and leaf diagram we can easily retrieve data in its original form.
Time series plot of lawn mowers sold

70 69
64
62
60 52
Lawn mowers sold
50
40
40
30
20 15
11 10
10 9 3
2 1
0
1 2 3 4 5 6 7 8 9 10 11 12
Figure 3.14 Line graph for the data on lawn mowers given in Example 3.10.
STEM AND LEAF DIAGRAM

DESCRIPTION A graphical tool used to display data using
actual data values. Each value is split into
two parts, the part with leading digits is
called the stem and the rest is called the
leaf.
USE Used very commonly for exploratory data

analysis.
DESIGN/APPLICATION In certain situations normality assumption

CONSIDERATIONS may not be valid and a data transformation
may be necessary.
SPECIAL COMMENTS/CONCERNS Unlike the histogram, stem and leaf diagram

does not lose the identity of the actual value
of the data point. Quite effective when the
data set is small.
RELATED TOOLS Frequency distribution table, histogram.
Table 3.9 Data on survival time (in hours) in example 3.9.
60 100 130 100 115 30 60 14 75 80 89 57 64 92 87 110 180

195 175 179 159 155 146 157 167 174 87 67 73 109 123 135 129 141
154 166 179 37 49 68 74 89 87 109 119 125 56 39 49 190
In other words, by preparing a stem and leaf diagram we do not lose any
information. We illustrate the construction of the stem and leaf diagram with
the following example.
Example 3.11 Use the data on survival time of parts in Example 3.9. The
data of Example 3.9 are reproduced in Table 3.9.
Solution: To create a stem and leaf diagram, we split each observation in
the data set into two parts, called the stem and the leaf. For this example we
split each observation at the unit place so that the digit at the unit place is a
leaf and the part to the left is a stem. For example, for observations 60 and
100 the stems and leaves are
Stem Leaf
6 0
10 0
To construct a complete stem and leaf diagram, list all the stems without
repeating them in a column and then list all the leaves in a row against its
corresponding stem. For the data in this example, we have the diagram
36 Chapter Three
(a) (b)
Stem Leaf Stem Leaf
3 3 0 7 9 3 3 0 7 9
5 4 9 9 5 4 9 9
7 5 7 6 7 5 6 7
12 6 0 0 4 7 8 12 6 0 0 4 7 8
15 7 5 3 4 15 7 3 4 5
21 8 0 9 7 7 9 7 21 8 0 7 7 7 9 9
22 9 2 22 9 2
(4) 10 0 0 9 9 (4) 10 0 0 9 9
24 11 5 0 9 24 11 0 5 9
21 12 3 9 5 21 12 3 5 9
18 13 0 5 18 13 0 5
16 14 5 6 1 16 14 1 5 6
13 15 9 5 7 4 13 15 4 5 7 9
9 16 7 6 9 16 6 7
7 17 5 9 4 9 7 17 4 5 9 9
3 18 0 3 18 0
2 19 5 0 2 19 0 5
Figure 3.15 Ordinary and ordered stem and leaf diagram for the data on survival
time for parts in extreme operating conditions in Example 3.9.
Note that in Figure 3.15(a) leaves occur in the same order as observa-
tions in the raw data. In Figure 3.15(b) leaves appear in the ascending order,
and that is why it is called an ordered stem and leaf diagram. By rotating
the stem and leaf diagram counterclockwise through 90 degrees, we see the
diagram can serve the same purpose as a histogram with stems serving the
role of classes, leaves as class frequencies, and rows of leaves as rectangles.
Unlike the frequency distribution table and histogram, the stem and leaf dia-
gram can be used to determine, for example, what percentage of parts sur-
vived between 90 and 145 hours. Using the stem and leaf diagram we can
see that 15 out of 50, or 30% of the parts, survived between 90 and 145
hours. Using either the frequency table or the histogram, this question can-
not be answered, since the interval 90 to 145 does not include whole parts
of classes 3 and 5. The first column in the graph is counting from the top
and the bottom the number of parts that survived up to and beyond certain
number of hours, respectively. For example, the entry in the fifth row from
the top indicates that 15 parts survived less than 80 hours, whereas the entry
in the fifth row from the bottom indicates that 13 parts survived at least 150
hours. The entry with parentheses indicates the row that contains the medi-
an value of the data. It is clear that we can easily retrieve the original data
from the stem and leaf diagram. Thus, for example, the first row in Figure
3.15 consists of data points 30, 37, and 39. Ultimately, we can see the stem
and leaf diagram is usually more informative than a frequency distribution
table or a histogram.
Breaking Each Stem into Two or Five Parts Quite often we deal with a large
data set that is spread in a narrow range. When we prepare a stem and leaf dia-
gram for data that do not indicate much variability, it becomes difficult to inter-
pret, as there are too many leaves on the same stem. The stem and leaf diagram
in which stems have too many leaves tend to be less informative since they are
not as clear as those in which the stems do not have too many leaves. To illus-
trate this scenario, we consider a stem and leaf diagram in Example 3.12.
Example 3.12 A manufacturing company has been awarded a huge con-

tract by the Defense Department to supply spare parts. In order to provide
these parts on schedule, the company needs to hire a large number of new
workers. To estimate how many workers to hire, representatives of the human
resources department took a random sample of 80 workers and found the
number of parts each worker produces per week. The data collected are
shown in Table 3.10.
Table 3.10 Number of parts produced by each worker per week.
66 71 73 70 68 79 84 85 77 75 61 69 74 80 83 82 86 87 78 81
82 74 73 69 68 87 85 86 87 89 90 92 71 93 67 66 65 68 73 72
75 76 74 89 86 91 92 65 64 62 67 63 69 73 69 71 76 77 84 83
68 81 87 93 92 81 80 70 63 65 62 69 74 76 83 85 91 89 90 85
Prepare a stem and leaf diagram for the data in Table 3.10.
Solution: The stem and leaf diagram for the data in Table 3.10 appears in
Figure 3.16.
The stem and leaf diagram in Figure 3.16 is not as informative as it
would be if it had more stems so that each stem had fewer leaves. We can
modify the diagram by breaking each stem into two parts so that the first part
carries leaves 0 thru 4 and the second one carries leaves 5 thru 9. The modi-
fied stem and leaf diagram is shown in Figure 3.17.
Sometimes even a two-stem and leaf diagram is insufficient in illustrat-
ing the desired information, since some of the stems still have too many
leaves. In such cases we can break each stem into five parts so that these
Stem Leaf
(22 6 1223345556677888899999
(23) 7 00111233334444556667789
(35 8 00111223334455556667777999
(29 9 001122233
Figure 3.16 Ordered stem and leaf diagram for the data in Table 3.10.
38 Chapter Three
Stem Leaf
(6 6.* 122334
(22 6* 5556677888899999
(36 7.* 00111233334444
(9) 7* 556667789
(35 8.* 001112233344
(23 8* 55556667777999
(9 9.* 001122233
Figure 3.17 Ordered two-stem and leaf diagram for the data in Table 3.10.
Stem Leaf
(1 6. 1
(5 6t 2233
(9 6f 4555
(13 6s 6677
(22 6* 888899999
(27 7. 00111
(32 7t 23333
(38 7f 444455
(5) 7s 66677
(37 7* 89
(35 8. 00111
(30 8t 22333
(25 8f 445555
(19 8s 6667777
(12 8* 999
(9 9. 0011
(5 9t 22233
Figure 3.18 Ordered five-stem and leaf diagram for the data in Table 3.10.
stems carry leaves 0–1, 2–3, 4–5, 6–7, and 8–9. The new stem and leaf dia-
gram appears in Figure 3.18.
Note that the stem and leaf diagram in Figure 3.18 has become much
simpler and accordingly more informative. It is also interesting to note
that the labels t, f, and s, used to denote the stems, have real meanings. In
this case, the stems indicate that in the leaves assigned to them, “t” stands
for two and three, “f” stands for four and five, and “s” stands for six and
seven.
3.2.7 Measure of Association

So far in this chapter we have dedicated our discussion to univariate statis-
tics because we were interested in studying only a single characteristic of a
subject of concern. The variable of interest was either qualitative or quanti-
tative. We now divert our attention to cases involving two variables; that is,
we simultaneously examine two characteristics of a subject of concern. The
two variables of interest could be either qualitative or quantitative. We will
study only variables that are quantitative in the remainder of this volume.
Qualitative variables will be visited in a later volume.
When studying two variables simultaneously, the data obtained for such
a study is known as bivariate data. In examining bivariate data, the first
question is whether there is any association between the two variables of
interest. One effective way to investigate for such an association is to pre-
pare a graph by plotting one variable along the horizontal scale (x-axis) and
the second variable along the vertical scale (y-axis). Each pair of observa-
tions (x, y) is then plotted as a point in the xy-plane. The graph prepared is
called a scatter plot. A scatter plot depicts the nature and strength of asso-
ciations between two variables. To illustrate, we consider the following
example.
SCATTER PLOT
DESCRIPTION A graphical tool used to plot and compare
one variable against another variable.
USE Used to assess if there are any

relationships between two variables.
DESIGN/APPLICATION Several relationships may be present

CONSIDERATIONS between two variables including: positive
correlation, possible positive correlation, no
correlation, possible negative correlation,
negative correlation.
SPECIAL COMMENTS/CONCERNS The Scatter Plot does not indicate “cause” in

a cause and effect relationship.
RELATED TOOLS Line Graph. A similar graph for single

variable is the dot plot.
Example 3.13 The cholesterol level and the systolic blood pressure of 30
randomly selected U.S. men in the age group of 40 to 50 years are given in
Table 3.11. Construct a scatterplot of this data and determine whether there
is any association between the cholesterol levels and systolic blood pres-
sures.
40 Chapter Three
Table 3.11 Cholesterol levels and Systolic BP of 30 randomly selected U.S. males.
Subject 1 2 3 4 5 6 7 8 9 10
Cholesterol (x) 195 180 220 160 200 220 200 183 139 155
Systolic BP (y) 130 128 138 122 140 148 142 127 116 123
Subject 11 12 13 14 15 16 17 18 19 20
Cholesterol (x) 153 164 171 143 159 167 162 165 178 145
Systolic BP (y) 119 130 128 120 121 124 118 121 124 115
Subject 21 22 23 24 25 26 27 28 29 30
Cholesterol (x) 245 198 156 175 171 167 142 187 158 142
Systolic BP (y) 145 126 122 124 117 122 112 131 122 120
Solution: Figure 3.19(a) shows the scatterplot of the data in Table 3.11.
This scatterplot clearly indicates that there is a fairly good upward linear
trend. Also, if we draw a straight line through the data points, we can see that
the data points are concentrated around the straight line within a narrow band.
The upward trend indicates a positive association between the two variables,
whereas the narrow width of the band indicates the strength of the association
is very strong. As the association between the two variables gets stronger, the
band enclosing the plotted points becomes narrower and narrower. The down-
ward trend indicates a negative association between the two variables. A
numerical measure of association between two numerical variables is called
the Pearson correlation coefficient, named after the English statistician Karl
Pearson (1857–1936). The correlation coefficient between two numerical
variables in sample data is usually denoted by r. A Greek letter denotes the
corresponding measure of association, that is, correlation coefficient for a
population data. The correlation coefficient is defined as
( Σxi )( Σyi )
Σ ( xi − x )( yi − y ) Σxi yi −
r= = n (3.5)
Σ ( xi − x ) Σ ( yi − y)
2 2
 2 ( Σxi )   2 ( Σyi )2 
2
 Σxi − n   Σyi − n 
The correlation coefficient is a unitless measure, which can attain any

value in the interval [1, 1]. As the strength of the association between the
two variables grows, the absolute value of r approaches 1. Thus, when there
is a perfect association between the two variables, r 1 or 1, depending
upon whether the association is positive or negative. In other words, r 1 if
the two variables are moving in the same direction (increasing or decreasing)
and r 1 if they are moving in the opposite direction.
Perfect association means that if we know the value of one variable then
the value of the other variable can be determined without any error. The other
special case is when r 0, which means that there is no association between
the two variables. As a rule of thumb, the association is weak, moderate, or
strong when the absolute value of r is less than 0.3, between 0.3 and 0.7 or
greater than 0.7 respectively. Figure 3.19 depicts scatter plots for data with
strong, perfect, moderate, and weak correlation.
150
r= .891
140
130
Y
120
110
150 175 200 225 250
X
(a)
−110
r= −.891
−120
−130
Y
−140
−150
150 175 200 225 250
X
(b)
Figure 3.19 MINITAB display depicting eight degrees of correlation: (a) represents
strong positive correlation, (b) represents strong negative correlation,
(c) represents positive perfect correlation, (d) represents negative perfect
correlation, (e) represents positive moderate correlation, (f) represents
negative moderate correlation, (g) represents a positive weak
correlation, and (h) represents a negative weak correlation.
Continued
42 Chapter Three
200
180 r=1
160
Y
140
120
100
150 175 200 225 250

X
(c)
−100
r = −1
−120
−140
Y
−160
−180
−200
150 175 200 225 250
X
(d)
Continued
150
140
130
Y
120
r = .518
110
150 175 200 225 250
X
(e)
−110
rr == -.891
.518
−120
−130
Y
−140
−150
150 175 200 225 250
X
(f)
Continued
44 Chapter Three
Continued
150
r = .212
140
130
Y
120
110
150 175 200 225 250
X
(g)
−110
r = −.212
−120
−130
Y
−140
−150
150 175 200 225 250
X
(h)
4
Describing Data Numerically
I
n Chapter 3 we studied graphical methods to organize and summarize
data. We saw that graphical methods provide us with powerful tools to
visualize the information contained in data. Perhaps you have a new
appreciation for the saying that “a picture is worth a thousand words.”
In Chapter 4 we extend our knowledge from graphical methods to numer-
ical methods. Numerical methods provide us with what are commonly known
as quantitative or numerical measures. The numerical methods that we are
about to study are applicable to both sample as well as population data.
4.1 Numerical Measures

Numerical methods can be used to analyze sample as well as population
data.
Definition 4.1 Numerical measures computed by using population

data are referred to as parameters.
Definition 4.2 Numerical measures computed by using sample data
are referred to as statistics.
In statistics it is a standard practice to denote parameters by letters of the

Greek alphabet and statistics by letters of the English alphabet.
We divide numerical measures into two major categories: (1) measures
of centrality and (2) measures of dispersion. Measures of centrality give us in-
formation about the center of the data whereas measures of dispersion give
information about the variation within the data.
45
46 Chapter Four
4.2 Measures of Centrality
MEASURES OF CENTRALITY
DESCRIPTION Measures of centrality include several
numerical measures. The more commonly
used such measures are mean, median and
mode.
USE Used to assess the location of the center

of a data set and to check the shape of the
distribution. An important tool to assess the
relative position of two or more distributions.
DESIGN/APPLICATION In many applications different treatments

CONSIDERATIONS or different actions on a process may affect
the measures of location. In such cases the
most commonly used measure is the mean.
SPECIAL COMMENTS/CONCERNS The choice of any measure of location

should be carefully made. For example, the
median is a better measure of location if the
data contains a few very small or very large
values. Normally measures of location
should be used in collaboration with
measures of dispersion such as variance.
Distinction must be made between the
sample and population measures.
RELATED TOOLS Measures of dispersion.
Measures of centrality are also known as measures of central tendency.

Whether referring to measures of centrality or central tendency, the follow-
ing measures are of primary importance:
1. Mean
2. Median
3. Mode
The mean is also sometimes referred to as the arithmetic mean, and it is the
most useful and most commonly used measure of centrality. The median is
the second most used, and mode is the least used measure of centrality.
4.2.1 Mean
The mean of sample or population data is calculated by dividing the sum of
the data measurements by the number of measurements in the sample or the
population data. The mean of a sample is called the sample mean and is
Describing Data Numerically 47
denoted by X (read as X bar), and the population mean is denoted by the

Greek letter (read as mu). These terms are defined numerically as follows:
Population mean µ =
X1 + X 2 + … + X N
=
∑ Xi (4.1)
N N
Sample mean X =
X1 + X 2 + … + X n
=
∑ Xi (4.2)
n n
where (read as sigma) is symbolized as a summation over all the meas-
urements, and where N and n denote the population and sample size respec-
tively.
Example 4.1 The following data give the hourly wages (in dollars) of some
randomly selected workers in a manufacturing company:
8, 6, 9, 10, 8, 7, 11, 9, 8
Find the mean hourly wage of these workers.
Solution: Since wages listed in these data are only for some of the work-
ers in the company, it represents a sample. We have
n9
xi 8 6 9 10 8 7 11 9 8 76
So the sample mean is
X=
∑ x1 = 76 = 8.44
n 9
In this example, the mean hourly wage of these employees is $8.44 an hour.
Example 4.2 The following data give the ages of all the employees in city
hardware store:
22, 25, 26, 36, 26, 29, 26, 26
Find the mean age of the employees in that hardware store.
Solution: Since the data give the ages of all the employees of the hardware
store, we are interested in a population. Thus, we have
N8
xi 2225263626292626 216
So the population mean is
µ=
∑ x1 = 216 = 27 years
N 8
In this example, the mean age of the employees in the hardware store is 27
years.
Note that even though the formulas for calculating sample mean and pop-
ulation mean are —similar, it is important to make a clear distinction between
the sample mean X and the population mean for all application purposes.
48 Chapter Four
Sometimes a data set may include a few observations or measurements

that are very small or very large. For examples, the salaries of a group of
engineers in a big corporation may include the salary of its CEO, who also
happens to be an engineer and whose salary is much larger than other engi-
neers’ in that group. In such cases where there are some very small and/or
very large observations, these values are referred to as extreme values. If
extreme values are present in the data set, the set’s mean is not an appropri-
ate measure of centrality. It is important to note that any extreme values,
large or small, adversely affect the mean value. In such cases the median is
a better measure of centrality since the median is unaffected by a few
extreme values. Next we discuss the method to calculate median of a data set.
4.2.2 Median
We denote the median of a data set by Md. To determine the median of a data
set we take the following steps.
Step 1. Arrange the measurements in the data set in ascending
order and rank them from 1 to n.
Step 2. Find the rank of the median which is equal to (n 1) / 2.
Step 3. Find the value corresponding to the rank (n 1) / 2 of
the median. This value represents the median of the data set.
Example 4.3 To illustrate this method we consider a simple example. The

following data give the length of an alignment pin for a printer shaft in a
batch of production:
30, 24, 34, 28, 32, 35, 29, 26, 36, 30, 33
Find the median alignment pin length.
Solution:
Step 1. Write the data in ascending order and rank them from 1
to 11 since n 11.
Observations in ascending order: 24 26 28 29 30 30 32 33 34 35 36
Ranks: 1 2 3 4 5 6 7 8 9 10 11
Step 2. Find the rank of the median.
Rank of the median (n 1) / 2 (11 1) / 2 6
Step 3. Find the value corresponding to rank 6 (this is the rank

of the median).
The value corresponding to rank 6 is 30.
Thus, the median alignment pin length is Md 30. This means that at
the most 50% alignment pins are of length less than 30 and at the most 50%
are of length greater than 30.
Example 4.4 The following data describe the sales (in thousands of dol-
lars) for the 16 randomly selected sales personnel distributed throughout the
United States:
10, 8, 15, 12, 17, 7, 20, 19, 22, 25, 16, 15, 18, 250, 300, 12
Find the median sales of these individuals.
Solution:
Step 1. Observations in ascending order:
7 8 10 12 12 15 15 16 17 18 19 20 22 25 250 300
Ranks: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Step 2. Rank of the median (16 1) / 2 8.5

Step 3. Find the value corresponding to the 8.5th rank. Since
the rank of the median is not a whole number, in this case the
median is defined as the average of the values that correspond
to the ranks 8 and 9 (since rank 8.5 is between the ranks 8
and 9).
The median of the above data is Md (16 17) / 2 16.5.

Thus, the median sales of the given individuals is 16.5 thousand dollars.
It is important to note the median does not have to be one of the values
of the data set. Whenever the sample size is odd, the median is the center
value and whenever it is even, the median is always the average of the two
middle values where the data is arranged in the ascending order.
Finally, note that the data in the above example contains two values, 250
thousand and 300 thousand dollars, that seem to be the sales of top perform-
ing sales personnel. These two large values may be considered as extreme
values.
In this case, the mean of these data is given by
X (7 8 10 12 12 15 15 16 17 18 19 20
22 25 250 300) / 16 47.875
Since the mean of 47.875 is so much larger than the median of 16.5, it is
obvious that the mean of these data has been adversely affected by the
extreme values. Since the mean does not adequately represent the measure of
centrality of the data set, the median would more accurately identify center
locations of the data for this example.
Furthermore, if we replace the extreme values of 250 and 300, for exam-
ple, with 25 and 30, the median will not change, although the mean becomes
$16,937. The new data obtained by replacing 250 and 300 with 25 and 30 did
not contain any extreme values. Therefore, the new mean value is more con-
sistent with the true average sales.
50 Chapter Four
Example 4.5 Elizabeth took five courses in a semester with 5, 4, 3, 3, and

2 credit hours. The grade points she earned in these courses at the end of the
semester were 3.7, 4.0, 3.3, 3.7 and 4.0, respectively. Find her GPA for that
semester.
Solution: Note that in this example the data points 3.7, 4.0, 3.3, 3.7, and
4.0 have different weights attached to them, that is, credit hours for each
course. Thus, to find Elizabeth’s GPA we cannot simply settle for the arith-
metic mean. In this case we shall find the mean called the weighted mean,
which is defined as:
Xw =
w1 X 1 + w 2X 2 + ... + w nX n
=
∑ wi X i
w1 + w 2 + ... + w n ∑ wi (4.3)
where w1, w2, ..., wn are the weights attached to X1, X2, ..., Xn, respectively.
In this example, the GPA is given by:
5( 3.7 ) + 4 ( 4.0 ) + 3( 3.3) + 3( 3.7 ) + 2( 4.0 )
Xw = = 3.735
5 + 4 + 3+ 3+ 2
4.2.3 Mode
The mode of a data set is the value that occurs most frequently. Mode is the
least used measure of centrality. When products are produced via mass pro-
duction, for example, clothes of certain sizes or rods of certain lengths, the
modal value is of great interest. Note that in any data set there may be no
mode or, conversely, there may be multiple modes. We denote the mode of a
data set by M0.
Example 4.6 Find the mode for the following data set:
3, 8, 5, 6, 10, 17, 19, 20, 3, 2, 11
Solution: In the given data set each value occurs once except 3 which
occurs twice. Thus, the mode for this set is:
M0 3
Example 4.7 Find the mode for the following data set:
1, 7, 19, 23, 11, 12, 1, 12, 19, 7, 11, 23
Solution: Note that in this data set, each value occurs the same number of
times. Thus, in this data set there is no mode.
Example 4.8 Find modes for the following data set:
5, 7, 12, 13, 14, 21, 7, 21, 23, 26, 5
Solution: In this data set, 5, 7, and 21 occur twice and the rest of the val-
ues occur only once. Thus, in this example there are three modes, that is,
M0 5, 7, and 21
Symmetric
Mean = Median = Mode
Left-skewed
Left-skewed
Mean < Median < Mode
Right-ske
Right-skewed
Mode < Median < Mean
Figure 4.1 Frequency distributions showing the shape and location of measures of
centrality.
Note that as such there is no mathematical relationship between the mean,

mode, and median. That is, if we are given any one or two of these measures
(i.e., mean, median, or mode) it is not possible for us to find the missing
value(s) without using the data values. However, the values of mean, mode,
and median do provide us important information about the potential type or
shape of the frequency distribution of the data, since their location depends
upon the shape of the frequency distribution. Although the shape of the fre-
quency distribution of a data set could be of any type, most frequently we see
the following three types of frequency distributions (Figure 4.1).
Definition 4.3 A data set is symmetric when the values in the data set
that lie equidistant from the mean, on either side, occur with equal
frequency.
Definition 4.4 A data set is left-skewed when values in the data set
that are greater than the median occur with relatively higher fre-
quency than those values that are smaller than the median. The val-
ues smaller than the median are scattered far from the median.
52 Chapter Four
Definition 4.5 A data set is right-skewed when values in the data set
that are smaller than the median occur with relatively higher fre-
quency than those values that are greater than the median. The val-
ues greater than the median are scattered far from the median.
4.3 Measures of Dispersion

In the previous section we discussed measures of central tendency, these
measures provide us information about the location of the center of frequen-
cy distributions of the data sets under consideration. For example, consider
the frequency distribution curves shown in Figure 4.2.
MEASURES OF DISPERSION
DESCRIPTION Measures of dispersion include several
numerical measures. The more commonly
used measures are variance, standard
deviation, range and inter-quartile range.
USE Used to assess the spread of the

distribution and the variability within a
data set or between the data sets.
DESIGN/APPLICATION An important measure that should be

CONSIDERATIONS monitored closely and controlled. While
designing any process or experiment care
should be taken to keep the measures of
dispersion as small as possible.
SPECIAL COMMENTS/CONCERNS Measures of dispersion are scale sensitive.

Therefore, when comparing such measures
for two or more data sets it is very important
to keep in mind that the units used in
different sets are the same. Distinction must
be made between the sample and
population measures.
RELATED TOOLS Coefficient of variation.
Measures of central tendency do not portray the whole picture of any

data set. For example, it can be seen in Figure 4.2; the two frequency distri-
butions have the same mean, median, and mode. Interestingly, however, the
two distributions are significantly different. The major difference is in the
variation among the values associated with each distribution. It is important
for us to know about the variation among the values of the data set. In-
formation about variation is provided by measures known as measures of dis-
persion. In this section we will study three measures of dispersion including
the range, variance, and standard deviation.
Figure 4.2 Two frequency distribution curves with equal mean, median and mode
values.
4.3.1 Range
The range of a data set is the easiest measure of dispersion to calculate.
Range is defined as follows:
Range Largest value – Smallest value (4.4)
Range is not a very efficient measure of dispersion since it takes into con-
sideration only the largest and the smallest values and none of the remaining
observations. For example, if a data set has 100 distinct observations, it uses
only two observations and ignores the remaining 98. As a rule of thumb, if
the data set contains 10 or fewer observations, the range is considered a rea-
sonably good measure of dispersion. For data sets larger than 10 observa-
tions, the range is not considered to be a very efficient measure of dispersion.
Example 4.9 The following data give the tensile strength (in psi) of a mate-
rial sample submitted for inspection:
8538.24, 8450.16, 8494.27, 8317.34, 8443.99,
8368.04, 8368.94, 8424.41, 8427.34, 8517.64
Find the range for this data set.
Solution: The largest and the smallest values in the data set are 8538.24
and 8317.34, respectively. Therefore, the range for this data set is:
Range 8538.24 8317.34 220.90
4.3.2 Variance
One of the most interesting pieces of information associated with any data is
how the values in the data set vary from one another. Of course, range can
give us some idea of variability. Unfortunately, range does not help us under-
stand centrality. To better understand variability, we rely on more powerful
54 Chapter Four
indicators such as variance, which is a value that focuses on how much indi-
vidual observations within the data set deviate from their mean.
For example, if the values in the data set are x1, x2, x3, ... xn and the mean
is x–, then x1 x–, x2 x–, x3 x– ... xn –x are the deviations from the mean.
It is then natural to find the sum of these deviations and argue that if this sum
is large, the values differ too much from each other, and if this sum is small,
they do not differ from each other too much. Unfortunately, this argument
does not hold since the sum of the deviations is always zero, no matter how
much the values in the data set differ. This is true because some of the devi-
ations are positive and some are negative, and when we take their sum they
cancel each other.
Since we don’t get any useful information from two sets of measures
(i.e., one positive and one negative) that cancel each other, we can square
these deviations and then take their sum. By taking the square we get rid of
the negative deviation in the sense that they also become positive. The vari-
ance then becomes the average value of the sum of the squared deviations
from the mean x–. If the data set represents a population, the deviations are
taken from the population mean . Thus, the population variance, denoted by
2 (read as sigma square), is defined as:
1 N
∑
2
σ2 = ( Xi − µ ) (4.5)
N i =1
And the sample variance denoted by S 2 is defined as:
1 n
∑
2
S2 = ( Xi − X ) (4.6)
n i =1
It is important to note, however, that for a reason to be discussed in
Chapter 9, the formula used in practice to calculate the sample variance S 2 is
1 n
∑
2
S2 = ( Xi − X ) (4.7)
n − 1 i =1
For computational purposes, we give the simplified forms of the above
formulas for population and sample variances:
(∑ X i )
2
1
σ = [∑ X i2 −
2
] (4.8)
N N
(∑ X i )
2
1
S =
2
[∑ X i2 − ] (4.9)
n −1 n
Note that one difficulty in using the variance as the measure of disper-
sion is that the units for measuring the variance are not the same as are used
for data values. Rather, variance is expressed as a square of the units used for
the data values. For example, if the data values are dollar amounts, then the
variance will be expressed in squared dollars that, in this case, becomes
meaningless. For application purposes therefore, we define another measure

of dispersion, called standard deviation that is directly related to the vari-
ance. Standard deviation is measured in the same units as the data values.
4.3.3 Standard Deviation

Standard deviation is obtained by taking the positive square root (with posi-
tive sign) of the variance. The population standard deviation and the sam-
ple standard deviation s are defined as follows:
1 (∑ X i ) 2
σ =+ [∑ Xi2 − ] (4.10)
N N
1 (∑ X i )2
S=+ [∑ Xi2 − ] (4.11)
n −1 n
Note: In general, random variables are denoted by uppercase letters and their
values by the corresponding lowercase letters.
Example 4.10 The following data give the length (in millimeters) of mate-
rial chips removed during a machining operation:
4, 2, 5, 1, 3, 6, 2, 4, 3, 5
Calculate the variance and the standard deviation for the data.
Solution: There are three simple steps involved in calculating the variance
of any data set.
Step 1. Calculate xi, the sum of all the data values. Thus we
have
xi 4 2 5 1 3 6 2 4 3 5 35
Step 2. Calculate ∑ X i , the sum of squares of all the

2
observations, that is,
∑ X i2 42 22 52 12 32 62 22 42 32 52 145
Step 3. Since the sample size is n 10, by inserting the values

xi and ∑ X i , calculated in Step 1 and Step 2 in formula 4.10,
2
we have
1 ( 35 )2 1
S2 = (145 − ) = (145 − 122.5 ) = 2.5
10 − 1 10 9
The standard deviation is obtained by taking the square root of the variance,
that is,
S = 2.5 = 1.58
56 Chapter Four
Notes:
1. It is important to remember that the value of S2, and therefore of
S, is always greater than zero, except where all the data values
are equal, in which case it is zero.
2. Sometimes the data values are so large that the calculations for
computing the variance become quite cumbersome. In such
cases one can code the data values by adding to (or subtracting
from) each data value the constant, say c, and then calculate
the variance/standard deviation of the coded data, since the
variance/standard deviation does not change. This can easily be
seen from the following discussion.
Let X1, X2, ..., Xn be a data set and let C 0 be any constant. Let Y1
X1 c, Y2 X2 C, ..., Yn Xn C. Then, Y = X +C.
— clearly we have
This means — that the deviations of Xi’s from X are the same as the deviations
of Yi’s from Y . Thus, the variance/standard deviation of X’s is the same as the
variance/standard deviation of Y’s (S2y Sx2 and Sy Sx). This result implies
that any shift in location of the data set does not affect the variance/standard
deviation of the data.
Example 4.11 Find the variance and the standard deviation of the follow-
ing data:
53, 60, 58, 64, 57, 56, 54, 55, 51, 61, 63
Solution: We now compute the variance and the standard deviation of the
new data set 3, 10, 8, 14, 7, 6, 4, 5, 1, 11, 13, which is obtained by subtract-
ing 50 from each value of the original data. This will also be the variance and
the standard deviation of the original data set. Thus, we have
xi 3 10 8 14 7 6 4 5 1 11 13 82
∑ xi2 32 102 82 142 72 62 42 52 12 112 132 786

So that
1 (82 )2 1
S2 = [ 786 − ] = [ 786 − 611.27 ] = 17.473
11 − 1 11 10
and
S = 17.473 = 4.18
The variance and the standard deviation of the original data set are 17.473
and 4.18, respectively.
3. Any change in scale of the data does affect the variance/
standard deviation. That is, if Yi CXi (C 0) then Y = CX .
Therefore, it can be seen that S2y C2Sx2 and sy | C | Sx.
4.3.4 Coefficient of Variation

The coefficient of variation is usually denoted by cv and is defined as the
ratio of the standard deviation to the mean expressed in percentage.
cv (standard deviation / mean) 100% (4.12)
The coefficient of variation is a relative comparison of a standard deviation
to its mean and it has no units. The cv is commonly used to compare the vari-
ability in two populations having different units. For example, we might
want to compare disparity of earnings for technicians who work for the same
employer but in two countries. In this case, we compare the coefficient of
variation of the two populations rather than comparing the variances, which
would be an invalid comparison. The population with a greater coefficient of
variation has more variability than the other. As another illustration we con-
sider the following example.
Example 4.12 A company uses two measuring instruments, one to meas-
ure the diameters of ball bearings and the other to measure the length of rods
it manufactures. The quality control department wants to find which instru-
ment is more precise. A quality control engineer takes several measurements
of a ball bearing by using one instrument and finds the mean and standard
deviation to be 3.84mm and .002mm respectively. Then she takes several
measurements of a rod by using the other instrument and finds the mean and
the standard deviation to be 29.5cm and .035cm, respectively. Calculate the
coefficient of variation from the two measurements.
Solution: By using Formula 4.12, we have
cv1 (0.02 / 3.84) 100% .52%
cv2 (0.035 / 29.5) 100% .118%
Thus, the measurements of the length of the rod are relatively less variable
than the diameter of the ball bearing. Therefore, we can say that instrument
2 is more precise than instrument 1.
4.4 Measures of Central Tendency

and Dispersion for Grouped Data
So far in this chapter we have learned how to compute measures of central
tendency and dispersion for ungrouped data. In this section we will learn
how to compute these measures for grouped data.
In Chapter 3, we saw that by grouping data we always lose some infor-
mation from the original data. The same is true for measurements that are
obtained using grouped data as they only approximate values of measure-
ments obtained from the original data. The actual approximation will, of
course, depend upon the nature of the data. In certain cases values may be
close to their actual values, but in other cases they may be far apart. A word
of caution: measurements obtained by using grouped data should be used
only when it is not possible to retrieve the original data.
58 Chapter Four
4.4.1 Mean
In order to compute the mean of a grouped data set, the first step is to find the
midpoint m, also known as the class mark for each class, which is defined as:
m (Lower limit Upper limit) / 2
Then the population mean G and the sample mean XG bar are defined as
follows:
G (fimi) / N (4.13)
XG (fimi) / n (4.14)
where mi midpoint of the ith class, fi frequency of the ith class, N
population size and n sample size.
Example 4.13 Find the mean of the grouped data given in Table 4.1.
Note: From the entries in Table 4.1 one can observe that the difference
between the midpoints of any two consecutive classes is always the same as
the class width.
Solution: Using Formula 4.14, we have
XG (fimi) / n 1350 / 40 33.75
4.4.2 Median
To compute the median MG of grouped data, follow these steps:
Step 1. Determine the rank of the median that is given by
Rank of MG (n 1) / 2
Table 4.1 Age distribution of group of 40 people watching a basketball game.
Class Frequency Class Midpoint (m) fm

10 + 20
10–under 20 8 =15 120
2
20 + 30
20–under 30 10 = 25 250
2
30 + 40
30–under 40 6 = 35 210
2
40 + 50
40–under 50 11 = 45 495
2
50 + 60
50–under 60 5 = 55 275
2
n =∑ f = 40 ∑ f i m = 1350
Step 2. Determine the class in which the rank (n 1) / 2 falls.

In order to find such a class proceed as follows:
Add the frequencies of classes starting from class 1 and continue doing
so until the sum becomes greater than or equal to (n 1) / 2, and stop as
soon as the sum becomes greater than or equal to (n 1) / 2. That is the class
that contains the median.
Step 3. Once we know the class where the rank of the median
falls, the median is given by
MG L (c / f ) w (4.15)
where
L lower limit of the class containing the median
c (n 1) / 2 [sum of the frequencies of all classes
preceding the class containing the median]
f frequency of the class containing the median
w class width
Example 4.14 Find the median of the grouped data in Table 4.1,
Example 4.13.
Solution:
Step 1. Rank of the median (40 1) / 2 20.5
Step 2. Add the frequencies until the sum becomes greater than
or equal to 20.5, that is
8 10 6 24 20.5
The class containing the median is (30–under 40)
Step 3.
MG 30 ((20.5 (8 10)) / 6)10

30 (2.5 / 6)10 34.16
4.4.3 Mode
To find the mode of grouped data is a simple exercise. That is, just find the
class with the highest frequency. The mode of the grouped data is equal to
the midpoint of that class. Note that if there is more than one class with the
highest, but equal, frequencies, there is more than one mode and those modes
are equal to the midpoints of such classes.
In Example 4.13, the mode is equal to the midpoint of the class
[40–under 50] since it has the highest frequency, 11. Thus,
Mode (40 50) / 2 45
60 Chapter Four
4.4.4. Variance
The population and the sample variance of grouped data are computed by
using the following formulas.
1 (∑ fi mi ) 2
PopulationVariance(σ G2 ) = [∑ fi mi2 − ] (4.16)
N N
1 (∑ fi mi )
2
SampleVariance(SG2 ) = [∑ fi mi2 − ] (4.17)
n −1 n
where f, m, N, and n are as defined earlier in this section.
Example 4.15 Determine the variance of the grouped data in Table 4.1,
Example 4.13.
Solution: From the data in Table 3.1, we have
fimi2 8(15)2 10(25)2 6(35)2 11(45)2 5(55)2 52800
fimi 8(15) 10(25) 6(35) 11(45) 5(55) 1350
n 40
Substituting the value in Formula 4.18, we have
1 (1350 )2
SG2 = [ 52800 − ]
40 − 1 40
1 1
= [ 52800 − 45562.5 ] = [ 7237.5 ] = 185.577
39 39
The population and the sample standard deviation are found by taking the
square root of the corresponding variances. For example, the standard devi-
ation for the data in example 4.13 is
SG 185.577 13.62
4.5 Empirical Rule (Normal Distribution)

If data have a distribution that is approximately bell-shaped, the following
rule, known as the empirical rule, can be used to compute the percentage of
data that will fall within k standard deviations from the mean (k 1, 2, 3).
1. About 68% of the data will fall within one standard deviation of
the mean, that is, between 1 and 1.
2. About 95% of the data will fall within two standard deviations
of the mean, that is, between 2 and 2.
3. About 99.7% of the data will fall within three standard
deviations of the mean, that is, between 3 and 3.
Figure 4.3 Application of the empirical rule.
Figure 4.3 illustrates the empirical rule.

Note. The empirical rule is applicable for population data as well as for
– sam-
ple data. In other words the above rule is valid if we replace with X and
with S.
Example 4.16 A soft-drink filling machine is used to fill 16-ounce soft-
drink bottles. Since the amount of beverage slightly varies from bottle to bot-
tle, it is believed that the actual amount of beverage in the bottles forms a
bell-shaped distribution with a mean 15.8 ounces and standard deviation of
0.15 ounces. Use the empirical rule to find what percentage of bottles have
between 15.5 ounces and 16.1 ounces of beverage.
Solution: From the information provided to us in this problem, we have
15.8 oz .15 oz
We are interested in finding the percentage of bottles that contain between
15.5 ounces and 16.1 ounces of beverage. Comparing Figure 4.4 with Figure
4.3, it is obvious that approximately 95% of the bottles contain between 15.5
ounces and 16.1 ounces, since 15.5 and 16.1 are two standard deviations
away from the mean.
Example 4.17 At the end of every fiscal year a manufacturer writes off or
adjusts its financial records to reflect the number of units of bad production
occurring over all lots of production during the year. Suppose the dollar val-
ues associated with the various units of bad production form a bell-shaped
62 Chapter Four
distribution with mean X $35,700 and standard deviation S $2,500.

Find the percentage of units of bad production that have a dollar value
between $28,200 and $43,200.
15.5 µ − 15.8 16.1
0.3 = 2σ 0.3 = 2σ
µ-2σ µ-2σ
Figure 4.4 Amount of soft drink contained in a bottle.
28,000 X = 35,700 43,200
7,500 = 3S 7,500 = 3S
X − 3S X + 3S
Figure 4.5 Dollar value of units of bad production.

Solution: From the information provided to us, we have X $35,700 and

S $2,500.
Since the limits $28,200 and $43,200 are three standard deviations away
from the mean, comparing Figure 4.5 with Figure 4.3, we see that approxi-
mately 99.7% of the bad units had an outstanding debt between $28,200 and
$43,200.
4.6 Certain Other Measures of

Location and Dispersion
In this section we will study certain measures that help us locate the place of
any data value in the whole data set. Then we will study another measure that
gives us the range of the middle 50% of the data values.
4.6.1 Percentiles
Percentiles divide the data into 100 equal parts and they are numbered from
1 to 99. The median of a data set is the 50th percentile, which divides the data
into two equal parts, that is, at most 50% of the data fall below the median
and at most 50% of the data fall above it. The procedure for determining the
other percentiles is similar to the procedure used for determining the medi-
an. We compute the percentiles as follows:
Step 1. Write the data values in the ascending order and rank
them from 1 to n.
Step 2. Find the rank of the pth percentile ( p 1, 2, ..., 99),
which is given by
Rank of the pth percentile p[(n 1) / 100]
Step 3. Find the data value that corresponds to the rank of the
pth percentile. We illustrate this procedure with the following
example.
Example 4.18 The following data give the salaries (in thousands of dol-
lars) of 15 engineers of a corporation:
62, 48, 52, 63, 85, 51, 95, 76, 72, 51, 69, 73, 58, 55, 54
Find the 70th percentile for these data.
Solution: Write the data values in the ascending order and rank them from
1 to 15, since n is equal to 15.
Step 1. Salaries: 48, 51, 51, 52, 54, 55, 58, 62, 63, 69, 72, 73, 76, 85, 95
Rank: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15
Step 2. Find the rank of the 70th percentile which is given by
rank of the 70th percentile 70((15 1) / 100) 11.2
64 Chapter Four
11 11.2 12
.2 .8 73
72
Figure 4.6 Salary data.
Step 3. Find the data value that corresponds to the rank 11.2,
which will be the 70th percentile. From Figure 4.6, we can
easily see that the value of the 70th percentile is given by
70th percentile 72(.8) 73(.2) 72.2
Thus, the 70th percentile of the salary data is $72,200.
That is, at most 70% of the engineers are making less than $72,200 and
at most 30% of the engineers are making more than $72,200.
In our above discussion we determined the value x of a given percentile p.
Now we would like to find the percentile p corresponding to a given value x.
This can be done by using the following formula.
(# of data values ≤ x )
p= (100 ) (4.18)
(n + 1)
For example, in Example 4.18 find the percentile corresponding to the salary
of $60,000, we have
P (7/(15 1))100 44
In this case, the engineer who is making a salary of $60,000 is at the 44th
percentile, which means that at most 44% of the engineers are making less
than her and that at most 56% are making more.
4.6.2 Quartiles
In the previous discussion we studied the percentiles that divide the data into
100 equal parts. Some of the percentiles have special importance. These
other important percentiles are the 25th, 50th, and 75th percentiles and are
known as the first, second, and third quartiles (denoted by Q1, Q2, and Q3).
These quartiles are sometimes also known as lower, middle, and upper quar-
tiles. Also note that the second quartile is the same as the median. To deter-
mine the values of different quartiles, one just finds the 25th, 50th, and 75th
percentiles (see Figure 4.7).
4.6.3 Interquartile Range

Often we are more interested in finding information about the middle 50% of
a population. A measure of dispersion relative to the middle 50% of the pop-
ulation or sample data is known as the interquartile range. This range is
25% 25% 25% 25%
________ ___________ _________

_ _________
___
Quar es Q1 Q2 Q3
Quartiles
Percentiles 25 th 50 th 75 th
Figure 4.7 Quartiles and percentiles.
obtained by trimming 25% of the values from the bottom and 25% from the
top. Interquartile range (IQR) is defined as
IQR Q3 Q1 (4.19)
Example 4.19 Find the interquartile range for the salary data in Example
4.18:
Salaries: 48, 51, 51, 52, 54, 55, 58, 62, 63, 69, 72, 73, 76, 85, 95
Solution: In order to find the interquartile range, we need to find the quar-
tiles Q1 and Q3 or, equivalently, 25th percentile and the 75th percentile. We
can easily see that the ranks of 25th and 75th percentile are:
Rank of 25th percentile (25 / 100)(15 1) 4
Rank of 75th percentile (75 / 100)(15 1) 12
Thus, in this case, Q1 52 and Q3 73.
This means that the middle 50% of the engineers earn a salary between
$52,000 and $73,000. The interquartile range in this example is
IQR $73,000 $52,000 $21,000
Notes:
1. The interquartile range gives the range of variation among the
middle 50% of the population.
2. The interquartile range is potentially a more meaningful
measure of dispersion as it is not affected by the extreme
values that may be present in the data. By trimming 25%
of the data from the bottom and 25% from the top, we are
eliminating any extreme values that may be present in the
data set. Interquartile range is used quite often as a measure
of comparison for comparing two or more data sets on similar
studies.
66 Chapter Four
4.7 Box-Whisker Plot

In this and the previous chapter, we have mentioned extreme values. So at
some point we must know what values in a data set are extreme values, also
known as outliers. A box-whisker plot (or, simply, a box plot) helps us
answer this question. Figure 4.8 illustrates a box plot for any data set.
BOX-WHISKER PLOT
DESCRIPTION A graphical tool that uses summary
statistics: first quartile, second quartile, third
quartile, extreme data values that are
located within a certain range.
USE Used to assess the skewness of the

distribution. The most important role of the
Box-Whisker Plot is to detect any outliers
that may be present in the data. Also, used
for visual comparison of two or more data
sets.
DESIGN/APPLICATION Any data set may contain outliers, which

CONSIDERATIONS if not corrected could invalidate the final
results. Distribution’s departure from
symmetry may violate the assumption of
the underlying model.
SPECIAL COMMENTS/CONCERNS The box-whisker plot may be presented in

horizontal or vertical form. The box in the
box plot contains the middle 50% of the
data values.
RELATED TOOLS Conceptually related to the Empirical Rule.
4.7.1 Construction of a Box Plot

Step 1. For a given data set, first find the quartiles Q1, Q2, and
Q3.
Step 2. Draw a box with its outer lines standing at the first
quartile (Q1) and the third quartile (Q3) and then draw a line at
the second quartile (Q2). The line at Q2 divides the box into two
boxes, which may or may not be of equal size.
Step 3. From the center of the outer lines draw straight lines
extending outwardly up to three times the interquartile range
(IQR) and mark them as shown in Figure 4.8. Note that each
distance between points A and B, B and C, D and E, and E and
F is equal to one and a one-half times the distance between the
points A and D, which is equal to the interquartile range (IQR).
The points S and L are respectively the smallest and largest data
Lower inner fence Upper inner fence

Lower outer fence Upper outer fence
S L
A D
C B E F
Q1 Q2 Q3
1.5 1.5 1.5 1.5
IQ R IQ R IQ R IQ R IQ R
Smallest value within Largest value within

the lower fence the lower fence
Region of extreme outliers
Region of mild outliers
Figure 4.8 Box-whisker plot.
points that fall within the inner fences. The lines from A to S
and D to L are called the whiskers.
4.7.2 How to Use the Box Plot

About the outliers:
1. Any data points that fall beyond the lower outer fence and
upper outer fence are the extreme outliers. These points are
usually excluded from the analysis.
2. Any data points between the inner and outer fences are the mild
outliers. These points are excluded from the analysis only if we
are convinced that these points are in error.
About the shape of the distribution:

1. If the second quartile (median) is close to the center of the box
and each of the whiskers is approximately of equal length, the
distribution is symmetric.
2. If the right box is substantially larger that the left box and/or
the right whisker is much longer than the left whisker, the
distribution is right skewed.
3. If the left box is substantially larger than the right box and/or
the left whisker is much longer than the right whisker, the
distribution is left skewed.
68 Chapter Four
Example 4.20 The following data gives the noise level measured in deci-
bels (a normal conversation by humans produces a noise level of about 75
decibels) produced by different machines in a large manufacturing plant:
85, 80, 88, 95, 115, 110, 105, 104, 89, 87, 96, 140, 75, 79, 99
Construct a box plot and see whether the data set contains any outliers.
Solution:
First we arrange the data in the ascending order and rank them from 1 to 15
(n 15)
Data values: 75, 79, 80, 85, 88, 89, 95, 96, 97, 99, 104, 105, 110, 115, 140
Ranks: 11, 12, 13, 14, 15, 16, 17, 18, 19, 10, 111, 112, 113, 114, 115
We now find the ranks of the quartiles Q1, Q2, and Q3. Thus, we have
Rank of Q1 (25 / 100)(15 1) 4

Rank of Q2 (50 / 100)(15 1) 8
Rank of Q3 (75 / 100)(15 1) 12
Therefore the values of Q1, Q2, and Q3 are

Q1 85 Q2 96 Q3 105
Interquartile range is
IQR Q3 Q1 105 85 20
and
(1.5)IQR (1.5)20 30
The Figure 4.9 shows the box plot for the above data.
Figure 4.9 shows that the data includes one outlier. In this case, action
should be taken to reduce the sounds of the machinery, which produces a
noise level of 140 decibels.

the inner fence the inner fence
Mild outlier
D C E F
A D
25 55 75 115 135 165
85 96 105
Figure 4.9 Example box plot.

Example 4.21 The following data give the number of persons who take the
bus during the off-peak time schedule from Grand Central Station to Lower
Manhattan in New York:
12 12 12 14 15 16 16 16 16 17 17 18 18 18 19 19 20 20 20 20
20 20 20 20 21 21 21 22 22 23 23 23 24 24 25 26 26 28 28 28
1. Find the mean, mode, and median for these data.

2. Prepare the box plot for the data.
3. Using results of part (1) and (2), verify whether the data are
symmetric or skewed. Examine whether the conclusion made
using the two methods about the shape of the distribution are
the same or not.
4. Using the box plot, determine whether the data contains any
outliers.
5. If in part (3) the conclusion is that the data are at least
approximately symmetric, find the standard deviation and
verify whether the empirical rule holds.
Solution:
1. The sample size in this problem is n 40. Thus, we have
Mean X xi / n 800/40 20

Mode 20
Median 20
2. To prepare the box plot, we first find the quartiles Q1, Q2 and
Q3.
Rank of Q1 (25 / 100)(40 1) 10.25
Rank of Q2 (50 / 100)(40 1) 20.5
Rank of Q3 (75 / 100)(40 1) 30.75
Since the data presented in this problem are already in ascending order, we
can easily see that the quartiles Q1, Q2, and Q3 are
Q1 17 Q2 20 Q3 23
Interquartile range:
IQR Q3 Q1 23 17 6
1.5(IQR) 1.5(6) 9
The box plot for the data is as shown in Figure 4.10
3. Both parts (1) and (2) lead us to the same conclusion—the data
are symmetric.
70 Chapter Four

the inner fence the inner fence
Mild outlier
D C E F
A D
−1 8 12 28 32 41
Figure 4.10 Box plot.
4. From the box plot in Figure 4.10, we see that the data do not
contain any outliers.
5. In part (3) we conclude that the data is symmetric. We proceed
to calculate the standard deviation and then verify whether the
empirical rule holds.
1 (12 + + 28 )2
S2 =
40 − 1
12 2 + + 28 2 −
40
] = 18.1538
Thus, the standard deviation is S 4.26.
It can be seen that in the intervals:
( X S, X S) (15.74 24.26) contains 72.5% of the data
( X 2S, X 2S) (11.48 28.52) contains 100% of the data

The data are slightly more clustered around the mean. But for all practi-
cal purposes we can say the empirical rule does hold.
5
Probability
I
n Chapters 1 through 4 we started our discussion of applied statistics by
setting a context for Six Sigma. We identified some foundational con-
cepts to get us started, and we explored how to describe data graphically
and numerically. Now it is time to extend our knowledge by looking at the
concept of probability and studying in section 5.1 how probability theory
relates to applied statistics. We will continue our discussion of probability by
introducing the random experiment in section 5.2, defining sample space and
simple events in section 5.3, and using Venn diagrams in section 5.4. We will
complete our discussion by reviewing probability rules and conditional prob-
ability in particular in sections 5.5, 5.6, and 5.7.
5.1 Probability and Applied Statistics

While many people who first study probability struggle to understand the
basic concepts, it need not be overly difficult. As with any subject or topic,
understandability, or lack thereof, rests in the approach and conduct of the
discussion. And as such discussion relates to probability, the most common
approach is to delve rather deeply into mechanics of formula derivation that,
in many cases, leads people to begin struggling without the benefit of under-
standing the basic concepts! We will use a different approach in this chap-
ter—we will begin with an explanation of the basic concepts first, and then
we will follow with several applications to the topic in examples.
To begin, probability is nothing more than a way to describe chance.
Chance in this context means there is a possibility, or probability, that some
sort of event will or will not occur. More specifically, for any given event
someone may be interested in, there is some level of probability the event
will occur as well as some level of probability the event will not occur.
In quantitative terms, we describe probability as a decimal value between
0 and 1. The sum of the probability that an event occurs plus the probability
that the event does not occur equals 1. In common use, we convert the deci-
mal values to a percent value by multiplying the decimal value by 100.
71
72 Chapter Five
Now, how do we relate probability to applied statistics? Statistics includes

the study of probability associated with events of interest. In fact, we spend
much of our effort in the application of statistics attempting to understand
when, where, or how certain events will occur or not occur. And the mecha-
nism we frequently use to study probability is the random experiment.
5.2 The Random Experiment

An experiment is a planned investigation of one or more phenomena wherein
the person conducting the experiment purposefully manipulates the condi-
tions under which the experiment is conducted in order to observe the results.
In practice, we conduct experiments in accordance with the “scientific
method” in order to ensure consistent and reproducible results. Accordingly,
experiments produce one of two types of results or outcomes:
1. The outcome is unique.
2. The outcome is not unique; it is one of several possible
outcomes.
Experiments that result in unique outcomes are known as deterministic
experiments, while experiments that do not result in unique outcomes are
known as random experiments.
Anytime a random experiment is used, we are typically interested in
knowing which possible outcome will occur. Normally the experimenter has
a certain belief that a particular outcome will occur. For example, a design
engineer may have a certain belief that a product will perform within certain
parameters when used under certain conditions for a certain length of time.
The term probability indicates the measure of one’s belief in the occurrence
of the desired outcome in a random experiment.
We now consider some examples of random experiments and list all pos-
sible outcomes in each case.
Example 5.1 As an experiment a Six Sigma Green Belt engineer wants to
test a computer chip that has come off the production line. In the past, both
defective and nondefective chips have been produced. Determine the sample
space associated with this experiment.
Solution: Since the possible outcomes in this example are either a defec-
tive (D) or nondefective (N) chip, the sample space associated with the
experiment is S {D, N}.
Example 5.2 Now consider a random experiment in which the engineer
wants to test two chips off the production line and list all the possible out-
comes.
Solution: In this case the possible outcomes of the random experiment are
{DD, DN, ND, NN}, where DD means that both chips are defective, DN
means that the first chip is defective and the second is nondefective, and so on.
Example 5.3 A box contains identical parts produced by six manufactur-
ers 1, 2, 3, 4, 5, and 6. A part is selected randomly and examined to find its
manufacturer. List all the possible outcomes in this experiment.
Probability 73
Solution: In this case there are six possible outcomes, which we list as {1,
2, 3, 4, 5, 6}.
Example 5.4 If in Example 5.3 two parts are selected, list all the possible
outcomes.
Solution: In this case there are 6 6 36 possible outcomes, that is {(1,1),
(1,2), ... (1,6), ..., (6,6)}. For example, the outcome (1,2) represents that the
first part is produced by manufacturer 1 and the second part by manufacturer
2. Note that in this example ordered pairs represent the possible outcomes.
5.3 Sample Space, Simple Events, and

Events of Random Experiments
In any discussion of probability there must be a careful description of all pos-
sible outcomes of the random experiment we want to study. This description
must be complete and unambiguous, that is, every possible outcome of the
experiment must be listed, and careful attention must be devoted to ensuring
the list includes only one entry for each possible outcome.
Definition 5.1 The set of all possible outcomes of a random exper-
iment is called the sample space of the experiment, and is usually
denoted by the letter S.
Conceptually, the sample space S may be regarded as a set whose ele-
ments are all the possible outcomes of an experiment. An element of S is usu-
ally called a sample point or a simple event, and it is denoted by the letter e.
Let us consider once again the experiments of Examples 5.1 through 5.4
and describe a sample space for each of them. The sample spaces for each
example are as follows:
Example 5.1 S {e1, e2}; where e1 D, e2 N.
Example 5.2 {e1, e2, e3, e4}; where e1 DD, e2 DN, e3 ND, e4 NN;
one may simply write the sample space as S {DD, DN, ND, NN}.
Example 5.3 S {1, 2, 3, 4, 5, 6}.
Example 5.4 S {(i,j); i 1, 2, 3, 4, 5, 6; j 1, 2, 3, 4, 5, 6}.
Example 5.5 Suppose an experiment involves the nomination of three work-

ers to be appointed on the negotiation team. We have determined that one
nominee is male (M) and two nominees are female (F). We are interested in
observing the order in which nominees are selected.
Solution: In this example there are three possible outcomes, so the sample
space may be written as follows:
S {(MFF), (FMF), (FFM)}
Note that any change in the experiment results in another sample space, since
the sample space must include all the possible outcomes of the new experi-
ment. For instance, if in the above example we do not specify the gender of
74 Chapter Five
the workers nominated, then the sample space will consist of eight possible
outcomes:
S {(MMM), (MMF), (MFM), (FMM), (MFF), (FMF), (FFM), (FFF)}
The sample spaces in all the examples considered so far are finite, which
means each sample space contains a finite number of elements or sample
points.
Definition 5.2 A set “C” is said to be countably infinite when there
is a one-to-one correspondence between the set C and a set of all
non-negative integers.
Many examples in our day-to-day life involve sample spaces that consist
of countably infinite number of elements.
Example 5.6 A lightbulb manufacturing company agrees to destroy all
bulbs produced until it produces a set quantity, say n, of bulbs at a defined
level of quality. Such an agreement is made in the context of negotiating a
sales contract wherein the purchaser wishes to ensure product of insufficient
quality does not enter the supply stream.
Solution: In this case, we observe the number of bulbs the company has to
destroy. The sample space for this situation consists of countably infinite
number of sample points S {0, 1, 2, ...} until a set number of bulbs pro-
duced meets or exceeds the desired level of quality.
The sample space S in this example contains the element or sample point
zero, since it is possible that the first n bulbs produced by the company meet
the desired quality level or standard, in which case the company does not
need to destroy any bulbs.
Example 5.7 In Example 5.1 suppose that the Six Sigma Green Belt engi-
neer decides to test the chips until she finds a defective chip. Determine the
sample space for this experiment.
Solution: The sample space S in this example will be S {1, 2, 3, ...}. The
defective chip may be found in the first trial or in the second trial or in the
third trial and so on.
In Examples 5.6 and 5.7, the sample spaces consist of countably infinite
number of elements.
Definition 5.3 A sample space S is considered discrete if it con-
sists of either a finite or a countably infinite number of elements.
Definition 5.4 Any collection of sample points of a sample space
S, i.e., any subset of S, is called an event.
Example 5.8 Consider the sample S in Example 5.2 and list all possible
events in S.
Solution: The sample space S in Example 5.2 is
S {DD, DN, ND, NN}
Probability 75
The possible subsets of S and consequently the possible events in this sam-
ple space S are
[{},{DD},{DN},{ND},{NN},{DD, DN},{DD, ND},{DD, NN},{DN,
ND},{DN, NN},{ND, NN},{DD, DN, ND},{DD, DN, NN},{DD, ND,
NN},{DN, ND, NN},{DD, DN, ND, NN}]
There are 16 total possible events in this sample space. In general, if a
sample space consists of n sample points then there are 2n possible events in
the sample space. Each sample space contains two special events: {},
which does not contain any elements of S, an empty set known as the null
event, and the event represented by the whole sample space S itself, which is
known as the sure event.
In Example 5.8 we encourage you to note that the simple events {DD},
{DN}, {ND}, and {NN} are also listed as events. By definition, all simple
events are also events; however, not all events are simple events. Events in a
sample space S are usually denoted by the capital letters A, B, C, D, and so
on. Event A is said to have occurred if the outcome of a random experiment
is an element of A.
Example 5.9 Suppose in Example 5.2, a part is randomly selected and the
manufacturer of the part is found. Determine whether a given event has
occurred.
Solution: In this case, the sample space S is {1, 2, 3, 4, 5, 6}. Let the given
event in S be A {1, 4, 5, 6}. Now we can say event A has occurred if the
manufacturer of the part is 1, 4, 5, or 6. Otherwise we say event A has not
occurred.
5.4 Representation of Sample Space

and Events Using Diagrams
Sometimes the number of sample points in a sample space becomes so large
that the manual description of every sample point is difficult if not impossi-
ble. Since it is common for sample spaces to become very large, we must
introduce some techniques that help us systematically describe all the sam-
ple points in a sample space S.
5.4.1 Tree Diagram

A tree diagram is a tool that is useful not only in describing the sample
points, but also in listing them in a systematic way. We illustrate this tech-
nique with the help of an example.
Example 5.10 Continuing the random experiments in Examples 5.2 and
5.3, suppose that an experiment consists of three trials. The first trial is
testing a chip off the production line, the second is randomly selecting a
part from a box containing parts produced by six manufacturers, and the
third trial is again testing a chip off the production line. We are interested
76 Chapter Five
in describing and listing the sample points in the sample space of the
experiment.
Solution: We use a tree diagram technique to describe and list the sample
points in the sample space of the experiment in this example. The first trial
in this experiment can result in only two outcomes (D, N); the second in six
outcomes (1, 2, 3, 4, 5, or 6) and the third, again, can result in two possible
outcomes (D, N). The tree diagram associated with the experiment is shown
in Figure 5.1.
D1D
D
N
D1N
1
D D2D
N
2 D2N
D D3D
3 N
D3N
4 D D4D
N
5 D4N
D D5D
6 N
D D5N
D
D6D
N
D6N
D N1D
N
1
N1N
D N2D
2
N
N N2N
3 D N3D
N
4 N3N
D N4D
5 N
N4N
6 D
N5D
N
D N5N
N6D
N
N6N
Figure 5.1 Tree diagram for an experiment of testing a chip, randomly selecting a
part, and testing another chip.
Probability 77
The tree diagram in Figure 5.1 is constructed as follows: Starting from

point 0 draw two straight-line segments indicating the number of possible
outcomes in the first trial. We call these line segments first-order branches.
From the endpoint of each first-order branch, draw six straight-line seg-
ments, called second-order branches, indicating the number of possible out-
comes in the second trial. Then from the end of each second-order branch,
draw two straight-line segments, called third-order branches, indicating the
number of possible outcomes in the third trial. Note that each branch is
marked by the corresponding possible outcome as, for example, the first-
order branches are marked with D and N.
The number of sample points in a sample space is equal to the number
of final-order branches. For instance, in the present example, the number of
sample points in the sample space is equal to the number of third-order
branches, which, in this case, is 24. To list all the sample points just start
counting from 0 along the paths of all possible connecting branches until you
reach the end of the final-order branches, listing the sample points in the
same order as the various branches are covered. In Example 5.10, the sam-
ple space S is given as follows:
S {D1D, D1N, D2D, D2N, D3D, D3N, D4D, D4N, D5D, D5N, D6D,
D6N, N1D, N1N, N2D, N2N, N3D, N3N, N4D, N4N, N5D, N5N, N6D,
N6N}
The tree diagram technique for describing the number of sample points
is extendable to an experiment with a large number of trials where each trial
has several possible outcomes. For example, if an experiment has n trials and
the ith trial has mi possible outcomes (i 1, 2, 3, ..., n), then the technique
of the tree diagram may be extended as is described next.
There will be m1 branches at the starting point 0, m2 branches at the end
of each of the m1 branches, m3 branches at the end of the each of m1 m2
branches and so on. The total number of branches at the end would be m1
m2 m3 ..., mn, which represents all the sample points in the sample
space S of the experiment. This rule of describing the total number of sam-
ple points is known as the multiplication rule.
5.4.2 Permutation and Combination

In this section we introduce the concept of permutation and combination. These
concepts are also helpful in describing the sample points in a sample space.
Permutation
Definition 5.5 A permutation of a set of objects is an arrangement
of that set in some specific order. For example, consider the set of
three objects A, B, and C. The possible arrangements for these dis-
tinct objects are
ABC, ACB, BAC, BCA, CAB, and CBA.
In this case, there are six arrangements. In other words, the number of per-
mutations to arrange three distinct objects is six. Note that we can achieve
this result without writing these arrangements, as is described next.
78 Chapter Five
Suppose that to arrange these objects we allocate three slots so that each
slot can accommodate only one object. The first slot can be filled with any of
the three objects or we can say that there are three ways to fill the first slot.
After filling the first slot we are left with only two objects which can be
either A, B; A, C; or B, C. Now the second slot can be filled with either of
the two remaining objects, meaning that there are two ways to fill the second
slot. Once the first two slots are filled, we are left with only one object, so
that the third slot can be filled only one way. Then, all three slots can be filled
simultaneously in 3 2 1 6 ways. This concept can be extended for any
number of objects, that is, n distinct objects can be arranged in n (n 1)
(n 2) ... 3 2 1 ways. The number n (n 1) (n 2) ...
3 2 1 is particularly important in mathematics and applied statistics
and is denoted by the special symbol n! (read as n-factorial).
Definition 5.6 The n-factorial is the product of all the integers
starting from n to 1. That is,
n! n (n 1) (n 2) ... 3 2 1. (5.1)
Note also, that 0! 1
Example 5.11 Compute the value of:
1. 8!
2. 10!
3. (13 5)!
Solution:
1. 8! 8 7 6 5 4 3 2 1 40,320
2. 10! 10 9 8 7 6 5 4 3 2 1 3,628,800
3. (13 5)! 8! 40,320
The number of permutations of n distinct objects is denoted by Pnn . If we are
interested in arranging only r of n objects (r n), the number of permuta-
tions is denoted by Prn. From our discussion above, we can see that
Pnn n (n 1) (n 2) ... 3 2 1 n! (5.2)
n!
Prn n (n 1) (n 2) ... (n r 1) (5.3)
(n − r )!
Example 5.12 An access code for a security system consists of four posi-
tive digits (1 through 9). How many access codes are possible if each digit
can be used only once?
Solution: Since each digit can be used only once and the different orders of
four digits give different access codes, the total number of access codes is
equal to the number of arrangements of choosing four digits from nine dig-
its and arranging four digits in all possible ways. That is,
9! 9! 9 × 8 × 7 × 6 × 5!
Number of access codes p49 = = = = 3024
(9 − 4 )! 5 ! 5!
Probability 79
Combinations
If we want to select r objects from a set of n objects, without giving any
importance to the order in which these objects are selected, the total number
of possible ways that r objects can be selected is called the
 n
number of combinations. It is usually denoted by crn and sometimes by   .
 x
Clearly each of the crn combinations of r objects can be arranged in r! ways.
Thus, the total number of permutations of n objects taken r at a time is r!
crn . Thus from Equation (5.3), we have
n!
r! c nr
(n − r )!
that is
n!
crn = (5.4)
r !(n − r )!
Example 5.13 The management team of a particular company is interested
in selecting three members from their team of 10 managers for a special
project. Find the number of possible groups.
Solution: The order in which the managers are selected is not important. In
this case, the total number of combinations of the 10-person team is given by:
10! 10 × 9 × 8 × 7 × 6 × 5 × 4 × 3 × 2 × 1 10 × 9 × 8 × ( 7!)
3 =
c10 = =
3! 7! 3! 7! 3! 7!
10 × 9 × 8 10 × 9 × 8
= = = 120
3! 3× 2 ×1
Said another way, the management team can select three managers out of the
10 possible managers in 120 possible ways.
So far we have covered the problem of describing sample points in a sam-
ple space and in events belonging to that sample space. Now we need to study
how to combine two or more events and describe the associated sample
points. When we look more closely at probability theory in the next section,
we will see that quite often we are interested in calculating the probability of
events that are, in fact, combinations of two or more events. The combinations
of events are completed by special operations known as unions, intersections,
and complements. To define these operations we rely on Venn diagrams.
We will now describe how to represent a sample space and events in that
sample space with the help of a Venn diagram. In Venn diagrams, the sample
space is represented by a rectangle, whereas events are represented by regions
or parts of regions within the rectangle. Note that a region representing an
event encloses all the sample points in that event. For example, suppose S
{1, 2, 3, 4, 5, 6} and A {2, 4, 5}. Then a Venn diagram, as shown in Figure
5.2, is drawn to represent the sample space S and the event A. Note that the
region representing the event A encloses the sample points 2, 4, and 5.
Definition 5.7 An event in sample space S is called a null event if
it does not contain any sample point, in which case it is usually
denoted by the Greek letter (read as phi).
80 Chapter Five
2 4
5 A 1 3
Figure 5.2 Venn diagram representing the sample space S and the event A in S.
Example 5.14 Consider a group of 10 shop floor workers in a produc-

tion/manufacturing operation. Suppose the group consists of nine men and
one woman. Let S be a sample space that consists of a set of all possible
groups of three workers. Determine an event A in S containing all groups of
three workers that have two women and one man.
Solution: Clearly no groups of three workers can have two women since
there is only one woman in the bigger group. Thus, the event A is the null
event, that is A .
Definition 5.8 Let S be a sample space and let A be an event in S.
Then the event A is called a sure event if it consists of all the sample
points in the sample space S.
Example 5.15 Let S be a sample space associated with a random experi-
ment E. Then determine a sure event in the sample space S.
Solution: By definition a sure event must contain all the sample points that
are in S. Thus, the only sure event is the sample space S itself.
As we saw above, a sample space and events can be represented by using
set notation. To more fully develop the basic concepts of probability theory
in an orderly fashion, it is important to study first some basic operations of
set theory.
Basic Operations of Set Theory
Let S be a sample space and let A and B be any two events in S. Then the
basic operations of set theory are union, intersection, and complements:
Definition 5.9 The union of events A and B, denoted by A B
(read as A union B), is defined as an event containing all the sample
points that are in either A or B or both A and B, as illustrated in
Figure 5.3.
Definition 5.10 The intersection of events A and B, denoted by A
B (read as A intersection B), is defined as an event containing all
the sample points that are in both A and B, as illustrated in Figure 5.4.
Definition 5.11 The complement of an event A in the sample space
S, denoted by A (read as complement of A), is defined as an event
Probability 81
A
B
Figure 5.3 Venn diagram representing the union of events A and B (shaded area).
S
S
A
A
B
B
Figure 5.4 Venn diagram representing the intersection of events A and B

(shaded area).
Figure 5.5 Venn diagram representing the complement of an event A (shaded area).
containing all the sample points that are in S but not in A, as illus-
trated in Figure 5.5.
Example 5.16 Let a sample space S and two events A and B in S be defined
as follows: S {1, 2, 3, 4, 5, 6, 7, 8, 9,– 10}, A– {1, 4, 6, 7, 8}, B {5, 7,
9, 10}. Then determine A B, A B, A and B .
Solution: Clearly from Figure 5.6, we have
– –
A B {1, 4, 5, 6, 7, 8, 9, 10}, A B {7}, A {2, 3, 5, 9, 10}, B
{1, 2, 3, 4, 6, 8}
82 Chapter Five
1 4 S
2
6 8
B A
5 9 7
10
A B
S
1 4
2
6 8
B
5 9 7
A
10
A B
S
1 4
2
6 8
B
5 9 7
A
10
S
1 4
2
6 8
B
5 9 7
A
10
Figure 5.6 Venn diagram representing A B {1, 4, 5, 6, 7, 8, 9, 10},

– –
A B {7}, A {2, 3, 5, 9, 10}, B {1, 2, 3, 4, 6, 8}.
Probability 83
Figure 5.7 Two mutually exclusive events, A and B.
Definition 5.12 Let S be a sample space and let A and B be any two
events in S. Then the events A and B are called mutually exclusive if
the event A B is a null event, that is A B (see Figure 5.7).
Example 5.17 Let S {1, 2, 3, 4, 5, 6, 7, 8, 9, 10}, A {1, 3, 5, 7, 9}, B
{2, 4, 5, 8, 10}. Determine whether events A and B are mutually exclusive.
Solution: Clearly events A and B do not have any sample point in com-
mon, that is, A B . Therefore, events A and B are mutually exclusive.
This means that events A and B cannot occur together.
5.5 Defining Probability Using

Relative Frequency
In the preceding section we defined sample spaces and events with various
methods of describing the sample points. In this section we will define prob-
ability using relative frequency.
Consider a random experiment E and let S be the sample space associat-
ed with this experiment. Let e1, e2, ..., en be the sample points in the sample
space S. Then we have the following definition.
Definition 5.13 The sample points e1, e2, ..., en in a sample S are
called equally likely whenever no particular sample point can occur
in preference to any other sample point.
Example 5.18 The CEO of a large corporation randomly selects an engi-
neer from a total pool of 150 Six Sigma Green Belt engineers for the position
of first line manager. Determine the sample space for this problem.
Solution: Since the engineer was randomly selected, it means any of the
150 engineers had the same chance of being selected. Thus, in this example
the sample space S consists of 150 sample points that are equally likely.
Example 5.19 Find the sample space for an experiment that consists of
tossing three balanced coins and observing whether a head or a tail appears.
Solution: This experiment consists of three steps, and in each step there are
two possible outcomes where each of them has the same chance of occurring.
84 Chapter Five
Thus, there are eight (2 2 2) equally likely sample points in the sample
S associated with this experiment, that is,
S {HHH, HHT, HTH, THH, HTT, THT, TTH, TTT}
Example 5.20 Consider an experiment E of rolling two balanced dice and
observing the numbers that appear on the uppermost face. Determine the
sample space associated with the experiment E.
Solution: The sample space S in this experiment consists of 36 (6 6)
equally likely sample points, that is,
(1, 1), (1, 2 ), (1, 3), (1, 4 ), (1, 5 ), (1, 6 ), (2, 1), (2, 2 ), (2, 3), (2, 4 ), (2, 5 ), (2, 6 ), 
 
S = ( 3, 1), ( 3, 2 ), ( 3, 3), ( 3, 4 ), ( 3, 5 ), ( 3, 6 ), ( 4, 1), ( 4, 2 ), ( 4, 3), ( 4, 4 ), ( 4, 5 ), ( 4, 6 ), 
 
(5, 1), (5, 2 ), (5, 3), (5, 4 ), (5, 5 ), (5, 6 ), (6, 1), (6, 2 ), (6, 3), (6, 4 ), (6, 5 ), (6, 6 ) 
Example 5.21 Repeat the experiment in Example 5.20, but instead of

observing only the numbers that appear on the uppermost faces, observe the
sum of the numbers that appear on both dice. Then determine the sample
space S associated with the new experiment.
Solution: The sample space S associated with the new experiment is
S {2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12}
The sample points in this sample space correspond to the sample points in
the sample space of Example 5.20:
2 {(1, 1)}
3 {(1, 2) (2, 1)}
4 {(1 ,3) (2, 2) (3, 1)}
5 {(1, 4) (2, 3) (3 ,2) (4, 1)}
6 {(1, 5) (2, 4) (3, 3) (4, 2) (5, 1)}
7 {(1, 6) (2, 5) (3, 4) (4, 3) (5, 2) (6, 1)}
8 {(2, 6) (3, 5) (4, 4) (5, 3) (6, 2)}
9 {(3, 6) (4, 5) (5, 4) (6, 3)}
10 {(4, 6) (5, 5) (6, 4)}
11 {(5, 6) (6, 5)}
12 {(6, 6)}
Note that the equations here express “equality of events.”
From the description of the sample points, we can see that the sample
points in the sample space are not equally likely. In fact, 3 is twice as likely to
appear as 2, 4 is three times as likely as 2 or 1.5 times as likely as 3, and so on.
Definition 5.14 Consider a random experiment E with sample
space S. The sample points that describe event A are said to be
favorable to the event A.
Probability 85
Definition 5.15 Let S be a sample space associated with a random

experiment consisting of n equally likely sample points. Of the n
sample points, suppose na, (na n), are favorable to the happening
of an event A. In this case, the probability of the event A, denoted by
P(A), is defined as
na
P(A) (5.5)
n
Defining probability in this way is known as the relative frequency
approach. Now, if we let n become as large as possible, so that n approaches
na
infinity, then P(A) approaches to a constant p, which is called the
n
theoretical probability. For example, if we toss a coin n times and let na be
na
the number of times that a head appears, as n becomes infinitely large,
n
converges to a constant p where p 1⁄ 2 or 50%. We do provide a cautionary
note, however, in that we should not expect that whenever we toss a coin,
50% of the time a head will appear and the other 50% a tail will appear, since
na
the limiting value of is not an actual probability but merely a theoretical
n
probability that may or may not hold in any particular case. This definition,
however, leads us to a more modern approach of defining probability known
as the axiomatic approach. We will discuss that in the following section. In
the remainder of this section, we discuss a few more examples using the rel-
ative frequency approach.
Example 5.22 Suppose that in Example 5.3 the box contains only six parts,
one part produced by each of the six manufacturers. We select one part ran-
domly. Find the probability of an event A that the part selected is produced
by manufacturer 2, 4, or 6.
Solution: Since the box contains exactly six parts, one part produced by
each of the six manufacturers, the sample space S consists of six equally like-
ly sample points, that is S {1, 2, 3, 4, 5, 6}. The sample points favorable
to the event A are A {2, 4, 6}. Thus, we have n 6 and na 3. In this
case, the probability of the event A is P(A) 3⁄ 6 1⁄ 2.
Example 5.23 The production department of a manufacturing company
wants to hire an engineer. In response to an advertisement, it received
60 applications, of which 20 were sent by women. To judge the quality of
the pool of applicants, the manager of the production department randomly
selects one application. Find the probability that the application is a
woman’s.
Solution: The sample space S consists of 60 equally likely sample
points. Let A be the event that the application is a woman’s. The number
of sample points favorable to the event A is 20. Thus, in this case, we have
n 60, na 20. Therefore
na
P(A) 20 / 60 1 / 3
n
86 Chapter Five
Example 5.24 Roll two balanced dice and observe the sum of the two num-
bers that appear on the uppermost faces. Let A be the event that the sum of
the numbers of the two dice is 7. Find the probability of the event A.
Solution: From Examples 5.20 and 5.21 we can see that n 36, na 6.
na
Thus, P(A) 6 / 36 1 / 6.
n
Example 5.25 In Example 5.20, find the probability that the two dice show
the same number.
Solution: Let A be the event that the two dice show the same number. Then
A {(1, 1)(2, 2)(3, 3)(4, 4)(5, 5)(6, 6)}, that is, na 6.
The probability that the two dice show the same number is
na
P(A) 6 / 36 1 / 6
n
Example 5.26 Consider a group of six workers, all of whom are born dur-
ing the same non–leap year. Find the probability that no two workers have
the same birthday.
Solution: We represent the workers as W1, W2, W3, W4, W5, and W6 and
their birthdays as D1, D2, D3, D4, D5, and D6, respectively. The sample point
that represents the birthdays of these workers may be represented by (D1, D2,
D3, D4, D5, D6). Since each birthday could be any day of the year, using the
multiplication rule, the total number of sample points in the sample space is
given by
n 365 365 365 365 365 365 3656
Now suppose that E is the event where no two of the six workers are born on
the same day. Event E will occur if the first worker’s birthday falls on any of
the 365 days, the second worker’s birthday falls on any of the remaining 364
days, the third worker’s birthday falls on any of the remaining 363 days, and
so on. The total number of sample points favorable to the event E, using the
multiplication rule, is
na 365 364 363 362 361 360. Thus, in this example, we have
na
P(E) (365 364 363 362 361 360) / 3656
n
0.959538
5.6 Axioms of Probability

In the preceding section we defined probability using the relative frequency
approach. In the early 1930s this approach was largely abandoned in favor of
the modern axiomatic approach to probability theory, which we will we
study in this section.
Consider a random experiment E and let S be the sample space associ-
Probability 87
the modern axiomatic approach to probability theory, which we will we

study in this section.
Consider a random experiment E and let S be the sample space associ-
ated with this experiment. To every event A in S, there corresponds a certain
number P(A), called the probability of A, which satisfies the following
axioms.
Axiom 1. 0 P(A) 1
Axiom 2. P(S) 1
Axiom 3. For any sequence {An} of mutually exclusive events
(Ai Aj for i j)
n n
P( ∪ Ai ) = ∑ P(Ai )
i =1
i =1
Please note that the first axiom states that the probability of an event A
always assumes a value between 0 and 1 (inclusive). Axiom 2 states that the
event S is sure to happen; in other words, it is certain that the outcome of the
experiment E will be a sample point in the sample space S. Axiom 3 states
that the probability of occurrence of one or more of the mutually exclusive
events A1, A2, ..., An is just the sum of their respective probabilities.
A consequence of these axioms is that several important results simplify
the computation of probability of complex events. Here we state just a few
of them. The proofs of these results are beyond the scope of this book.
Theorem 5.1 Let S be a sample space, and let A be any event in S. The
–
sum of probabilities of the event A and its complement A is one, that is,
–
P(A) P(A) 1 (5.6)
From this it follows that
– –
P(A) 1 P(A) or P(A) 1 P(A) (5.7)
Theorem 5.2 Let S be a sample space, and let be the null event.
Then
P() 0 (5.8)
Theorem 5.3 Let S be a sample space. Let A and B be any two events
(may or may not be mutually exclusive) in S. Then, we have
Figure 5.8 Venn diagram showing the phenomenon of P(A B) P(A) P(B)
P(A B).
88 Chapter Five
P(A B) P(A) P(B) P(A B) (5.9)

A nonmathematical proof of Equation (5.9) follows. From Figure 5.8,
we can easily see that P(A B) is included in both P(A) and P(B). Thus,
when we add P(A) and P(B), we are adding the probability P(A B) twice
and, therefore, we must subtract P(A B) from the sum P(A) P(B).
If the events A and B are mutually exclusive, P(A B) P() 0,
Therefore,
P(A B) P(A) P(B). (5.10)
The result in Theorem 5.3 can easily be extended for more than two events.
For example, for any three events A, B and C we have
P(A B C) P(A) P(B) P(C) P(A B)
P(A C) P(B C) P(A B C)
Example 5.27 Suppose a manufacturing plant has 100 workers, some of

whom are working on two projects, project 1 and project 2. Suppose 60
workers are working on project 1, 30 are working on project 2, and 20 work-
ers are working on both the projects. Suppose a worker is selected random-
ly. What is the probability that he or she is working on at least one of the
projects?
Solution: Let A be the event that the selected worker is working on proj-
ect 1 and B be the event that the selected worker is working on project 2. We
are interested in finding the probability that the worker is working on at least
one project, that is, either on project 1 or on project 2 or on both the projects.
This is just equivalent to finding the probability P(A B). From the infor-
mation provided to us, we have
P(A) 60 / 100, P(B) 30 / 100 and P(A B) 20 / 100
Therefore, from Formula (5.9), we have
P(A B) P(A) P(B) P(A B) 60 / 100
30 / 100 20 / 100 70 / 100 7 / 10
5.7 Conditional Probability

Let S be a sample space and let A and B be any two events in the sample
space S. So far we have been interested in finding the probabilities of –events
–
A, B, or some combination of A and B such as (A B), (A B), A or B.
Now in this section we are interested in finding the probability of an event,
say A, if we know that the event B has already happened. This probability is
called the conditional probability of the event A given that the event B has
already happened and is denoted by P(A | B), (note that (A | B) is read as A
Probability 89
given that B and it should not be confused with A / B, which means A divided
by B). The conditional probability may be defined as follows:
Definition 5.16 Let S be a sample space and let A and B be any
two events in the sample space S. The conditional probability of the
event A, given that the event B has already occurred, is as follows:
P ( A ∩ B)
P(A | B) , if P (B) ≠ 0 (5.11)
P (B)
Similarly,
P ( A ∩ B)
P(B | A) , if P( A) ≠ 0 (5.12)
P( A)
Example 5.28 The manufacturing department of a company hires techni-
cians who are college graduates as well as technicians who are not college
graduates. Under the diversity program, the manager of any given depart-
ment is very careful to hire both male and female technicians. The data in
Table 5.1 shows a classification of all technicians in a selected department
by qualification and gender.
In this case, the manager promotes one of the technicians to a supervi-
sory position. If it is known that the promoted technician is a woman, then
what is the probability that she is a nongraduate? Find the probability that
the promoted technician is a nongraduate when it is not known that the pro-
moted technician is a woman.
Solution: Let S be the sample space associated with this problem and let
A and B be two events defined as follows:
A: the promoted technician is a nongraduate
B: the promoted technician is a woman
We are interested in finding the conditional probability P(A | B).
Since any of the 100 technicians could be promoted, the sample space S
consists of 100 equally likely sample points. The sample points that
are favorable to the event A are 65 and those that are favorable to the event
B are 44. Also, the sample points favorable to both the events A and B are all
the women who are nongraduates and equal to 29. To describe this situation
we have
P(A) 65 / 100, P(B) 44 / 100, and P(A B) 29 / 100
Therefore,
Table 5.1 Classification of technicians by qualification and gender.
Graduates Nongraduates Total

Male 20 36 56
Female 15 29 44
Total 35 65 100
90 Chapter Five
P ( A ∩ B) 29 / 100
P(A | B) 29 / 44
P (B) 44 / 100
Note the probability P(A), sometimes known as absolute or nonconditional
probability is the probability that the promoted technician is a nongraduate
when it is not known that the promoted technician is a woman, and is differ-
ent from the conditional probability P(A | B).
When the conditional probability P(A | B) is the same as the noncondi-
tional probability P(A), that is, P(A | B) P(A), the two events A and B are
said to be independent. From results in Equations (5.11) and (5.12) we can
easily see that
P(A B) P(A | B) P(B) (5.13)
and
P(A B) P(B | A) P(A) (5.14)
Now, using the results in Equations (5.13) and (5.14) and if P(A | B) P(A)
or P(B | A) P(B), that is, if events A and B are independent, we can easi-
ly see that
P(A B) P(A) P(B)
A consequence of this result is that we have the following definition.
Definition 5.17 Let S be a sample space, and let A and B be any
two events in S. The events A and B are independent, if and only if
any one of the following is true:
1. P(A | B) P(A) (5.15)
2. P(B | A) P(B) (5.16)
3. P(A B) P(A) P(B) (5.17)
The conditions in Equations (5.15), (5.16) and (5.17) are equivalent in the
sense that if one is true then the other two are true.
Note that the results in 5.13 and 5.14 are known as the multiplication rule.
Earlier in this chapter we learned about mutually exclusive events.
Although it may seem that mutually exclusive events are the same as inde-
pendent events, we encourage you to be aware that the two concepts are
entirely different. Independence is a property that relates to the probability of
events, whereas mutual exclusivity relates to the composition of events, that
is, to the sample points presented in the events. For example, if the events A
and B are mutually exclusive and P(A) 0, P(B) 0, then P(A B)
P() 0 P(A)P(B) so the events are not independent.
Another method of calculating conditional probability without using the
formulas in Equations (5.11) and (5.12) is by determining a new sample
space, called the induced sample space, taking into consideration the infor-
mation about the event that has already occurred. For instance, in Example
5.28, if we use the information that a woman has already been promoted,
then it is determined that the technician who was promoted can’t be a man
and, therefore, the new sample space, or the induced sample space, consists
Probability 91
Table 5.2 Classification of technicians by qualification and gender.
Graduates Nongraduates Total

Male 27 33 60
Female 18 22 40
Total 45 55 100
only of 44 sample points (the total number of women). Out of the 44 women
technicians, 29 are nongraduates. The conditional probability P(A | B), is the
probability that a nongraduate technician has been promoted given that a
female technician has been promoted, and is now found as
# of nongraduate women technicians
P(A | B) 29 / 44
# of all women tecchnicians
This is, of course, the same as found in Example 5.27.
To elaborate the concept of independence further we consider the fol-
lowing example.
Example 5.29 Suppose that in Example 5.28 a new manager in the manu-
facturing department has made changes in the hiring policy. As a consequence
of the changes, the new classification of the technicians is as in Table 5.2.
The new manager has promoted a technician to a foreman’s position.
Find the following probabilities:
a. The conditional probability that the promoted technician is a
nongraduate given that the technician is a woman.
b. The nonconditional probability that the promoted technician is
a nongraduate.
Solution:
(a) Let the events A and B be defined as in Example 5.28, that is,
A: The promoted technician is a nongraduate.
B: The promoted technician is a woman.
Again, we are interested in determining the conditional probability
P(A | B). Using the new classification, we can see, as in Example 5.27, that:
P(A) 55 / 100 11 / 20
P(B) 40 / 100 2 / 5
P(A B) 22 / 100 11 / 20
Therefore,
P ( A ∩ B) 11 / 50
P(A | B) 11 / 50 5 / 2 11 / 20
P (B) 2/5
(b) In this part we are interested only in finding the probability
P(A). This probability, as it turns out, we already calculated in
part 1. That is,
6
Discrete Random Variables
and Their Probability
Distributions
I
n Chapter 5 we studied sample space, events, and basic concepts, includ-
ing certain axioms of probability theory. We saw that the sample space
associated with a random experiment E describes all possible outcomes
of the experiment. In many applications such a description of outcomes is not
sufficient to extract full information about the possible outcomes of the
experiment. In such cases it is always useful to assign a certain numerical
value to all the possible outcomes. Defining a variable known as a random
variable does the assigning of numerical values to all the possible outcomes.
In this chapter we define random variables and study their probability
distribution, mean, and standard deviation. Then, we study some special
probability distributions that are commonly encountered in various statistical
applications.
6.1 Discrete Random Variables

In most applications we deal with two types of random variables, discrete
random variables and continuous random variables. In this chapter we study
discrete random variables, and in Chapter 7 we shall study continuous ran-
dom variables.
Definition 6.1 A random variable is a vehicle (in mathematical
language we call it a function) that assigns a real numerical value to
each sample point (or outcome) in the sample space of a random
experiment.
A random variable is usually denoted by uppercase letters at the end
of the English alphabet, such as X, Y, or Z. The corresponding low-
ercase letter usually denotes the value that a random variable assigns
to the sample point.
Note: A random variable may assign the same numerical value to vari-
ous outcomes, but it will never assign more than one value to any one out-
come.
93
94 Chapter Six
Definition 6.2 A random variable that assumes a finite (or count-

ably infinite) number of values is called a discrete random variable.
Definition 6.3 A random variable that assumes an uncountably in-
finite number of values is called a continuous random variable.
Examples of discrete random variables are such as the number of cars
sold by a dealer, the number of new employees hired by a company, the num-
ber of parts produced by a machine, the number of defects in an engine of a
car, the number of patients admitted to a hospital, the number of telephone
calls answered by a receptionist, the number of applications sent out by a job
seeker, the number of games played by a batter before he makes a home run,
and so on.
To elaborate the concept that a random variable assigns numerical values
to all the possible outcomes, we consider a simple example of rolling two
dice. Remember that experiments of rolling dice or tossing coins were used
in this text to introduce the concept of probability theory.
Example 6.1 Roll two fair dice and observe the numbers that show up on
the upper faces. Find the sample space of this experiment and then define a
random variable that assigns a numerical value to each sample point equal
to the sum of the points that show up on upper faces. Find all the values that
such a random variable assumes.
Solution: Obviously, when a fair die is rolled any one of the six possible
numbers (1, 2, 3, 4, 5, 6) can come up. Thus, the sample space when two dice
are rolled is as follows:
S {(1,1), (1,2), (1,3), (1,4), (1,5), (1,6), (2,1), (2,2), ..., (2,6), ..., (6,6)}
Let X be a random variable that assigns a numerical value to each sam-
ple point equal to the sum of the two numbers. We have
X(1,1) 2
X(1,2) X(2,1) 3
X(1,3) X(2,2) X(3,1) 4
X(1,4) X(2,3) X(3,2) X(4,1) 5
X(1, 5) X(2, 4) X(3, 3) X(4, 2) X(5, 1) 6
X(1, 6) X(2, 5) X(3, 4) X(4, 3) X(5, 2) X(6, 1) 7
X(2, 6) X(3, 5) X(4, 4) X(5, 3) X(6, 2) 8
X(3, 6) X(4, 5) X(5, 4) X(6, 3) 9
X(4, 6) X(5, 5) X(6, 4) 10
X(5, 6) X(6, 5) 11
X(6, 6) 12
The random variable X assumes the values 2, 3, 4, 5, 6, 7, 8, 9, 10, 11,
12. X assumes only a finite number of values; therefore, it is a discrete ran-
dom variable.
Discrete Random Variables and Their Probability Distributions 95
Definition 6.4 The set of all possible values of a random variable

X, denoted by R {x1, x2, ..., xn,...} is usually called the range space.
To each value xi in the range space R, we assign a number pi P(X xi),
where pi satisfies the following two conditions:
1. pi 0 for all i (6.1)
2. pi 1 (6.2)
The function P defined above is known as the probability function of the
random variable X. The set of pairs (xi, pi), i 1, 2, ..., n written in tabular
form as shown in Table 6.1 is called the probability distribution of the ran-
dom variable X. Note that in order for any probability function to be a prob-
ability distribution, it must satisfy properties described in Equations (6.1)
and (6.2).
To illustrate the concept of probability distribution we determine the
probability distribution of the random variable X defined in Example 6.1.
To determine the probability distribution of the random variable X, we
use the original sample space S. For instance, in Example 6.1 the sample
space S consists of 36 equally likely sample points. Using this fact about the
sample space and the relative frequency definition of probability introduced
in Chapter 5, we have
P(X 2) P{(1,1)} 1 / 36
P(X 3) P{(1,2), (2,1)} 2 / 36
P(X 4) P{(1,3), (2,2), (3,1)} 3 / 36
P(X 5) P{(1,4), (2,3), (3,2), (4,1)} 4 / 36
P(X 6) P{(1,5), (2,4), (3,3), (4,2), (5,1)} 5 / 36
P(X 7) P{(1,6), (2,5), (3,4), (4,3), (5,2), (6,1)} 6 / 36

P(X 12) 1/36.
We can easily verify that the probabilities in Table 6.2 satisfy the proper-
ties given in Equations (6.1) and (6.2). Thus, the probability function P(X x)
Table 6.1 Probability distribution of a random variable X.
Xx x1 x2 x3 x4 – – – xn
P(X x ) p1 p2 p3 p4 – – – pn
Table 6.2 Probability distribution of random variable X defined in Example 6.1.
Xx 2 3 4 5 6 7 8 9 10 11 12
P(X x ) 1/36 2/36 3/36 4/36 5/36 6/36 5/36 4/36 3/36 2/36 1/36
96 Chapter Six
2 3 4 5 6 7 8 9 10 11 12
X
Figure 6.1 Graphical representation of probability function in Table 6.2.
defined above is a probability distribution of the random variable X. Note that

it is quite common to denote the probability function P(X x) by f(x).
A probability function f(x) P(X x) is graphically represented in
Figure 6.1.
Let us consider, once again, the discrete random variable X and its range
space R {x1, x2, ..., xn}. Let A be any subset of R. Then, we have
P(A) f (xi) P(X xi) (6.3)
where the summation is taken over all xi in A. Thus, for example, let A in
Example 6.1 be such that
A {2, 4, 5, 8}.
Then, from Table 6.2, we have
P(A) P(X 2) P(X 4) P(X 5) P(X 8)
1 / 36 3 / 36 4 / 36 5 / 36 13 / 36
In particular, if we define the subset A as
A {x | x 6}
Then, again using Table 6.2, we have
P(A) P(X 2) P(X 3) P(X 4) P(X 5) P(X 6)
1 / 36 2 / 36 3 / 36 4 / 36 5 / 36 15 / 36 5 / 12.
In general, if we define A as
A {xi | xi x}
then
P( A) = ∑ P( X = xi ) = ∑ f ( xi ) (6.4)
xi ≤ x xi ≤ x
Equation (6.4) is clearly the sum of probabilities for all xi that are less
than or equal to x. The probability P(A) defined in Equation (6.4) is com-
monly known as a cumulative probability.
Definition 6.5 The cumulative distribution function (cdf), simply

known as distribution function, of a discrete random variable X, and
denoted by F(x), is defined as follows:
F(x) P(X x) = ∑ f ( xi ) (6.5)
xi ≤ x
Example 6.2 Consider a random experiment of tossing a coin twice. Let X

be a discrete random variable defined as the number of heads that appear in
two tosses. Determine the probability function and the distribution function
of the random variable X. Give the graphical representation of the probabil-
ity function and the distribution function.
Solution: Let H and T denote the head and the tail. Then the sample space
S is
S {HH, HT, TH, TT}
Let the random variable X denote the number of heads, so that
X(HH) 2
X(HT) X(TH) 1
X(TT) 0
Thus, the range space R is
R {0, 1, 2}
Let f(x) be the probability function of the random variable X (see Table 6.3).
The graphical representation of the probability function f(x) in Table 6.3
is as shown in Figure 6.2
Table 6.3 Probability function of X.
Xx 0 1 2
f(x) P(X = x) __ __ __
0 1 2
X
Figure 6.2 Graphical representation of probability function f(x) in Table 6.3.

98 Chapter Six
0 1 2
X
Figure 6.3 Graphical representation of the distribution function F(x) in Example 6.2.
We can now easily find the distribution function F(x) as

F(x) 0 x 0
1⁄ 4 0 x 1
3⁄ 4 1 x 2
1 2x
The graphical representation of F(x) is as shown in Figure 6.3.
The distribution function F(x) of a discrete random variable possesses
the following properties:
1. 0 F(x) 1 (6.6)
2. F(x1) F(x2), for x1 x2 (6.7)
Example 6.3 Consider a random experiment of rolling two dice. Let X be
a discrete random variable defined as in Example 6.1. Let X x1, x2 where
x1 4, x2 5. Show that 0 F(x) 1 and F(x1) F(x2), where F(x) is
the distribution function of the random variable X.
Solution: Using Definition 6.5, it can easily be shown that
F(x) 0 x2
1 / 36 2 x3
3 / 36 3 x4
6 / 36 4 x5
10 / 36 5 x6

35 / 36 11 x 12
1 12 x.
This clearly shows that 0 F(x) 1. Furthermore, it is obvious that
F(x1) F(4) 6 / 36
and
F(x2) F(5) 10 / 36.
Therefore, F(x1) F(x2).
6.2 Mean and Standard Deviation

of a Discrete Random Variable
The mean and the standard deviation of a discrete random variable X are two
measures that are usually used to summarize the probability distribution of the
random variable. The mean, denoted by , is sometimes also known as the
expected value. It is denoted by E(X), and it is a measure of the center of
the probability distribution. The standard deviation, denoted by , is a meas-
ure of variability or dispersion of the probability distribution. In the absence
of complete information about the probability distribution of a random vari-
able, the mean and the standard deviation give us summarized information
about the probability distribution of the random variable.
Let X be a discrete random variable and let f (x) be the probability func-
tion of X. Then the mean and the standard deviation of the random variable
X are defined as follows:
Definition 6.6 The mean or expected value of a discrete random
variable X is defined as
µ = E ( X ) = ∑ xf ( x ) (6.8)
x
that is, each value of the random variable X is multiplied by the cor-
responding probability and summed over all the possible values of
the random variable X.
Definition 6.7 The variance of a discrete random variable X is
defined as
σ 2 = V ( X ) = ∑ ( x − µ )2 f ( x ) (6.9)
x
The standard deviation of discrete random variable X is defined as
σ= ∑ ( x − µ )2 f ( x ) (6.10)
x
Equivalently, we can show that
σ= ∑ x2 f (x) − µ 2 (6.11)
x
Example 6.4 Let a random variable X denote the number of defective parts
produced per eight-hour shift by a machine. Experience shows that it pro-
duces defectives between 0 and 4 (inclusive) with the following probabilities:
Xx 0 1 2 3 4
f(x) P(X x) 0.1 0.4 0.25 0.20 0.05
a. Find the mean and the standard deviation of the random

variable X.
100 Chapter Six
b. Find the probability that X falls in the interval ( 2, 2).
Solution:
a. Using Definition 6.7, the mean of the random variable X is
µ = E ( X ) = ∑ xf ( x )
= 0 × (0.1) + 1 × (0.4 ) + 2 × (0.25 ) + 3 × (0..20 ) + 4 × (0.05 )
= 0 + 0.40 + 0.50 + 0.60 + 0.20 = 1.70
Now, using Equation (6.10), the standard deviation of the random vari-
able X is
σ = x2 f (x) − µ 2
= ( 0 (0.1) + 1 (0.4 ) + 2 (0.25) + 3 (0.20) + 4

2 2 2 2 2
(0.05 ) − (1.70 )2 )
= (0 + 0.40 + 1.00 + 1.80 + 0.80 − 2.89 )
= 1.05
b. Using the value of and calculated in part (a), then as shown
in Figure 6.4, we have
( 2, 2) (1.70 2(1.05), 1.70 2(1.05)) (0.4, 3.80)
Thus, the probability that X falls in the interval (0.4, 3.80) is
P(0.4 X 3.80) P(X 0) P(X 1) P(X 2) P(X 3)
0.1 0.4 0.25 0.20 0.95
This result tells us that the machine produces the number of defective
parts within 2 standard deviations of the mean with probability 95%.
0.4
0.3
0.2
0.1
0.0
0 1 2 3 4
−0.4 1.70 3.80
Figure 6.4 Location of mean and the end point of interval ( 2, 2).
6.2.1 Interpretation of the Mean and the Standard Deviation

Mean In Example 6.4 the mean is the number of defective parts that the
machine is expected to produce per eight-hour shift. Note that the mean value
in this example is 1.70, not a whole number. Obviously, the machine cannot
produce 1.70 defectives, but this is okay because 1.70 does not mean that
in every shift the machine is going to produce exactly 1.70 defective parts.
This simply means that if we observe the number of defectives parts produced
by this machine for many eight-hour shifts, then the machine will produce dif-
ferent numbers of defective parts in different shifts, but the average number
of defective parts produced by the machine in one shift is approximately 1.7.
Physical interpretation of mean is that if we put weights 0.1, 0.4, 0.25,
0.20, and 0.05 units on a rod at the points 0, 1, 2, 3, and 4, respectively, then
the mean is the center of gravity, or the balance point of the rod.
Standard Deviation From part (b) of Example 6.4, it is very clear that the
standard deviation is the measure of dispersion; that is, it tells us how far the
points with probability greater than zero are scattered from the mean. As in
this example, we saw that points with 95% probability fall within two stan-
dard deviations of the mean.
Physical interpretation of the variance, which is the square of the stan-
dard deviation, is that if we place the weights on a rod as mentioned earlier
then the variance is the moment of inertia about a perpendicular axis through
the mean. The moment of inertia is the constant of proportionality used in
Newton’s second law for rotational motion about a fixed axis.
6.3 The Bernoulli Trials and

the Binomial Distribution
Let us consider a random experiment E consisting of repeated trials where
each trial has only two possible outcomes, referred to as success S and fail-
ure F. Then a sequence of independent trials (repetitions), such that the prob-
ability of success on each trial remains a constant p and the probability of
failure is q 1 p, is called a sequence of Bernoulli trials. For example, if
we toss a coin repeatedly, we would have Bernoulli trials since in each trial
the probability of a head as well as of a tail remains fixed.
Let X be a random variable denoting the number of successes in each
Bernoulli trial. Clearly, if we set X 1 or 0 according as the trial is a suc-
cess or a failure and
P(X x) p x1
1pq x 0, (6.12)
then the probability function of the Bernoulli random variable X is given by
Xx 0 1
P(X x) q p
102 Chapter Six
which may also be written as

P(X x) pxq1x, x 0, 1 (6.13)
The function P in Equation (6.13) is a probability function, since
P(X 0) 0, P(X 1) 0
and
P(X 0) P(X 1) p q 1.
Definition 6.8 A random variable X is said to be distributed as
Bernoulli distribution if its probability function is defined as
P(X x) pxq1x, x 0, 1; p q 1
Here p is the parameter of the distribution.
Sometimes the Bernoulli distribution is also known as a point binomial
distribution.
6.3.1 Mean and Standard Deviation of a Bernoulli Distribution

The mean and the standard deviation of a Bernoulli distribution are given by
µ= p and σ= pq (6.14)
respectively where p is the probability of success and q is the probability of
failure.
6.3.2 The Binomial Distribution

The binomial distribution is one of the most commonly used discrete proba-
bility distributions. It is applied whenever an experiment possesses the fol-
lowing characteristics:
1. The experiment consists of n independent trials.
2. Each trial has two possible outcomes, usually called success
and failure.
3. The probability p of success in each trial is constant throughout
the experiment. Consequently the probability q 1 p of
failure is also constant throughout the experiment.
For example, consider the following scenarios when the binomial distri-
bution will be applicable.
1. A machine is producing 5% defective parts. Let the random
variable X denote the number of defective parts in the next 60
parts produced by that machine.
2. Babies are being born in a given hospital. Let X denote the
number of boys among the next 15 babies born in that hospital.
3. Let the probability that a worker in a company will join the

union be 0.4. Let X denote the number of workers out of the
50 workers in that company who would join the union.
4. The probability that a computer in a lab has a virus is 0.25. Let
X denote the number of computers out of a total 30 computers
that have a virus.
5. A job applicant has a 35% chance that he or she will be called
for an interview. Let X denote the number of applicants out of a
total of 18 applicants who will be called for an interview.
6. The likelihood that a consignment being shipped on time
is high with probability 0.70. Let X denote the number of
consignments out of a total of 25 consignments that will
be shipped on time.
Note: In each of the above examples, X is the sum of independent Bernoulli
random variables.
binomial distribution if its probability function is given by
 n
P( X = x ) =   p x q n − x , x = 0, 1, 2, ..., n; p + q = 1 (6.15)
 x
where n 0 is the number of trials, x the number successes, and p the prob-
ability of success. Sometimes, practitioners call the probability distribution
as a binomial model. The n and p in Equation (6.15) are the parameters of the
distribution.
 n
Recall from Equation (5.4) that   , pronounced “n choose x” is the
 x
number of combinations when x items are selected from a total of n items,
and is equal to
 n n!
 x  = x ! (n − x )!
For example,
 6 6! 6 × 5 × 4 × 3× 2 ×1
 4  = 4 ! (6 − 4 )! = ( 4 × 3 × 2 × 1) ( 2 × 1) = 15
Example 6.5 The probability is 0.80 that a randomly selected technician

will finish his or her project successfully. Let X be the number of technicians
among a randomly selected group of 10 technicians who will finish their
projects successfully. Find the probability distribution of the random vari-
able X. Also, represent this probability distribution graphically.
104 Chapter Six
Solution: It is clear that the random variable X in this example is distrib-

uted as binomial with n 10, and p 0.8. Thus, by using the binomial prob-
ability we have
 10 
f ( 0 ) =   ( 0.80 ) (.20 ) = .0000
0 10
0 
 10 
f (1) =   ( 0.80 ) (.20 ) = .0000
1 9
 
1
 10 
f ( 2 ) =   ( 0.80 ) (.20 ) = .0001
2 8
2 
 10 
f ( 3) =   ( 0.80 ) (.20 ) = .0008
3 7
3 
 10 
f ( 4 ) =   ( 0.80 ) (.20 ) = .0055
4 6
4 
 10 
f ( 5 ) =   ( 0.80 ) (.20 ) = .0264
5 5
5 
 10 
f ( 6 ) =   ( 0.80 ) (.20 ) = .0881
6 4
6 
 10 
f ( 7 ) =   ( 0.80 ) (.20 ) = .2013
7 3
7 
 10 
f ( 8 ) =   ( 0.80 ) (.20 ) = .3020
8 2
8 
 10 
f ( 9 ) =   ( 0.80 ) (.20 ) = .2684
9 1
9 
 10 
f (10 ) =   ( 0.80 ) (.20 ) = .1074
10 0
 10 
The graphical representation of the probability distribution is shown in

Figure 6.5.
Example 6.6 Using the information in Example 6.5, find the following
probabilities:
1. At least three technicians will finish their project successfully.
2. At most five technicians will finish their project successfully.
3. Between four and six (inclusive) technicians will finish their
project successfully.
0.3
0.2
0.1
0.0
0 1 2 3 4 5 6 7 8 9 10
Figure 6.5 Binomial probability distribution with n 10, p 0.80.
Solution:
1. In this part we are interested in finding the cumulative
probability P(X 3). Using the probabilities obtained in
Example 6.5, we get
P(X 3) P(X 3) P(X 4) ... P(X 10)
.0008 .0055 ... .1074 .9999
2. In this part we want to find the probability of P(x 5). Again,
using the probabilities in Example 6.5 we get
P(X 5) P(X 0) P(X 1) P(X 2) P(X 3) P(X 4)
P(X 5)
.0000 .0000 .0001 .0008 .0055 .0264 .0328.
3. Now we want to find the probability P(4 X 6). Thus we get
P(4 X 6) P(X 4) P(X 5) P(X 6) .0055 .0264
.0881 .1200.
6.3.3 Binomial Probability Tables

The tables of binomial probabilities for n 1 to 15 and for some selected
values of p are given in Table I of the Appendix. We illustrate the use of these
tables with the following example.
Example 6.8 The probability that the Food and Drug Administration
(FDA) will approve a new drug is 0.60. Suppose that five new drugs are sub-
mitted to FDA for its approval. Find the following probabilities:
1. Exactly three drugs are approved.
2. At most three drugs are approved.
3. At least three drugs are approved.
4. Between two and four (inclusive) drugs are approved.
106 Chapter Six
Table 6.4 Portion of Table I of the Appendix for n 5.
p
x .05 — — — .60 ———
0 .774 .010
1 .203 .077
2 .022 .230
3 .001 .346
4 .000 .259
5 .000 .078
Solution: To use the appropriate table, one must first determine the values
of n. Then, the probability for given values of n and p is found at the inter-
section of the row corresponding to the given value of X and the column cor-
responding to the given value of p. In this example the probability for n 5,
p 0.60, and x 3 is shown in Table 6.4.
Thus, from Table 6.4, we have
1. P(x 3) 0.346
2. P(x 3) P(x 0) P(x 1) P(x 2) P(x 3)
.010 .077 .230 .346 .663
3. P(x 3) P(x 3) P(x 4) P(x 5)
.346 .259 .078 .683
4. In this part we want to find the probability P(2 x 4). Thus,
from Table 6.4, we get P(2 x 4) P(x 2) P(x 3)
P(x 4) .230 .346 .259 .835
Mean and Standard Deviation of a Binomial Distribution

Definition 6.10 The mean and standard deviation of binomial ran-
dom variable X are
Mean: E(X) np (6.16)
Standard Deviation: σ = V ( X ) = npq (6.17)

Where n is the total number of trials, p is the probability of success
in each trial, q 1 p is the probability of failure in each trial, and
V(X) npq is the variance of the random variable X.
Example 6.9 In Example 6.5 find the mean and the standard deviation of
the random variable X, which represents the number of technicians who will
finish their project successfully.
Solution: In Example 6.5, we have
n 10, p 0.8, and q 1 p 1 0.8 0.2
Thus, using Equations (6.16) and (6.17), we have

µ = np = 10 ⋅ (0.8 ) = 8
σ = npq = 10(0.8 )(0.2 ) = 1.60 = 1.26
Example 6.10 The probability that a shopper entering a department store

will make a purchase is 0.30. Let X be the number of shoppers out of a total
of 30 shoppers who enter that department store within a certain period who
make a purchase. Use the formulas (6.16) and (6.17) of the mean and the
standard deviation of the binomial distribution to find the mean and the stan-
dard deviation of the random variable X.
Solution: Using formulas (6.16) and (6.17), we have
µ = np = 30 × (.30 ) = 9
σ = npq = 30(.30 )(.70 )

= 6.30
= 2.51
6.4 The Hypergeometric Distribution

In earlier chapters we introduced the term population and the concept of
sampling with and without replacement. In section 6.3 we introduced the
concept of independent trials. If the sampling is done with replacement and
if we consider selecting an object from the population as a trial, we can eas-
ily see that these trials are independent. However, if the sampling is done
without replacement, these trials are not independent. That is, the outcome
of any trial will depend upon what happened in the previous trial(s).
Consider now a special kind of population, consisting of two categories
such as a population of males and females, defectives and nondefectives,
salaried and nonsalaried workers, healthy and nonhealthy, successes and fail-
ures, and so on. Such populations are generally known as dichotomized pop-
ulations. If a sampling with replacement is done from a dichotomized popu-
lation, we can answer all our questions by using the binomial probability
distribution. However, if a sampling is done without replacement, the trials
will not be independent and therefore the binomial probability distribution
will not be applicable. For example, a box contains 100 parts of which five are
defective. Randomly select two parts, one at a time, from this box. The prob-
ability that the first part will be defective is 5 / 100. However, the probability
of second part being defective depends upon whether the first part was defec-
tive or not. If the first part was defective, the probability of the second part
being defective is 4 / 99, but if the first part was not defective this probability
will be 5 / 99. Because the two probabilities are different, we can’t use bino-
mial probability distribution. For example, if we randomly select 10 parts
from this box to find the probability that exactly one of these parts is defec-
tive, we can’t use binomial distribution.
108 Chapter Six
However, this probability can easily be found by using another probabil-

ity distribution, known as hypergeometric distribution.
hypergeometric if
 r   N − r
 x   n − x 
P( X = x ) = , x = a, a + 1, ..., min(r, n ) (6.18)
 N
 n 
Where
a Max(0, n N r)
N total number of objects, say successes and failures in the
population
r number of objects of category of interest, say successes in
the population
N r number of failures in the population
n number of trials
x number of successes in n trials
n x number of failures in n trials
Example 6.11 A Six Sigma Green Belt randomly selects two parts from a box
containing 5 defective and 15 nondefective parts. He discards the box if one or
both parts drawn are defective. What is the probability that he will:
1. one defective part
2. two defective parts
3. Reject the box.
Solution:
1. In this problem we have N 20, r 5, n 2, x 1. Thus, we have
 5   15 
 1   1 
5 × 15 755
P ( X = 1) = = = = .3947
 20  190 190
 2 
2.
 5   15 
 2   0 
10 × 1
P( X = 2) = = = .0526
 20  190
 2 
3. The probability that he/she rejects the box is
P(X 1) P(X 2) .3947 .0526 .4473
Example 6.12 A manufacturer ships parts in lots of 100 parts. The quali-
ty control department of the receiving company agrees to the sampling plan
that it will select a random sample without replacement of five parts. The lot
will be accepted if the sample does not contain any defective part. What is
the probability that a lot will be accepted if:
1. The lot contains 10 defective parts.
2. The lot contains four defective parts.
Solution:
1. In this problem, we have N 100, r 10, n 5, x 0.
Therefore, the probability that the lot is accepted, that is, the sample does
not contain any defective part is
 10   100 − 10   100   90 
 0   5 − 0   0   5 
P( X = 0) = =
 100   100 
 5   5 
10! 90!
× 90 ⋅ 89 ⋅ 88 ⋅ 87 ⋅ 86
= 0!10! 5!885! = = .5837
100! 100 ⋅ 99 ⋅ 98 ⋅ 97 ⋅ 96
5! 95!
2. In this case, we have
N 100, r 4, n 5 and x 0.
Therefore, the probability that the lot will be accepted is
 4   100 − 4 
 0   5 − 0 
P( X = 0) =
 100 
 5 
 4 !   96! 
  ⋅ 
0!! 4 !   5! 91!  96 ⋅ 95 ⋅ 94 ⋅ 93 ⋅ 92
= =
100! 100 ⋅ 99 ⋅ 98 ⋅ 97 ⋅ 96
5! 95!
= .8119.
110 Chapter Six
6.4.1 Mean and Standard Deviation of a Hypergeometric

Distribution
The mean and standard deviation of hypergeometric distribution are
Mean: np (6.19)
N −n
Standard Deviation: σ = ⋅ npq (6.20)
N −1
Where
N total number of objects in the population
r total number of objects in the category of interest
n the sample size
r
p
N
N −r
q1p
N
Example 6.13 A shipment of 250 computers contains eight computers with
defective CPUs. A sample without replacement of size 20 is selected. Let X
be a random variable that denotes the number of computers with defective
CPUs. Find the mean and the variance of the random variable X.
Solution: Clearly the shipment is a dichotomized population and the sam-
pling is done without replacement. Thus, the probability distribution of the ran-
dom variable X is hypergeometric. Here the category of interest is computers
with defective CPUs. Thus, using the formulas (6.18) and (6.19), we have
 8 
µ = np = 20  = 0.64
 250 
N −n 250 − 20  8   250 − 8 
σ= × npq = × 20 
N −1 250 − 1  250   2550 
 230   8   242 
=  × 20  = .7565
 249   250   250 
6.5 The Poisson Distribution

The Poisson distribution is used whenever we are interested in finding the
probability of rare events, for example, the number of occurrences of a par-
ticular event occurs over a specified period of time, over a specified length
measurement (such as the length of an electric wire), over a specified area, or
in a specified volume when the probability of such an event happening is very
small. For instance, we may be interested in finding the probability of a cer-
tain number of accidents occurring in a manufacturing plant over a specified
period of time, the number of patients admitted to a hospital, the number of

cars passing through a toll booth, the number of customers entering in a bank,
or the number of telephone calls received by a receptionist over a specified
period of time. Similarly, we may be interested in finding the probability of
an electric wire of certain length having a particular kind of defect, the num-
ber of scratches over a specified area of a smooth surface, number of holes in
a roll of paper, or the number of radioactive particles in a specified volume of
air. All these examples have one thing in common, which is that the random
variable X denoting the number of occurrences of events that may be over a
specified period of time, length, area, or volume must satisfy the conditions
of a process or belong to a process called the Poisson Process, for us to be
able to use the Poisson distribution.
Poisson Process
Let X(t) denote the number of times a particular event occurs randomly in a
time period t. Then these events are said to form a Poisson process having
rate λ, λ 0, (for t 1, X(t) λ), if
1. X(0) 0
2. The numbers of events that occur in any two nonoverlapping
intervals are independent.
3. The average number of events occurring in any interval is
proportional to the size of the interval and does not depend
upon when they occur.
4. The probability of precisely one occurrence in a very small
interval (t, t t) of time is equal to λ(t), and the probability
of occurring more than one occurrence in such a small interval
is zero.
The number of events occurring over a certain length, area, or in vol-
ume will form a Poisson process only if they possess all of the above char-
acteristics.
Poisson Distribution
Definition 6.12 A random variable X that is equal to the number of
events occurring according to the Poisson process is said to have a
Poisson distribution if its probability function is given by
e− λ λ x
f ( x ) = P( X = x ) = , x 0, 1, 2, … (6.21)
x!
Where λ 0 (the Greek letter lambda) and
is the only parameter of the
distribution and e ≅ 2.71828.
The binomial distribution, when p is very small and n is very large such
that λ np as n → , can be approximated by Poisson distribution. Note
that as a rule of thumb the approximation is good when λ np 10. We
112 Chapter Six
shall revisit this concept in Chapter 8. The Poisson distribution is also known
to be a distribution that deals with rare events, that is, events that occur with
a very small probability.
It can easily be shown that Equation (6.21) satisfies both properties of
being a probability function, that is
P(X x) f (x) 0
and
∑ P( X = x ) = ∑ f ( x ) = 1
x x
Example 6.14 It is known from experience that 4% of the parts manufac-

tured at a plant of a manufacturing company are defective. Use the Poisson
approximation to the binomial distribution to find the probability that in a lot
of 200 parts manufactured at that plant, seven parts will be defective.
Solution: Since n 200 and p .04, we have np 200(.04) 8 ( 10).
The Poisson approximation should give a satisfactory result. From formula
(6.20), we get
e−8 (8 )7
P( X = 7) = f (7) =
7!
(.0009118965 )(2097152 )
≅ = .3794
5040
Example 6.15 The number of breakdowns of a machine is a random vari-
able having the Poisson distribution with λ 2.2 breakdowns per month.
Find the probability that the machine will work during any given month with:
(a) No breakdown
(b) One breakdown
(c) Two breakdowns
(d) At least two breakdowns
Solution: In this example we are given the number of breakdowns of the
machine per unit time. The unit time in this problem is one month. The prob-
abilities that we want to find are also of the number breakdowns in one
month. The parameter
remains the same, that is, λ 2.2. The probabilities
in parts (a)–(d) can be easily found by using the probability function given
in formula (6.21).
e−2.2 (2.2 )0
(a) P ( X = 0 ) =
0!
= e−2.2 since 0! 1
= 0.1108
e−2.2 (2.2 )1
(b) P ( X = 1) =
1!
(0.1108 )(2.2 )
= = 0.2438
1
e−2.2 (2.2 )2
(c) P ( X = 2 ) = = 0.2681
2!
(d) P(X 2) 1 P(X 2) Since ∑ P ( X = x ) = 1
x
1 P(X 0) P(X 1) 1 0.1108 0.2438

0.6454.
Note that if in the above example we were interested in finding the prob-
abilities of certain number of breakdowns in t-months, for example, the value
of the parameter λ will change to λt.
Example 6.16 In Example 6.15, find the probabilities the machine will
work with:
(a) Four breakdowns in two months
(b) Five breakdowns in two and a half months
Solution:
(a) We are interested in finding the probability of breakdowns over
an interval equal to two times the unit time. Thus, λ 2(2.2)
4.4, so that
e−4.4 ( 4.4 )4 (.012277 )( 374.8096 )

P( X = 4 ) = =
4! 24
= .1917.
(b) In this part we want to find the probability of the number of

breakdowns in 2.5 times the unit time, therefore, λ (2.5)(2.2)
5.5. Thus, the desired probability is
e−5.5 (5.5 )5 (.00408677 )(5032.84375 )

P( X = 5) = =
5! 120
= 0.1714.
114 Chapter Six
Table 6.5 Portion of Table II of the Appendix.
x 1.1 — — — 1.9 2.0

0 .333 .150 .135
1 .366 .284 .271
2 .201 .270 .271
3 .074 .171 .180
4 .020 .081 .090
5 .005 .031 .036
6 .001 .010 .012
7 .000 .003 .004
8 .000 .000 .001
9 .000 .000 .000
Mean and Standard Deviation of a Poisson Distribution

Mean: E(X) λ (6.22)
Variance: V(X) λ
2
(6.23)
Standard deviation: σ = V ( X ) = λ (6.24)
Poisson Probability Tables

The tables of Poisson probabilities for various values of λ are given in Table
II of the Appendix. We illustrate the use of these tables with the following
example.
Example 6.17 The average number of accidents occurring in a manufac-
turing plant over a period of one year is equal to two. Find the probability
that during any given year five accidents will occur.
Solution: To use the Poisson table, first find the value of x and λ for which
the probability is being sought. Then, the desired probability is the value at
the intersection of the row corresponding to x and column corresponding to λ.
Thus, the desired probability P(x 5) at λ 2 is 0.036.
7
Continuous Random
Variables and Their
Probability Distributions
I
n Chapter 6 we studied discrete random variables and their probability
distributions. In section 6.1 we saw that the discrete random variable can
assume only finite or countably infinite number of values. But in real life,
situations often arise when a random variable can assume infinite and
uncountable number of values. For example, a quality engineer may want to
determine how long the bulb of an overhead projector lasts in normal opera-
tion, or a production engineer may want to determine how long a worker will
take to assemble a motor. In both these examples the random variable X is
the time, which can assume any value in an interval. The interval contains an
uncountably infinite number of values. A random variable that can assume
any value in one or more intervals is called a continuous random variable. In
this chapter, we discuss some of the more commonly used probability distri-
butions of continuous random variables.
7.1 Continuous Random Variables

In this section, we introduce the general concept of probability distributions
of continuous random variables. Then in the next several sections, we will
discuss specific probability distributions.
Definition 7.1 A random variable is called continuous if it can
assume any value over one or more intervals. Since by definition the
number of values contained in any interval is infinite, the possible
number of values that a continuous random variable can assume is
also infinite and uncountable.
More examples of a continuous random variable are: time taken by a
technician to complete a certain job, length of a rod, and diameter of a ball
bearing.
In Chapter 6, we saw that one of the properties of a probability distribu-
tion is that the total probability is always equal to 1. This property also holds
for probability distributions of continuous random variables. Also, the con-
tinuous random variables assume an uncountably infinite number of values.
115
116 Chapter Seven
Combining the above property of probability distributions with the charac-

teristic of continuous random variables, we see that we cannot assign any
nonzero probability when a continuous random variable takes an individual
value, for otherwise it is not possible to keep the total probability equal to 1.
Consequently, unlike the discrete random variables, the probability that a
continuous random variable assumes any individual value is always zero. In
case of continuous random variables, we are always interested in finding the
probability of random variables taking any value in an interval rather than
taking any individual values. For example, in the problem of time taken by a
technician to finish a job, let a random variable X denote the time (in hours)
taken by the technician to finish a given job. Then, we would be interested in
finding, for example, the probability P(3.0 X 3.5). That is, we would be
interested in finding the probability that she takes between 3 and 3.5 hours to
finish the job rather than finding the probability of her taking 3 hours, 10
minutes, 15 seconds to finish the job. In this case, the chance of the event
associated with completing the job in exactly three hours, ten minutes, and
fifteen seconds is very remote and, therefore, the probability of such an event
will be zero.
The probability function of a continuous random variable X, denoted by
f(x), is usually known as the density function and is represented by a smooth
curve. For example, a typical density function curve of a continuous random
variable is shown in Figure 7.1.
The density function of a continuous random variable satisfies the fol-
lowing properties:
∞
(i) f (x) 0 (ii) ∫ f ( x ) dx = 1 (7.1)
−∞
Note that the mathematical expression in property (ii) represents the

total area enclosed by the probability density curve and the x-axis. All it
a b
Figure 7.1 An illustration of a density function of a continuous random variable X.

Continuous Random Variables and Their Probability Distributions 117
says is that the total area, which represents the total probability, is equal to
1. For example, the probability that the random variable X falls in an inter-
val (a, b) is
P(a X b) Shaded area in Figure 7.1.
Note that if in Figure 7.1 we take a b, then the shaded area will be 0. That
implies the P(X a) P(X b) 0, which confirms the point we made
earlier in that the probability of a continuous random variable taking any
individual value is 0. This fact leads us to another important result in that it
does not matter whether the endpoints of an interval are included or not
while calculating the probability. In other words, if X is a continuous ran-
dom variable,
P(a X b) P(a X b) P(a X b) P(a X b) (7.2)
The cumulative distribution function denoted by F(x) is defined as
F(x) P(X x) (7.3)
Graphically, Equation (7.3) may be represented as shown in Figure 7.2.
The distribution function F(x) of a continuous random variable X satis-
fies the following properties:
(i) 0 F(x) 1 (7.4)
(ii) If x1 x2 then F(x1) F(x2) (7.5)
(iii) F() 0, F() 1 (7.6)
So far, we have had a general discussion about the probability distribu-
tions of continuous random variables. In the remainder of the chapter we are
going to discuss some special continuous probability distributions that we
encounter frequently in applied statistics.
F(x)
Figure 7.2 Graphical representation of F(x) P(X x).

118 Chapter Seven
7.2 The Uniform Distribution

The uniform distribution, sometimes also known because of its shape as
rectangular distribution, is perhaps the simplest continuous probability
distribution.
Definition 7.2 A random variable X is said to be uniformly dis-
tributed over an interval (a, b) if its probability density function is
given by:
 1
 for a ≤ x ≤ b
f (x) =  b − a (7.7)
0
 otherwise
Note that the density function f (x) in Equation (7.7) is constant for all val-
ues of x in the interval (a, b). Figure 7.3 shows the graphical representation
of a uniform distribution of the random variable X distributed over the inter-
val (a, b), where a b.
The probability that the random variable X takes the values in an interval
(x1, x2), where a x1 x2 b is the shaded area in Figure 7.4 and is equal to
x 2 − x1
P ( x1 ≤ X ≤ x2 ) = (7.8)
b−a
Example 7.1 Let a random variable X be the time taken by a technician to
complete a project. In this example, the time can be anywhere between two
to six months, so the random variable X is uniformly distributed over the
interval (2, 6). Find the following probabilities:
(a) P(3 X 5) (b) P(X 4) (c) P(X 5)
Solution:
(a) To find the probability P(3 X 5) we use the result given in
Equation (7.8), where we have a 2, b 6, x1 3, and x2 5.
Thus, we have
5−3 2
P(3 ≤ X ≤ 5) = = = 0.5.
6−2 4
f(x)
1
(b − a)
a b
Figure 7.3 Uniform distribution over the interval (a, b).

f(x)
1
(b − a)
a x1 x2 b
Figure 7.4 Probability P (x1 X x2).
(b) In this part, we want to find the probability P(X 4). This is
equivalent to finding the probability P(2 X 4), since the
probability for any interval that falls below the point x 2 is
zero. Again, using the result in Equation (7.8), we have
4−2 2
P ( X ≤ 4 ) = P (2 ≤ X ≤ 4 ) = = = 0.5.
6−2 4
(c) By the same argument as in part b, we have P(X 5)
P(5 X 6), and we have
6−5 1
P ( X ≥ 5 ) = P (5 ≤ X ≤ 6 ) = = = 0.25.
6−2 4
Example 7.2 Suppose a delay in starting production due to an unexpected

mechanical failure is anywhere from 0 to 30 minutes. Find the following
probabilities:
(a) Production will be delayed by less than 10 minutes.
(b) Production will be delayed by more than 20 minutes.
(c) Production will be delayed by 12 to 22 minutes.
Solution: Let X be a random variable denoting the time by which produc-
tion will be delayed. From the given information we can see that the random
variable X is uniformly distributed over the interval (0, 30). Using this infor-
mation the desired probabilities are found as follows:
10 − 0 10 1
(a) P ( X ≤ 10 ) = P (0 ≤ X ≤ 10 ) = = =
30 − 0 30 3
30 − 20 10 1
(b) P ( X ≥ 20 ) = P (20 ≤ X ≤ 30 ) = = =
30 − 0 30 3
22 − 12 10 1
(c) P (12 ≤ X ≤ 22 ) = = =
30 − 0 30 3
120 Chapter Seven
Note that in each case, the probability turned out to be the same (i.e., 1/3).
This shows that, in a uniform distribution, the probability depends upon the
length of the interval and not on the location of the interval. In each case the
length of the interval was equal to 10.
7.2.1 Mean and Standard Deviation of the Uniform Distribution

Let X be a random variable distributed uniformly over an interval (a, b). The
mean and the standard deviation of the random variable X are given by
a+b
µ= (7.9)
2
b−a
σ= (7.10)
12
The distribution function F(x) of a random variable X distributed uni-
formly over an interval (a, b) is defined as
F(x) P(X x)
P(a X x)
x−a
= (7.11)
b−a
Example 7.3 Let a random variable X denote the coffee break (in minutes)
that a technician takes every morning. Let the random variable X be uni-
formly distributed over an interval (0, 16). Find the mean and the standard
deviation of the distribution.
Solution: Using Equations (7.9) and (7.10), we get
a + b 0 + 16
µ= = =8
2 2
b − a 16 − 0
σ= = = 4.619.
12 12
Example 7.4 In Example 7.3, find the following values of the distribution
function of the random variable X:
(a) F(3) (b) F(5) (c) F(12)
Solution: Using the result of Equation (7.11), we get
x − a 3− 0 3
(a) F ( 3) = = =
b − a 16 − 0 16
x−a 5−0 5
(b) F (5 ) = = =
b − a 16 − 0 16
x − a 12 − 0 12 3
(c) F (12 ) = = = =
b − a 16 − 0 16 4
7.3 The Normal Distribution

The normal distribution forms the basis of modern statistical theory. The
normal distribution is the most widely used probability distribution in
applied statistics. In fact, it is very hard to find many situations in real life
where the normal distribution is not used in one way or the other. For
example, the tensile strength of paper, survival time of a part, time taken
by a programmer to neutralize a new computer virus, volume of a chemi-
cal compound in a 1-pound container, compressive strength of a concrete
block, length of rods, time taken by a commuter to travel from home to
work, heights and weights of people; all can be modeled by a normal dis-
tribution. Another striking application, which we shall discuss in the next
chapter,– is the central limit theorem, which is based on the concept that the
mean X of a random sample is approximately normally distributed. In
applied statistics the normal distribution and central limit theorem are of
paramount importance. Some of these applications we shall see in subse-
quent chapters. Now we will discuss the normal probability distribution.
Definition 7.3 A random variable X is said to have a normal

probability distribution if the density function of X is given by
1 2 2
f (x) = e− ( x − µ ) / 2 σ x (7.12)
2πσ
where and 0 are the two parameters of the dis-

tribution, 3.1428 and e 2.71828. Also, note that and are
the mean and standard deviation of the distribution. A random vari-
able X having a normal distribution with mean and a standard
deviation is usually written as X N(, ).
Some of the characteristics of the normal density function are the fol-
lowing:
1. The normal density function curve is bell shaped and
completely symmetric about its mean . For this reason the
normal distribution is also known as a bell-shaped distribution.
2. The specific shape of the curve, whether it is more or less tall, is
determined by its standard deviation .
3. The tails of the density function curve extend from to .
4. The total area under the curve is 1.0. However, 99.74% of the
area falls within three standard deviations of the mean .
5. The area under the normal curve to the right of is 0.5 and to
the left of is also 0.5.
Figure 7.5 shows the normal density function curve of a random variable
X with mean and standard deviation .
122 Chapter Seven
µ−3σ µ µ+3σ
Figure 7.5 The normal density function curve with mean and standard deviation .
σ =1 µ=5 µ =7
µ =3
Figure 7.6 Curves representing the normal density function with different means,
but with the same standard deviation.
Since 99.74% of the probability of a normal random variable with mean

and standard deviation falls between 3 and 3, the distance
6 between 3 and 3, is usually considered the range of the nor-
mal distribution. Figures 7.6 and 7.7 show that as the mean and the stan-
dard deviation change the location and the shape of normal curve change.
From Figure 7.7 we can observe an important phenomenon of the nor-
mal distribution, that is as the standard deviation becomes smaller and
smaller, the probability is concentrated more and more around the mean .
We will see later that this property of the normal distribution is very useful
in making inferences about populations.
Using integral calculus one can find the probability of the normal ran-
dom variable X falling in any interval. Since the use of integral calculus is
beyond the scope of this book, in order to find such probabilities we need to
σ=1
σ=2
σ=3
Figure 7.7 Curves representing the normal density function with different standard
deviations, but with the same mean.
−3 −2 −1 0 1 2 3
Figure 7.8 The standard normal density function curve.
introduce a new random variable, called standardized random variable. A

standard normal random variable, denoted by Z, is defined as follows:
X−µ
Z= (7.13)
σ
The new random variable Z is also distributed normally, but with mean 0 and
a standard deviation 1. The distribution of the random variable Z is generally
known as the standard normal distribution.
Definition 7.4 The normal distribution with mean 0 and standard
deviation 1 is known as the standard normal distribution and is usu-
ally written as N(0,1).
The values of the standard normal random variable Z, denoted by the
lower case letter z, are called the z-scores. For example, in Figure 7.8 the
points marked on the x-axis are the z-scores. The probability of the random
variable Z falling in an interval (a, b) is shown by the shaded area under the
standard normal curve in Figure 7.9. This probability is determined by using
a standard normal distribution table (see Table III of the appendix).
7.3.1 Standard Normal Distribution Table

The standard normal distribution, Table III of the appendix, lists the proba-
bilities of the random variable Z for its values between z 0.00 and z
3.09. A small portion of this table is reproduced below in Table 7.1. The
entries in the body of the table are the probabilities P(0 Z z), where z is
some point in the interval (0, 3.09). These probabilities are also shown by the
124 Chapter Seven
−3 a b 3
Figure 7.9 Probability (a Z b) under the standard normal curve.
Table 7.1 A portion of standard normal distribution Table III of the appendix.
Z .00 .01 .02 .03 .04 .05 .06 .07 .08 .09
0.0 .0000 .0040 .0080 .0120 .0160 .0199 .0239 .0279 .0319 .0359
0.1 .0398 .0438 .0478 .0517 .0557 .0596 .0636 .0675 .0714 .0753
• •
• •
• •
1.0 .3413 .3438 .3461 .3485 .3508 .3531 .3554 .3577 .3599 .3621
1.1 .3643 .3665 .3686 .3708 .3729 .3749 .3770 .3790 .3810 .3830
• •
• •
• •
1.9 .4713 .4719 .4726 .4732 .4738 .4744 .4750 .4756 .4761 .4767
2.0 .4772 .4778 .4783 .4788 .3793 .4798 .4803 .3808 .4812 .4817
shaded area under the normal curve given at the top of the Table III of the
appendix. To read this table we mark the row and the column corresponding
to the value of z to one decimal point and the second decimal point respec-
tively. Then the entry at the intersection of that row and column is the prob-
ability P(0 Z z). For example, the probability P(0 Z 2.09) is found
by marking the row corresponding to z 2.0 and column corresponding to
z .09 (note that z 2.09 2.0 .09) and locating the entry at the inter-
section of the marked row and column, which in this case is equal to .4817.
The probabilities for the negative values of z are found, due to the symmet-
ric property of the normal distribution, by finding the probabilities of the cor-
responding positive values of z. For example, P(1.54 Z 0.50)
P(0.50 Z 1.54).
Example 7.5 Use the standard normal distribution table, Table III of the
appendix, to find the following probabilities:
(a) P(1.0 Z 2.0) (b) P(1.50 Z 0) (c) P(2.2 Z 1.0)
Solution:
(a) From Figure 7.10 it is clear that
P(1.0 Z 2.0) P(0 Z 2.0) P(0 Z 1.0)

.4772 .3413 0.1359
−3 0 1 2 3
Figure 7.10 Shaded area equal to P(1 Z 2).
−3 −1.5 1.5 3
Figure 7.11 Two shaded areas showing P(1.50 Z 0) P(0 Z 1.50).
−3 −2.2 −1 1 2.2 3
Figure 7.12 Two shaded areas showing P(2.2 Z 1.0) P(1.0 Z 2.2).
(b) Since the normal distribution is symmetric about the mean,

which in this case is 0, the probability of Z falling between
1.5 and 0 is the same as the probability of Z falling between 0
and 1.5. Figure 7.11 also supports this assertion. Using Table
III, we have the following:
P(1.50 Z 0) P(0 Z 1.50) 0.4332
(c) By using the same argument as in part b and using Table III of
the appendix (also, see Figure 7.12), we get
P(2.2 Z 1.0) P(1.0 Z 2.2)
P(0 Z 2.2) P(0 Z 1.0)
.4861 .3413 0.1448
Example 7.6 Use Table III of the appendix on page 317 to determine the
following probabilities:
(a) P(1.50 Z 0.80) (b) P(Z 0.70) (c) P(Z 1.0)
Solution:
(a) Since the standard normal distribution table (Table III of the
appendix) gives the probabilities of z-values starting from zero
to positive z-values, we have to break the interval 1.5 to 0.8
into two parts, that is, 1.5 to 0 plus 0 to 0.8 (see Figure 7.13),
so that we get
P(1.50 Z 0.80) P(1.50 Z 0) P(0 Z 0.80)

126 Chapter Seven
−3 −1.5 0 0.8 3
Figure 7.13 Showing P(1.50 Z .80) P(1.50 Z 0) P(0 Z 0.80).
−3 0 0.7
Figure 7.14 Shaded area showing P(Z 0.70).
−3 −1 0 3
Thus, we have
P(1.50 Z 0.80) P(1.50 Z 0) P(0 Z 0.80)
P(0 Z 1.50) P(0 Z 0.80)
.4332 .2881 0.7213
(b) The probability P(Z 0.70) is shown by the shaded area in
Figure 7.14. This area is equal to the sum of the area to left of
z 0 and the area between z 0 and z 0.7, which implies that:
P(Z 0.70) P(Z 0) P(0 Z 0.7) 0.5 .2580 0.7580
(d) By using the same argument as in part b and Figure 7.15, we get
P(Z 1.0) P(1.0 Z 0) P(Z 0)
P(0 Z 1.0) P(Z 0)
.3413 .5 0.8413
Example 7.7 Use Table III of the appendix to find the following proba-
bilities:
(a) P(Z 2.15) (b) P(Z 2.15)
Solution:
(a) The desired probability P(Z 2.15) is equal to the shaded
area under the normal curve to right of z 2.15, shown in
−3 0 2.15 3
−3 −2.15 0 3
Figure 7.16. This area is equal to the area to the right of z 0

minus the area between z 0 and z 2.15. Since the area to
the right of z 0 is 0.5. Thus, we have
P(Z 2.15) 0.5 P(0 Z 2.15) 0.5 0.4842 0.0158
(b) Using the symmetric property of the normal distribution (see
Figure 7.17) and using part a, we have
P(Z 2.15) P(Z 2.15) 0.0158
So far in this section, we have considered the problems of finding prob-
abilities of the standard normal variable Z, that is, a normal random variable
with mean 0 and standard deviation 1. Now we consider the prob-
lems where 0 and 1.
Example 7.8 Let X be a random variable distributed normally with 6
and 4. Then determine the following probabilities:
(a) P(8.0 X 14.0) (b) P(2.0 X 10.0) (c) P(0 X 4.0)
Solution:
(a) In order to find the probability P(8.0 X 14.0), we first need
to transform the random variable X into the standard normal
variable Z, which is done by subtracting throughout the
inequality, the mean , and dividing by the standard deviation
. Thus, as shown in Figures 7.18, and 7.19, we get
 8 − 6 X − 6 14 − 6 
P (8.0 ≤ X ≤ 14.0 ) = P  ≤ ≤ 
 4 4 4 
P(0.5 Z 2.0)
P(0 Z 2.0) P(0 Z 0.50)
0.4772 0.1915 0.2857.
128 Chapter Seven
6 8 14 −3 0.5 1 2 3
Figure 7.18 Converting normal N(6,4) to standard normal N(0,1).
−3 0 0.5 2.0 3
Figure 7.19 Shaded area showing P(0.5 Z 2.0).
−3 −1 1 3
(b) Proceeding in same manner as in part (a) and using Figure 7.20,
we have
 2 − 6 X − 6 10 − 6 
P (2.0 ≤ X ≤ 10.0 ) = P  ≤ ≤ 
 4 4 4 
= P (−1.0 ≤ Z ≤ 1.0 )
= P (−1.0 ≤ Z ≤ 0 ) − P (0 ≤ Z ≤ 1.0 )
= 2 P (0 ≤ Z ≤ 1.0 ) = 2(0.3413) = 0.6826.
(c) Again, transforming X into Z and using Figure 7.21, we get
 0 − 6 X − 6 4 − 6
P (0 ≤ X ≤ 4.0 ) = P  ≤ ≤ 
 4 4 4 
= P (−1.50 ≤ Z ≤ −0.50 ) = P (0.5 ≤ Z ≤ 1.50 )
= P (0 ≤ Z ≤ 1.50 ) - P (0 ≤ Z ≤ 0.50 )
= 0.4332 − 0.1915 = 0.2417
Example 7.9 Suppose a quality characteristic of a product is normally dis-
tributed with mean 18 and standard deviation 1.5. The specifica-
tion limits furnished by the customer are (15, 21). Determine what percent-
age of the product meets the specifications set by the customer.
−3 −1.5 −0.5 0 3
Figure 7.21 Shaded area showing P(1.50 Z 0.50)
Solution: Let the random variable X denote the quality characteristic of

interest. Then, X is normally distributed with mean 18 and standard
deviation 1.5.
So we are interested in finding the percentage of product with the char-
acteristic of interest within the limits (15, 21), which is given by
 15 − 18 X − 18 21 − 18 
100·P (15 ≤ X ≤ 21) = 100 P  ≤ ≤ 
 1.5 1.5 1.5 
= 100 P (−2.0 ≤ Z ≤ 2.0 )
= 100 [ P (−2.0 ≤ Z ≤ 0 ) + P (0 ≤ Z ≤ 2.0 )]
= 100 × 2 P (0 ≤ Z ≤ 2.0 )
= 100 × 2(.4772 ) = 95.44%.
In this case, the percentage of product that will meet the specifications
set by the customer is 95.44%.
7.4 The Exponential Distribution

In Chapter 6, we studied the Poisson probability distribution, which describes
the phenomenon of random events that occur in a Poisson process. The events
in the Poisson process occur randomly. This means, for example, the time
between the occurrences of any two consecutive events is a random variable
T (say). Then, the random variable T is distributed as exponential. As another
example, the distance between two defects in a telephone or an electric wire
is distributed as exponential. The exponential distribution has a wide range of
applications in any process that does not take the aging/anti-aging factor into
account. For example, if a machine is always as good as new, we use the expo-
nential distribution to study its reliability.
exponential if its probability density function is defined as
f (x) λeλx for x 0 0, otherwise (7.14)

Where λ 0, is the only parameter of this distribution and e 2.71828. It
is important to note that λ is the number of events occurring per unit of time,
per unit length, per unit area, or per unit volume in a Poisson process.
130 Chapter Seven
f(x)
2
1.5
λ =2.0
0.5 λ =1.0
λ = 0.5
x
2 4 6 8 10
λ = 0.1
Figure 7.22 Graphs of exponential density function for λ 0.1, 0.5, 1.0, and 2.0.
The shape of the density function of an exponential distribution changes

as the value of λ changes. Figure 7.22 shows the density function of expo-
nential distribution for some selected values of λ.
7.4.1 Mean and Standard Deviation of an Exponential Distribution
E(X) 1/λ and σ = V (X) = 1 / λ (7.15)

where V(X) 1/λ2 is the variance of the exponential distribution.
7.4.2 Distribution Function F(x) of the Exponential Distribution
F(x) P(X x)
1 eλx (7.16)
From Equation (7.16), it follows that
P(X x) 1 P(X x)
1 F(x)
1 (1 eλx)
e
x (7.17)
Equation (7.17) leads us to an important property known as the “memory-
less” property of the exponential distribution. As an illustration of this prop-
erty, we consider the following example.
Example 7.10 Let the breakdowns of a machine follow the Poisson process
so that the random variable X denoting the number of breakdowns per unit
of time is distributed as Poisson distribution. Then, the time between any two
consecutive failures is also a random variable (say) T, which is distributed
as exponential with parameter

. Assuming
0.1, determine the following
probabilities:
(a) P(T t), that is, the probability that the machine will function
for at least time t, before it breaks down again.
(b) P(T t t1/T t1), which means that it is known the machine
has already operated for time t1 after a breakdown. Then find
the probability it will function for at least another time t from
time t1. In other words, find the probability that the machine
will function for a total time of at least t t1 before its next
breakdown given that it has already worked for time t1 since
the previous breakdown.
Solution:
(a) Given that λ 0.1, we want to find the probability P(T t).
From Equation (7.17), this probability is given by
P(T t) eλt e(0.1)t et/10

(b) Here we are interested in finding the conditional probability
P(T t t1, T t1).
Using the definition of conditional probability, we have
P (T > t + t1 , T > t1 )
P (T > t + t1 , T > t1 ) =
P (T > t1 )
Where P(T t t1, T t1) means that the probability that T t t1 and
T t1. When T t t1 it is automatically greater than t1. Thus, we have
P(T t t1 | T t1) P(T t t1)
So that
P (T > t + t1 )
P (T > t + t1 | T > t1 ) =
P (T > t1 )
Now using Equation (7.17), we get
e− λ (t + t1 )
P (T > t + t1 | T > t1 ) = = e− λt = e− ( 0.1)t = e− t /10 , since λ = 0.1
e− λt1
Therefore, the probability P(T t t1 | T t1) is the same as the prob-
ability P(T t). This means that under the exponential model, the probabil-
ity P(T t) remains the same no matter from what point we measure the
time t. In other words, it does not remember when the machine had its last
breakdown. For this reason, the exponential distribution is known to have a
memory-less property.
From the above discussion we can see that it does not matter when we
start observing the system, since it does not take into account an aging fac-
tor. That is, whether the machine is brand new, or 20 years old, we have the
same result as long as we model the system using the same Poisson process
132 Chapter Seven
(or exponential model). In practice, however, this is not very valid. For exam-
ple, if we are investigating how tollbooths function during rush hours and
non–rush hours, and we model it with the same Poisson process, then the
results may not be very valid. It would make more sense that when there is
very clear distinction between the two scenarios, we should model them by
two different processes.
7.5 The Weibull Distribution

The Weibull distribution, named after its inventor, is used extensively in qual-
ity and reliability engineering. In particular, it is widely used in reliability
problems. Unlike the exponential distribution, the Weibull distribution does
take into account an aging/anti-aging factor. In fact, the exponential distribu-
tion is a special case of Weibull distribution. This point is better explained
with a function, called failure rate function or hazard rate function.
Definition 7.6 A hazard rate function, denoted by h(t), is the con-
ditional probability that a system will fail instantaneously some time
after time t given that it has survived up to time t.
In a Weibull model, the hazard rate function can be increasing, decreas-
ing, or constant. When the hazard rate is constant, the Weibull model reduces
to an exponential model, and when it is increasing/decreasing, it means the
aging/anti-aging factor is being taken into account. For example, a hazard
rate function for a system that is getting old and is not well maintained may
increase or decrease after it is reconditioned and remain constant if it is
updated/maintained frequently. In human populations, the hazard rate func-
tion is defined as the proportion of individuals alive at the age of t years who
will die in the age interval (t, t t1). The failure rate curve for humans is
almost tub shaped; first it is decreasing, then almost flat, and finally increas-
ing. Figure 7.23 shows three kinds of hazard rate functions, h1(t), h2(t), and
h3(t), that are respectively increasing, decreasing, and constant.
h1 (t)
h3 (t)
1
h2 (t)
0 5 10
Figure 7.23 Curves of three different hazard rate functions.

Definition 7.7 A random variable T is said to be distributed as

Weibull if its probability density function is given by
f(t) (t)1 e(t), for t 0
0, otherwise (7.18)
where 0 and 0 are the two parameters of the distribution. The
Weibull model of the hazard rate function with these parameters is
h(t) t 1 (7.19)
Note that if 1, then h(t) is a constant and Equation (7.18) reduces to
Equation (7.14). That is, the Weibull density function reduces to the exponen-
tial density function with λ. When 1, the hazard function h(t) increases
and when 1, h(t) decreases. Figure 7.24 presents graphs of the hazard func-
tion when 1 and 0.5, 1, 2. Note that at 0.5, 1, 2 the hazard func-
tion is respectively decreasing, constant and increasing. For these values of
and , the graphs of the Weibull density function are shown in Figure 7.25.
7.5.1 Mean and Variance of the Weibull Distribution
1  1
µ= Γ 1 +  (7.20)
α  β
1   1 
2
2  
σ = 2 Γ  1 +  −  Γ  1 +   
2
(7.21)
α   β    β  
 
where (n) is a gamma function. In particular, when n is a natural number,
say n, (n) (n 1)!.
7.5.2 Distribution Function F(t) of Weibull

F(t) P(T t) 1 e(t) (7.22)
4
β = 2.0
3
2
β = 1.0
1
β = 0.5
0 5 10
Figure 7.24 Hazard function h(t) with 1; 0.5, 1, 2.

134 Chapter Seven
α =1, β = 0.5
α =1, β = 1
α =1, β = 2.0
0 1 2 3
Figure 7.25 Weibull density function (a) 1, 0.5 (b) 1, 1

(c) 1, 2.
From Equation (7.22), it follows that

P(T t) 1 F(t) e(t) (7.23)
Example 7.11 From data on a system, the parameters of a Weibull distri-
bution are estimated to be 0.00025 and 0.5 where t is measured in
hours. Then, determine:
(a) The mean time before the system breaks down
(b) The probability P(T 5,000)
(c) The probability P(T 10,000)
(d) The probability P(T 10,000)
Solution:
(a) Using the expression in Equation (7.20) for the mean, we have
1  1 
µ= Γ 1 + 
0.00025  0.5 
(4,000) (3)
(4,000) (2!)
8,000
(b) Using the expression in Equation (7.23), we have
P (T ≥ 5, 000 ) = e( − ( 0.00025 )( 5, 000 ))

0.5
0.5
= e− (1.25 )
= e−1.118
= 0.3269
(c) Again, using the expression in Equation (7.23), we have
P (T ≥ 10, 000 ) = e− (( 0.00025 )(10, 000 ))

0.5
= e−1.5811388
= 0.2057
(d) The probability P(T 10,000) can be found using the result in
part c, that is,
P(T 10,000) 1 P(T 10,000) 1 0.2057 0.7943
8
Sampling Distributions
I
n Chapters 6 and 7 we discussed distributions of data as they apply to dis-
crete and continuous random variables. Now we will turn our attention to
sampling distributions, or the probability distributions of functions of
observations from a random sample. The sampling distributions we are going
to discuss below are frequently encountered in applied statistics.
One of the key functions of statistics is to draw conclusions about the
population based upon information contained in a random sample. To use
such sample information for drawing conclusions about a population, it is
necessary that we understand the relationship between numerical measures
of sample data (statistics) and numerical measures of population data
(parameters). The purpose of this and the next chapter is to establish and dis-
cuss the importance of these relationships between statistics and parameters.
As an illustration, consider that we have a population with an unknown
mean and we would like to gain some knowledge about that population. It
seems quite plausible that we could take a random sample of n observations
(X1, X2, ..., Xn) from this population and use the sample mean as a substitute
(called an estimator) of the population mean based on the following:
1 n
X= ∑xi
n i =1
(8.1)
Once we decide to use the sample mean as an estimator of the popula-

tion mean, we have an immediate question about how well any particular – esti-
mate actually describes the true value of . Since the value of X changes
from sample to sample, how well the estimate describes
– the true value of
depends upon the behavior of the sample mean X, which is a– random vari-
able known as a statistic. To see how this random variable X behaves, –we
need to study its probability distribution. The probability distribution of X is
known as the sampling distribution of the sample mean. Generally speaking,
a sampling distribution is the probability distribution of a statistic. For exam-
ple, the probability distribution of a sample median, sample proportion, and
sample variance are called sampling distributions of the sample median,
sample proportion, and sample variance, respectively.
137
138 Chapter Eight
8.1 Sampling Distribution of Sample Mean

We start this section with an example that will illustrate the concept of a
sampling distribution of sample mean.
Example 8.1 Consider an experiment of rolling a fair die and observing
the number that appears on the uppermost face. The population associated
with this experiment and its probability distribution is shown in Table 8.1.
Take a sample of size 2 from this population and develop the concept of a
sampling distribution of sample mean.
Solution: The population mean and the population variance respectively
are as follows:
1 1
µ= Σ Xi = (1 + 2 + 3 + 4 + 5 + 6 ) = 3.5
N 6
1 1
σ2 = Σ Xi2 − µ 2 = (1 + 4 + 9 + 16 + 25 + 36 ) − ( 3.5 )2
N 6
1
= (91 − ( 3.5 )2 )
6
2.917
σ = 2.917 = 1.708
Now suppose instead of considering the whole population we want to
consider a random sample of size 2 to draw conclusions about the entire pop-
ulation. To achieve this goal we must determine all possible samples of size
2. In this case, there are 15 possible samples, when sampling is done with-
out replacement (under this sampling scheme any population element can
appear in a given sample only once). We list these samples with their respec-
tive means in Table 8.2.
Note that some of the samples have the same mean. The sample we will
draw will be selected randomly from the population, which means that each
one of the 15 samples has the same chance (1/15) of being drawn. Our
chances, or probability, of getting different sample means will vary depend-
ing upon the actual drawing of the sample. For example, the probability of
getting a sample mean of 2.5 is 2/15, whereas the probability of getting a
sample mean of either 1.5 or 2.0 is only 1/15 each. We list different sample
means with their respective chances or probabilities– in Table 8.3.
Table 8.3 gives the sampling distribution of X. If we select a random
sample of size 2 from the population given –in Table 8.1, we may draw any of
the 15 possible samples. The sample mean X can then assume any of the nine
Table 8.1 Population with its distribution for the experiment of rolling a fair die.
Xx 1 2 3 4 5 6
p(x) 1/6 1/6 1/6 1/6 1/6 1/6
Sampling Distributions 139
Table 8.2 All possible samples of size 2 with their respective means.
Sample number Sample Sample mean

11 1, 2 1.5
12 1, 3 2.0
13 1, 4 2.5
14 1, 5 3.0
15 1,6 3.5
16 2, 3 2.5
17 2, 4 3.0
18 2, 5 3.5
19 2, 6 4.0
10 3, 4 3.5
11 3, 5 4.0
12 3, 6 4.5
13 4, 5 4.5
14 4, 6 5.0
15 5, 6 5.5
Table 8.3 Different sample means with their respective probabilities.
x 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5

p(x) 1/15 1/15 2/15 2/15 3/15 2/15 2/15 1/15 1/15
values listed in Table 8.3 with their corresponding probabilities.

– We now find
the mean and variance of the sampling distribution of X given in Table 8.3 as
follows:
–
– E(X ) x– p(x– )
x i i (8.2)
1.5(1 / 15) 2.0(1 / 15) 2.5(2 / 15) 3.0(2 / 15)
3.5(3 / 15) 4.0(2 / 15) 4.5(2 / 15) 5.0(1 / 15)
5.5(1 / 15)
1 / 15(1.5 2.0 5.0 6.0 10.5 8 9 5 5.5)
52.5 / 15 3.5
– (x– –)2 p(x– )
x
2
i x i (8.3)
x–i2 p(x–i) (x–)2 (8.4)
(1.5) (1 / 15) (2.0) (1 / 15) (2.5) (2 / 15) (3.0)
2 2 2 2
(2 / 15) (3.5)2(3 / 15) (4.0)2(2 / 15) (4.5)2(2 / 15)

(5.0)2(1 / 15) (5.5)2(1 / 15) (3.5)2
1 / 15(2.25 4 12.5 18 36.75 32 40.5 25
30.25) 12.25 1.167
140 Chapter Eight
From this example we can see that the mean of the sample mean is equal
to the population mean. Note that this is not a coincidence, but it is true in
general. That is,
–
x– E(X ) (8.5)
–
The variance of X, however, is not equal to the variance of the population.
The relationship between
– the two variances (i.e., variance of the population
and the variance of X ) depends upon the size of the population and whether
the sample has been taken with replacement or without replacement. If the
population is finite, say of size N, and the sample of size n is taken without
replacement, then we have the following formula:
N −n σ2
σ x2 = × (8.6)
N −1 n
N −n
where the fraction is called the finite population correction factor. The
N −–1
standard deviation of X, usually known as the standard error of the sample
mean, is found by taking the square root of the variance in Equation (8.6). If
the population is infinite, or if the population is finite and the sample has
been taken with replacement, we have the following formula:
σ2
σ x2 = (8.7)
n
Also, if the population is finite and the sample of size n is taken without
replacement such that
n
≤ 0.05 (8.8)
N
then the finite population correction factor is approximately equal to 1 and is
ignored. In this case, we again have
σ2
σ x2 = (8.9)
n
From these formulas we see that the variance of the sample mean is smaller
than the population
– variance and, therefore, the spread of the sampling dis-
tribution of X is smaller than the spread of the corresponding population
–
distribution. This also implies that as–n increases, the values of X become
more concentrated about the mean of X, which is the same as the population
mean. This grouping of sample means about the population mean is the rea-
son that, whenever possible, we like to take as large a sample as possible
when we want to estimate the population mean.
In the above discussion we have not said anything about the shape of the
probability distribution of the sample mean. The concept of shape as related
to a probability distribution is very interesting and occupies an important
place in statistical applications.
If the distribution
– of a population is normal then the distribution of the
sample mean X is also normal, – regardless of sample size. That is, when
the population is N(, ) then X is N(, σ / n ). If the population is not nor-
mally distributed, then we have another important

– benefit that provides us the
sampling distribution of the sample mean X. We describe this benefit in the
context of a theorem, as shown in section 8.2.
8.2 The Central Limit Theorem

Theorem 8.1 Let X1, X2, ..., Xn be a random– sample from a popu-
lation with mean and variance 2, and let X be the sample mean.
– a large n (n 30) the sampling distribution of the sample
Then, for
mean X is approximately normal with mean and variance 2 / n.
In other words, the probability distribution of the random variable
– σ
((X ) / ) is approximately standard normal.
n
It is important to note that there is a clear distinction between the two
cases when the population is normal and when it is not normal. When the
population is normal, there is–no restriction on the sample size, and the dis-
tribution of the sample mean X is exactly normal.
– When the population is not
normally distributed, the distribution of X is approximately normal only if
the sample size is large (n 30). In addition, as discussed in section 8.1, if
the population is finite and sampling is done without replacement, we use the
finite population correction
– factor to calculate the variance x–2. That is, for a
large sample size, X is approximately normally distributed with mean and
N − n σ2
variance × .
N −1 n
Example 8.2 The mean weight of a food entrée is 190g with a stan-
dard deviation of 14g. If a sample of 49 entrées is selected, then find:
(a) The probability that the sample mean weight will fall between
186g and 194g.
(b) The probability that the sample mean will be greater than
192g.
Solution:
–
(a) Let X be the sample mean. Since the sample–size n 49 is
large, the central limit theorem tells us that X is approximately
normal with mean 190g and standard deviation
σ 14
σx = = = 2g. Thus, from Figure 8.1, we have
n 49
 
186 − 190 X − 190 194 − 190 
P (186 ≤ X ≤ 194 ) = P  ≤ ≤
 2 2 2 
 
P(2 Z 2) 2P(0 Z 2) 2(.4772) .9544

142 Chapter Eight
−2 0 2
Figure 8.1 Shaded area showing P(2 Z 2).
0 1
Figure 8.2 Shaded area showing P(Z 1).
(b) Using the same argument as in part (a) and Figure 8.2, we have
the following:
 
–  X − 190 192 − 190 
P(X 192) P ≥ P(Z 1) 0.1587
 2 2 
 
Example 8.3 Repeat Example 8.2 when the sample size is increased from
49 to 64.
Solution:
–
(a) In this example X will be approximately normal with mean
σ 14 14
190g and standard deviation σ x = = = = 1.75g.
n 64 8
Continuing our Example 8.2 and using Figure 8.3, we have
–  186 − 190 X − 190 194 − 190 
P(186 X 194) P  ≤ ≤
 1.75 1.75 1.75 
P(2.28 Z 2.28) 2P(0 Z 2.28)
2(0.4887) 0.9774
−2.20 0 2.20
0 1.14
 
– X -190 192 − 190
(b) Using Figure 8.4, we have P(X 192) P  ≥ 
 1.75 1.75 

P(Z 1.14) 0.5 P(0 Z 1.14) 0.5 0.3729 0.1271
From Examples 8.2 and 8.3, we see that as the sample size increases
from 49 to 64, the probability that the sample mean falls within four units of
the population mean increases while the probability that the sample mean
falls beyond two units from the population mean decreases. These examples
support our previous assertion that as the sample size increases, the variance
of the sample mean decreases and, therefore, the –means are more concen-
trated about the population mean. This fact makes X the best candidate to be
used for estimating the population mean . We will study this concept in
more detail in the next chapter.
Example 8.4 A random sample of 36 reinforcement rods is taken from a
production plant that produces these rods with mean length of 80cm and
standard deviation of 0.6cm. Find the approximate probability that the sam-
ple mean of the 36 rods falls between 79.85cm and 80.15cm.
–
Solution: Let X be the sample mean. Then, we are interested in finding the
probability
–
P(79.85 X 80.15)
144 Chapter Eight
−1.5 0 1.5
−1.6 0 1.6
−2 0 2
Figure 8.7 Shaded area showing P(2 Z 2).
–
Since the sample size is large, the central limit theorem tells us that X is
approximately normally distributed with mean x– 80cm and standard
σ 0.6
deviation x– = 0.1cm. Thus, using Figure 8.5, we have
n 36
–  79.85 − 80 X − 80 80.15 − 80 
P(79.85 X 80.15) P  ≤ ≤ 
 0.1 0.1 0.1
 −0.15 0.15 
P ≤Z≤  P(1.5 Z 1.5)
 0.1 0.1 
2(0.4332) 0.8664
Example 8.5 Suppose the mean hourly wage of all employees in a large
semiconductor
– manufacturing facility is $50 with a standard deviation of $10.
Let X be the mean hourly wages of certain employees selected randomly from
all the employees of this manufacturing
– facility. Find the approximate proba-
bility that the mean hourly wage X falls between $48 and $52 when the num-
ber of selected employees is (a) 64, (b) 100.
Solution:
(a) The sample size 64 is large,
– so by use of the central limit
theorem, we know that X is approximately normally distributed
with mean and standard deviation as follows:
x– 50
σ 10
σx = = = 1.25
n 64
Now we are interested in finding the probability
–
P(48 X 52)
–
Using the mean and the standard deviation of the sample mean X derived
above and Figure 8.6, we have the following:
 
–  48 − 50 X − 50 52 − 50 
P(48 X 52) P ≤ ≤
 1.25 1.25 1.25 
 
P(1.6 Z 1.6) 2(.4452) .8904
(b) In this case the sample size is 100, which is again large. Using
the same technique as used in part (a), we have the following:
10
x– 50 and x– 1
100
Then, the desired probability (see Figure 8.7) is given by
 
–  48 − 50 X − 50 52 − 50 
P(48 X 52) P ≤ ≤
 1 1 1 
 
P(2 Z 2) 2(.4772) .9544
Example 8.6 Repeat Example 8.5, assuming that the total number of
employees in the company is only 500.
Solution: In this case, the sample size is large, but the population is not
very large. Before applying the central limit theorem, we must determine
146 Chapter Eight
whether n (0.05)N, because otherwise to calculate the standard deviation

of the sample mean we have to use the finite population correction factor.
n 64
(a) In this case, we have = = 0.125
N 500
Thus, the sample size is greater than 5% of the population. By using the finite
population correction factor, we have the following:
σ N − n 10 500 − 64 436
µ x = µ = 50 and σ x = × = × = 1.25 = 1.168
n N −1 8 500 − 1 499
Therefore, the desired probability (see Figure 8.8) is given by
 
48 − 50 X − 50 52 − 50
P(48 X 52) P  
–
≤ ≤
 1.168 1.168 1.168 
 
P(1.71 Z 1.71) 2(.4564) .9128
(b) Again, in this example, the sample size is greater than 5% of
the population size, since
n 100
= = 0.20
N 500
Thus, by using the finite population correction factor, we have the following:
σ N − n 10 500 − 100 400

µ x = µ = 50 and σ x = × = × = = 0.895
n N − 1 10 500 − 1 499
Therefore, the desired probability (see Figure 8.9) is given by
 
–  48 − 50 X − 50 52 − 50 
P(48 X 52) P ≤ ≤
 0.895 0.895 0.895 
 
P(2.23 Z 2.23) 2(.4871) .9742
−1.71 0 1.71

−2.23 0 2.23
8.2.1 Sampling Distribution of Sample Proportion

Let X1, X2, ..., Xn be a random sample, where each Xi represents the outcome
of the ith Bernoulli trial, that is
Xi 1, with probability p
0, with probability q 1 p (8.10)
where p is the probability of success and q the probability of failure in a
Bernoulli trial. Thus, the sample mean
X1 + X 2 + ... + X n m
X= = (8.11)
n n
–
where m is the total number of successes in n Bernoulli trials. Thus, X rep-
resents the proportion
– of successes in a sample of n trials. In other words, we
may look upon X as the sample proportion that is usually denoted by p̂ (read
as p hat). Thus, the sampling distribution of the sample proportion is just the
sampling distribution of the sample mean when the sample is taken from a
Bernoulli population with mean p and variance pq.
From the above discussion and the result of central limit theorem, we
have that for a large n the sampling distribution of the sample proportion p̂
(sampling mean of a sample from the Bernoulli population) is approximately
normal with mean p and variance pq / n.
It is important to note, however, that when the sample is taken from a
Bernoulli population, the central limit theorem holds only when np 5 and
nq 5. If p 1⁄ 2, for example, the sampling distribution of the sample pro-
portion is approximately normal even when n is as small as 10.
Example 8.7 Let X be a random variable distributed as binomial with
parameters n and p, B(n, p), where n is the number of trials and p is the prob-
ability of success. Find the sampling distribution of the sample proportion p̂,
when (a) n 100, p 0.25, and (b) n 64, p 0.5.
Solution:
(a) We have the following:
np 100(.25) 25 5
nq 100(1–.25) 100(.75) 75 5
148 Chapter Eight
so the central limit theorem holds. Thus, p̂ is approximately normally dis-

tributed with mean and variance given as follows:
µ pˆ = p = 0.25
pq (.25 )(.75 )
σ 2pˆ = = = .001875
n 100
(b) In this case, again, we have
np (64)(.5) 32 5
nq (64)(1–. 5) 64(.5) 32 5
Thus, p̂ is approximately normally distributed with mean and variance as
follows:
µ pˆ = p = .05
pq (.5 )(.5 ) .25
σ 2pˆ = = = = 0.0039
n 64 64
8.3 Chi-Square Distribution

In this section we study a new distribution known as the chi-square distribu-
tion, usually written as the χ2-distribution. The symbol χ is the Greek letter
chi. We encounter chi-square distributions very frequently in statistical
applications and it occupies a very important place in applied statistics. The
chi-square distribution is related to the normal distribution as described in
the following theorem.
Theorem 8.2 Let Z1, Z2, ..., Zn be a random sample from a stan-
dard normal population N(0,1). Let a new random variable X be
defined as follows:
X Z12 Z22 ... Zn2 (8.12)

The variable X is said to be distributed as chi-square with n degrees of free-
dom and is written as χ2n. The frequency distribution of chi-square with n
degrees of freedom is given by
1
f (x) = n
e− x / 2 x ( n / 2 )−1 x≥0
2Γ (n / 2)
2
0, otherwise (8.13)
where x is the value of χ . A simple explanation of degrees of freedom is that
2
it represents the number of variables in the sample that can independently

vary.
The chi-square distribution has only one parameter n, the degree of free-
dom. The shape of the distribution changes as the degree of freedom
f(x)
n=4
n=6
n=8
n = 10
10 20
Figure 8.10 Chi-square distribution with different degrees of freedom.
0 2
Xn,α
Figure 8.11 Chi-square distribution with upper-tail area .
changes. For example, the shape of chi-square for n 4, 6, 8 and 10 is

From Figure 8.10 we can see that the random variable χ2 assumes non-
negative values only. The entire frequency distribution curve falls on the
right of the origin and it is skewed to the right. The mean and variance of the
chi-square distribution are respectively equal to the degrees of freedom and
twice the degrees of freedom. That is,
χ n
2 (8.14)
χ 2n
2
2 (8.15)
From Table V of the appendix we can find the value χn,
2
of the variable χ2
such that as shown in Figure 8.11, we have
P(χ2n χn,
2
) (8.16)
For example, if the random variable χ n is distributed with n 18 and
2
0.05, which we write as χ218, 0.05 then

χ218, 0.05 28.8693
where the value 28.8693 is found from the Table V of the appendix by first
locating 18 in the first column of degrees of freedom and then locating 0.05 in
the top row of the table. The value 28.8693 is found at the intersection of the
150 Chapter Eight
0.05
0 28.8693
Figure 8.12 Chi-square distribution with upper-tail area 0.05.
0 2
Xn,1-α
Figure 8.13 Chi-square distribution with lower-tail area .
row corresponding to 18 degrees of freedom and the column corresponding to

the value 0.05. Thus, as shown in Figure 8.12, P(χ218 28.8693) 0.05.
Note that if we are interested in finding the value of the variable χ2 such
that the lower tail area as shown in Figure 8.13 is , then in Table V of the
appendix we look for the value of χ2 such that
P(χ2n χ2 ) 1 (8.17)
That is, we first find the corresponding area under the upper tail (total
area under the χ2 curve 1 ). Since Table V lists the values of the
variable χ2 only for certain values of upper tail areas.
For example, if the random variable χ2 is distributed with n 10 degrees
of freedom and 0.10 which we write as χ210,1–-0.10 or as χ210,0.90 (see
Figure 8.14) then from Table V of the appendix, we have
χ210,0.90 4.86518 and P(χ210 4.86518) 0.10.
Example 8.8 Let a random variable χ2 be distributed as chi-square with
20 degrees of freedom. Find the value of χ2 such that (a) P(χ220 χ2) 0.05
(b) P(χ220 χ2) 0.025.
0.05
0 4.86518
Figure 8.14 Chi-square distribution with lower-tail area 0.10.
Solution:
(a) In this case we are given the area under the upper tail. Thus we
can see the value of χ2 directly from the table with n 20 and
0.05. That is,
χ220,0.05 31.410
(b) In this case, we are given the area under the lower tail. We now
first find the corresponding area under the upper tail that is
given by
1 1 0.025 0.975
Then, the value of χ can directly be seen from Table V of the appendix with
2
n 20 and 0.975. That is,

χ220,1 0.025 χ220, 0.975
9.591
In applications, we are commonly interested in finding the distribution of
the sample variance S2 when a random sample is taken from a normal popu-
lation. We state this important result in the following theorem.
Theorem 8.3. Let X1, X2, ..., Xn be a random sample from a nor-
mal population with mean and variance 2. Let
1
S2 =
n −1
∑ ( X i − X )2 (8.18)
Then
(n − 1)S 2
(8.19)
σ2
is distributed– as χ2 with (n 1) degrees of freedom. This follows from
the fact that X and S2 are independent random variables and, as seen earlier,
152 Chapter Eight
–
X is distributed
– as normal with mean and variance 2 / n. In this case, for
a given X only (n 1) of the variables X1, X2, ..., Xn can vary freely, there-
fore, the degree of freedom of χ2 is (n 1). The actual proof of this theorem
is beyond the scope of this book.
Example 8.9 Suppose a tea packaging machine is calibrated so that the

amount of tea it discharges is normally distributed with mean 1 pound
(16oz) with a standard deviation of 1.0 oz. Suppose we randomly select 21
packages and weigh the amount of tea in each package. If the variance of
these 21 weights is denoted by S2, then it may be of interest to find the val-
ues of c1 and c2 such that
P(c1 S2 c2) 0.95
The solution to this problem would enable us to calibrate the machine such
that the value of the sample variance would be expected to fall between cer-
tain values with a very high probability.
Solution: From Theorem 8.3, we have the following:
(n − 1)S2
∼ χ 220
σ2
Thus, we have
 n −1 (n − 1)S2 n − 1 
P  2 c1 ≤ ≤ 2 c2  = 0.95
 σ σ2 σ 
or
 n −1 n −1 
P  2 c1 ≤ χ 20
2
≤ 2 c2  = 0.95
 σ σ 
Now n 21 and 1. Thus, we have

P(20c1 χ2n-1 20c2) 0.95
Now by assigning probability 0.025 under each tail, or equivalently selecting
the middle 0.95 area, we have from Table V of the appendix
P(9.591 χ220 34.170) 0.95
Thus,
20 c1 9.591 and 20 c2 34.170
or
c1 0.479 and c2 1.708
8.4 The Student’s t-Distribution

Consider two independent random variables X and Y such that X is distrib-
uted as standard normal and Y is distributed as χ2n. Then we define another
random variable, that is
X
T= (8.20)
Y
n
The random variable T is said to be distributed as a Student’s t-distribution
with n degrees of freedom. W. S. Gosset introduced and named this distribu-
tion, while using the pen name “Student.”
The frequency distribution function of the random variable T is given by
n +1
−
1  t2  2
f (t ) = 1+  −∞≤t≤∞ (8.21)
 1 n   n
nB  , 
 2 2
where B(a, b) is called the beta function and is equal to Γ(a)Γ(b)/Γ(a b).
Like the standard normal distribution, the t-distribution is unimodal and sym-
metric about t 0. The mean and the variance of t-distribution with n
degrees of freedom are
0, provided n 1 (8.22)
and
n
2 , provided n 2 (8.23)
n−2
respectively.
Figure 8.15 gives a comparison of the frequency distribution function
of the Student’s t-distribution and the standard normal distribution. Note
that as the degrees of freedom increase, the t-distribution tends to become
more like the standard normal distribution. In most applications, as n
becomes large (n 30), we use the standard normal distribution rather
than the t-distribution. We will see this substitution of normal distribution
for the Student’s t-distribution in Chapter 9 and subsequent chapters.
From Theorem 8.3 and the definition of the t-distribution, we have an
important result that is used quite frequently in applications.
Theorem 8.4 Let X1, X2, ..., Xn be a random sample from a– normal
population with mean and an unknown variance 2. Let X and S2
respectively be the sample mean and sample variance. Then the ran-
dom variable
–
T (X ) / (S / n) (8.24)
154 Chapter Eight
−4 −2 0 2 4
−3 0 3
Figure 8.15 Frequency distribution function of t-distribution with, say n 15

degrees of freedom and standard normal distribution.
−t n,α t n,α
Figure 8.16 t-distribution with shaded area under the two tails equal to P(T tn, )
P(T tn, ) .
is distributed as a Student’s t-distribution with (n 1) degrees of freedom.

It is quite common to denote the distribution of T with t(n-1).
A frequently asked question relates to the concept of degrees of freedom.
As discussed earlier, we define the concept of degrees of freedom as the
number of observations that can be selected freely. –For example, in Theorem
8.4 we have n observations, but the knowledge of X imposes
– one restriction
on these observations that their sum must be equal to nX. Thus, we can select
only (n 1) variables freely and the nth observation
– must be such that the
total of all the observations must be equal to nX, so that the degree of free-
dom for the t-distribution in Theorem 8.4 is (n 1).
Like the standard normal distribution tables, we have tables for the t-dis-
tributions. Let the random variable T be distributed as a t-distribution with n
degrees of freedom. We then define the quantity tn, as
P(T tn, ) (8.25)
Table IV of the appendix lists the values of the quantity tn, for various val-
ues of n and .
To find the value of tn, from Table IV of the appendix, first locate the
value of n in the column of degrees of freedom and then locate the value of
(probability represented by the shaded area under the upper tail) at the top
of Table IV. Then, the value of tn, is the entry found at the intersection of
the row of n degrees of freedom and the column of the probability .
Also, from Figure 8.16 we can see that P(T tn, ) P(T tn, ) .
Example 8.10 Find the value of t15, 0.05.
Solution: A small portion of the t-table is reproduced in Table 8.4. Using
the technique described above, we mark the row corresponding to 15 degrees
of freedom and the column corresponding to the value of 0.05. The entry
Table 8.4 A portion of the t-table giving the value

of tn, for certain values of n and .
.10 .05 .025 .01

14 1.365 1.761 2.145 2.624
15 1.361 1.753 2.131 2.602
16 1.337 1.746 2.120 2.583
17 1.333 1.740 2.110 2.567
19 1.330 1.724 2.101 2.552
at the intersection of the marked row and column is 1.753. Thus, we have t15,
0.05 1.753
If we now want the value of tn, such that the probability under the left
tail is 0.05, then it is equal to tn,0.05. This is due to the fact that t-distribu-
tion is symmetric about the origin.
8.5 Snedecor’s F-Distribution

Let the random variables X1 and X2 be distributed as chi-square with ν1 and
ν2 degrees of freedom respectively, and let X1 and X2 be independent. Then
the random variable
X1
ν
F= 1 (8.26)
X2
ν2
is said to be distributed as Snedecor’s F-distribution with ν1 and ν2 degrees
of freedom and is usually written as Fν1,ν2. The ν1 and ν2 are respectively the
numerator and denominator degrees of freedom.
The probability density function of the random variable F, which is dis-
tributed as Snedecor’s F-distribution with ν1 and ν2 degrees of freedom, is
given by
 
 v1 v2 v1
−1 
1  v1 2 v22 x 2 
f(x) =  v1 + v2  , for x > 0 (8.27)
 v v   
B  1 , 2   v1 x + v2 2 
 2 2   
 
0, otherwise
The mean and variance of the F-distribution are
ν2
µ= , provided ν2 2 (8.28)
ν2 − 2
156 Chapter Eight
2ν 22 (ν1 + ν 2 − 2 )
σ2 = , provided ν2 4 (8.29)
ν 1 (ν 2 − 2 ) (ν 2 − 4 )
2
respectively.
Note that the mean of the F-distribution depends only on the degree of
freedom of the denominator.
Figure 8.17 shows the curve of the probability density function of a typ-
ical F-distribution with ν1 and ν2 degrees of freedom. Like the χ2 random
variable, the F random variable is also non-negative, and its distribution is
right skewed. The shape of the distribution changes as the degrees of free-
dom change.
Now consider two random samples X11, X12, ..., X1n1 and X21, X22, ..., X2n2
from two independent normal distributions with variances 12 and 22,
respectively. Let S12 and S22 be the sample variances of the samples coming
from these normal populations respectively. From our previous discussion in
( n1 − 1) S12 ( n2 − 1) S22
section 8.4, we know that X1 and X2 are inde-
σ 12 σ 22
pendently distributed as chi-square with ν1 n1 1 and ν2 n2 1
degrees of freedom. In this case, we have the following theorem.
Theorem 8.5 Let X11, X21, ..., X1n1 and X21, X22, ..., X2n2 be two inde-
pendent random samples from two normal populations N(1, 1)
and N(2, 2). Let S12 and S22 be the sample variances and let a new
random variable X be defined as
S12
σ2
X = 12 (8.30)
S2
σ 22
Then the random variable X is distributed as Fν1, ν2, where ν1 n11 and ν2
n2 1.
f(x)
Figure 8.17 A typical probability density function curve of Fν1, ν2.

f(x)
α
x
Fv, v , α
1 2
Figure 8.18 Probability density function curve of Fν1, ν2 with upper-tail area .
f(x)
α
x
Fη, η, 1-α
Figure 8.19 Probability density function curve of Fν1, ν2 with lower-tail area .
Like tables for some other distributions, we also have tables for the F-
distribution. Table VI of the appendix lists values of Fν1, ν2; for various val-
ues of ν1, ν2 and (see Figure 8.18), such that
P(F Fν1, ν2; ) (8.31)
The following example illustrates the technique to read F-distribution
from Table VI of the appendix.
Example 8.11 Find the value of F15,20; 0.05
Solution: Locate and mark the column and row corresponding to the
numerator degrees of freedom (ν1 15) and the denominator degrees of
freedom (ν2 20). The entry at the intersection of the marked column and
row corresponding to the value 0.05 is the desired value of F15,20; 0.05. In
this case, we have
F15,20; 0.05 2.20
Note that entries Fν1, ν2, in the Table correspond only to the upper-tail areas.
To find the entries corresponding to the lower-tail areas which we denote by
Fν1, ν2, 1 such that (see Figure 8.19)
(F Fν1, ν2, 1 )
158 Chapter Eight
We use the following rule:

1
Fν1, ν2, 1 (8.32)
Fv2 , v1 ,α
For example, the value of F20,15; 1–0.05 is given by
1
F15, 20; 1-0.05
F20,15,0.05
1
0.429.
2.33
As an application of Theorem 8.5, consider the following example.
Example 8.12 Consider two random samples of sizes 10 and 12 from two
independent normal populations N(1, ) and N(2, ). Let S12 and S22 be
their respective sample variances. Find the value of such that
S12
P ( 2 ≥ δ ) = 0.05.
S2
s2
Solution: Since 12 22 2, from Theorem 8.5 it follows that 12 is
distributed as F9,11. Thus, we have s2
S12
P( ) P(F9,11 )
S22
So we need to find the value of F9,11; 0.05. From Table VI of the appen-
dix, we have
F9,11; 0.05 2.90.
This means the probability that the variance of the first sample is greater than
or equal to 2.90 times the variance of the second sample is only 0.05. We
encourage the reader to verify that the probability that the variance of the first
sample is less than or equal to 0.3448 times the variance of the second sam-
ple is also 0.05.
8.6 The Poisson Approximation to

In Chapter 6, we saw that when X is a binomial random variable, the proba-
bility that it takes a certain value depends upon the values of the parameters
(n, p). The probability P(X x; x 0, 1, 2,...,n), where x is the number of
successes in n independent trials is given by
 n
P(X x)   px ( 1 p)n-x, x 0, 1, 2, ..., n (8.33)
 x
In Chapter 6, we also noted that for n 20 for certain values of p the

probability P(X x) can readily be found by using the tables (Table I of the
appendix). But if these tables are not available for a given value of n or p, or
both, we need to use an advanced scientific calculator or a computer to cal-
culate these probabilities. In this section we will see that when p becomes
very small and n becomes very large, a binomial distribution can be approx-
imated by using the Poisson distribution with λ np, which, relatively
speaking, is much easier to calculate than by using the binomial distribution.
The actual proof showing that the binomial distribution can be approximat-
ed with the Poisson distribution is beyond the scope of this book. We illus-
trate the use of the Poisson distribution as an approximation to the binomial
distribution with the following example.
Example 8.13 Experience shows that the probability that an insurance com-
pany pays out against damages of car engine fires in any given year is 0.0001.
Suppose that the insurance company has 50,000 persons who are insured for
such damages. Find the probability that during any given year insurance com-
pany will pay against this kind of damage to at most four persons.
Solution: From the given information it is clear that if X denotes the num-
ber of persons who are seeking compensation for damages due to engine
fires, X is a random variable that is distributed as binomial with n 50,000
and p 0.0001 and we are interested in finding the probability P(X 4).
Finding this probability by using the binomial distribution formula would be
almost an insurmountable amount of work. But by using the Poisson approx-
imation to the binomial distribution, we have
λ np (5000)(0.0001) 5
and, therefore, we have
P(X 4) P(X 0) P(X 1) P(X 2) P(X 3) P(X 4)
e−5 5 0 e−5 51 e−5 5 2 e−5 5 3 e−5 5 4

= + + + +
0! 1! 2! 3! 4!
0.0067 0.0337 0.0842 0.1402 0.1775 0 .4425
8.7 The Normal Approximation to

In the previous section we studied how to use the Poisson distribution as an
approximation to the binomial distribution. In this section we study how we
use the normal distribution to approximate the binomial distribution. From our
discussions of the binomial distribution in Chapter 6 and of the normal distri-
bution in Chapter 7, we know that the binomial distribution is a distribution of
a discrete random variable, while the normal distribution is a distribution of a
continuous random variable. Further, the normal distribution is completely
symmetric about its mean , whereas the shape of the binomial distribution
depends upon the value of p. For example, in Figure 8.20 we can see that the
160 Chapter Eight
p = 0.2 p = 0.3
0.3 0.25
0.25 0.2
0.2 0.15
0.15
0.1
0.1
0.05 0.05
0 0
0 2 4 6 8 10 12 14 0 2 4 6 8 10 12 14
p = 0.4 p = 0.5
0.25 0.25
0.2 0.2
0.15 0.15
0.1 0.1
0.05 0.05
0 0
0 2 4 6 8 10 12 14 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Figure 8.20 Comparison of histograms for various binomial distributions (n 15,

p 0.2, 0.3, 0.4, 0.5)
binomial distribution becomes more symmetric about its mean np as p

approaches to 0.5 (p → 0.5). Also, from Figure 8.21 (page 163) we can see that
the approximation to the binomial distribution by using the normal distribution
with mean np and variance 2 npq seems very reasonable. Further, as
we should expect, the normal approximation to the binomial distribution
improves significantly as n increases and p approaches 0.5 (see Table 8.5).
The empirical results show that, in general, the approximation to the
binomial distribution using the normal distribution is quite good whenever n
is large and p is such that np 5 and n(1 p) 5.
As mentioned earlier, normal and binomial distributions are respectively
the distributions of continuous and discrete random variables. This means we
are using the distribution of a continuous random variable to approximate the
distribution of a discrete random variable. In this case, it is natural to expect
that we would need to make a correction in order to convert the discrete ran-
dom variable to a continuous random variable. In fact, the correction is made
by adding or subtracting 0.5 to or from the values of the discrete random
variable. This correction is usually known as continuity correction factor.
Table 8.6 shows the correction factor under different scenarios.
Let X be a binomial random variable with parameters (n, p). Then for
some n and p such that np 5 and n(1 p) 5, the binomial distribution is
approximated using the normal distribution with mean np and variance
2 npq and by applying the appropriate continuity correction factor.
We summarize the results as follows:
Example 8.14 Let X be a binomial random variable with n 20 and p
0.4.
Table 8.5 Comparison of approximate probabilities to the exact probabilities (n 5,

p 0.4, 0.5)
n 15 p 0.4 p 0.5
x Exact prob. Normal app. Exact prob. Normal app.
10 0.0005 0.0015 0.0000 0.0001
11 0.0047 0.0070 0.0005 0.0008
12 0.0219 0.0237 0.0032 0.0040
13 0.0634 0.0613 0.0139 0.0145
14 0.1268 0.1208 0.0417 0.0412
15 0.1859 0.1814 0.0916 0.0902
16 0.2066 0.2079 0.1527 0.1519
17 0.1771 0.1815 0.1964 0.1973
18 0.1181 0.1207 0.1964 0.1972
19 0.0612 0.0613 0.1527 0.1519
10 0.0245 0.0237 0.0916 0.0902
11 0.0074 0.0070 0.0417 0.0412
12 0.0016 0.0015 0.0139 0.0145
13 0.0003 0.0003 0.0032 0.0040
14 0.0000 0.0000 0.0005 0.0008
15 0.0000 0.0000 0.000 0.0001
Table 8.6 Showing the use of continuity correction factor under different scenarios.
Probability using binomial distribution Probability using normal approximation

P(a X b) P(a 0.5 X b 0.5)
P(a X b) P(a 0.5 X b 0.5)
P(a X < b) P(a 0.5 X b 0.5)
P(a X < b) P(a 0.5 X b 0.5)
P(X a) P(X a 0.5)
P(X a) P(X a 0.5)
P(X a) P(a 0.5 X a 0.5)
P(X a) P(X a 0.5)
P(X a) P(X a 0.5)
(a) Find the probability P(7 X 12) by using the binomial

tables (Table I of the appendix).
(b) Find the probability P(7 X 12) by using the normal
approximation to the binomial distribution. Find the difference
between the approximate probability calculated in part (b) with
the exact probability calculated in part (a).
162 Chapter Eight
Solution:
(a) From Table I of the appendix, we have
P(7 X 12) P(X 7) P(X 8) P(X 9) P(X 10)
P(X 11) P(X12)
0.1659 0.1797 0.1597 0.1170 0.0710 0.0355
0.7289
(b) First we check whether we can use normal approximation to the
binomial distribution or not by verifying the condition that np
5 and n(1 p) 5. From the given information, we have
np 20(0.4) 8 5
n(1 p) 20(1 0.4) 12 5
In this case, both conditions necessary for being able to use the normal
approximation for the binomial distribution are satisfied. Thus, we can now
proceed to calculate the approximate probability as follows:
np 20(0.4) 8
2 npq 20(0.4)(0.6) 4.8
4.8 2.19
Using the continuity correction factor, we have
P(7 X 12) P(7 0.5 X 12 0.5)
↑ ↑
Binomial random variable Normal random variable
 6.5 − 8 X − 8 12.5 − 8 
= P (6.5 ≤ X ≤ 12.5 ) = P  ≤ ≤ 
 2.19 2.19 2.199 
P(0.68 Z 2.05) P(0.68 Z 0) P(0 Z 2.05)
0.2517 0.4798 0.7315.
The difference between the approximate and the exact probability is 0.7315
0.7289 0.0026, which is clearly not very significant.
Example 8.15 A fair coin is tossed 12 times. Find the exact and approxi-
mate probabilities of getting seven heads and compare the two probabilities.
Solution: Let X be a random variable that denotes the number of heads. In
this case, X is distributed as binomial with n 12 and p 0.5.
Using the binomial tables the exact probability of getting seven heads is
P(X 7) 0.1934
Now we can calculate the approximate probability by using the normal
approximation. Clearly both the conditions np 5 and n(1 p) 5 are sat-
isfied and
(a)
0 67 8 12 20
(b)
0 5 10 15 20 0 6.5 8 12.5 20
Figure 8.21 (a) Showing the normal approximation to the binomial (b) Replacing
the shaded area contained in the rectangles by the shaded area under
the normal curve.
np 12(0.5) 6
2 npq 12(0.5)(0.5) 3
3
1.73
Thus, we have
P(X 7) P(7 X 7)
P(7 0.5 X 7 0.5)
P(6.5 X 7.5)
 6.5 − 6 X - 6 7.5 − 6 
P ≤ ≤  P(0.29 Z 0.87)
 1.73 1.73 1.73 
P(Z 0.87) P(Z 0.29) 0.3078 0.1141 0.1937
In this case, the exact and approximate probabilities of getting 7 heads in 12
trials are almost equal.
9
Point and Interval Estimation
I
n Chapters 5 and 6 we studied probability distributions (or probability
models) that describe various types of populations. Each of these proba-
bility distributions is characterized by one or more numerical descriptive
measures called “parameters.” If the parameters of a probability distribution
are not known, it means we are completely unfamiliar with that distribution.
In practice, it is common that the parameters of a probability distribution that
describes a population are unknown. One of the goals of statistics is to make
some inference about the unknown parameters of a population based on the
information contained in a sample taken from the population under consid-
eration. Methods of statistical inference can be divided into two parts:
parameter estimation and testing of statistical hypotheses. In this chapter we
consider the problem of parameter estimation, and in Chapter 10 we will
consider certain techniques of testing statistical hypotheses.
Estimation of statistical characteristics has many practical applications.
For example, a paper mill might be interested in knowing the percentage of
paper it has to discard due to wrinkles, holes, or other defects. A Six Sigma
Black Belt may want to know if a production process meets required speci-
fications, or he or she may want to find the process-capability ratio. A relia-
bility engineer may believe the survival time of product units in actual use is
normally distributed and may want to estimate the mean and the standard
deviation, which are not known.
The estimation process is divided into two parts. In the first part, the infor-
mation contained in a sample is used to arrive at a single number that closely
depicts the actual characteristics of interest. For instance, we may estimate that
25% of the paper produced on a specific machine is discarded due to wrinkles,
holes, or other defects. This part of estimation is called point estimation, and
the single number we identify is called the point estimate. The second part of
the estimation process uses the information contained in a sample to identify
two numbers that represent an interval (a, b), which we believe encloses the
unknown parameter with a certain probability. This second part of the estima-
tion process is called interval estimation, and the interval itself is called the
interval estimate or confidence interval. In both point estimation and interval
estimation we work with a statistic (or a function of sample values) that allows
165
166 Chapter Nine
us to determine a point estimate and an interval estimate of the parameter under

consideration. First, we will take a closer look at point estimation, and in later
sections we will look at interval estimation.
9.1 Point Estimation
POINT ESTIMATION
DESCRIPTION A method to find a single number, based
upon the information contained in a sample,
that comes close to an unknown parameter
value.
USE Used to assess characterization of a

population by taking a sample from the
population.
DESIGN/APPLICATION Seeking a sample that contains the

CONSIDERATIONS pertinent information about the population.
SPECIAL COMMENTS/CONCERNS Information extracted from a sample usually

varies from sample to sample. An
appropriate sample size should be taken so
that the variation in the information obtained
from sample to sample is minimal.
RELATED TOOLS Interval estimation.
Point estimation is a method to determine a suitable statistic, called an esti-

mator. The estimator tells us how to arrive at a single value, called a point
estimate, based on the observations contained in a sample. For example:
1
X=
n
∑ Xi (9.1)
–
is a point estimator of the population mean . Note that X is one of the many
possible estimators of the population mean and is usually denoted by ˆ
(read as “mu hat”). This estimator tells us how to use the sample data to
arrive at a single value x–, a point estimate of . To calculate x–, we add all the
observations in the sample and then divide the sum by n, the number of
observations in the sample.
Since it is always possible to find many point estimators of a parameter,
our immediate problem is to decide which estimator is good. A good estima-
tor is one that would give, based on the information contained in a sample, an
estimate that falls closer to the true value of the parameter to be estimated. But
the question at hand is how to identify a good estimator. There are certain
properties associated with a good estimator. An estimator that possesses more
of these properties is considered a better estimator. Here we will examine only
Point and Interval Estimation 167
a couple of such properties, as the rest of them are beyond the scope of this
book.
9.1.1 Properties of Point Estimators

There are various properties of a good point estimator, such as being unbiased,
having minimum variance, relative efficiency, consistency, and sufficiency. The
properties that we are going to discuss in some detail are the following:
1. Unbiased
2. Minimum variance
Let f(x, ) be the probability distribution of a population of interest with a
parameter , which is unknown. Let X1, X2, ..., Xn be a random sample from
the population of interest. Let ˆ (X1, X2, ..., Xn) be a point estimator of
the unknown parameter .
Definition 9.1 The point estimator ˆ ( X1, X2, ..., Xn) is said
to be an unbiased estimator of if and only if E(ˆ) (i.e., the mean of
ˆ) is equal to . If E(ˆ) , then ˆ is a biased estimator of .
Note that ˆ in Definition 9.1 is a statistic.
Example 9.1 Find an unbiased estimator of the population mean .
Solution: In Chapter 8, we–saw that the mean of the sample mean – is equal
to the population mean, or E(X) . Therefore, the sample mean X is always
an unbiased estimator of the population mean .
Example 9.2 Find an unbiased estimator of the population proportion p.
Solution: In Chapter 8, we saw that the mean of the sample proportion p̂ is
equal to the population proportion p, that is, E(p̂) p. Thus, the sample pro-
portion p̂ is an unbiased estimator of the population proportion p.
If an estimator is not unbiased, the bias of the estimator is equal to the
difference between E(ˆ) and . If E(ˆ) , ˆ is said to be positively biased,
and if E(ˆ) , it is said to be negatively biased.
Having said this, there still remains one question to be answered. If the
mean of a population is unknown and we take a random sample from this
population, find its mean x– and use it as an estimate of , how do we know
how close our estimate x– is to the true value of ? Don’t worry, the answer
to this question is simple, but depends upon the population size, the proba-
bility distribution of the population, and the sample size. However, before
discussing the answer to this question, we would like to discuss the estima-
tion of the population variance with the following example.
Example 9.3 Let us consider a population with probability distribution
f (x, , 2) where and 2 are unknown population mean and variance,
respectively. Then find an unbiased estimator of 2.
Solution: Let X1, X2, ..., Xn be a random sample from the population f (x,
,2) and let S2 be the sample variance. Then S2 is an estimator of 2.
168 Chapter Nine
However, whether this estimator is unbiased or biased depends upon how S2

is defined. If it is defined as
1
S2 = Σ( Xi − X )2 (9.2)
n
it is not an unbiased estimator of 2. If, on the other hand, it is defined as
1
S2 = Σ( Xi − X )2 (9.3)
n −1
it is an unbiased estimator of 2, since it can be shown that E (S2) 2,
where S2 is defined as in Equation (9.3). This is the reason why we usually
use Equation (9.3) instead of (9.2) to calculate the sample variance S2 (see
Chapter 4).
Getting back to the question we raised earlier, let E be the maximum
absolute difference between the estimate x– and the actual (unknown) value of
, and let 0 1, (In practice, is usually taken to be 0.01, 0.05, or 0.1).
Now if either the population is normal (with no restriction on the sample
size) or the sample size is large (n 30) and is chosen from an infinite pop-
ulation with known , we can say with probability 1 that
σ
E = zα 2 (9.4)
n
The quantity E is usually known as margin of error or bound on error of
estimation. The result in Equation (9.4) is still valid if the population is finite
and the sampling is done with replacement or the sample size is less than 5%
(see Equation (8.8)) of the population size. If the population is finite and
sample size relative to the population size is not small, we use the finite cor-
rection factor, and the maximum difference between the estimate x– and the
true value of is
σ N −n
E = zα 2 (9.5)
n N −1
where N and n are the population and the sample size respectively. If is not
known in Equations (9.4) or (9.5) we replace it by the sample standard devi-
ation S, which is an estimator of . Thus, in this case the maximum differ-
ences between the estimate x– and the true value of in Equations (9.4) and
(9.5), respectively, are given by
S
E = zα 2 (9.6)
n
and
S N −n
E = zα 2 (9.7)
n N −1
Note that the margin of error E given in Equations (9.4)–(9.7) is with prob-
ability 1 .
Example 9.4 A manufacturing engineer wants to use the mean of a ran-
dom sample of size n 64 to estimate the average length of the rods being
manufactured. If it is known that 0.5 cm, find the margin of error with
95% probability.
Solution: Since the sample size is large, and assuming that the total num-
ber of rods manufactured at the given facility is quite large, from Equation
(9.4) it follows that
σ
E = zα 2
n
0.5 0.5
= 1.96 = ±1.96 = 0.1225
64 8
From Equations (8.6) and (9.4) or (8.7) and (9.5) it follows that as the sam-
ple size increases the variance of the estimator of the parameter and the mar-
gin of error E decrease. Thus, if the variance is minimal the margin of error
will also be minimal. In general, it is true that an unbiased estimator with
minimum variance is a better estimator because it will result in an estimate
that is closer to the true value of the parameter. This makes the minimum
variance property of an estimator desirable.
Definition 9.2 Consider a population with probability density
function f(x,), where ˆ is an unknown parameter. Let ˆ1, ˆ2, …, ˆn,
be the unbiased estimators of . Then an estimator ˆ i is said to be a
minimum variance unbiased estimator of if the variance of ˆ i is
smaller than the variance of any other unbiased estimator.
There are techniques to find the minimum variance unbiased estimator,
if it exists, but these techniques are beyond the scope of this book. So we
shall limit ourselves only to the following rule:
If we have more than one unbiased estimator (not necessarily all possi-
ble unbiased estimators) of , choose from these estimators the one that has
the smallest standard error (standard error is nothing but the standard devia-
tion of sampling distribution of the estimator).
Example 9.5: Let X1, X2, ..., Xn be a random
– sample from an infinite pop-
ulation with an unknown mean and let X and – Md be the sample mean and
the sample median,
– respectively. Then both X and Md are unbiased estima-
tors of . But X is a better unbiased estimator of .
–
Solution: It can be shown that the expected value of X and Md is equal to
and therefore both are unbiased estimators of . Furthermore, the variance
of Md for large samples is approximately equal to
σ2
σM
2
d ≅ (1.25 )
2
= (1.25 )2 σ x2 , (9.8)
n
170 Chapter Nine
which implies that the variance of the sample median is larger than the vari-
ance of the sample mean. Thus, between the two–unbiased estimators of the
population mean we shall choose sample mean X as a better estimator – of .
It is very interesting to note that if the population is normal then X is the
minimum variance unbiased estimator of .
Example 9.6 In order to evaluate a new catalyst in a chemical production
process a chemist uses that catalyst in 30 batches. The final yield of the
chemical in each batch is recorded as follows:
72 74 71 78 84 80 79 75 77 76 74 78 88 78 70
72 84 82 80 75 73 76 78 84 83 85 81 79 76 72
(a) Find a point estimate of the final mean yield of the chemical.
(b) Find the standard error of the point estimator calculated in
part (a).
(c) Find with 95% probability the margin of error.
Solution: Since the sample size is large, all the results discussed above are
applicable to this problem. Also, note that when the population size is not
known as in this case we assume that the population is very large or at least
large enough that the sample size is less than 5% of the population size.
(a) To find a point estimate of the final mean yield we find the
sample mean, which is a point estimate of the final mean yield
of the chemical. Thus, we have
µˆ = X = ( 72 + 74 + 71 + 78 + ... + 72 ) 30 = 77.8
(b) To find the standard error of the point estimate calculated in
part (a), we first need to determine the sample standard
deviation S that is given by
1
S= Σ( Xi − X )2 (9.9)
n −1
–
Substituting n 30, and the values of Xi and X in Equation (9.9), we get
S 4.6416.
so that the standard error of the point estimate is
S 4.6416
= = 0.8474
n 30
(c) Since we want to find the margin of error with 95% probability,
0.05 and the population standard deviation is not known.
Thus, substituting the value of Z 2 Z0.002 = 1.96, S 4.6416
and n 30 in Equation (9.6), we get the margin of error to be
equal to
E = 1.96( 4.6416 30 ) = 1.6609
The value of the margin of error E shows that our estimate of the final
mean yield of the chemical is quite good.
9.2 Interval Estimation
INTERVAL ESTIMATION
DESCRIPTION A method to find two numbers forming an
interval, based upon the information
contained in a sample, that would contain
with certain probability the true value of an
unknown parameter.

population.

SPECIAL COMMENTS/CONCERNS The size of an interval formed by using the

information extracted from a sample usually
varies from sample to sample. An
appropriate sample should be taken so that
the size of the interval under the given
conditions is as small as possible.
RELATED TOOLS Point estimation, hypothesis testing.
In the preceding section we found a single number to replace the unknown

parameter. But in applications, a practitioner sometimes is more interested in
finding a range of values for the unknown parameter rather than finding a sin-
gle value, because it is possible that it may be either difficult to attain that
specific value or such an estimate may not make much sense. For example,
it may not be possible to estimate precisely the cost of a project as
$189,547.30, or the life of an electric bulb as exactly 500.25 hours. In this
and the following sections instead of finding a single value we will find a pair
of values that will serve as the end points of an interval such that the interval
contains the true value of the unknown parameter with a desired probability.
The interval that we find is usually called an interval estimate or the confi-
dence interval. The probability with which it contains the true value of the
parameter is known as the confidence coefficient.
Consider a population with probability distribution f(x,) where is an
unknown parameter. Then we are interested in finding two values ˆ and û
such that the interval (ˆ, û) contains the unknown parameter with proba-
bility, say 1 , that is
P(ˆ û) 1 (9.10)
172 Chapter Nine
Then ˆ and û are commonly called the lower confidence limit (LCL) and
upper confidence limit (UCL), respectively. The probability (1 ) is the
confidence coefficient.
The difference û ˆ is called the width or the size of the confidence
interval.
9.2.1 Interpretation of a Confidence Interval

Note that the lower and upper confidence limits ˆ and û are statistics and
therefore random variables, which means the interval (ˆ, û ) will be differ-
ent for different samples. Thus, it is possible that some of these confidence
intervals may contain the true value of the unknown parameter while some
other may not contain that value. This leads us to the following interpretation
of the confidence interval with confidence coefficient 1 . That is, if we
take a large number of samples and for each sample we determine the confi-
dence interval (ˆ, û ) then the frequency with which these intervals will
contain the true value of , say 0, is 1 .
Figure 9.1 shows that 2 out of 50 confidence intervals with confidence
coefficient 0.95 ( 1 0.05) do not contain 0, the true value of .
9.3 Confidence Intervals

A general method to determine a confidence interval for an unknown param-
eter is using a random variable or a statistic called a pivotal quantity.
Definition 9.3 Let X1, X2, ..., Xn be a random sample from a pop-
ulation with an unknown parameter . Then a statistic (X1, X2, ...,
Xn) is called a pivotal quantity if it possesses the following prop-
erties:
1. It is a function of sample values and some parameters,
including the unknown parameter .
−2
−1
Figure 9.1 An interpretation of a confidence interval.

2. Among all the parameters it contains, is the only unknown

parameter.
3. The probability distribution of the random variable does not
depend upon the unknown parameter .
Example 9.7 Let X1, X2, ..., Xn be a random sample from a normal popu-
lation with an unknown mean and known variance 2. Find a pivotal quan-
tity for the unknown mean .
X−µ
Solution: Clearly is a pivotal quantity because it is a function of
σ/ n
sample values and parameter and , is the only unknown parameter and
its probability distribution does not depend upon .
9.3.1 Confidence Interval for Population Mean When the

Sample Size Is Large
9.3.1.1 Population Standard Deviation Known Let X1, X2, ..., Xn be a
random sample of size n ( 30) from a population having a probability dis-
tribution with unknown mean and variance 2 where 2 is known. We want
to find a confidence interval for with confidence coefficient (1 ). To
find this confidence interval we would first determine a pivotal quantity,
X−µ
which in the case is . Since the sample of size n 30 is large, it
σ n
follows from the central limit theorem (see Chapter 8) that irrespective of the
X−µ
form of the population probability distribution the pivotal quantity is
σ n
distributed as standard normal (i.e., the mean 0 and standard deviation 1).
Thus, we have (also, see Figure 9.2)
 X−µ 
P  − zα 2 ≤ ≤ zα 2  = 1 − α (9.11)
 σ n 
After applying some simple mathematical operations, Equation (9.11) can be
written as
(
P X − zα 2 σ n ≤ µ ≤ X + zα 2 σ )
n = 1− α (9.12)
Equation (9.12) gives the confidence interval for the mean with confi-
dence coefficient 1 . It is very interesting to note that the areas under the
two tails shown in Figure 9.2 each equal to /2. In other words, we have
divided into two equal parts such that half-alpha we take under one tail and
other half under the second tail. Technically speaking we may divide into
two parts as we wish, that is we may take, for example, one-third of under
one tail and the remaining two-third under the other tail. But traditionally we
always divide into two equal parts unless we have very strong reason to do
otherwise. Moreover, for a symmetric distribution, by dividing into two
equal parts we get a slightly smaller confidence interval, which is one of the
nicest properties of a confidence interval (smaller the better).
174 Chapter Nine
−z α/2 z α/2
Figure 9.2 Standard normal-curve with tail areas equal to /2.
Thus, we have a confidence interval (ˆ , ˆ u) with confidence coefficient

σ σ
(1 ), where µ̂ = X − zα 2 and µ̂u = X + zα 2 are, respectively,
n n
the lower confidence limit (LCL) and upper confidence limit (UCL). The
confidence interval (ˆ , ˆ u) is known as a two-sided confidence interval.
As discussed above, suppose we decide not to divide at all. That is sup-
pose lies completely under one tail or the other as shown in Figure 9.3(a)
and Figure 9.3(b). Then we get confidence intervals that are known as one-
sided confidence intervals. For example, from Figure 9.3(a), we have
 X−µ 
P ≥ − zα  = 1 − α (9.13)
σ / n 
Again, after applying some simple mathematical operations, Equation
(9.13) can be written as
P ( µ ≤ X + zα σ / n ) = 1 − α (9.14)
This is equivalent to saying that the probability of the interval (, ˆ u )
where µ̂u = X + zα σ n contains the true value of is 1 . In other
words, the probability that the upper bound of is equal to X + zα σ n is
1 . Hence, the interval (, ˆ u ) is an upper one-sided confidence inter-
val with confidence coefficient 1 . Similarly, we can determine a lower
one-sided confidence interval with confidence coefficient (1 ) as
( µˆ , ∞ ) = ( X − zα σ n , ∞ ) (9.15)
9.3.1.2 Population Standard Deviation Unknown Since in this case is

X−µ
not known, the quantity no longer satisfies the desired properties of
σ n
−z α
(a)
(b)
Figure 9.3 (a) Standard normal curve with lower-tail area equal to . (b) Standard
normal curve with upper-tail area equal to .
being a pivotal quantity because it contains besides another unknown

parameter . Thus, under these circumstances we replace by its estimator
S. Thus, when the population standard deviation is unknown, then the
X−µ
quantity that we consider as a pivotal quantity is .
S n
Since the sample size is large, it can easily be shown that the pivotal
X−µ
quantity will still be approximately distributed as standard normal.
S n
Thus, the confidence interval for with confidence coefficient (1 ) can
be obtained by following the same procedure as when is known. In other
words, when the sample size is large the confidence interval for can be
176 Chapter Nine
obtained by simply replacing with S in the corresponding confidence inter-

val for when is known. Thus, the following:
Two-sided confidence interval with confidence coefficient 1 is
S S
( µˆ , µˆ u ), where µ̂ = X − zα 2 and µ̂u = X + zα 2 (9.16)
n n
Lower one-sided confidence interval with confidence coefficient 1 is
S
( µˆ , ∞ ), where µ̂ = X − zα (9.17)
n
Upper one-sided confidence interval with confidence coefficient 1 is
S
(−∞, µˆ u ), where µ̂u = X + zα (9.18)
n
Example 9.8 A manufacturing engineer decides to check the efficiency of a
new technician hired by the company. She records the time taken by the tech-
nician to complete 100 randomly selected jobs and found that the average
time taken per job was 10 hours with a standard deviation of 2 hours. Find a
95% confidence interval for , the average time taken to complete one job.
Solution: In this example we do not know , but we are given that
–
X 10 and S 2.
Also, the sample size n 100 is large. Thus, using the confidence interval
(ˆ , ˆ u) where
S S
µˆ = X − zα 2 µˆ u = X + zα 2
n n
and z/2 z0.025 1.96, we have
2 2
ˆ 10 − 1.96 ˆ u 10 + 1.96
100 100
9.608 10.392
Thus, a 95% confidence interval for the average time taken by the tech-
nician to complete one job is (9.608, 10.392) hours.
Example 9.9 Suppose that it is known that the standard deviation of
workers hourly wage in auto industry is $5. A random sample of 64 workers
had an average hourly wage of $30. Find a 99% confidence interval for the
mean hourly wage .
Solution: Since in this case the sample size is n 64, which is large– and
the population standard deviation 5. Also, we are given that X 30.
Thus, a confidence interval for mean hourly wage is (ˆ , ˆ u) where
σ σ
ˆ X − zα 2 ˆ u X + zα 2
n n
5 5
= 30 − 2.575 = 30 + 2.575
64 64
30 1.61 30 1.61
28.39 31.61
Thus, a 99% confidence interval for the mean hourly wage is (28.39,
31.61) dollars.
Note: It is important to remember that the size of a confidence interval,
which is defined as ˆ u ˆ , will increase or decrease as the sample size
decreases or increases.
9.3.2 Confidence Interval for Population Mean When the

Sample Size Is Small
The large-sample procedures for finding a confidence interval for the popu-
lation mean that we discussed in the previous section does not make any
assumptions about the distribution of the sampled population except that the
mean and the standard deviation of the population are and respectively.
The confidence interval (ˆ , ˆ u) was obtained using the–fact that for large
sample size by the central limit theorem (see Chapter 8) X is approximately
normally distributed with mean and standard deviation σ n . When the
sample size is small, we cannot apply the central limit theorem, so we
assume that the sampled population is normally distributed. Note that when
the population is normal then irrespective of the sample size, the sample
–
mean X is exactly normal with mean and standard deviation σ n .
Under the present scenario we consider two cases. One is when is
known and the other is when is not known.
9.3.2.1 Population Standard Deviation Is Known The case when is

known is dealt with exactly in the same manner as in section 9.3.1, where the
sample size was large. Since in the present case the sampled population is
normally
– distributed with mean and standard deviation , the sample mean
X for any sample size is also normally distributed with mean and standard
deviation σ n . Thus, a confidence interval for with confidence coeffi-
cient 1 is (ˆ , ˆ u) where
σ σ
ˆ = X − zα 2 and ˆ u = X + zα 2 (9.19)
n n
Lower and upper one-sided confidence intervals with confidence coefficient
1 are the same as in Equations (9.17) and (9.18), respectively.
9.3.2.2 Population Standard Deviation Is Unknown When the population

X−µ
is normal and sample size is small, the pivotal quantity obtained
S/ n
178 Chapter Nine
X−µ
from by replacing population standard deviation with its estimator
σ/ n
S is no longer normally distributed. In Chapter 8 (Theorem 8.4), we saw that
X−µ
the pivotal quantity is distributed as Student’s t-distribution with
S/ n
n 1 degrees of freedom. Thus, from Figure 9.4, we have
X−µ
P (− t n −1,α 2 ≤ ≤ t n −1,α 2 ) = 1 − α
S/ n
or
S S
P (− t n −1,α 2 ≤ X − µ ≤ t n −1,α 2 ) = 1− α
n n
or
S S
P ( X − t n −1,α 2 ≤ µ ≤ X + t n −1,α 2 ) = 1− α
n n
Thus, a two-sided small-sample confidence interval for with confi-
dence coefficient 1 when is not known is (ˆ , ˆ u) where
S S
ˆ X − t n −1,α
, and ˆ u X + t n −1,α 2
2 (9.20)
n n
Lower and upper one-sided confidence intervals are (ˆ , ) and (, ˆ u)
respectively, where
S S
ˆ X − t n −1,α , and ˆ u X + t n −1,α (9.21)
n n
Figure 9.4 Student’s t-distribution with tail areas equal to /2.

Example 9.10 A random sample of 16 technicians between the ages of 35

and 40 years working in a large manufacturing company was taken and their
cholesterol levels were checked. It was found that the mean cholesterol level
for this sample was 175mg/100ml with a standard deviation of 15mg/100ml.
Assuming that the cholesterol levels of all technicians in that company
between the ages of 35 and 40 years are normally distributed, find a 95%
confidence interval for the population mean .
Solution: From the information provided to us, we have
–
n 16, X 175mg/100ml, and S 15mg/100ml
Using a two-sided small-sample confidence interval for when is
unknown (see Equation (9.20)), we get
S S
ˆ X − t n −1,α 2 , and ˆ u X + t n −1,α 2
n n
15 15
= 175 − t15,0.025 = 175 + t15,0.025
16 16
175 (2.131)(3.75) 175 (2.131)(3.75)
175 7.99 175 7.99
167.01 182.99
Thus, a 95% confidence interval form the population mean is
(167.01,182.99).
Example 9.11 A random sample of size 25 of a certain kind of lightbulb
yielded an average lifetime of 1875 hours and a standard deviation of 100
hours. From past experience it is known that the lifetime of this kind of bulb
is normally distributed with mean and standard deviation . Find a 99%
confidence interval for the population mean . Find a 99% lower and upper
one-sided confidence interval for the population mean .
Solution: We have
–
n 25, X 1875, and S 100.
Using the small-sample two-sided confidence interval (see Equation (9.20)),
we get
S S
ˆ X − t n −1,α 2 , and ˆ u X + t n −1,α 2
n n
100 100
1875 t24, 0.005 1875 t24, 0.005
25 25
1875 2.797(20) 1875 2.797(20)
1875 55.94 1875 55.94
1819.06 1930.94
Thus, a small-sample two-sided 99% confidence interval for is (1819.06,
1930.94).
180 Chapter Nine
The lower and upper one-sided 99% confidence limits are

S S
ˆ X − t n −1,α and ˆ u X + t n −1,α
n n
100 100
1875 t24, 0.01 1875 t24, 0.01
25 25
1875 2.492(20) 1875 2.492(20)
1875 49.84 1875 49.84
1825.16 1924.84
Thus, lower and upper one-sided small-sample confidence intervals for
the population mean with confidence coefficient 99% are (1825.16, ) and
(0, 1926.86) (note that lifetime of bulb cannot be negative, so the lower limit
instead of is zero).
We would like to remind the reader that the use of Student’s t-distribu-
tion to find a confidence interval for the population mean is applicable only
when the following are true:
1. Population is normal.
2. Sample size is small (n 30).
3. Population variance is not known.
9.4 Confidence Interval for the Difference

between Two Population Means
We first give an important result in the form of a theorem. We are going to
use the result of this theorem throughout this section.
Theorem 9.1 Let X1 and X2 be independent random variables dis-
tributed as normal with means 1 and 2 and variances 12, 22
respectively. Then the random variable X X1 X2 is also nor-
mally distributed with mean 1 2 and variance 12 22. (The
proof of this theorem is beyond the scope of this book.)
9.4.1 Large Sample Confidence Interval for the Difference

between Two Population Means
9.4.1.1 Population Variances 12 and 22 Are Known Let X11, X12, ..., X1n1
and X21, X22, ..., X1n2 be random samples from two independent populations
having probability distribution with means 1 and– 2 and – variances 1
2
and 2 , respectively, and n1 30 and n2 30. Let X1 and X2 be the sample

2
means
– of– samples X11, X12, ..., X1n1 and X21, X22, ..., X1n2 respectively.
– Since
–
X1 and X2 are unbiased estimators of 1 and 2 respectively, then X1 X2 is
an unbiased estimator of 1 2. The pivotal quantity that we use to deter-
mine a confidence interval for 1 2 is
( X1 − X 2 ) − ( µ1 − µ2 )
(9.22)
σ 12 n1 + σ 22 n2
Using the central limit theorem and the result of Theorem 9.1, it can eas-
ily be shown that the pivotal quantity in Equation (9.22) is distributed as
standard normal (i.e., the mean 0 and standard deviation 1). Thus, we have
( X1 − X2 )− ( µ1 − µ2 )
P ( − zα 2 ≤ ≤ zα 2 ) = 1 − α
σ12 n1 + σ 22 n2
P ( − zα σ 1 n1 + σ 2 n 2 ≤ (X1 − X 2 ) − ( µ − µ ) ≤ zα σ 1 n1 + σ 2 n 2 ) = 1 − α
2 2 2 2
2 2
1 2
or
P (( X1 − X 2 ) − zα σ 1 n1 + σ 2 n2 ≤ µ − µ ≤ (X1 − X 2 ) + zα σ 1 n1 + σ 2 n 2 ) = 1−α
2 2 2 2
2 2
1 2
The large-sample two-sided confidence interval for 1 2 with confidence
coefficient 1 is as given in Equation (9.23).
σ 12 σ 2 2 σ 12 σ 2 2
(X1 − X 2 − zα 2 + , X1 − X 2 + zα 2 + ) (9.23)
n1 n2 n1 n2
1 are
σ 12 σ 2 2 σ 12 σ 2 2
(( X1 − X 2 − zα + , ∞ ) and (−∞, X1 − X 2 + zα + ) (9.24)
n1 n2 n1 n2
respectively.
Example 9.12 Suppose two independent random samples, one of 64

mechanical engineers and the other of 100 electrical engineers, showed that
the mean starting salaries of mechanical and electrical engineers are $36,250
and $40,760, respectively. Suppose it is known that the standard deviations of
starting salaries of mechanical and electrical engineers are $2240 and
$3000, respectively. Find a two-sided 95% confidence interval for 1 2.
Find the upper and lower one-sided 95% confidence intervals for 1 2.
Solution: From the given information, we have
–
n1 64 X1 36,250 1 2240
–
n2 100 X2 40,760 2 3000
Using Equation (9.23) a two-sided confidence interval for 1 2 with 95%
confidence coefficient is given by
σ 12 σ 2 2 σ 12 σ 2 2
(X1 − X 2 − zα 2 + , X1 − X 2 + zα 2 + )=
n1 n2 n1 n2
(2240 )2 ( 3000 )2
(36,250 40,760 z0.025 + , 36,250 40,760
64 100
(2, 240 )2 ( 3, 000 )2

z0.025 + )
64 100
182 Chapter Nine
(4,510 1.96(410.36), 4510 1.96(410.36))

(5314.30, 3705.70)
Thus, a 95% confidence interval for 1 2 is (5314.30, 3705.70).
Note that both the lower and upper confidence limits are negative, which
indicates with 95% probability that the electrical engineers’ starting salary is
higher than that of mechanical engineers.
An upper one-sided 95% confidence interval for 1 2 is given by
σ 12 σ 2 2
(−∞. X1 − X 2 + zα + ) = (−∞, 36, 250 − 40, 760 +
n1 n2
(2240 )2 ( 3000 )2
z0.05 + )
64 100
(, 4510 675) (, 3835)
Similarly, a lower one-sided confidence interval for 1 2 is (5185, ).
9.4.1.2 Population Variances 12 and 22 Are Unknown When the popula-
tion variances are not known and the sample sizes are large, the confidence
interval for 1 2 with confidence coefficient 1 is obtained by replac-
ing 12and 22 in Equation (9.23) by the sample variances S12 and S22
respectively. Thus, a two-sided confidence interval for 1 2 with confi-
dence coefficient 1 is
S12 S2 2 S12 S2 2
( X1 − X 2 − zα 2 + , X1− 2 + α 2
X z + ) (9.25)
n1 n2 n1 n2
↑ LCL ↑ UCL
1 are
S12 S2 2 S2 S2
( X1 − X 2 − zα + , ∞ ) and (−∞, X1 − X 2 + zα 1 + 2 ) (9.26)
n1 n2 n1 n2
Example 9.13 Two types of copper wires used in manufacturing electrical
cables are tested for their tensile strength. Two random samples one of each
type of size n1 40 and n2 40 produced the following summary statistics
– –
X1 150, S1 13 ; X2 120, S2 12
Find a 99% confidence interval for 1 2, the difference in the mean ten-
sile strength of the two types of wires.
Solution: Since the population variances in this case are not known, a 99%
confidence interval for 1 2 is obtained by using Equation (9.25). Thus,
we have
S12 S2 2 S12 S2 2
(X1 − X 2 − zα 2 + , X1 − X 2 + zα 2 + )
n1 n2 n1 n2
132 12 2 132 12 2 )
(150 120 2.575 + , 150 120 2.575 +
40 40 40 40
(30 2.575(2.797), 30 2.575(2.797))
(30 7.20, 30 7.20) (22.80, 37.20)
Thus, a 99% confidence interval for 1 2 is (22.80, 37.20). In this
case both lower and upper confidence limits are positive, which indicates
with 99% probability that type I wires have higher mean tensile strength.
9.4.2 Small Sample Confidence Interval for the

Difference between Two Population Means
In this section we discuss how to find a confidence interval for 1 2, the
difference between two population means when the sample sizes are small
(at least one of n1 and n2 is less than 30).
As in the one population case, when the sample size is small, we assume
that the two sampled populations are normally distributed with means 1 and
2 and variances 12and 22 respectively. Under the small-sample case we
shall consider here, are the following three different scenarios:
1. Both variances 12and 22 are known.
2. Both variances 12 and 22 are unknown, but 12 and 22 can be
assumed to be equal.
3. Both variances 12 and 22 are unknown, but 12 and 22 cannot
be assumed to be equal.
9.4.2.1 Both Variances 12and 22 Are Known In this case the pivotal quan-
tity we use to find a confidence interval for 1 2 is
(X1 − X 2 ) − ( µ1 − µ2 )
σ 12 σ 2 2
+ (9.27)
n1 n2
which is distributed as standard normal N(0,1), that is, normal with mean 0
and standard deviation 1. So in this case pivotal quantity is the same as when
the sample size is large and the variances are known. Moreover, in the large-
sample case, by the central limit theorem, and here, because of the normali-
ty assumption, the pivotal quantity is distributed as standard normal. Thus,
the confidence interval for 1 2 with confidence coefficient (1 ) is
exactly the same as in Equation (9.23). That is,
σ 12 σ 2 2 σ 12 σ 2 2
( X1 − X 2 − zα 2 + , X1 − X 2 + zα 2 + ) (9.28)
n1 n2 n1 n2
(1 ) are
( X1 − X 2 − zα σ 12 n1 + σ 22 n2 , ∞ ) (9.29)
184 Chapter Nine
and
(−∞, X1 − X 2 + zα σ 12 n1 + σ 22 n2 ) (9.30)
respectively.
Example 9.14 A manager of a company wants to evaluate the technicians
at two of its plants. She took two samples, one from each plant, of sizes n1
13 and n2 17 technicians. Then she looked at the number of jobs each tech-
nician performed during a fixed period of time. From experience, the number
of jobs performed by all the technicians at the two plants are known to be
normally distributed with variances 12 21, 22 18.The data collected
produced the following summary statistics:
–
X1 27 12 21
–
X2 24 22 18
Find a 95% confidence interval for 1 2 , the mean difference of the num-
ber of jobs performed by the technicians at the two plants.
Solution: The populations are normally distributed with known variances
and the sample sizes are small. To find a desired confidence interval we use
Equation (9.28), that is,
σ 12 σ 2 2 σ 12 σ 2 2
( X1 − X 2 − zα 2 + , X1 − X 2 + zα 2 + )
n1 n2 n1 n2
21 18 21 18
(27 24 1.96 + , 27 24 1.96 + )
13 17 13 17
(3 3.205, 3 3.205) (0.205, 6.205)
9.4.2.2 Both Variances 12and 22 Are Unknown But 12and 22 Can Be
Assumed to Be Equal
Under this scenario we assume that the variances are unknown but they can
still be assumed to be equal, that is, 12 22 2. This situation looks
somewhat strange in that we are assuming the variances to be equal though
we do not know what the variances are. Don’t worry! We can easily verify
this assumption by using techniques of testing hypotheses that we are going
to learn in the next chapter.
Since the two populations have the same variance 2, from the variance
point of view only it is quite reasonable to assume that the two populations
are identical. We can enhance the efficiency of the estimator of the unknown
variance 2 by pooling the two samples drawn from the two populations. We
denote such an estimator of 2 by Sp2, which is defined as
(n1 − 1)S12 + (n2 − 1)S22

S p2 = (9.31)
n1 + n2 − 2
where S12 and S22 are the sample variances of the samples drawn from the two
populations. In this case, the pivotal quantity that we use to find a confidence
interval for 1 2 with confidence coefficient 1 is
(X1 − X 2 ) − ( µ1 − µ2 )
1 1
Sp + (9.32)
n1 n2
It can easily be shown that the pivotal in Equation (9.32) is distributed as

Students’ t-distribution with n1 n2 2 degrees of freedom. Thus, the two-
sided confidence interval for 1 2 with confidence coefficient 1 is
given by
( X1 − X 2 − t α Sp 1 n1 + 1 n2 , X1 − X 2 + t α Sp 1 n1 + 1 n2 ) (9.33)
n1 + n2 − 2 , n1 + n2 − 2 ,
2 2
Lower and upper one-sided confidence intervals for 1 2 with confi-

dence coefficient 1 are given by
( X1 − X 2 −t n1 + n2 − 2,α S p 1 n1 + 1 n2 , ) (9.34)
and
( , X1 − X 2 + t n1 + n2 – 2,α S12 n1 + S22 n2 ) (9.35)
respectively.
9.4.2.3 Both Variances 12 and 22 Are Unknown But 12 and 22 Cannot Be
Assumed to Be Equal
Under this scenario the population variances are again unknown, but they
cannot be assumed to be equal (again, this assumption can be verified by
using techniques discussed in Chapter 10). In this case, the pivotal quantity
we use to find a confidence interval for 1 2 with confidence coefficient
1 is
(X1 − X 2 ) − ( µ1 − µ2 )
(9.36)
S12 S22
+
n1 n2
The pivotal quantity in Equation (9.36) can be shown to be approximately
distributed as Student’s t-distribution with m degrees of freedom where
2
 S12 S22 
 n + n 
1 2
m= (9.37)
( S12 n1 ) +(
2
S22 n2 ) 2
n1 − 1 n2 − 1
186 Chapter Nine
Since the degree of freedom is always a whole number, it is usually nec-

essary to round the value of m in Equation (9.37). Thus, the two-sided con-
fidence interval for 1 2 with confidence coefficient (1 ) is given by
( X1 − X 2 − t m,α 2 S12 n1 + S22 n2 , X1 − X 2 +t m,α 2 S12 n1 + S22 n2 ) (9.38)

Lower and upper one-sided confidence intervals for 1 2 with confi-
dence coefficient (1 ) are given by
( X1 − X 2 − t m,α S12 n1 + S22 n2 , ∞ ) (9.39)

and
(−∞, X1 − X 2 +t m,α S12 n1 + S22 n2 ) (9.40)

respectively.
Example 9.15 A pharmaceutical company sets two machines to fill 15oz
bottles with cough syrup. Two random samples of n1 16 bottles from
machine 1 and n2 12 bottles from machine 2 are selected. The two sam-
ples yield the following sample statistics:
–
X1 15.24 S12 0.64
–
X2 14.96 S22 0.36
Find a 95% confidence interval for 1 2, the mean difference of the
amount of cough syrup filled in bottles by the two machines. Assume that the
two population variances are equal.
Solution: Since in this case the population variances are unknown but
assumed to be equal, we first find the pooled estimate of the common vari-
ance. That is,
(n1 − 1)S12 + (n2 − 1)S22

S p2 =
n1 + n2 − 2
(16 − 1)(0.64 ) + (12 − 1)(0.36 )
= = 0.5215.
16 + 12 − 2
Sp 0.722
Now to determine a desired confidence interval using Equation (9.33), we
have
( X1 − X 2 − t α Sp 1 n1 + 1 n2 , X1 − X 2 +t α Sp 1 n1 + 1 n2 )
n1 + n2 − 2 , n1 + n2 − 2 ,
2 2
1 1
(15.24 14.96 2.056(0.722) + , 15.24 14.96
16 12
1 1
2.056(0.722) + )
16 12
(0.28 0.56, 0.28 0.56) (0.28, 0.84)

Example 9.16 Repeat Example 9.15, this time assuming that the popula-
tion variances are not equal.
Solution: When the sample sizes are small and the variances are not equal,
the pivotal quantity used to determine a desired confidence interval is
(X1 − X 2 ) − ( µ1 − µ2 )
S12 S22
+
n1 n2
which is approximately distributed as Student’s t-distribution with m degrees

of freedom, m in this example being equal to
2
 0.64 0.36 
 + 
16 12 
m= 2 2
≅ 26
 0.64   0.36 
   
16 12 
+
15 11
Note that in this case the degree of freedom turned out to be the same as
in Example 9.15. But this is not the case always. Thus, using the confidence
interval in Equation (9.38), we get
( X1 − X 2 − t m,α 2 S12 n1 + S22 n2 , X1 − X 2 +t m,α 2 S12 n1 + S22 n2 )

0.64 0.36
( 15.24 14.96 2.056 + , 15.24 14.96
16 12
0.64 0.36 )
2.056 +
16 12
(0.28 0.54, 0.28 0.54) (0.26, 0.82)
9.5 Confidence Intervals for Population

Proportions When Sample Sizes Are Large
Let X1, X2, ..., Xn be a random sample of size n from a Bernoulli population
(see section 8.3.1) with parameter p. Then from our earlier discussion in this
chapter we know that p̂ = X n is an unbiased estimator of p where X is the
total number of successes in n Bernoulli trials. In Chapter 8, we also saw that
p(1 − p )
the statistic ( pˆ − p ) / is approximately normally distributed with
n
188 Chapter Nine
p(1 − p )
mean 0 and standard deviation 1. This makes ( pˆ − p ) / a good can-
n
didate to be considered a pivotal quantity for estimating p because it pos-
sesses all the characteristics of a pivotal quantity. Having said this, we are
now ready to study the technique of finding a confidence interval for p. Note
that throughout this section we are going to assume that n is large (np 5,
n(1 p) 5).
9.5.1 Confidence Interval for p the Population Proportion

Let X1, X2, ..., Xn be a random sample of size n from a Bernoulli population
with parameter p and let X X1 X2 ... Xn. Then we are interested in
finding a confidence interval for p with confidence coefficient 1 . As dis-
cussed above we consider the quantity
p(1 − p )
( pˆ − p ) / (9.41)
n
as a pivotal quantity for finding the confidence interval for p. Also, from our
discussion in Chapter 8, we know that the pivotal quantity in Equation (9.41)
is distributed approximately as standard normal N(0, 1). Thus, we have
pˆ − p
P (− zα 2 ≤ ≤ zα 2 ) = 1 − α
p(1 − p )
n
or
p(1 − p ) p(1 − p )
P (− zα 2 ≤ pˆ − p ≤ zα 2 ) = 1− α
n n
or
p(1 − p ) p(1 − p )
P ( pˆ − zα 2 ≤ p ≤ pˆ + zα 2 ) = 1−α
n n
↑ LCL ↑ UCL (9.42)
p(1 − p )
Note that the quantity in LCL and UCL is the standard error p̂ ,
n
which is unknown, since p is not known. But a good approximation of the
standard error is found by substituting p̂ for p. Thus, we have
pˆ (1 − pˆ ) pˆ (1 − pˆ )
P ( pˆ − zα 2 ≤ p ≤ pˆ + zα 2 ) = 1−α (9.43)
n n
Therefore a confidence interval for p with confidence coefficient (1 ) is

( p̂, p̂u) where
pˆ (1 − pˆ )
pˆ = pˆ − zα 2 (9.44)
n
pˆ (1 − pˆ )
pˆ u = pˆ + zα 2 (9.45)
n
Example 9.17 A random sample of 400 computer chips is taken from a
large lot of chips and 50 of them are found defective. Find a 95% confidence
interval for p, the proportion of defective chips contained in the lot.
Solution: From the given information, we have n 400 and x 50. Thus,
we have
x 50 1
= = p̂ =
n 400 8
Since we are interested in finding a 95% confidence interval, we have
.05, / 2 .025, and z.025 1.96.
Hence the 95% confidence interval for p is (p̂, p̂u) where
pˆ (1 − pˆ ) pˆ (1 − pˆ )
pˆ = pˆ − zα 2 , pˆ u = pˆ + zα 2
n n
(1 / 8 )( 7 / 8 ) (1 / 8 )( 7 / 8 )
= 1 / 8 − 1.96 = 1 / 8 + 1.96
400 400
= 0.1250 − .0016 = 0..1250 + .0016
= 0.1234 = 0.1266
Thus, a 95% confidence interval for p is (0.1234, 0.1266).
9.5.2 Confidence Interval for the Difference of

Two Population Proportions
Quite often we are interested in finding a confidence interval for the differ-
ence of the two population proportions. For example, we may be interested
in estimating the true difference (p1 p2) of the failure rate of a product
manufactured by two independent companies. One way to know which com-
pany’s product is better, is to find a confidence interval for (p1 p2) with a
certain confidence coefficient.
Let X11, X12, ..., X1n1 and X21, X22, ..., X1n2 be random samples of sizes
n1 and n2 from two independent binomial populations with parameters p1 and
p2 respectively. Then from our earlier discussion we know that
n1 n2
∑ X1i ∑ X2 j
j =1
pˆ1 = i =1
, p̂2 = (9.46)
n1 n2
190 Chapter Nine
are unbiased estimators of p1 and p2, respectively. Therefore, (p̂1 p̂2) is an

unbiased estimator of (p1 p2). Moreover, for large sample size (n1p1 5,
n1(1 p1) 5) and (n2p2 5, n2(1 p2) 5) we know that p̂1 and p̂2 are
p1 (1 − p2 )
normally distributed with mean p1 and p2 and variances and
n1
p2 (1 − p2 )
, respectively.
n2
Now using the result of Theorem 9.1, it follows that (p̂1 p̂2) is approx-
p1 (1 − p2 )
imately normally distributed with mean (p1 p2) and variance +
n1
p2 (1 − p2 )
.That is,
n2
( pˆ 1 − pˆ 2 ) − ( p 1 − p 2 )
p1 (1 − p1 ) p2 (1 − p2 ) (9.47)
+
n1 n2
is approximately distributed as standard normal N(0, 1). Thus, using the statis-
tic in Equation (9.47) as the pivotal quantity for estimating (p1 p2), we have
( pˆ1 − pˆ 2 ) − ( p1 − p 2 )
P (− Z α / 2 ≤ ≤ Z α / 2) = 1 − α
 p1(1 − p1) p 2(1 − p 2 ) 
 + 
n1 n2
or
 p (1 − p1) p 2(1 − p2 ) 
P (− Z α / 2  1 +  ≤ ( pˆ 1 − pˆ 2 ) − ( p1 − p 2 ) ≤
 n1 n2
 p1(1 − p1) p 2(1 − p2 ) 

Z α /2  +  = 1 − α
 n1 n2
or
 p (1 − p1) p 2(1 − p2 ) 
P (( pˆ 1 − pˆ 2 ) − Z α / 2  1 +  ≤ ( p1 − p 2 ) ≤ ( pˆ1 − pˆ 2 ) +
 n1 n2
 p (1 − p1) p 2(1 − p2 ) 
Zα / 2  1 +  ) = 1 − α
 n1 n2
p1 (1 − p1 ) p2 (1 − p2 )
Note that the quantity + in LCL and UCL is
n1 n2
unknown since p1 and p2 are not known. Also, note that this quantity is the
standard error of (p̂1 p̂2) Thus, we estimate the standard error of (p̂1 p̂2)
by replacing p1 and p2 with p̂1 and p̂2 respectively. Therefore, a confidence

interval for (p1 p2) with confidence coefficient 1 is given by
pˆ1 (1 − pˆ1 ) pˆ 2 (1 − pˆ 2 )
(( pˆ1 − pˆ 2 ) − zα 2 + , ( pˆ1 − pˆ 2 ) +
n1 n2
pˆ1 (1 − pˆ1 ) pˆ 2 (1 − pˆ 2 )
zα 2 + (9.48)
n1 n2
Lower and upper one-sided confidence intervals for (p1 p2) with con-
fidence coefficient 1 are given by
pˆ1 (1 − pˆ1 ) pˆ 2 (1 − pˆ 2 )
(( pˆ1 − pˆ 2 ) − zα + , 1) (9.49)
n1 n2
and
pˆ1 (1 − pˆ1 ) pˆ 2 (1 − pˆ 2 )
(0, ( pˆ1 − pˆ 2 ) + zα + ) (9.50)
n1 n2
respectively.
Example 9.18 Companies A and B claim that the new type of lightbulb
has a lifetime of more than 5,000 hours. In a random sample of 400 bulbs
manufactured by company A, 60 bulbs burned out before the guaranteed
period ended, and in a random sample of 500 bulbs manufactured by com-
pany B, 100 bulbs burned out before the guarantee period ended. Find a
point estimate and a 95% confidence interval for the true value of the dif-
ference (p1 p2), where p1 and p2 are the proportion of the bulbs manu-
factured by company A and company B, respectively, that burn out before
the guarantee period, that is, 5,000 hours.
60 3 100 1
p̂ 1 = = and p̂ =
2
=
400 20 500 5
Thus, the point estimate of (p1 p2) is
3 1
pˆ 1 − pˆ 2 =
−
20 5
We now want to find a 95% confidence interval for ( p1 p2). From Equation
(9.48), we have
pˆ1 (1 − pˆ1 ) pˆ 2 (1 − pˆ 2 )
(( pˆ1 − pˆ 2 ) − zα 2 + , ( pˆ1 − pˆ 2 ) +
n1 n2
pˆ1 (1 − pˆ1 ) pˆ 2 (1 − pˆ 2 )
zα 2 + )
n1 n2
192 Chapter Nine
Substituting the values of p̂1 and p̂2 in this relation and z/2 1.96 since
0.05, we have
3 1 3 / 20(1 − 3 / 20 ) 1 / 5(1 − 1 / 5 )
LCL = ( − ) − 1.96 +
20 5 400 500
= −0.05 − 0.06 = −0.11
3 1 3 / 20(1 − 3 / 20 ) 1 / 5(1 − 1 / 5 )
UCL = ( − ) + 1.96 +
20 5 400 500
= −0.05 + 0.06 = 0.01
Thus, a 95% confidence interval for ( p1 p2) is (0.11, 0.01).
9.6 Determination of Sample Size

In this section we want to determine the sample size needed to estimate
a parameter with the desired margin of error E (see section 9.1.1), where
may be the population mean , difference of the two population means
1 2, population proportion p, or the difference of the two population
proportions p1 p2.
Thus, for example, let X1, X2, ..., Xn be a random sample from a popu-
lation with probability distribution f(x,) where is an unknown parameter.
Let ˆ (x1, x2, ..., xn) be an estimate of where X1 x1, X2 x2, ..., Xn
xn . Obviously, we cannot expect ˆ to be exactly equal to the true value of
the parameter. The difference between ˆ and is the error of estimation. The
maximum value of the error of estimation is called the margin of error or
bound on error of estimation where , 1 2, p, p1 p2. The margin
of error of estimation denoted by E, which from Equation (9.6) with proba-
bility 1 is given by
E = zα 2σ θˆ
Note that E is also equal to half the width of the confidence interval for
with confidence coefficient 1 . Suppose we predetermine the size of the
margin of error E, we then would like to determine the sample size needed
to attain this value of the margin of error.
Case 1
Let , then the margin of error with probability 1 is given by
σ
E = zα 2
n
where is the population standard deviation. By taking the square on both
sides and doing some algebraic manipulations, we get
zα2 2σ 2
n= 2 (9.51)
Ε
Example 9.19 Suppose a manufacturing engineer wants to estimate the

number of defective parts produced by a machine during each shift. An ear-
lier study on a similar machine shows that the number of defective parts pro-
duced by the machine vary from shift to shift, with standard deviation equal
to 12. How large a sample should the engineer take so that with 95% prob-
ability the estimate is within 3 parts of the true value of , the average num-
ber of defective parts produced by the machine in each shift?
zα 2 = z0.025 = 1.96, 12, E 3
Thus, the desired sample size is
zα 2
2
σ2 (1.96 )2 (12 )2
n= = = 61.46
E2 32
The engineer should take a sample of size 62 to achieve the goal. Note that
the value of n is always rounded up.
Case 2
Let 1 2, then in order to determine the sample size in this case we
assume that the sample sizes taken from two population are equal, that is
n1 n2 n. Then the margin of error with probability (1 ) is given by
σ 12 σ 22 σ 12 + σ 22
E = zα 2 + = zα 2
n n n
Now by taking the square on both sides and doing some algebraic manipula-
tions, we get
zα2 2 (σ 12 + σ 22 )
n= (9.52)
E2
where 12 and 22 are the variances of populations under consideration.
Example 9.20 Suppose that we want to estimate the difference between
two population means 1 and 2. Further suppose that we know 1 2.0
and 2 2.5. How large a sample should be taken so that with probability
99% our estimate is within 1.2 units of the true value of 1 2.
zα 2 = z0.005 = 2.575, σ 1 = 2.0 and σ 2 = 2.5, E = 1.2
Using Equation (9.52), the desired sample size is
(2.575 )2 (2 2 + (2.5 )2 )
n= = 47.197 ≅ 48.
(1.2 )2
Notes: In practice it is quite common that we do not know the population
variance. In such cases we replace the population variance by the sample
variance. It is interesting to note here that if we do not know the population
194 Chapter Nine
variance, we will have to find the sample variance, for which we would need
to have a sample. But to have a sample we must know the sample size we are
trying to find. Thus it becomes a vicious circle. To solve this problem we use
one of two possible solutions.
a. We use some existing data on the same kind of study to
calculate the sample variance. Then we use the value of the
sample variance to determine the sample size n.
b. We take a preliminary sample, say of size n1, to calculate the
value of the sample variance. Then, we use this value of the
sample variance to determine the sample size n. Since we
already have a sample size n1, now we take another
supplemental sample of size n n1 and then combine the two
samples in order to get a full sample of size n.
Case 3
Let p. In this case the margin of error E is given by
p(1 − p )
E = zα 2
n
Now taking the square on both sides and doing some algebraic manipulation,
we get
zα2 2 p(1 − p )
n= (9.53)
E2
Example 9.21 Suppose we select a random sample of eligible voters from
some district to estimate the proportion of voters who would favor the incum-
bent candidate. How large a sample should be taken in order to estimate the
proportion with a margin of error of 3% with 95% probability?
Solution: From the information available to us, we have
zα 2 = z0.025 = 1.96, and E 3% 0.03
Since we do not have any prior information about p, in order to make
certain that our margin of error is no more than 3% we use p 0.5. Note that
this choice gives us the largest possible sample needed to attain the given
margin of error. Using Equation (9.53) the sample size is
(1.96 )2 (0.5 )(1 − 0.5 )
n= = 1067.11 ≅ 1068.
(0.03)2
Case 4
Let p1 p2. In this case, we assume that the sample sizes taken from
two Bernoulli populations are equal, that is, n1 n2 n. Then the margin
of error E is given by
p1 (1 − p1 ) p2 (1 − p2 )
E = zα 2 +
n n
Again, taking the square on both sides and doing some algebraic manipula-
tions, we get the desired sample size n needed to have the margin of error no
more than E with probability 1 as
zα2 2 [ p1 (1 − p1 ) + p2 (1 − p2 )]
n= (9.54)
E2
Example 9.22 A marketing specialist of a car manufacturing company
wants to estimate the difference between the proportion of those customers
who prefer a domestic car and those who prefer an imported car. How large
a sample should she take from the ones who prefer domestic cars and ones
who prefer imported cars, in order to have a margin of error of 2.5% with a
probability of 99%? It is known that not very long ago 60% of the customers
preferred domestic and 40% preferred imported cars.
Solutions: From the given information, we have
p1 0.6 p2 0.4 z/2 z0.005 2.575 E 2.5% 0.025
Substituting these values in Equation (9.54), we get
(2.575 )2 ((0.6 )(0.4 ) + (0.4 )(0.6 ))

n= = 5092.32 ≅ 5093
(0.025 )2
Notes: In cases 1 and 2 we are confronted with a problem where we had to
estimate the unknown population variances. Similarly, in cases 3 and 4 we
are confronted with the problem of estimating the unknown population pro-
portions. In this scenario we give three possible solutions.
1. Use some old data on this study to estimate p and then use this
estimate to find the desired sample size.
2. We take a preliminary sample of size n1 to estimate p and then
use this estimate to determine the sample size n. Then we take a
supplemental sample of size n n1 and combine the two
samples to get the full sample.
3. Take p 0.5 and use this value to determine the sample size.
When p 0.5 the quantity p(1 p) is largest. Therefore, in this
case we get the largest possible sample that we need to attain
the margin of error E with probability 1 .
9.7 Confidence Interval for Population Variances

So far in this chapter we have considered the problem of point estimation of
population mean, population proportion, and population variance. Also we
considered the problem of interval estimation of population mean, difference
of two population means, population proportion, and the difference of two
population proportions. Quite often we need to find the confidence interval
of a population variance or the ratio of two population variances. In this sec-
tion we consider the problem of interval estimation of population variances
under the assumption that the sample populations are normally distributed.
196 Chapter Nine
9.7.1 Confidence Interval for a Population Variance

From Theorem 8.3 we know that when the sampled population is normally
distributed with mean and variance 2 then the random variable
(n − 1)S 2
χ2 = (9.55)
σ2
is distributed as chi-square distribution with (n 1) degrees of freedom.
Clearly the random variable 2 is a function of sample values and the
unknown parameter 2. From Theorem 8.2 we can also see that its probabil-
ity distribution is free of 2. Thus, the random variable 2 has all the charac-
teristics of being a pivotal quantity for estimating 2. Thus, we have
(n − 1)S 2
P ( χ n2−1,1− α 2 ≤ ≤ χ n2−1,α 2 ) = 1 − α
σ 2
or
P(σ 2 χ n2−1,1− α 2 ≤ (n − 1)S 2 ≤ σ 2 χ n2−1,α 2 ) = 1 − α

Doing some further algebraic manipulations, we get
 (n − 1)S 2 (n − 1)S 2 
P 2 ≤σ2 ≤ 2 = 1− α (9.56)
 χ ( n −1),α 2 χ ( n −1),1−α 2 
LCL ↑ UCL ↑
Thus, a two-sided confidence interval for 2 with confidence coefficient

1 is (σˆ , σˆ u ) where
2 2
(n − 1)S 2 (n − 1)S 2
σˆ 2 = and σ
ˆ u =
χ (2n −1),α 2 χ (2n −1),1− α 2
Similarly, using the following probability relations

(n − 1)S 2
P( ≤ χ n2−1,α ) = 1 − α
σ2
and
(n − 1)S 2
P( ≥ χ n2−1,1− α ) = 1 − α
σ 2
we get lower and upper one-sided confidence intervals for 2 with confi-
dence coefficient 1 as
 (n − 1)S 2   (n − 1)S 2 
 χ 2 , ∞  and  0, χ 2 
n − 1,1− α 
n −1,α
(9.58)
respectively. Note that the confidence interval for the population standard
deviation with confidence coefficient 1 is obtained by taking the
square root of the corresponding confidence interval for 2. Thus for exam-
ple, a two-sided confidence interval for with confidence coefficient 1
is (σˆ , σˆ u ) where
(n − 1)S 2 (n − 1)S 2
σˆ = and σˆ u = (9.59)
χ n2−1,α 2 χ n2−1,1− α 2
Example 9.23 The time taken by a worker in a car manufacturing compa-
ny to finish a paint job on a car is normally distributed with mean and vari-
ance 2. A random sample of 15 paint jobs is randomly selected and
assigned to that worker, and the time taken by the worker to finish the job is
jotted down. These data yields a sample standard deviation of S 2.5 hours.
Find a 95% two-sided and one-sided lower and upper confidence intervals
for the population standard deviation .
Solution: From the given information and using the chi-square distribution
table (Table V of the appendix) and Figure 9.5, we have
S 2.5 0.05 n 1 14 χ214,0.025 26.119
χ214,1–0.025 χ214,0.975 5.629
Thus, a two-sided confidence interval for 2 with confidence coefficient 95%
is (σˆ , σˆ u ) where
2 2
(n − 1)S 2 (15 − 1)(2.5 )2

σˆ 2 = = = 3.35
χ n2−1,α 2 26.119
(n − 1)S 2 (15 − 1)(2.5 )2
σˆ u2 = = = 15.54
χ n2−1,1− α 2 5.629
Therefore, a 95% two-sided confidence interval for 2 is (3.35, 15.54).

Now taking the square root of the lower and upper confidence limits for 2 ,
we get a 95% confidence interval for the population standard deviation,
which is (1.83, 3.94), because
σˆ = 1.83 σˆ u = 3.94
0.025 0.025
0 5.629 26.119
Figure 9.5 Chi-square distribution with two tail areas each equal to 0.025.
198 Chapter Nine
To find a one-sided confidence interval, note that the value of 2 will

change as the whole falls under only one tail. Thus, for example, we have
(n − 1)S 2 (51 − 1)(2.5 )2 87.5

σˆ 2 = = = = 3.69
χ n −1,α
2
χ14 , 0.05
2
23.685
(n − 1)S 2 (51 − 1)(2.5 )2 (15 − 1)(2.5 )2

σˆ u2 = = = = 13.32
χ n2−1,1− α χ14
2
, 0.95 6.57
Therefore, one-sided lower and upper confidence intervals for 2 are (3.69,
) and (0, 13.32), respectively. These confidence intervals for the population
standard deviation are found just by taking the square root; that is, one-sided
lower and upper 95% confidence intervals for the population standard devi-
ation are (1.92, ) and (0, 3.65) respectively.
9.7.2 Confidence Interval for the Ratio of

Two Population Variances
In this section we consider two normal populations with unknown variances
12 and 22. We want to find a confidence interval for 12 /22 with confi-
dence coefficient 1 . Let X11, X12, ..., X1n1 and X21, X22, ..., X2n2 be
random samples from independent populations. Let S12 and S22 be the cor-
responding sample variances. Then, from Theorem 8.5 it follows that the ran-
dom variable
S12 / σ 12
F= (9.60)
S22 / σ 22
is distributed as F-distribution with 1 and 2 degrees of freedom, where 1

n1 1 and 2 n2 1.
From section 8.5, we can see that the probability distribution of the ran-
dom variable F is free of the unknown parameters 12 and 22. Furthermore,
the random variable F is a function of sample values and of the unknown
parameters 12 and 22 only; it has all the characteristics of being a pivotal
quantity for estimating the ratio of two variances 12 and 22. Thus, we have
S12 σ 12
P( Fν1 ,ν 2 ,1− α 2 ≤ ≤ Fν1 ,ν 2 ,α 2 ) = 1 − α
S22 σ 22
or
S12 σ 22
P( Fν1 ,ν 2 ,1− α 2 ≤ ≤ Fν1 ,ν 2 ,α 2 ) = 1 − α
S22 σ 12
1
Now , using Fν1 ,ν 2 ,1− α 2 = and doing some algebraic manipulation,
Fν 2 ,ν1 ,α 2
we get
S12 σ 12 S12
P ( Fν 2 ,ν1 ,1− α 2 ≤ ≤ Fν , ν , α 2 ) = 1− α (9.61)
S22 σ 22
2 1
S22
σ2
From Equation (9.61) it follows that a confidence interval for 12 with con-
fidence coefficient 1 is σ2
S12 S12
( Fν 2 ,ν1 ,1− α 2 , Fν ,
2 1ν , α 2 ) (9.62)
S22 S22
The corresponding confidence interval for the ratio of the population stan-
dard deviations is found by taking the square root of the confidence limits in
σ
Equation (9.62). Thus, a confidence interval for 1 with confidence coeffi-
cient 1 is σ2
 S12 S12 
 Fν 2 ,ν1 ,1− α 2 2 , Fν 2 ,ν1 ,α 2 2  (9.63)
 S2 S2 
Lower and upper one-sided confidence intervals for the ratio of the popula-
tion variances and population standard deviations with confidence coefficient
1 are
S12 S12
( Fν 2 ,ν1 ,1− α , ∞) (0, Fν 2 ,ν1 ,α ) (9.64)
S22 S22
and
 S12   S12 
 Fν 2 ,ν1 ,1− α 2 , ∞   0, Fν 2 ,ν1 ,α  (9.65)
 S2   S22 
respectively.
Example 9.24 Two random samples of sizes 13 and 16 are selected from a
group of patients with hypertension. The patients in the two samples are
independently treated with drug A and B. After a full course of treatments,
these patients are evaluated. The data collected at the time of evaluation
yielded sample standard deviations S1 6.5 mm Hg and S2 7.5 mm Hg.
Assume that the two sets of data come from independent normal populations
with variances 12 and 22, respectively. Determine 95% two-sided and
one-sided confidence intervals for 12/22 and 1/2.
200 Chapter Nine
f(x) f(x) f(x)
(a) (b) (c)
0.025 0.05 0.05

0.025
0.3378 3.18 0.4032 1.9679
Figure 9.6 F-distribution curve (a) shaded area under two tails each equal to 0.025
(b) shaded area under left tail equal to 0.05 (c) shaded area under the
right tail equal to 0.05.

0.05 1 12 2 15, S1 6.5 S2 7.5
Thus, a two-sided confidence interval for the ratio 1 /22 of the two popu-
2
lation variances is determined by substituting these values in Equation (9.62)

(see Figure 9.6(a)), that is,
 S12 S12 
 ν 2 ,ν1 ,1− α 2 S 2 ν 2 ,ν1 ,α 2 S 2  = (0.22537, 2.3884),
F , F
2 2
and for the ratio of the standard deviations 1/2 the two-sided confidence
interval is found by taking the square root, which gives
(0.5037, 1.5454)
Using Equations (9.64) and (9.65) and Figures 9.6(b) and 9.6(c), we get
95% lower and upper one-sided confidence intervals for 12/22 and 1/2 as
(0.3028, ), (0, 1.9679) and (0.5502, ), (0, 1.4028)
respectively.
10
Hypothesis Testing
A
s discussed earlier, one of the aims of statistics is to make inferences
about the unknown parameters of a population based upon the infor-
mation contained in a sample selected from this population. The goal
of making such inferences may be achieved by estimating the unknown
parameters and then testing hypotheses about the plausible values of these
unknown parameters. In Chapter 9 we considered the problem of estimating
the unknown parameters. Here we will consider certain aspects of testing
hypotheses.
Testing of hypotheses is a phenomenon that we deal with in everyday
life. For example, a pharmaceutical company may like to test a hypothesis
for a new drug used to treat patients with high cholesterol, breast cancer, or
coronary artery disease. Amtrak, a train transportation service company, may
like to test whether an existing track can be used to introduce a new train
service for a particular route that covers a certain distance in a given period
of time. A Six Sigma Green Belt in a paper mill may like to test a hypothe-
sis that the new machine will produce no more than 10% of paper with
defects. A civil engineer may like to test a hypothesis that a new bridge can
withstand a weight of 80 tons. The U.S. Congress may like to test a hypoth-
esis that the new economic measures can reduce the unemployment rate by
one full point. We could list any number of possible hypotheses. For all such
hypotheses we are obliged to collect some data and test the validity of these
hypotheses. In this chapter we discuss some commonly used tests that would
help us to either establish or contradict, with a certain desired probability the
validity of such hypotheses.
10.1 Basic Concepts of Testing

Statistical Hypotheses
The first step toward testing a statistical hypothesis is to identify an appro-
priate probability model for the population under study, and to identify the
parameter for which the hypothesis is being formulated. Thus, if we identify
201
202 Chapter Ten
HYPOTHESIS TESTING
DESCRIPTION A decision-making process, based upon the
information contained in a sample, about
whether an unknown population parameter
can take some assigned value.

population.

SPECIAL COMMENTS/CONCERNS In deciding whether an unknown population

parameter can have an assigned value
based on information contained in a sample,
we commit two types of errors with certain
probabilities. To keep these probabilities at
the desired levels, appropriate sample size
should be determined. If the data is
qualitative then such decisions are made by
using some special methods known as
nonparametric methods.
RELATED TOOLS Point estimation, interval estimation.
a normal probability model as an appropriate model for the population under

study, we formulate hypotheses about the mean and/or the standard devi-
ation , since and are the only parameters of a normal probability model.
Once an appropriate probability model is selected and the hypothesis is for-
mulated, the next step is to collect data and proceed to conduct our testing of
the hypothesis that we had formulated. After doing so, we will either support
or discredit (with a certain desirable probability) the hypothesis that we had
formulated about the unknown parameter. These steps are usually enough to
identify the probability model that fully describes the population under
investigation.
Generally speaking, a statistical hypothesis consists of a pair of state-
ments about the unknown parameter. One of these statements describes
someone’s belief or the existing theory and is known as the null hypothesis,
denoted by H0. The second statement is usually an assertion based upon
some new information. It is known as the research hypothesis, or alternative
hypothesis, and is denoted by H1 or Ha. Then based on the information con-
tained in a sample, we either reject the null hypothesis H0 in favor of the
alternative hypothesis H1, or we do not reject H0. Rejecting a null hypothe-
sis H0 means that the sample data is supporting our assertion. However, not
rejecting the null hypothesis H0 means the sample data does not support our
assertion, or, in other words, the sample data do support the existing theory.
This procedure of rejecting or not rejecting the null hypothesis H0 is called
the testing of statistical hypothesis.
Hypothesis Testing 203
Now suppose we have a population with a probability model f(x,),

where is an unknown parameter. Then we may formulate a statistical
hypothesis as
H0: 0 (10.1)
H1: 0
where 0 is known. Thus, under the null hypothesis it is believed that takes
some known value 0, whereas under the alternative hypothesis, our asser-
tion, based on some theory or some new information, is that takes a value
less than 0. Should we have some different information, then that could lead
us to another alternative hypothesis, namely
H1: 0
or (10.2)
0
Note that under the null hypothesis we have a specified value 0 of ,
whereas under the alternative hypotheses we do not have any specified value
of . A hypothesis that assigns a specified value to an unknown parameter is
usually known as a simple hypothesis, and the one that does not assign a
specified value to the unknown parameter is known as a composite hypothe-
sis. In the above scenario, the null hypothesis is a simple hypothesis, where-
as the alternative hypotheses are composite hypotheses. The hypothesis
H1: 0
or (10.3)
0
is called a one-tail alternative while
H1: 0 (10.4)
is called a two-tail alternative. These names for the alternative hypotheses are
based on reasons that will become clear as we move forward. Having defined
these terminologies, the question now is, how do we test these hypotheses?
The most logical answer that comes to mind: To make any decision we are
going to use the information contained in a sample that has been drawn from
the population with probability model f(x,), where is unknown. We should
consider some statistic, called the test statistic, say ˆ, which for example,
may be an estimator of . Then using the sample data we calculate the value
of the test statistic. Then for certain values of the test statistic we may favor
the alternative hypothesis H1 and reject the null hypothesis H0, whereas for
any other value of the test statistic we do not reject the null hypothesis H0.
Thus, for example, consider the following hypothesis.
H0: 0
H1: 0
It seems quite reasonable to consider that if the value of the test statistic
ˆ turns out to be too small then we should favor the alternative hypothesis H1
204 Chapter Ten
and reject the null hypothesis H0. Otherwise we should not reject H0. As far
as the decision of how the small value of ˆ is too small, that can be made by
considering the sample space of ˆ and dividing it into two regions so that if
the value of ˆ falls in the lower region, the shaded region in Figure 10.1(a),
we reject H0. Otherwise we do not reject H0. The region for which we reject
H0 is usually known as the rejection region or critical region, and the region
for which we do not reject the null hypothesis H0 is known as the acceptance
region. The point separating these two regions is called the critical point.
Using the same argument, we can easily see that for testing the alternatives
H1: 0
and
H1: 0
the hypothesis H1: 0 is favored for large values of ˆ, while the hypoth-
esis H1 : 0 is favored when ˆ is either very small or very large. Thus,
the rejection regions will respectively fall in the upper region, and in both
lower and upper regions. These regions are shown in Figures 10.1(b) and
10.1(c) respectively.
Now it should be clear why we call the alternatives 0 or 0 the
one tail and the alternative 0 the two tail. It is because of the location
of the rejection regions. In the first two cases the rejection region is located
on only one side, while in the third case it is located on both sides.
We have developed the above procedure of using the information con-
tained in a sample, by means of a statistic, to make a decision about the
unknown parameters and consequently, about the population itself. Having
done this, the next question that one might ask is whether there are any risks
10.1(a) H1 : θ < θ0
10.1(b) H1 : θ > θ0
10.1(c) H1 : θ ≠ θ0
Figure 10.1 Critical points dividing the sample space of ˆ in two regions, the
rejection region and the acceptance region.
of committing any errors while making such decisions. The answer is yes.
There are two risks. One occurs when the null hypothesis is true but, based
on the information contained in the sample, we end up rejecting it. This type
of error is called type I error. The second kind of error is when the null
hypothesis is false or the alternative hypothesis is true but still we do not
reject the null hypothesis. This kind of error is called type II error. Note that
these errors cannot be eliminated, but they certainly can be minimized. For
that we will have to pay some price. We shall study this aspect of the prob-
lem a little later in this chapter.
Certain probabilities are associated with committing type I and type II
errors, which we denote by and , respectively. We may define and as
follows:
P(rejecting H0 H0 is true) (10.5)
P(not rejecting H0 H0 is false) (10.6)
We summarize the discussion of type I and type II errors in Table 10.1.
Table 10.1 Presenting the view of type I and type II errors.
H0 is true H0 is false
Reject H0 Type I error () Correct decision
Do not reject H0 Correct decision Type II error ()
The probability is also known as the level of significance, while the

probability is known as the probability of type II error. (In quality control,
and are called producer’s risk and consumer’s risk, respectively). The
complement of , 1 , is known as the power of the test.
Notes: It is clear that the determination of the rejection regions depends upon
the following:
1. The alternative hypothesis, which determines whether the
rejection region falls under the left tail, right tail, or both
the tails.
2. The level of significance determines the size of rejection
region.
3. The value of is always predetermined, but that is not true for .
The value of depends upon what the alternative hypothesis is, and it is
always determined at a specific value of under the alternative hypothesis.
For example, if the alternative hypothesis is H1: 0, the specific value,
say 1, should be such that 1 is less than 0. Similarly, if the alternative
hypothesis is H1: 0 or H1: 0, then 1 should be such that 1 0
or 1 0 respectively. Determining the value of sometimes may be cum-
bersome. Quite often, however, the population and the parameter under
investigation are such that the probability distribution of the test statistic is
206 Chapter Ten
normal. In such cases the value of can easily be obtained by using one of
the following formulas.
 θ 0 − θ1 
β = PZ > − zα  , if H1: 0 (10.7)
 σ θˆ 
 θ 0 − θ1 
β = PZ < + zα  ,
 σ θˆ  if H1: 0 (10.8)
 θ 0 − θ1 θ −θ 
β = P − zα < Z < 0 1 + zα  if H : (10.9)
 σ θˆ
2 σ θˆ
2  1 0
From these formulas we can easily see that under the alternative hypothesis,
if we set 0 then will always be (1 ) and the power of the test will
be .
If we plot a graph of the values of versus different values of 1 under
the alternative hypothesis, we get a curve known as the operating character-
istic curve or simply the OC-curve. The OC-curves for different alternative
hypotheses are shown in Figure 10.2.
If we now plot a graph of power (1 ) versus different values of 1
under the alternative hypothesis, we get a curve known as the power curve.
Power curves under different alternative hypotheses are shown in Figure 10.3.
It is quite clear that although the value of is predetermined, the value
of is determined later, and it depends upon the alternative hypothesis.
Remember, when the value of is lower, the power of the test is higher and
is, therefore, a better test. At this juncture one might ask whether one can
ever assign some predetermined value to as well. The answer is yes, but at
a certain cost. What cost? The only cost is that the appropriate sample size
1.0
1.0
1.0
0.8
0.8
0.8
0.6
0.6
0.6
0.4
0.4
0.4
0.2
0.2
0.2
θ θ
0
0
0
θ
1
θ
1
0 0
θ 0
H 1: θ < θ0 H 1: θ > θ0 H 1: θ ≠ θ0
Figure 10.2 OC-curves for different alternative hypotheses.

1.0
1.0
1.0
0.8
0.8
0.8
0.6
0.6
0.6
Power
0.4
0.4
0.4
0.2
0.2
0.2
0
0
θ 0 θ 1 θ 0 θ 0 θ 1
H 1: θ ≠ θ0 H 1: θ < θ 0 H 1: θ > θ 0
Figure 10.3 Power curves for different hypotheses.
needed to achieve this goal may turn out to be quite large. For given values
of and , the sample size n should be such that
( zα + zβ )2 σ 2
n≥ for one-tail test (10.10)
(θ1 − θ 0 )2
( z α + zβ )2 σ 2
n≥ 2
for two-tail test (10.11)
(θ1 − θ 0 )2
So far we have learned about some general concepts of testing statistical
hypotheses. Now we are ready to study the actual techniques of testing spe-
cific statistical hypotheses. An important technique of testing these hypothe-
ses is to adhere to the following six steps.
Step 1 State the null hypothesis and the alternative hypothesis
clearly.
Step 2 Assign an appropriate value to the level of significance,
that is, . It is common to assign one of the following values to
: 0.01, 0.05, or 0.10.
Step 3 Determine a suitable test statistic. For the statistical
hypotheses that we are going to discuss in this book, the pivotal
quantity, discussed in Chapter 9, for the parameter under
investigation is usually used as a test statistic.
Step 4 Determine the probability distribution of the test
statistic designated in step 3.
Step 5 Locate rejection region(s) and determine the critical
point.
Note that, as remarked earlier, the location of the rejection region
always depends on the alternative hypothesis, while the critical point
208 Chapter Ten
or the size of the rejection region depends on the value assigned to

, the size of type I error.
Step 6 Calculate the value of the test statistic and make the
decision; that is:
Take a random sample from the population in question and
calculate the value of the test statistic and determine whether it
falls in the rejection region. If it falls in the rejection region, we
reject the null hypothesis H0. Otherwise, do not reject H0.
10.2 Testing Statistical Hypotheses about One

Population Mean When Sample Size Is Large
10.2.1 Population Variance Is Known
Let X1, X2, X3, ..., Xn be a random sample from a population
– with probability
density function f(x) with mean and variance 2. Let X and S2 be the sam-
ple mean and the sample variance, respectively. Then we want to test each of
the three hypotheses, proposed in Equation (10.12), about the population
mean .
Step 1 Define the null and alternative hypotheses
(i) H0: 0 versus H1: 0,

(ii) H0: 0 versus H1: 0, (10.12)
or
(iii) H0: 0 versus H1: 0
Step 2 Assign some suitable value to , say 0.05.
Step 3 Determine the suitable test statistic.
We consider the pivotal quantity
X−µ
(10.13)
σ n
for as a test statistic for testing hypotheses (i), (ii), or (iii) about .
statistic.
Since we are assuming the sample size to be large (n 30), the central
X−µ
limit theorem we know that the test statistic is distributed as
σ n
standard normal, that is, normal with mean 0 and standard deviation 1.
Step 5 Find the rejection regions.
Since the location of the rejection region depends upon the alterna-
tive hypothesis and its size depends upon the size of type I error set
(i) (ii) (iii)
−1.645 1.645 −1.96 1.96
Figure 10.4 Rejection regions for hypotheses (i), (ii), and (iii).
in this case at 0.05, the rejections regions for all three hypotheses
are as shown in Figure 10.4
Note that because of the location for the rejection regions, the hypothe-
ses (i), (ii), and (iii) are sometimes known as lower-tail, upper-tail, and two-
tail hypotheses, respectively.
decision.
Now we take a random sample from the given population and calculate
the value of the test statistic
X−µ
σ n
–
Note that in the test statistic and n are known, and X is calculated using the
sample data. The value of is always taken equal to 0, since we always test
a hypothesis under the assumption that the null hypothesis is true. Then, if
the value of the test statistic falls in the rejection region we contradict our
assumption and reject H0. Otherwise, we do not reject H0.
Example 10.1 A random sample of 36 pieces of copper wire produced in a–

plant of a wire manufacturing company yields the mean tensile strength of X
950 psi. Suppose that the population of tensile strengths of all copper
wires produced in that plant are distributed with mean and standard devi-
ation 120 psi. Test a statistical hypothesis
H0: 980 versus H1: 980
at the 0.01 level of significance.
Solution:
Step 1
H0: 980 versus H1: 980
Step 2
0.01
210 Chapter Ten
Step 3 Test statistic is

X−µ
Z=
σ n
Step 4 Since the sample size n 36 (30) is large, it follows
from the central limit theorem that the test statistic Z is
distributed as standard normal.
Step 5 Since the test is a lower-tail test, using the standard
normal distribution tables it can easily be found that the
rejection region is as shown in Figure 10.5.
Step 6 The value of the test statistic is
X − µ 950 − 980
Z= = = −1.5
σ n 120 36
This value does not fall in the rejection region, so we do not reject the
null hypothesis H0. In other words, the data seem to support the hypothesis
that the mean tensile strength of the copper wires manufactured in that plant
is 980 psi.
Sometimes instead of determining the rejection region (in step 5) and
then verifying whether the value of the test statistic falls in the rejection
region, we use a different method to take our decision. This method makes
use of a quantity, called the p-value.
Definition 10.1 The p-value of a test is the smallest value of for
which the null hypothesis H0 is rejected.
Given that the sample has been taken and the value z of the test statistic
Z has been computed, the p-value may be determined as follows:
p-value P(Z z); if H1: 0 (10.14)
P(Z z); if H1: 0 (10.15)
2P(Z |z|); if H1 0 (10.16)
f(x)
−2.33
Figure 10.5 Lower-tail rejection region with 0.01.

Rules for Using the p-Value

1. If the p-value is less than or equal to , reject H0.
2. If the p-value is greater than , do not reject H0.
In Example 10.1, the p-value (see Equation (10.14)) is given by
p-value P(Z 1.50)
0.0668,
which is obviously greater than 0.01. Thus, we do not reject the null
hypothesis.
Note: Whether one uses rejection region method or the p-value method, one
should always arrive at the same decision.
Example 10.2 Using the information given in Example 10.1, test the sta-
tistical hypothesis
H0: 980 versus H1: 980
Solution: The only difference between Examples 10.1 and 10.2 is that in
Example 10.1 the test was a lower-tail test, but here it is a two-tail test. The
first four steps in this example are exactly the same as in Example 10.1, so
we start here with step 5.
Step 5 The level of significance is 0.01 and the test is a two-
tail test. The rejection regions shown in Figure 10.6 are found
by using the normal distribution table.
Step 6 Since the only change that occurred in Example 10.2
from Example 10.1 is in the alternative hypothesis, the value of
the test statistic is not affected. In this example the value of the
test statistic is again z 1.5, which obviously does not fall in
the rejection region. Therefore, we do not reject the null
hypothesis H0.
Now we proceed to find the p-value in this example [see Equation
(10.16)] and determine whether we arrive at the same conclusion.
p-value 2P(Z | 1.50|) 2(0.0668) 0.1336
It is greater than 0.01, so we do not reject the null hypothesis H0.
−2.575 2.575
Figure 10.6 Two tail rejection region with 0.01.

212 Chapter Ten
Example 10.3 Construct the power curve for the test in Example 10.2.
Solution: Since the hypothesis in Example 10.2 is a two-tail test. we cal-
culate the value of at 860, 880, 900, 925, 950, 975, 985, 1010, 1035,
1060, 1080, and 1100. Note that we have selected these values in such a way
that some of these values are smaller and some are larger than the value of
under the null hypothesis. This clearly satisfies the requirement of the alter-
native hypothesis that 0, since 0 980. Now using the formula given
in Equation (10.9) for calculating the value of , we have
 980 − 860 980 − 860 

At 860; 1 − β = 1 − P  − 2.575 < Z < + 2.5575 
 120 36 120 36 
= 1 − P ( 3.425 < Z < 8.575 ≅ 1.0
 980 − 880 980 − 880 

At 880; 1 − β = 1 − P  − 2.575 < Z < + 2.5575 
 120 36 120 36 
= 1 − P (2.425 < Z < 7.575 ≅ 0.9923
 980 − 900 980 − 900 

At 900; 1 − β = 1 − P  − 2.575 < Z < + 2.5575 
 120 36 120 36 
= 1 − P (1.425 < Z < 6.575 ≅ 0.9229
Similarly, we can calculate the values of the power 1 at other values of
, that is,
925 1 0.4305
950; 1 0.1412
975; 1 0.0124
985; 1 0.0124
1010 1 0.1412
1035 1 0.4305
1060 1 0.9229
1080 1 0.9923
1100 1 1.0
Now the power curve for the test in Example 10.2 is obtained by plotting
the values of versus the values of 1 . The power curve is shown in
Figure 10.7.
It is important to remember that there is no analytic relationship between
type I error () and type II error (). That is, there does not exist any function
such that (). However, one can easily see that if everything except
and are fixed, then as increases decreases and as decreases
increases.
1.0
Power
0.5
0.0
900 1000 1100
mu
Figure 10.7 Power curve for the test in example 10.2.
10.2.2 Population Variance Is Unknown

Let X1, X2, X3, ..., Xn be a random sample from a population with probabil-
ity density
– function f(x) with unknown mean and unknown variance 2.
Let X be the sample mean and S2 be the sample variance. Then, we want to
test one of the hypotheses defined below in step 1 at the level of signifi-
cance, say 0.05, assuming that the sample size is large ( 30).
Step 1 (i) H0: 0 versus H1: 0,

(ii) H0: 0 versus H1: 0,
or
(iii) H0: 0 versus H1: 0

Step 2 0.05
Step 3 We consider as a test statistic the pivotal quantity
X−µ
S n (10.17)
X−µ
for . Note that in the section 10.2.1, we considered a pivotal quan-
σ n
tity since in that case we knew . But in the present case we do not know
X−µ
and, therefore, is not a pivotal quantity, since a pivotal quantity does
σ n
not contain any unknown parameter other than the one under consideration,
which in this case is .
214 Chapter Ten
Step 4 Since the sample size n is large, it can be shown that

X−µ
when is unknown the pivotal quantity is
S n
approximately distributed as standard normal N(0, 1).
That is, normal with mean 0 and standard deviation 1.
Since the location of the rejection region depends upon the alter-
native hypothesis and its size depends upon the size of type I error,
set in this case at 0.05, the rejection regions for all three hypothe-
ses are as shown in Figure 10.8.
As mentioned earlier, because of the location for the rejection
regions the hypotheses (i), (ii), and (iii) are sometimes known as
lower-tail, upper-tail, and two-tail hypotheses, respectively.
decision.
Now we take a random sample from the given population and calculate the
X−µ
value of the test statistic .
S n
–
Note that in the test statistic, n, is known, X and S are calculated using
the sample data, and the value of is always taken equal to 0, that is, the
value of under the null hypothesis. Then, if the value of the test statistic
falls in the rejection region, we contradict our assertion and reject H0.
Otherwise we do not reject H0.
f(x) f(x) f(x)
(i) (ii) (iii)
−1.645 1.645 −1.96 1.96
Figure 10.8 Rejection regions for hypotheses (i), (ii), and (iii).
Example 10.4 A tire manufacturing company claims that its top-of-the-line

tire lasts for, on average, at least 61,000 miles. A consumer group tested 64
– of
these tires to check the claim. The data collected by this group yielded X
60,000 miles and standard deviation S 4,000 miles. Test at the 0.05
level of significance the validity of the company’s claim. Find the p-value.
Also, find the size of the type II error, , at 1 60,500 miles.
Solution:
Step 1 H0: 61k versus H1: 61k
This is equivalent to testing
H0: 61k versus H1: 61k
since if we favor H1: 61k and reject H0: 61k, certainly we
will reject H0: 61k.
Step 2 0.05
Step 3 Since the population standard deviation is unknown, we
use
X−µ
Z=
S n
as the test statistics.
Step 4 Since the sample size is 64( 30), the test statistic
X−µ
Z=
S n
is distributed as standard normal.
Step 5 Since the test is a lower-tail test and 0.05, the
Step 6 The value of the test statistic is
X − µ 60, 000 − 61, 000

Z= = = −2.0,
S n 4, 000 64
which falls in the rejection region. Thus, we reject the null hypothesis
H0.
The p-value for the test is given by
p-value P(Z z) P(Z 2.0) 0.0228,
−1.645
Figure 10.9 Rejection region under the lower test with 0.05.
216 Chapter Ten
and the type II error at 1 60,500 miles, using Equation (10.7), is given
by
 µ0 − µ1 
= P Z > − zα 
 σx 
 61, 000 − 60, 500 
= P Z > − 1.645 
 4, 000 64 
= P ( Z > −.0645 ) ≅ 0.7405.
10.3 Testing Statistical Hypotheses about the

Difference between Two Population Means When
the Sample Sizes Are Large
10.3.1 Population Variances Are Known
Consider two populations I and II having probability density functions f1(x)
and f2(x) with unknown means 1 and 2 and known variances 12 and 22
respectively. Let X11, X12, X13, ..., X1n1 and X21, X22, X23, ... , X2n2 be the
random samples from two –populations – and where n1 and n2 30, that is,
sample sizes are large. Let X1 and X2 be the sample means of samples from
populations I and II, respectively. Then we are interested in testing one of the
hypotheses defined below, in step 1, at the level of significance.
To test these hypotheses when the variances are known, we go through
the same six steps that we did in section 10.2.1 for testing hypotheses about
the mean of one population. Thus, we have
Step 1
(i) H0: 1 2 0 versus H1: 1 2 0,

(ii) H0: 1 2 0 versus H1: 1 2 0,
or
(iii) H0: 1 2 0 versus H1: 1 2 0
(10.18)
Step 2 Assign a predetermined value to the type I error.
Suppose 0.05.
Step 3 Determine a suitable test statistic.
We consider, again, the pivotal quantity for 1 2
( X1 − X 2 ) − ( µ1 − µ2 )
Z= (10.19)
σ 12 n1 + σ 22 n2
as the test statistic.

Step 4 Determine the sampling distribution of the test statistic.
(i) (ii) (iii)
−1.645 1.645 −1.96 1.96
Figure 10.10 Rejection regions for testing hypotheses (i), (ii), and (iii) at the
0.05 level of significance.
Since the sample sizes are large, using the central limit theorem and
Theorem 9.1, we can easily show that the test statistic in Equation (10.19),
that is,
( X − X 2 ) − ( µ1 − µ2 )
Z= 1
σ 12 n1 + σ 22 n2
is distributed as standard normal, that is, normal with mean 0 and standard
deviation 1.
As explained in section 10.2, the location of the rejection regions is
determined by the alternative hypothesis, and its size is determined by the
size of the type I error . Using 0.05, the rejection region for each of the
above hypotheses is shown in Figure 10.10.
Step 6 Now take two samples one from each of the
populations I and II and calculate the sample means. Then
calculate the observed value of the test statistic, and if it falls in
the rejection region reject the null hypothesis H0. Otherwise do
not reject H0.
Example 10.5 Suppose two random samples one from each of population
I and population II, with known variances 12 23.4 and 22 20.6, yield-
ed the following sample statistics:
–
n1 50 X1 38.5
–
n2 45 X2 35.8
Test at the 0.05 level of significance the hypothesis H0: 1 2 0
versus H1: 1 2 0.
Solution:
Step 1 H0: 1 2 0 versus H1: 1 2 0.
Step 2 0.05
218 Chapter Ten
1.645
Figure 10.11 Rejection region under the upper tail with 0.05.
Step 3 Test statistic for testing the hypothesis in step 1 is

( X1 − X 2 ) − ( µ1 − µ2 )
Z=
σ 12 n1 + σ 22 n2
Step 4 Since sample sizes are large, using the central limit
theorem we can easily show that the test statistic is distributed
as standard normal, that is, normal with mean 0 and standard
deviation 1.
Step 5 The hypothesis in this example is clearly upper-tail
hypothesis. The rejection region is as shown in Figure 10.11.
– –
Step 6 Substituting the value of X1 and X2, 12 and 12, and the
value of 1 2 0, under the null hypothesis, in the test
statistic, the observed value of the test statistic is
( 38.5 − 35.8 ) − 0
Z= = 2.806
23.4 20.6
+
50 45
Clearly this value falls in the rejection region. Thus, we reject the null
hypothesis of equal means. In other words, based upon the given informa-
tion, we can conclude, at the 0.05 level of significance, that population
means are not equal.
The p-value in this example (see Equation (10.15)) can be found, using
the normal tables.
p-value P(Z z)
P(Z 2.806) 0.0026
Example 10.6 A suppler furnishes two types of filaments, type I and type II,
to a manufacturer of electric bulbs. Suppose an electrical engineer in the man-
ufacturing company wants to compare the average resistance of the two types
of filament. In order to do so, he takes two samples, size n1 36 of filament
– I and size n2 40 of
type – filament type II. The two samples yield sample means
X1 7.35 Ohms and X2 7.65 Ohms, respectively. If from experience it is
known that the standard deviations of the two filaments are 1 0.50 Ohms
and 2 0.64 Ohms, respectively, test at the 0.05 level of significance the
−1.96 1.96
Figure 10.12 Rejection regions under the two tails with 0.05.
hypothesis that H0: 1 2 0, versus H1: 1 2 0. Find the p-value of

the test.
Solution:
Step 1 H0: 1 2 0 versus H1: 1 2 0
Step 2 0.05
Step 3 Test statistic for testing the above hypothesis is the
pivotal quantity for 1 2, that is
( X1 − X 2 ) − ( µ1 − µ2 )
Z=
σ 12 n1 + σ 22 n2
Step 4 Since the sample sizes n1 36 and n2 40 are large,
we can easily show that the test statistic in step 3 is distributed
as standard normal, that is, normal with mean 0 and standard
deviation 1.
Step 5 Since the test is a two-tail test and 0.05, the
rejection regions are as shown in Figure 10.12.
Step 6 Using the information provided by the two samples and
the fact that under the null hypothesis 1 2 0, the
observed value of the test statistic is
( 7.35 − 7.65 ) − 0
Z= = −2.28
(0.50 )2 (0.64 )2
+
36 40
The observed value of the test statistic falls in the rejection region and we
reject the null hypothesis H0. In other words, we conclude at the 0.05
level of significance that the two filaments have different resistances.
10.3.2 Population Variances Are Unknown

Consider two populations with probability distribution models f1(x) and f2(x)
with means 1 and 2 and variances 12 and 22 respectively. Let X11, X12,
X13, ..., X1n1 and X21, X22, X23, ..., X2n2 be random samples from populations
220 Chapter Ten
– –
I and II respectively. Let X1 and X2 be the sample means and S12 and S22 be
the sample variances of the samples from populations. Then we are interest-
ed in testing one of the hypotheses defined below in step 1 at the level of
significance.
The method for testing these hypotheses when variances are unknown is
exactly the same as when the variances are known, discussed in section
10.3.1, except that the population variances are replaced with sample vari-
ances. We proceed to discuss these hypotheses as follows:
Step 1 Define the null and alternative hypotheses.
(i) H0: 1 2 0 versus H1: 1 2 0,
(ii) H0: 1 2 0 versus H1: 1 2 0,

or
(iii) H0: 1 2 0 versus H1: 1 2 0.
(10.20)
Step 2 Assign the predetermined value to , the level of
significance. Suppose 0.05.
Since the population variances are unknown, we consider the pivotal
quantity for 1 2 the test statistic, that is,
(X1 − X 2 ) − ( µ1 − µ2 )
(10.21)
 S12 S22 
 n + n 
1 2

statistic.
Since the sample sizes are large, using the central limit theorem and the
result of Theorem 9.4, we show that the test statistic of Z in Equation (10.21)
is distributed as standard normal, that is, normal with mean 0 and standard
deviation 1. Note that when sample sizes are large, the distribution of the test
statistics continues to be approximately normal when the population variances
are replaced by the sample variances. Therefore the probability distribution of
the test statistic in step 3 is the same as the one considered in section 10.3.1,
where the population variances were known.
Step 5 Using the same argument as in section 10.4.1, it
can easily be seen that the rejection regions are as shown
in Figure 10.13.
Step 6 Now take one sample from each of the two populations.
Calculate the sample means and the sample variances, then
calculate the observed value of the test statistic. If the
calculated value of the test statistic falls in the rejection region,
we reject the null hypothesis H0. Otherwise do not reject H0.
(i) (ii) (iii)
−1.645 1.645 −1.96 1.96
Figure 10.13 Rejection regions for testing hypotheses (i), (ii), and (iii) at 0.05
level of significance.
Example 10.7 Rotor shafts of the same diameters are being manufactured
at two different facilities of a manufacturing company. A random sample of
size n1 72 rotor shafts from one facility produced a mean diameter of
0.536 inch with a standard deviation of 0.007 inch, while a sample of size n2
60 from the second facility produced a mean diameter of 0.540 inch with
a standard deviation of 0.01 inch.
(i) Test the null hypothesis H0: 1 2 0 versus H1: 1 2
0 at the 0.05 level of significance.
(ii) Find the p-value for the test in part (i)
(iii) Find the size of the type II error and the power of the test if
the true value of 1 2 0.002.
Solution:
(i)
Step 1 H0: 1 2 0 versus H1: 1 2 0
Step 2 0.05
Step 3 Test statistic (see Equation (10.21)) for testing the
hypothesis in step 1 is
(X1 − X 2 ) − ( µ1 − µ2 )
 S12 S22 
 n + n 
1 2
Step 4 Since the sample sizes are large, it can easily be seen
that the test statistic Z in step 3 is distributed as standard normal
N(0, 1).
Step 5 Since the test is a two-tail test and the level of
significance is 0.05, the rejection regions are as shown in
Figure 10.14.
Step 6 Substituting the values of the sample means, sample
standard deviation and the value 1 2 0 in the test
222 Chapter Ten
−1.96 1.96
Figure 10.14 Rejection regions for a two-tail test with 0.05.
statistic given in Equation (10.21), the observed value of the

test statistic is
(0.536 − 0.540 ) − 0
Z= = −2.61,
(0.007 )2 72 + (0.01)2 60
which obviously falls in the rejection region. Thus, we reject the null hypoth-
esis H0.
(ii) Since the test is a two-tail test the p-value of the test is given
by
p-value 2P(z 2.61) 2(.0045) 0.009

(iii) Using Formula 10.9 for calculating the type II error , we get
 ( µ − µ2 )0 − ( µ1 − µ2 )1 ( µ − µ2 )0 − ( µ1 − µ2 )1 
β = P 1 − zα / 2 ≤ Z ≤ 1 + zα / 2 
 σˆ ( µˆ1 − µˆ 2 ) σˆ ( µˆ1 − µˆ 2 ) 
 
 0 − ( −0.002 ) 0 − ( −0.002 ) 
= P − 1.96 ≤ Z ≤ + 1.96 
 (.007 )2 (.01)2 (.007 )2 (.01)2 
 + + 
 72 60 72 60 
P(1.30 1.96 Z 1.30 1.96)

P(0.66 Z 3.26) 0.7454.
Thus, the power of the test is 1 1 0.7454 0.2546.
10.4 Testing Statistical Hypotheses about One

Population Mean When Sample Size Is Small
Quite often it is not possible to take large samples, perhaps due to budgetary
problems or time constraints. Other times it happens because sampling and
testing means destroying the sampled product, and the product may be so
expensive that it may not be economical to take large samples. Under such
circumstances the experimenter may have to evaluate whether it is more ben-

eficial to take a larger sample or to take a smaller sample and accept some-
what less accurate results. So she may choose to take a smaller sample, or
she may have no choice other than to take a smaller sample. In this and the
next two sections we work with the problem of testing hypotheses when
sample sizes are small.
In this section, we assume that the sample is drawn from a population
distributed normally with an unknown mean and variance 2 that may or
may not be known.
10.4.1 Population Variance Is Known

Let X1, X2, X3, . . . , Xn be a random sample from a normal–population with
an unknown mean and variance 2 that is known. Let X be the sample
mean. We would like to test one of the hypotheses defined in step 1 at the
level of significance. As in section 10.3, we use the six-step method to test
these hypotheses.
(i) H0: 0 versus H1: 0,

(ii) H0: 0 versus H1: 0, (10.22)
or
(iii) H0: 0 versus H1: 0.
Step 2 Assign a predetermined value to type I error , say,
0.05.
Since the variance is known and the population is normally distributed,
X -µ
we consider the pivotal quantity for , as a test statistic.
σ n
Step 4 Find the probability distribution of the test statistic.
Since the sample has been drawn from a normal population with known
variance, the test statistic in step 3 is distributed as standard normal N(0,1).
Step 5 Find the rejection region.
Using the arguments discussed in sections 10.3 and 10.4, it can be shown
that the rejection regions are as shown in Figure 10.15.
Step 6 Calculate the observed value of the test statistic and
make a decision.
–
Use the sample data to calculate the sample mean X. Then calculate the
value of the test statistic under the null hypothesis H0: 0. If the
observed value of the test statistic falls in the rejection region, then we reject
the null hypothesis H0. Otherwise do not reject H0.
224 Chapter Ten
(i) (ii) (iii)
−1.645 1.645 −1.96 1.96
Figure 10.15 Rejection regions for testing hypotheses (i), (ii), (iii) at the 0.05
Example 10.8 The workers union of a large corporation located in a big

city demands that each worker should be compensated for traveling time to
work, since it takes on the average at least 75 minutes for each worker to
travel to the job. In order to verify the union’s claim, the director of the
human resources took a random sample of 16 workers and found that the
average traveling time for these workers was 68 minutes. Assume that from
experience the director knows that traveling times are normally distributed
(in applications this condition must be verified) with a standard deviation
10 minutes. Do these data provide sufficient evidence to support the
union’s claim? Use 0.05. Find the p-value. Find the size of the type II
error if the true travel time is 72 minutes.
Solution:
Step 1 H0: 75 versus H1: 75
It seems more reasonable to consider the null hypothesis H0: 75
instead of H0: 75. But note that it is not necessary, since if H0: 75
is rejected in favor of H1: 75, it is clear that we shall certainly reject H0:
75.
Step 2 0.05.
Step 3 Test statistic for testing the above hypothesis is
X -µ
Z=
σ n
Step 4 Since the population is assumed to be normal, the test
statistic Z is distributed as standard normal N(0,1).
Step 5 Since the test is a lower–tail test the rejection region is
as shown in Figure 10.16.
Step 6 Under the null–hypothesis 75 and, from the given
information, we have X 68, n 16, and 10. Thus, the
value of the test statistic is
68 − 75 −7
Z= = = −2.8,
10 / 16 2.5
−1.645
Figure 10.16 Rejection region under the lower tail with 0.05.
which falls in the rejection region. Thus, we reject the null hypothesis H0 and
conclude that based upon the data, travel time is less than 75 minutes.
The p-value is given by
p-value P(Z z) P(Z 2.8)
To find the type II error, we proceed as follows:
µ0 − µ1
β = P(Z > − Zα )
σ/ n
75 − 72
= P(Z > − 1.645 )
10 / 16
P(Z 0.445) 0.6768
Example 10.9 The advising office at a university claims that freshmen

spend on an average 10 hours watching television per week. A random sam-
ple of 25 freshmen showed that these students spend an average of 10.5
hours watching television per week. From experience it is known that the
time spent watching television by freshmen is normally distributed with stan-
dard deviation 2.5 hours. Test at the 0.05 level of significance if
there is sufficient evidence to indicate the validity of the advising office’s
claim. Find the p-value.
Solution:
Step 2 0.05
X -µ
Z=
σ/ n
Step 4 Since the population is normal with a known standard
deviation, the test statistic in step 3 is distributed as standard
normal N(0,1).
226 Chapter Ten
−1.96 1.96

– 10 and from the

Step 6 Since under the null hypothesis
information provided to us we have X 10.5, n 25, 2.5,
the value of the test statistic is
10.5 − 10 0.5
Z= = = 1.0,
2.5 / 25 0.5
which does not fall in the rejection region. Thus, we do not reject the null
hypothesis H0. In other words the data support the advising office’s claim that
10 at the 0.05 level of significance.
The p-value is given by
p-value P(Z z) P(Z z)
2P(Z |z|) 2(0.1587) 0.3174.
10.4.2 Population Variance Is Unknown

In this section, as in Chapter 9, we shall invoke the use of the Student’s t-dis-
tribution with (n 1) degrees of freedom. Note that we use t-distribution
only when all of the following conditions hold.
(i) The sampled population is at least approximately normal.
(ii) The sample size is small (n 30).
(iii) The population variance is unknown.
Let X1, X2, X3, . . . , Xn be a random sample from– a normal population
with unknown mean and unknown variance 2. Let X and S be the sample
mean and the sample standard deviation, respectively. Then we want to test
the following hypotheses about the mean , defined in step 1, at the level
of significance.
The six-step method to test these hypotheses is as follows:
(i) H0: 0 versus H1: 0,
(ii) H0: 0 versus H1: 0, (10.23)
or
(iii) H0: 0 versus H1: 0.
Step 2 Assign a predetermined value to , the level of
significance; say 0.05.
Step 3 Since the population variance 2 is unknown, we
consider the pivotal quantity for as a test statistic, that is,
X−µ
T= (10.24)
S/ µ
Step 4 Since the sample has been drawn from a normal
population with an unknown variance 2, it can be shown that
the test statistic in step 3 is distributed as Student’s t-
distribution with (n 1) degrees of freedom.
Step 5 Since from step 4 we know that the test statistic T is
distributed as Students’ t-distribution with (n 1) degrees of
freedom, the rejection regions with 0.05 are as shown in
Figure 10.18.
–
Step 6 Use the sample data to calculate the sample mean X
and
– the sample standard deviation S. Then using these values of
X and S and whatever the value is of under the null
hypothesis, calculate the observed value of the test statistic. If
the observed value of the test statistic falls in the rejection
region, we reject H0 at the level of significance. Otherwise do
not reject H0.
Example 10.10 A tool assembling company believes that a worker should
take no more than 30 minutes to assemble a particular tool. A sample – of 16
workers who assembled that tool showed that the average time was X 33
minutes with a standard deviation S 6 minutes. Test at the 0.05 level
of significance if the data provide sufficient evidence to indicate the validity
(i) (ii) (iii)
−t n-1, 0.05 t n-1, 0.05 −t n-1, 0.25 t n-1, 0.25
Figure 10.18 Rejection regions for testing hypotheses (i), (ii), and (iii) at the given .
228 Chapter Ten
of the company’s belief. Assume that the assembly times are normally dis-
tributed. Find the p-value.
Solution:
Step 2 0.05
X -µ
T=
S/ n
Step 4 Since the population is normal with an unknown
standard deviation, the test statistic in step 3 is distributed
as Students t-distribution with 15 degrees of freedom, since
n 16.
Step 5 Since the test is an upper-tail test and 0.05, the
Step 6 We find the observed value of the test statistic, which is
given by
33 − 30
T= = 2.0
6 / 16
Since the value of the test statistic T 2.0 falls in the rejection region, we
reject the null hypothesis H0.
To find the exact p-value, we will have to integrate the density function
of the t-distribution with 15 degrees of freedom between the limits 2.0 to .
But this is beyond the scope of this book. Thus, we content ourselves with
simply finding a pair of values within which the p-value falls, that can be
found simply by using the t-distribution table (Table IV of the appendix).
Thus, to achieve this goal we proceed as follows.
We find two entries in the t-distribution table with 15 degrees of freedom
such that one value is just smaller and other is just larger than the observed
1.753
value of the test statistic. Thus, for example, in this case these entries are
1.753 and 2.131. This implies that
P(T 2.131) P(T 2.0) P(T 1.753)
or
0.025 p-value 0.05
since the values 1.753 and 2.131 correspond to under the upper tail areas
0.05 and 0.025, respectively. Note that sometimes the situation may arise
such that the value of the test statistic is either so small or so large that it is
not possible to find two entries in the table that will enclose that value. Using
the case above, let us assume that the observed value of the test statistic is t
3.0. We find only one entry 2.947, which is just smaller than t 3.0, and
there is no value larger than 3.0. In this case p-value will be
p-value P(t 3.0) P(t 2.947) 0.005
That is, the p-value is less than 0.005.
10.5 Testing Statistical Hypotheses about

the Difference between Two Population
Means When Sample Sizes Are Small
In this section we shall assume that both the sampled populations are nor-
mally distributed with means 1 and 2 and variances 12 and 22, respec-
tively, where the means are unknown but the variances may or may not be
known.
Let X11, X12, X13, ..., X1n1 and X21, X22, X
– 23, ..., –X2n2 be random samples
from populations I and II respectively. Let X1 and X2 be the sample means
and S12 and S22 be the sample variances of the samples from population I and
II, respectively. We are interested in testing one of the hypotheses at the
level of significance about the difference of the two population means
defined below.
(i) H0: 1 2 0 versus H1: 1 2 0,
(ii) H0: 1 2 0 versus H1: 1 2 0, (10.25)
or
(iii) H0: 1 2 0 versus H1: 1 2 0.
We shall consider three possible scenarios.
1. Population variances 12 and 22 are known.
2. Population variances 12 and 22 are unknown, but we can
assume that they are equal, that is, 12 22 2.
3. Population variances 12 and 22 are unknown, but we cannot
assume that they are equal, that is 12 22.
230 Chapter Ten
For testing each of the hypotheses, we shall consider the pivotal quanti-
ty for 1 2 as the test statistic, which will depend upon whether the pop-
ulation variances are known. Since under the last two scenarios we shall be
using Student’s t-distribution, it is quite important to review the conditions
under which we use Student’s t-distribution.
When to Use Student’s t-Distribution under Scenarios 2 and 3:
1. The sampled populations are at least approximately normal.
2. The samples are independent and at least one of the sample
sizes is small.
3. The population variances 12 and 22 are unknown.
Note that under scenario 2, we assume that 12 22 2, which
implies that as far as the variance is concerned, the two populations are iden-
tical. Thus, as discussed in Chapter 9, to estimate the common unknown vari-
ance 2 we use the information from both the samples. Such an estimator,
denoted by Sp2, usually known as the pooled estimator of 2, is defined as
(n1 − 1)S12 + (n2 − 1)S22
=
S p2 (10.26)
n1 + n2 − 2
Having said all this, we now proceed to consider, one by one, the three sce-
narios.
10.5.1 Population Variances 12 and 22 Are Known

We have two normal populations with unknown means 1 and 2 but with
known variances 12 and 22. Thus, if we take
(X1 − X 2 ) − ( µ1 − µ2 )
, (10.27)
σ 12 σ 22
+
n1 n2
the pivotal quantity for 1 2 as the test statistics, then, as in Chapter 9,
we can show that the sampling distribution of the test statistic is standard
normal N(0,1). This means that this case turns out to be exactly the same as
the one we studied in section 10.4.1. We further illustrate this case with the
following example.
Example 10.11 Two brands of motor fuel are being tested for their octane
number. From experience it is known that the octane numbers of each brand
are normally distributed with 1 1.5 and 2 1.5. Further suppose that
the two random samples of size n–1 12 and n2 – 16 from the two brands
produced mean octane numbers X1 92.8 and X2 90.1. Test at the
0.01 level of significance the hypothesis H0: 1 2 0 versus H1: 1
2 0. Find the p-value. Find the power of the test if the true mean differ-
ence is 1 2 2.
Solution:
Step 1 H0: 1 2 0 versus H1: 1 2 0
Step 2 0.01
(X1 − X 2 ) − ( µ1 − µ2 )
Z=
σ 12 σ 22
+
n1 n2
Step 4 Since the populations are normal with known standard
deviations, the test statistic as given in step 3 is distributed as
standard normal N(0,1).
Step 5 Since the test is an upper-tail test and 0.01, the
– 1 2– 0 and
Step 6 Since under the null hypothesis
from the given information we have X1 92.8, X2 90.1
and 1 2 1.5, the value of the test statistic is
(92.8 − 90.1) − 0
Z=
(1.5 )2 (1.5 )2
+
12 16
2.7
= = 4.71
0.328
This value of the test statistic clearly falls in the rejection region. Thus, we
reject the null hypothesis H0.
p-value P(Z z)
P(Z 4.71) 0
2.33
232 Chapter Ten
To find the power of the test, we first find , the type II error (see
Equation (10.8)), that is given by
( µ1 − µ2 )0 − ( µ1 − µ2 )1
β = P(Z < + z0.01 )
σ 12 σ 22
+
n1 n2
0−2
= P(Z < + 2.33)
(1.5 )2 (1.5 )2
+
12 16
P(Z 3.49 2.33)
P(Z 1.16) 0.1230
Thus, the power of the test is 1 1 0.1230 0.8770.

But 12 22 2
Consider two normal populations with unknown means 1 and 2 and with an
unknown common variance 2. We want to test hypotheses about 1 2 the
difference between the two population means at the level of significance. To
achieve this goal we proceed as follows:
Step 1 (i) H0: 1 2 0 versus H1: 1 2 0,
(ii) H0: 1 2 0 versus H1: 1 2 0,
or
(iii) H0: 1 2 0 versus H1: 1 2 0.
(10.28)
Step 2 Assign a suitable predetermined value to .
Step 3 We consider the pivotal value for 1 2 as the test
statistic, that is,
(X1 − X 2 ) − ( µ1 − µ2 )
1 1
Sp + (10.29)
n1 n2
where the pooled estimator Sp2 for the common variance 2 is given by
(n1 − 1)S12 + (n2 − 1)S22

S p2 = (10.30)
n1 + n2 − 2
Step 4 Since the populations under consideration are normal
with common variance 2 and Sp2 is an estimator of 2, the test
(i) (ii) (iii)
−t n + n - 2, α t n + n - 2, α −tn + n - 2, α/2 t n + n - 2, α/2

1 2 1 2
1 2
1 2
Figure 10.21 Rejection regions for testing hypotheses (i), (ii), and (iii) at the level
of significance.
statistic given in step 3 is distributed as t-distribution with

(n1 n2 2) degrees of freedom.
Step 5 The rejection regions for testing the hypotheses (i), (ii),
and (iii) at the level of significance are as shown in Figure
10.21.
Step 6 Now take two random samples, one – sample– from each
population. Calculate the sample means X1 and X2 and the pooled
estimator Sp2 of the populations common variance 2. Calculate
the observed value of the test
– –statistic given in step 3 by
substituting the values of X1, X2, the pooled estimator Sp2, and the
value of 1 2 under the null hypothesis H0. If the observed
value of the test statistic falls in the rejection region then we
reject the null hypothesis H0. Otherwise do not reject H0.
Example 10.12 Suppose that in Example 10.10 the only information we
have about the populations is that they are normally distributed with com-
mon variance, but we have no information about the value of the variance.
Two random samples, one sample from each– population –of sizes n1 14 and
n2 16 produce mean octane numbers X1 92.7 and X2 89.8 with sam-
ple standard deviations S1 1.6 and S2 1.5. Test at the 0.025 level of
significance the hypothesis H0: 1 2 0 versus H1: 1 - 2 0. Find
the p-value.
Solution:
Step 1 H0: 1 - 2 0 versus H1: 1 - 2 0
Step 2 0.025
Step 3 The test statistic is
(X1 − X 2 ) − ( µ1 − µ2 )
T=
1 1
Sp +
n1 n2
Step 4 Since the sampled populations are normal with
unknown but equal variance, the test statistic given in step 3 is
234 Chapter Ten
2.048
distributed as t-distribution with (n1 n2 2) 26 degrees of

freedom.
Step 5 The test in this problem is an upper-tail test. Thus, the
rejection region with 0.025 under the upper tail is as shown
in Figure 10.22.
Step 6 The pooled estimator Sp2 for 2 is given by
(n1 − 1)S12 + (n2 − 1)S22

S p2 =
n1 + n2 − 2
13(1.6 )2 + 15(1.5 )2
= = 2.39
14 + 16 − 2
– –
Using Sp2 2.39, X1 92.7, X2 89.8, and the value of 1 2, under
the null hypothesis that is 1 2 0, we have the observed value of the
test statistic as
(92.7 − 89.9 ) − 0
T=
1 1
1.55 +
14 16
4.94
Clearly this value of the test statistic falls in the rejection region. Thus, we
reject the null hypothesis H0. In other words, we can say that at the
0.025 level of significance that fuel one has a higher octane number.
p-value P(t 4.94)
P(t 2.763)
0.005
Thus, the p-value of the test is less than 0.005.

and 12 22
Consider two normal populations with unknown means 1 and 2 and with
unknown variances 12 and 22, respectively. In this case, we assume that the
variances 12 and 22 cannot be assumed to be equal. Then we want to test
hypotheses about 1 2, the difference between the two population means,
at the level of significance. To achieve this goal we proceed as follows:
Step 1 (i) H0: 1 2 0 versus H1: 1 2 0,

(ii) H0: 1 2 0 versus H1: 1 2 0,
or
(iii) H0: 1 2 0 versus H1: 1 2 0.
(10.31)
Step 2 Assign a suitable predetermined value to .
Step 3 We consider the pivotal quantity for 1 2 as the test
statistic, that is,
(X1 − X 2 ) − ( µ1 − µ2 )
T= (10.32)
S12 S22
+
n1 n2
Step 4 The two populations are normal with unknown
variances, which can’t be assumed to be equal. Thus, in this
case the test statistic T given in step 3 is distributed as Student’s
t-distribution with approximately m degrees of freedom, where
2
 S12 S22 
 n + n 
1 2
m= (10.33)
(S 2
1 n1 ) + (S
2 2
2 n2 ) 2
n1 − 1 n2 − 1
Step 5 The rejection regions for testing the hypotheses (i),
(ii), and (iii) at the level of significance are as shown in
Figure 10.23.
– –
Step 6 Substituting the values X1, X2, S12, S22, and 1 2
0, since under the null hypothesis 1 2 0, we find the
observed value t of the test statistic T given in step 3. If the
observed value falls in the rejection region, we reject the null
hypothesis H0. Otherwise we do not reject H0.
236 Chapter Ten
(i) (ii) (iii)
−t m, α t m, α −t m, α/2 t m, α/2
Figure 10.23 Rejection regions for testing the hypotheses (i), (ii), and (iii) at the
Example 10.13 A new weight control company A claims that persons who
use its program regularly for a certain period of time lose the same amount
of weight as those who use the program of a well-established company B for
the same period of time. A random sample of n1 12 persons who used com-
pany A’s program lost on the average 20 pounds with standard deviation of
4 pounds, while another sample of n2 10 persons who used company B’s
program for the same period lost on the average 22 pounds with standard
deviation of 3 pounds. Determine at the 0.01 level of significance
whether the data provide sufficient evidence to support the claim by compa-
ny A. Find the p-value of the test. We assume that the two population vari-
ances are not equal.
Solution:
Step 1 H0: 1 2 0 versus H1: 1 2 0.
Step 2 Assign a suitable predetermined value to ;
say 0.01.
Step 3 We consider the pivotal quantity for 1 2 to be the
test statistic, that is,
(X1 − X 2 ) − ( µ1 − µ2 )
T=
S12 S22
+
n1 n2
Step 4 The two populations are normal with unknown
variances, which cannot be assumed to be equal. Thus, in
this case the test statistic given in step 3 is distributed as
t-distribution with approximately m degrees of freedom,
where
2
 S12 S22 
 n + n  4.988
1 2
m= = ≅ 20.
(S
2
1 n1 ) + (S
2 2
2 n2 ) 2
0.2516
n1 − 1 n2 − 1
−2.845 2.845
Figure 10.24 The rejection region under the two tails with 0.01.

– –
Step 6 Substituting the values X1, X2, S12, S22, and 1 2
0, since under the null hypothesis 1 2 0, we find the
observed value of the test statistic t, given in step 3, is
(20 − 22 ) − 0
T= ≅ −1.34,
 16 9 
 + 
12 10
hypothesis H0.
In other words, at the 0.01 level of significance, the data support the
claim of company A.
Since the test is a two-tail test, the p-value is given by
p-value 2P(T 1.34)
But
P(T 1.725) P(T 1.34) P(T 1.325)
or
0.05 P(T 1.34) 0.01
or
2(0.05) 2 P(T 1.34) 2(0.10)
or
0.10 p-value 0.20
That is, the p-value of the test is somewhere between 10% and 20%.
10.6 Paired t-Test

In section 10.5 we studied the hypotheses about the difference of two popu-
lation means when we had access to two independent random samples, one
238 Chapter Ten
from each population. Quite often for various reasons the experiments are
designed in such a way that the data are collected in pairs, that is, two obser-
vations are taken on the same subject and consequently the samples are not
independent. We encounter this kind of data in fields such as medicine, psy-
chology, chemical industry, and engineering. For example, a civil engineer
may divide each specimen of concrete into two parts and apply two drying
techniques, one technique to each part; a nurse collects blood samples to test
the serum-cholesterol level, divides each sample into two parts, and sends
one part to one lab and the second part to another lab; a psychologist treats
patients with some mental disorder and takes two observations on each
patient, one before the treatment and the other after the treatment; or a pro-
duction engineer may want to increase the productivity of some product by
adjusting a machine differently, so she measures the productivity before and
after the adjustment. The data collected in this manner are usually known as
paired data. If the techniques of testing hypotheses discussed in section 10.5
are applied to paired data, our results may turn out to be inaccurate, since the
samples are not independent.
These kinds of data are also sometimes known as before and after data.
To compare the two means in such cases, we use a test known as paired t-
test.
Let (X11, X21), (X12, X22), ..., (X1n, X2n) be a set of n paired observations
on n randomly selected individuals or items, where (X1i, X2i) is a pair of
observations on the ith individual or item. We assume that the samples (X11,
X12, X13, ..., X1n) and (X21, X22, X23, ..., X2n) come from populations with
means 1 and 2 and variances 12 and 22 respectively. Clearly the samples
(X11, X12, X13, ..., X1n) and (X21, X22, X23, ..., X2n) are not independent, since
each pair of observations (X1i, X2i) are two observations on the same indi-
vidual and are not independent. Finally we assume that the sample of differ-
ences between each pair, that is (d1, d2, d3, ..., dn), where di X1i X2i; i
1, 2, 3, ..., n, comes from a normal population with mean d 1 2 and
variance d2, where d2 is unknown. We are then interested in testing the fol-
lowing hypotheses:
(i) H0: d 0 versus H1: d 0,
(ii) H0: d 0 versus H1: d 0, (10.34)
or
(iii) H0: d 0 versus H1: d 0

Recall the discussion we had in section 10.5.2 concerning testing of
hypotheses about one population mean . The problem of testing hypothe-
ses about the mean d falls in the same framework as the problem of testing
hypotheses about the mean of a normal population with unknown variance.
It follows that the test statistic for testing any one of the above hypotheses is
Xd − µd
T= (10.35)
Sd n
–
where Xd and Sd are respectively the sample mean and the sample standard
deviation of the sample of differences (d1, d2, d3, ..., dn). Assuming that the
population of differences is normal it follows that the test statistic T is dis-
tributed as Student’s t-distribution with (n 1) degrees of freedom. We fur-
ther illustrate this method with the following example.
Example 10.14 A manager of a manufacturing company wants to evaluate
the effectiveness of a training program by measuring the productivity of
those workers who went through that training. The following data shows the
productivity scores before and after the training of 10 randomly selected
workers.
Workers 1 2 3 4 5 6 7 8 9 10
Before 75 78 76 80 79 83 70 72 72 74
After 79 77 80 85 80 84 78 76 70 80
di 4 1 4 5 1 1 8 4 2 6
X1i X2i
Do the data provide sufficient evidence to indicate that the training is effec-
tive? Use 0.05. Find the p-value of the test.
Solution: We first calculate some sample statistics that we need for testing
the desired hypothesis, that is,
–
Xd ( di) / n 30 / 10 3

( ) 
2
1 ∑ di 1
Sd2 =  ∑ di2 −  = (180 − 90 ) = 10
n −1 n  9
 
Sd = 10 = 3.162
To test the hypothesis we again follow the six-step technique.
Step 1 H0: d 0 versus H1: d 0
Step 2 Assign a suitable predetermined value to ; say
0.05.
Step 3 From our above discussion, the test statistic that we
would use is
X − µd
T= d
Sd n
Step 4 The test statistic is distributed as Student’s t-
distribution (we encourage readers to check the conditions
needed to use t-distribution) with n 1 9 degrees of
freedom.
240 Chapter Ten
0.05
−1.833
Step 5 Since the test is a lower tail test with 0.05, the
–
Step 6 Substituting the values Xd 3, Sd 3.162, and d
0 in the test statistic T given in step 3, we have
−3 − 0
T= = −3
10 10
Clearly the observed value of the test statistic falls in the rejection region.
Thus, we reject the null hypothesis. In other words the test does indicate, at
the 0.05 level of significance, that the training program is effective.
The p-value of the test is given by
p-value P(T 3) P(T 3) 0.01.
10.7 Testing Statistical Hypotheses about

Population Proportions
So far in this chapter we have discussed methods of testing hypotheses about
the population means. In this section we shall discuss techniques of testing
hypotheses about the population proportions. In applications, it is quite
common that we want to test such hypotheses. For example, we may be inter-
ested in verifying the percentage of defective product manufactured by a
company, the percentage of the population of a country that is infected with
HIV, the proportion of employees of a company who are not happy with the
health insurance they have, the proportion of students of a class who have
made honors, or the proportion of drivers who are going above the posted
speed limit on a given highway. Thus, we now proceed with testing a hypoth-
esis about one population proportion, and then later in this section, we shall
discuss methods of testing hypotheses about the difference of two population
proportions, that is, comparing the proportions of two populations.
10.7.1 Testing of Statistical Hypotheses about One Population

Proportion When Sample Size Is Large
Let X1, X2, X3, ..., Xn be a random sample from a dichotomous population or
a population of Bernoulli trials with parameter p. Let X Xi be the total
number of elements in the sample that possess the desired characteristic. Then
from Chapter 8 we know that X/n is a point estimator of p, that is, p̂ X / n.
We also know that for large n (np 5, n(1 p) 5), the estimator p̂ is dis-
tributed approximately as normal with mean p and variance p(1 p) / n.
Having said that, we are now ready to discuss the method of testing of a
hypothesis about the population proportion p. Under the assumption that the
sample size is large, we discuss the following hypotheses about the popula-
tion proportion.
(i) H0: p p0 versus H1: p p0
(ii) H0: p p0 versus H1: p p0, (10.36)
or
(iii) H0: p p0 versus H1: p p0
Since the method of testing these hypotheses follows the same six-step
technique that we used to test hypotheses about the population mean, we
illustrate the method with the following example.
Example 10.15 Environmentalists believe that sport utility vehicles

(SUVs) consume excessive amount of gasoline and are the biggest polluters
of our environment. An environmental agency wants to find what proportion
of vehicles on U.S. highways are SUVs. Suppose that a random sample of
500 vehicles collected from highways in the various parts of the country
showed that 120 out of 500 vehicles were SUVs. Do these data provide suf-
ficient evidence that 25% of the total vehicles driven in the United States are
SUVs? Use 0.05 level of significance. Find the p-value of the test.

n 500; X Xi 120,
thus
p̂ X/n 120/500 0.24
Now to test the desired hypothesis we proceed as follows:
Step 1 H0: p p0 versus H1: p p0
Step 2 0.05
Step 3 We consider the pivotal quantity for p as the test
statistic, that is,
pˆ - p
Z= (10.37)
p(1 - p) n
Step 4 Since np 500(0.24) 120 5, and n(1 p) 500

(1 0.24) 380 5, the sample size is large. Thus, the test
statistic Z in step 3 is distributed approximately as standard
normal N(0,1).
242 Chapter Ten
−1.96 1.96

Step 6 Since under the null hypothesis p 0.25 and p̂ 0.24,
the value of the test statistic is
0.24-0.25
Z=
0.25(1-0.25) 500
0.516,
hypothesis H0.
Since the test is a two tail test the p-value is given by
p-value 2P(Z z) 2P(Z 0.516)
2(0.3030) 0.6060
10.7.2 Testing of Statistical Hypotheses about the Difference

Between Two Population Proportions When Sample Sizes Are
Large
Consider two binomial populations with parameters n1, p1 and n2, p2 respec-
tively. Then we are usually interested in testing hypotheses such as
(i) H0: p1 p2 versus H1: p1 p2
(ii) H0: p1 p2 versus H1: p1 p2, (10.38)
or
(iii) H0: p1 p2 versus H1: p1 p2
The hypotheses in 10.38 may equivalently be written as
(i) H0: p1 p2 0 versus H1: p1 p2 0
(ii) H0: p1 p2 0 versus H1: p1 p2 0, (10.39)
or
(iii) H0: p1 p2 0 versus H1: p1 p2 0
We illustrate the method of testing the above hypotheses with the fol-
lowing example.
Example 10.16 A computer assembling company gets all its chips from
two suppliers. The company has experienced that both suppliers have sup-
plied a certain proportion of defective chips. The company wants to test a
hypothesis with three hypotheses: (i) supplier I supplies a smaller proportion
of defective chips, (ii) supplier I supplies a higher proportions of defective
chips, or (iii) the suppliers do not supply the same proportion of defective
chips. To achieve this goal the company took a random sample from each
supplier. It was found that in one sample of 500 chips, 12 were defective, and
in the second sample of 600 chips, 20 were defective. For each of the above
hypotheses use 0.05 level of significance. Find p-value for each test.
Solution: From the given data, we have
n1 500, X1 12, p̂1 X1/n1 12/500 0.024
n2 600, X2 20, p̂1 X2/n2 20/600 0.033
where X1 and X2 are the number of defective chips in samples 1 and 2 respec-
tively. Now to test the desired hypotheses we proceed as follows:
Step 1
(i) H0: p1 p2 0 versus H1: p1 p2 0

(ii) H0: p1 p2 0 versus H1: p1 p2 0,
or
(iii) H0: p1 p2 0 versus H1: p1 p2 0
Step 2 0.05
Step 3 We consider the pivotal quantity for p1 - p2 as the test
statistic, that is,
(pˆ1 − pˆ 2 ) − (p1 − p2 )
Z=
p1 (1 − p1 ) p2 (1 − p2 ) (10.40)
+
n1 n2
Step 4 Since n1p1 500(0.024) 12 5, and n1(1 p1)
500(1 0.024) 488 5, the sample size n1 is large.
Similarly, we can verify that the sample size n2 is large. Thus,
the test statistic Z in step 3 is distributed approximately as
standard normal N(0,1).
Step 5 Since the test statistic is approximately normally
distributed, the rejection regions for testing hypotheses (i), (ii),
and (iii) at the 0.05 level of significance are as shown in
Figure 10.27.
Step 6 Since under the null hypothesis p1 p2 0, we
substitute the values of p̂1, p̂2, and p1 p2 0 in the
numerator, and the values of p1 and p2 in the denominator. Note
244 Chapter Ten
(i) (ii) (iii)
−1.645 1.645 −1.96 1.96
0.05 level of significance.
however, that p1 and p2 are unknown but under the null

hypothesis p1 p2 p (say). Thus, we estimate p1 and p2 or
for that matter p by pooling the two samples, that is,
p̂ (X1 X2) / (n1 n2). (10.41)

Then replace p1 and p2 in the denominator with p̂. In this example , we have
p̂ (12 20) / (500 600) 0.029
Thus, the value of the test statistic under the null hypothesis is given by
(0.024 − 0.033) − 0
Z= = −0.8857
0.029(0.971) (0.029 )(0.9971)
+
500 600
Clearly, in all cases, the value of the test statistic does not fall in the rejec-
tion region. Thus, in either case (i), (ii), or (iii), we do not reject the null
hypothesis at the 0.05 level of significance. In other words the data
imply, at the 0.05 level of significance, that both suppliers supply the
same proportion of defective chips.
As a final remark, it is quite interesting to note that whether we want to
test the hypothesis (i), (ii), or (iii), except for the rejection regions, all the
steps including the value of the test statistic are exactly the same. However,
the p-value of these tests will be different for different hypotheses. Thus, we
now proceed to calculate these p-values
(i) p-value P(Z 0.8857) 0.1880
(ii) p-value P(Z 0.8857) 0.8120
(iii) p-value 2P(Z 0.8857) 2(0.1880) 0.3760.
10.8 Testing Statistical Hypotheses

about Population Variances
So far in this chapter we used population variances and sample variances as
important tools to study techniques of testing hypotheses about population
means and population proportions. In this section we are going to study
methods of testing hypotheses about population variances. First we shall

consider the case of one population variance and then two population vari-
ances. As in Chapter 9, we are going to assume that the population(s) is nor-
mally distributed with mean and unknown variance 2.
10.8.1 Testing Statistical Hypotheses about One

Population Variance
Let X1, X2, X3, ..., Xn be a random sample from a population
– distributed nor-
mally with mean and unknown variance 2. Let X be the sample mean and
S2 be the sample variance. Then from Chapter 8, under the assumption of the
population being normal, we know that the pivotal quantity for 2, that is,
(n − 1)S 2
(10.42)
σ2
is distributed as chi-square with (n 1) degrees of freedom. In Chapter 9,
we used this pivotal quantity to find confidence intervals for the population
variance. Here we are using this quantity as a test statistic for testing
hypotheses about the population variance 2. We consider here the hypothe-
ses about the variance 2 as given in Equation (10.43). To test these hypothe-
ses we are going to use again the six-step method we used earlier.
(i) H0: 2 02 versus H1: 2 02,
(ii) H0: 2 02 versus H1: 2 02, (10.43)
or
(iii) H0: 2 02 versus H1: 2 02
where 02 0 is known. As we described earlier the location of the rejection
regions depend upon the alternative hypotheses. Thus, for example the rejec-
tion regions for testing the hypotheses (i), (ii), and (iii) at the level of sig-
nificance are as shown in Figure 10.28.
f(x) f(x) f(x)
(i)
(ii)
(iii)
2 2 2 2
X n-1, 1- α X n-1, α X n-1, 1 - α X n-1, 1 - α
2 2
Figure 10.28 Rejection region under the chi-square distribution curve for testing
hypotheses (i), (ii), and (iii) at the level of significance.
246 Chapter Ten
We illustrate the method of testing a hypothesis about the population

variance with the following example.
Example 10.17 The production manager of a light bulb manufacturer
believes that the lifespan of the 14W bulb with light output of 800 lumens is
6000 hours. A random sample of 25 bulbs produced the sample mean of 6180
hours and sample standard deviation of 178 hours. Test at the 5% level of
significance that the population standard deviation is less than 200 hours.
Assume that the lifespan of these bulbs is normally distributed with mean
and unknown standard deviation . Find the p-value for the test.
Solution: Using the six-step method, we have
Step 2 0.05
Step 3 The test statistic is a pivotal quantity for 2 (see
Equation (10.42)), that is,
(n − 1)S 2
X2 =
σ2
Step 4 The test statistic in step 3 is distributed as χ2(n–1), that is,
chi-square with 24 degrees of freedom since n 25.
Step 5 Since the test is a lower-tail test, the rejection region is
as shown in Figure 10.29.
Step 6 Since under the null hypothesis 200 and from the
given sample we have n 25 and S 178, the value of the test
statistic is
(25 − 1)(178 )2
X2 = = 19.0104
(200 )2
This value clearly does not fall in the rejection region, so we do not reject the
null hypothesis H0.
f(x)
13.848
The p-value for the test is given by

p-value P(χ224 19.0104) 0.10
10.8.2 Testing Statistical Hypotheses about the Two Population

Variances
Consider two populations distributed normally with means 1 and 2 and
variances 12 and 22 respectively. Then we are interested in testing the
hypotheses about the ratio of variances of the two populations given in
Equation (10.44).
(i) H0: σ 12 σ 22 1 versus H1: σ 1 σ 2 1,
2 2
(ii) H0: σ 12 σ 22 1 versus H1: σ 12 σ 22 1, (10.44)

or
(iii) H0: σ 12 σ 22 1 versus H1: σ 12 σ 22 1.
Let X11, X12, X13, ... , X1n1 and X21, X22, X23, ... , X2n2 be the random
– normal populations N(1, 1 2) and N(
2
samples from two independent
– 2,
2 ), respectively. Let X1 and X2 be the sample means and S1 and S22 the
2
sample variances of samples (X11, X12, X13, ... , X1n1) and (X21, X22, X23, ...,
X2n2), respectively. From Chapter 8, we know that F (S1 σ 1 ) (S2 σ 2 ) is
2 2 2 2
distributed as F-distribution with (n1 - 1) and (n2 1) degrees of freedom.

Since under the null hypothesis 12 22, S12 / S22 is distributed as F-distri-
bution with (n1 1) and (n2 1) degrees of freedom. Thus, using
S12 / S22 (10.45)
as a test statistic we can test any of the hypotheses in Equation (10.44). The
rejection regions for testing the hypotheses (i), (ii), and (iii) at the level of
significance are as shown in Figure 10.30.
We illustrate the method of testing a hypothesis about the ratio of two
population variances with the following example.
Figure 10.30 Rejection region under the F-distribution curve for testing hypotheses
(i), (ii), and (iii) at the level of significance.
248 Chapter Ten
Example 10.18 The quality of any process depends on the amount of vari-
ability present in the process, which we measure in terms of the variance of
the quality characteristic. For example, if we have to choose between two
similar processes, we would prefer the one with smaller variance. Any
process with smaller variance is more dependable and more predictable. In
fact, one of the most important criteria used to improve the quality of a
process or to achieve 6 quality is to reduce the variance of the quality char-
acteristic in the process. In practice, comparing the variances of two
processes is common. Suppose the following is the sample summary of sam-
ples from two independent processes. We assume that the quality character-
istics in the two processes are normally distributed as N(1, 12) and N(2,
22) respectively.
–
n1 21 X1 15.4 S12 24.6
–
n2 16 X2 17.2 S22 16.4
Test at the 0.05 level of significance the hypothesis H0: 12 22 ver-
sus H1: 12 22, which is equivalent to testing H0: 12 / 22 1 versus H1:
12 / 22 1. Find the p-value for the test.
Solution:
Step 1 H0: 12 / 22 1 versus H1: 12 / 22 1
Step 2 0.05
Step 3 As explained in the introductory paragraph, the test
statistic for testing the hypothesis in step 1 is
F S12 / S22.
Step 4 The test statistic in step 3 is distributed as Fn1-1,n2-1 or,
in this case, F20, 15.
Step 5 Since the test is a two-tail test, the rejection region is as
shown in Figure 10.31. As noted in Chapter 8, the critical point
under the right tail is F20, 15; 0.025, which can be found directly
from F tables (Table VI of the appendix). However, the critical
point under the lower tail is F20, 15; 1 0.025 or F20, 15; 0.975, which
cannot be found directly from the F tables. Thus, to find this
value we use the following relation (see Equation (8.32)):
1
Fν1 ,ν 2 ,1−α = (10.46)
Fv2 ,v1 ,α
So that, in the present case, we have

F20, 15; 0.975 1 / F15,20,0.025 1/2.57 0.389
Step 6 Substituting the values of S12 and S22 in the test statistic
S12 / S22, we get
f 24.6 / 16.4 1.5

f(x)
0.389 2.76
Figure 10.31 Rejection region under the right tail with 0.05.
f(x)
2.33
Figure 10.32 Rejection region under the right tail with 0.05.
Clearly this value does not fall in the rejection region. Thus, we do not reject
the null hypothesis H0.
Note that for the tests about variances we can only find a range for the p-
value. Thus, in this case we have
p-value 2P(F f) 2P(F 1.5) 0.20.
Example 10.19 Use the data of Example 10.17 to test the following
hypothesis:
H0: 12 / 22 1 versus H1: 12 / 22 1.
Solution: The only difference between this example and Example 10.18 is
that the alternative hypothesis is different. In this example the only change
that occurs is in the rejection region; everything else, including the value of
the test statistic, will be exactly the same. The rejection region in this case
will be only under the right tail, which can be determined directly from Table
VI of the appendix. Thus, the rejection region is as shown in Figure 10.32.
Since the value of the test statistic does not fall in the rejection region,
we do not reject the null hypothesis H0.
The p-value for the test in this example is given by
p-value P(F f) P(F 1.5) 0.10.
250 Chapter Ten
10.9 An Alternative Technique for Testing of

Statistical Hypotheses Using Confidence Intervals
In Chapter 9, we studied certain techniques of constructing confidence inter-
vals for population parameters such as population means, proportions, and
population variances. In this chapter we have studied some techniques of
testing hypotheses about these parameters. From our discussion in this chap-
ter and Chapter 9, it seems that the two techniques are independent of each
other but, in fact, it is quite the contrary. The two techniques are closely knit
together, in the sense that all the testing of hypotheses we have done in this
chapter could have been done by using appropriate confidence intervals. We
explore the concept of using confidence intervals by redoing some of the
examples that we did earlier in this chapter.
Example 10.20 Referring back to Example 10.8, we have that the sampled
population is normally distributed with an unknown mean and known stan-
dard deviation
– 2.5. Furthermore, we are given the sample summary as
n 25, X 10.5. We want to test the hypothesis H0: 10 versus H1:
10 at the 0.05 level of significance by using a confidence interval for
with confidence coefficient 1 , that is, 95%.
Solution: Recall from Example 10.8 the test statistic used for testing the
hypothesis
H0: 10 versus H1: 10
X−µ
was . It is clear that we do not reject the null hypothesis H0 if the
σ n
value of the test statistic under the null hypothesis H0: 0 is such that
X − µ0
− zα 2 < < zα 2 (10.47)
σ n
or
− zα 2 σ n < X − µ0 < zα 2 σ n
or
X − zα 2 σ n < µ0 < X + zα 2 σ n (10.48)
From Equation (10.48) it follows that we do not reject the null hypothe-
sis H0 if the value (0) of under the null hypothesis falls in the interval
( X − zα 2 σ n ,X + zα 2 σ n ). This is equivalent to saying that we do not
reject the null hypothesis H0 if the confidence interval
( X − zα 2 σ n ,X + zα 2 σ n ) for with confidence coefficient 1
contains the value (0) of under the null hypothesis. Now, using the infor-
mation contained in the sample summary the confidence interval for with
confidence coefficient 1 ( in our case it is 95%) is
( X − zα 2 σ n ,X + zα 2 σ n)
2.5 2.5
(10.5 1.96 , 10.5 1.96 )
25 25
(9.52, 11.48)
This interval clearly contains 10, the value of under the null hypothesis.
Thus, we do not reject the null hypothesis H0, and that was the conclusion
we made in Example 10.8.
We now consider a one-tail test.
Example 10.21 Referring back to Example 10.9, we have that the sampled
population is normally distributed with an unknown mean and unknown
standard deviation . Also, we are–given that the sample size is small, with
sample summary given as n 16, X 33, S 6. We want to test the hypoth-
esis H0: 30 versus H1: 30 at the 0.05 level of significance,
using a confidence interval with confidence coefficient 1 , that is, 95%.
Solution: Recall from Example 10.9 that the test statistic used to test the
hypothesis
H0: 30 versus H1: 30
X−µ
was . Thus, it is clear that we do not reject the null hypothesis H0 if
S n
the test statistic under the null hypothesis H0: 0 is such that
X − µ0
< t n −1,α (10.49)
S n
or
X − µ0 < t n −1,α S n
or
X − t n −1,α S n < µ0
In other words, we do not reject the null hypothesis H0 if the lower one-
sided confidence interval
( X − t n −1,α S n ,∞) (10.50)
with confidence coefficient 1 contains the value (0) of under the null
hypothesis.
Now using the information contained in the sample and Equation
(10.50), the lower one-sided confidence interval for with confidence coef-
ficient 95% is
( X − t n −1,α S n , ∞ )
= ( 33 − 1.753 (6 16 ), ∞ )
(30.3705, )
252 Chapter Ten
This confidence interval clearly does not contain 30, the value of under
the null hypothesis. Thus, we reject the null hypothesis H0, and this was the
conclusion we made in Example 10.9.
Having discussed these two examples, we now give the rule (see
Equations (10.48) and (10.50)) and the confidence intervals to be used for
testing various hypotheses that we discussed earlier in this chapter.
Rule: Do not reject the null hypothesis H0 at the level of sig-

nificance if the corresponding confidence interval with confidence
coefficient 1 , given in Table 10.2, contains the value of the
parameter under the null hypothesis H0.
Table 10.2 Confidence intervals for testing various hypotheses.
Hypothesis Confidence Interval with Confidence

Coefficient 1
Large Sample Size
H0: 0 vs. H1: 0 (−∞, X + zα σ / n ) if is known
H: 0 vs. H1: 0 (−∞, X + zα S / n ) if is unknown
H0: 0 vs. H1: 0 (X − zα σ / n , ∞ ) if is known
H0: 0 vs. H1: 0 (X − zα S / n , ∞ ) if is unknown
H0: 0 vs. H1: 0 (X − zα / 2 σ / n , X + zα / 2 σ / n ) if is known
H0: 0 vs. H1: 0 (X − zα / 2 S / n , X + zα / 2 S / n ) if is unknown
H0: 1 2 0 vs. H1: 1 2 0 (−∞, X 1 − X 2 + zα σ 12 / n1 + σ 22 / n2 ) if 1, 2 are

known
H0: 1 2 0 vs. H1: 1 2 0 (−∞, X 1 − X 2 + zα S12 / n1 + S22 / n2 ) if 1, 2 are

unknown
H0: 1 2 0 vs. H1: 1 2 0 (X 1 − X 2 − zα σ 12 / n1 + σ 22 / n2 ,∞ ) if 1, 2 are

known
H0: 1 2 0 vs. H1: 1 2 0 (X 1 − X 2 − zα S12 / n1 + S22 / n2 ,∞ ) if 1, 2 are

unknown
H0: 1 2 0 vs. H1: 1 2 0 (X 1 − X 2 − zα / 2 σ 12 / n1 + σ 22 / n2 ,
X 1 − X 2 + zα / 2 σ 12 / n1 + σ 22 / n2 ) if 1, 2 are
known
H0: 1 2 0 vs. H1: 1 2 0 (X 1 − X 2 − zα / 2 S12 / n1 + S22 / n2 ,
X 1 − X 2 + zα / 2 S12 / n1 + S22 / n2 ) if 1, 2 are

unknown
Continued

Coefficient 1
Normal Population with
Small Sample Size
H0: 0 vs. H1: 0 (−∞, X + zα σ / n ) if is known
H0: 0 vs. H1: 0 (−∞, X + t n −1,α S / n ) if is unknown
H0: 0 vs. H1: 0 (X − zα σ / n , ∞ ) if is known
H0: 0 vs. H1: 0 (X − t n −1,α S / n , ∞ ) if is unknown
H0: 0 vs. H1: 0 (X − zα / 2 σ / n , X + zα / 2 σ / n ) if is known
H0: 0 vs. H1: 0 (X − t n −1,α / 2S / n ,X + t n −1,α / 2S / n ) if is known
H0: 1 2 0 vs. H1: 1 2 0 (−∞, X 1 − X 2 + zα σ 12 / n 1 + σ 22 / n2 ) if 1, 2

are known
H0: 1 2 0 vs. H1: 1 2 0 (−∞, X 1 − X 2 + t n1+n2 − 2,α Sp 1/ n 1 + 1/ n2 ) if 1, 2

are unknown and 1 2
H0: 1 2 0 vs. H1: 1 2 0 (−∞, X 1 − X 2 + t m ,α S12 / n1 + S22 / n2 ) (*)

if 1, 2 are unknown and 1 2
H0: 1 2 0 vs. H1: 1 2 0 (X 1 − X 2 − zα σ 12 / n1 + σ 22 / n2 , ∞ ) if 1, 2 are

known
H0: 1 2 0 vs. H1: 1 2 0 (X 1 − X 2 − t n1+n2 − 2,α Sp 1/ n1 + 1/ n2 , ∞ ) if 1, 2

are unknown and 1 2
H0: 1 2 0 vs. H1: 1 2 0 (X 1 − X 2 − t m ,α S12 / n1 + S22 / n2 , ∞ )

H0: 1 2 0 vs. H1: 1 2 0 (X 1 − X 2 − zα / 2 σ 12 / n1 + σ 22 / n2 ,
X 1 − X 2 + zα / 2 σ 12 / n1 + σ 22 / n2 )
if 1, 2 are known
(X 1 − X 2 − t n +n α Sp 1/ n1 + 1/ n2 ,
H0: 1 2 0 vs. H1: 1 2 0 1 2 − 2, 2
X 1 − X 2 + t n +n α Sp 1/ n1 + 1/ n2 )
1 2 − 2, 2
H0: 1 2 0 vs. H1: 1 2 0 (X 1 − X 2 − t m ,α / 2 S12 / n1 + S22 / n2 ,
X 1 − X 2 + t m ,α / 2 S12 / n1 + S22 / n2

Large Sample Size
H0: p1 p0 vs. H1: p1 p0 (0, pˆ + zα p 0q 0 / n ) where q 1 p

0 0
H0: p1 p0 vs. H1: p1 p0 (pˆ − zα p 0q 0 / n , 1)
H0: p1 p0 vs. H1: p1 p0 (pˆ − zα / 2 p0q0 / n , pˆ + zα / 2 p0q0 / n )
Continued
254 Chapter Ten
Continued

Coefficient 1
H0: p1 p2 0 vs. H1: p1 p2 0 (0, (pˆ 1 − pˆ 2 ) + zα pq

ˆ ˆ (1/ n1 + 1/ n2 )) where
n1pˆ 1 + n2 pˆ 2
pˆ =
n1 + n2
H0: p1 p2 0 vs. H1: p1 p2 0 ((pˆ 1 − pˆ 2 ) − zα pq

ˆ ˆ (1/ n1 + 1/ n2 ), 1)
H0: p1 p2 0 vs. H1: p1 p2 0 ((pˆ 1 − pˆ 2 ) − zα / 2 pq

ˆ ˆ (1/ n1 + 1/ n2 ),
(pˆ 1 − pˆ 2 ) + zα / 2 pq
ˆ ˆ (1/ n1 + 1/ n2 ))
Normal Population but No
Restriction on Sample Size
 (n − 1)S 2 
 2 , ∞
H0: 2 02 vs. H1: 2 02  X (n −1),1−α 
 (n − 1)S 2 
 0, 2 
H0: 2 02 vs. H1: 2 02  X (n −1),1−α 
 (n − 1)S 2 (n − 1)S 2 
 2 , 2 
H0: 0 vs. H1: 0
2 2 2 2
 X (n −1),α / 2 X (n −1),1−α / 2 
Coefficient 1
Normal Population with
Small Sample Size
O′ 12 O′ 12  S12 
H0: O′ 2 1 vs. H0: O′ 2 1  0, Fn2 −1,n1−1,α S 2 
2 2  2 
O′ 12 O′ 12  S12 
H0: O′ 2 1 vs. H0: O′ 2 1  Fn2 −1,n1−1,α S 2 , ∞ 
2 2  2 
O′ 12 O′ 12  S12 S12 
H0: O′ 2 1 vs. H0: O′ 2 1  Fn2 −1,n1−1,α / 2 S 2 , Fn2 −1,n1−1,α / 2 S 2 
2 2  2 2 
2
 S12 S22 
 n + n 
1 2
m=
(S12 / n1)2 (S22 / n2 )2
(*) +
n1 − 1 n2 − 1
11
Computer Resources to
Support Applied Statistics
Using MINITAB® and JMP® Statistical Software
I
n the past two decades, the use of technology to analyze complicated data
has increased substantially, which not only has made the analysis very
simple, but also has reduced the time required to complete such analysis.
To facilitate statistical analysis many companies have acquired personal com-
puter-based statistical software. Several PC-based software packages are
available, including BMDP, JMP, MINITAB, SAS, SPSS, and SYSTAT. A
great deal of effort has been expended in the development of these software
packages to create graphical user interfaces that allow users to complete sta-
tistical analysis without having to know a programming or scripting language.
We believe that publishing a book discussing applied statistics without
acknowledging and addressing the importance and usefulness of statistical
software would simply not be in our readers’ best interests. Accordingly, in
this chapter we briefly discuss two popular statistical packages, MINITAB
and JMP. It is our explicit intent not to endorse either software package. Each
package has its strengths and weaknesses.
11.1 Using MINITAB, Version 14

MINITAB offers the option of using commands from the menu bar, typing
in session commands, or using both. As shown in Figure 11.1, in the
Windows environment it has the look and feel of most other applications
where the menu options help you navigate through the package.
Once in the MINITAB environment, you will see the heading
MINITAB-Untitled and three windows:
1. The Data window (Worksheet) is used to enter data in
columns denoted by C1, C2, C3, ..., C4000.
2. The Session window displays the output and also allows the
user to enter commands when using the command language.
3. The Project Manager window (minimized at startup) displays
project folders; navigate through them and manipulate as
necessary.
255
256 Chapter Eleven
Menu
commands
Session
window
Data
window
Project
manager
window
Figure 11.1 The screen that appears first in the MINITAB environment.
11.1.1 Getting Started

In this chapter we discuss briefly how to use MINITAB pull-down menus to
analyze statistical data. Once you log on to your computer and open
MINITAB, you will see the picture in Figure 11.1 on your screen. The pull-
down menus appear at the top of the screen.
Menu Commands
File Edit Data Calc Stat Graph Editor Tools Window Help
By clicking any of the menu commands, we arrive at options included in

that command. For example, if we click on the File menu we get the drop-
down menu as shown in Figure 11.2. The first option, New, allows us to cre-
ate a worksheet.
Creating a New Worksheet
Creating a worksheet means to enter the new data in the data window. The
data window consists of 4000 columns, which are labeled C1, C2, ..., C4000.
The data can be entered in one or more columns depending upon the setup
of the problem. In each column immediately below the labels C1, C2, ...
Computer Resources to Support Applied Statistics 257
From the Menu bar select File > New.

This gives two options: create a new
worksheet or a project.
Selecting MINITAB Worksheet opens a

new worksheet (an empty Data window)
that is added to the current project.
Selecting MINITAB Project opens a new

project and closes the existing project.
Figure 11.2 MINITAB window showing the menu command options.
there is one cell that is not labeled, whereas the rest of the cells are labeled
1, 2, 3, ... . In the unlabeled cell you can enter a variable name, such as part
name, shift, lot number, and so on. In the labeled cells you enter data, using
one cell for each data point. If a numerical observation is missing, MINITAB
will replace the missing value with a star (*).
Saving a Data File
The command File Save Current Worksheet As allows saving the cur-
rent data file. When you enter this command a dialog box titled Save
Worksheet As appears. Type the file name in the box next to File Name,
select the drive location for the file, and click Save.
Retrieving a Saved MINITAB Data File
Using the command File Open Worksheet will prompt the dialog box
Open Worksheet to appear. Select the drive and directory where the file was
saved by clicking the down arrow next to the Look in box, enter the file
name in the box next to FILE NAME and then click Open. The data will
appear in the same format you had entered earlier.
Saving a MINITAB Project
Using the command File Save Project saves the ongoing project in a
MINITAB Project (MPJ) file to the designated directory with the name you
chose. Saving the project saves all windows opened in the project, along with
the contents of each window.
Print Options
To print the contents in any specific window you need to make the specific
window active by clicking on it, then use the command File Print Session
Window... (Graph..., Worksheet...).
If you want to print multiple graphs on a single page, highlight the
graphs in the Graph folder in the Project Manager Window, right-click
and choose Print. The Print Multiple Graphs dialog box appears. To
258 Chapter Eleven
change the page orientation of the multiple graphs, use File Page Setup
to adjust the printing options.
11.1.2 Calculating Descriptive Statistics

Column Statistics
First enter the desired data in the Worksheet window. Then, from the Menu
command select Calc Column Statistics. The statistics that can be dis-
played for the selected columns are Sum, Mean, Standard Deviation,
Minimum, Maximum, Range, Median, Sum of squares, N total, N non-
missing, and N missing. All these choices appear in the dialog box shown
in Figure 11.3. This dialog box appears immediately after you select com-
mand Calc Column Statistics. Note that using this command you can
choose only one statistic at a time.
Example 11.1 Use the following steps to calculate any one of the statistics
listed in the Column Statistics dialog box, using the following data:
8976568989
Solution:
1. Enter the data in column C1 of the Data window.
2. Select Calc from the Menu command.
3. Click Column Statistics from the pull-down menu in the Calc
command menu.
4. Check in the dialog box Column Statistics the circle next to
the desired statistics; here we will use standard deviation.
5. Enter C1 in the box next to the input variable.
6. Click OK. The MINITAB output will appear in the session
window, as shown in Figure 11.3.
Row Statistics
From the Menu bar select Calc Row Statistics. The statistics that can be
displayed for the selected rows are Sum, Mean, Standard deviation,
Minimum, Maximum, Range, Median, Sum of squares, N total, N nonmiss-
ing, and N missing. Note that Column Statistics and Row Statistics give
you exactly the same choices. Use the appropriate command Column
Statistics or Row Statistics depending upon the format of your data and
whether it is arranged in columns or rows.
Descriptive Statistics
From the Menu bar select Stat Basic Statistics Display Descriptive
Statistics. Statistics available for display are Mean, SE of mean, Standard
deviation, Variance, Coefficient of variation, Trimmed mean, Sum,
Minimum, Maximum, Range, N nonmissing, N missing, N total, Cumulative
Pull-down
menu Dialog box
Figure 11.3 MINITAB window showing input and output for Column Statistics.
N, Percent, Cumulative percent, First quartile, Median, Third quartile,

Interquartile range, Sum of squares, Skewness, Kurtosis, and MSSD.
The benefit of the command Stat Basic Statistics Display
Descriptive Statistics over the commands Column Statistics and Row
Statistics is that it provides all the statistics listed in the above paragraph in
one step rather than one at a time.
listed in the Basic Statistics dialog box, using the following data from
Example 11.1:
8976568989
Solution: Enter the data in column C1 of the Data window.
1. Select Stat from the Menu command.
260 Chapter Eleven
2. Click Basic Statistics Display Descriptive Statistics from

the pull-down menus available in the Stat command menus
(Figure 11.4).
3. Enter C1 in the box below Variables and click the statistics
button to choose the statistics to be calculated.
4. Click OK. The MINITAB output will appear in the session
window, as shown in Figure 11.4
Figure 11.4 MINITAB window showing various options available under Stat
command.
To Display Several Descriptive Statistics Simultaneously

Graphs
From the Menu bar select Graph and then the graph of choice. Some of
the choices include Scatterplot, Histogram, Dotplot, Boxplot, Bar Chart,
Stem-and-Leaf, Time Series Plot, and Pie Chart. We discuss below some of
these graphs.
Histogram
First enter the data in one or more columns of the worksheet depending upon
whether you have data on one or more variables. For each variable use only
one column. Then use the menu command Graph Histogram. This
prompts a Histograms dialog box, which has four options. Choose the
desired option and click OK. For example, choose the option Simple, and
click OK. Then another dialog box appears, titled Histogram-Simple. In
this dialog box, enter under Graph variables one or more variables. If you
have not entered the names of the variables in the data columns, then under
Graph variables just enter C1, C2, and so forth and click OK. A separate
graph is displayed for each variable. To display more than one graph, select
the Multiple Graphs option and choose the desired display option.
Example 11.3 Prepare a histogram for the following data:
23 25 20 16 19 18 42 25
28 29 36 26 27 35 41 18
20 24 29 26 37 38 24 26
34 36 38 39 32 33
Solution: Use the following steps to draw any one of the graphs listed in the
pull-down menu in the Graph command.
2. Select Graph from the Menu command.
3. Click Histogram from the pull-down menus available in the
Graph command menu.
4. Enter C1 into the Graph variables box and click OK.
5. The MINITAB output will appear in the Graph window, as
Figure 11.5 MINITAB display of histogram for the data given in Example 11.3.
262 Chapter Eleven
Figure 11.6 MINITAB window showing Edit Bars dialog box.
Sometimes we are interested in constructing a histogram with a particu-

lar number of classes or intervals, say 5. Right-click on one of the bars in the
default histogram to bring up the Edit Bars dialog box shown in Figure 11.6.
In the Edit Bars dialog box select Binning tab and then under Interval
Type check the circle next to Midpoint. Under Interval Definition check
the circle next to Number of Intervals and enter the number of desired inter-
vals in the box next to it, 5 in this example. Click OK. The output will appear
in the graph window as shown in Figure 11.7.
Dotplot
First enter the data in one or more columns of the worksheet, depending
upon how many variables you have. For each variable use only one column.
Then use the menu command Graph Dotplot. These commands prompt
a dialog box titled Dotplots to appear; it has seven options. Choose the
desired graph option and click OK. Then another dialog box appears,
Dotplot–One Y, Simple. Enter one or more variables into Graph variables.
If you have not entered the names of the variables in the data columns, under
Graph variables just enter C1, C2, and so forth and click OK. A separate
graph is displayed for each variable. To display more than one graph, select
the Multiple Graphs option and choose the desired display option.
Example 11.4 Prepare a dot plot for the following data:
23 25 20 16 19 18 42 25
28 29 36 26 27 35 41 18
20 24 29 26 37 38 24 26
34 36 38 39 32 33
Histogram of data with five groups

9
8
7
6
Frequency
5
4
3
2
1
0
18 24 30 36 42
Data
Figure 11.7 MINITAB display of histogram with 5 classes for the data in Example
11.3.
Solution:
1. Enter the data in column C1 of the Data window (same as
Example 11.3).
3. Click Dotplot from the pull-down menus available in the
Graph command menu.
4. Select the Simple dotplot.
Scatterplot
Enter the data in one or more columns of the worksheet, depending upon
how many variables you have. For each variable use only one column. Use
the menu command Graph Scatterplot. These commands prompt a dia-
log box titled Scatterplots, which has seven options. Choose the desired
graph option and click OK. Another dialog box appears, titled Scatterplot-
Simple. Enter the names of the variables under y variable and x variable. If
you have not entered the names of the variables in the data columns, then do
so under y variable and x variable (enter the columns where you have entered
the data, say C1, C2, etc.) and then click OK. A separate graph is displayed
for each set of variables. To display more than one graph, select the Multiple
Graphs option and choose the desired option.
Example 11.5 The following data shows the test scores (x) and the job
evaluation scores (y) of 16 Six Sigma Green Belts. Prepare a scatter plot for
these data and interpret the result you observe in this graph.
264 Chapter Eleven
x 45 47 40 35 43 40 49 46
y 9.2 8.2 8.5 7.3 8.2 7.5 8.2 7.3
x 38 39 45 41 48 46 42 40
y 7.4 7.5 7.7 7.5 8.8 9.2 9.0 8.1
Figure 11.8 MINITAB output of Dotplot for the data in Example 11.4.
Solution:
1. Enter the data in columns C1 and C2 of the Data window.
3. Click Scatterplot from the pull-down menus available in the
Graph command menu.
4. Select the simple scatterplot and click OK.
5. Enter C2 and C1 under the y variable and x variable
respectively and click OK.
The graph in Figure 11.9 shows that although the plotted points are not
clustered around the line, they still fall around the line going through them.
This indicates that there is a moderate correlation between the test scores and
the job evaluation scores of the Six Sigma Green Belts.
Box Whisker Plot
First, enter the data in one or more columns of the worksheet depending
upon how many variables you have. For each variable use only one column.
Then use the menu command Graph Boxplot or Stat EDA Boxplot.
These commands prompt a dialog box titled Boxplot to appear with four
Figure 11.9 MINITAB output of Scatterplot for the data given in Example 11.5.
graph options. Choose the desired option and click OK. Then another dialog
box appears, titled Boxplot—One Y, Simple. Enter one or more variables
into Graph variables. If you have not entered the names of the variables in
the data columns, then under Graph variables just enter C1, C2, and so
forth and click OK. A separate graph is displayed for each variable. To dis-
play more than one graph select the Multiple Graphs option and choose the
desired display option. The Box Plot will appear in the graph window.
Example 11.6 Prepare a box plot for the following data:
23 25 20 16 19 55 42 25
28 29 36 26 27 35 41 55
20 24 29 26 37 38 24 26
34 36 38 39 32 33
Solution:
Example 11.3).
3. Click Boxplot from the pull-down menus available in the
Graph command menu.
266 Chapter Eleven
4. Select the Simple boxplot.

The Box plot for the data in this example will appear in the graph win-
dow as shown in Figure 11.10(a). Figure 11.10(b) shows the Box plot rotat-
ed through 90° so that the whiskers are horizontal.
(a) As shown in MINITAB output (b) Rotated through 90° to

illustrate the skewness
Figure 11.10 MINITAB display of box plot for the data in Example 11.6.
Graphical Summary
First enter the data in one or more columns of the worksheet, depending how
many variables you have. For each variable use only one column. Then use
the menu command select Stat Basic Statistics Graphical Summary.
These commands prompt a dialog box titled Graphical Summary to appear.
Enter the names of the variables you want summarized under Variables. If
you have not entered the names of the variables in the data columns, then
under Variables just enter C1, C2, and so forth. In the box next to
Confidence Level enter the appropriate value of the confidence level and
click OK. This option provides both graphical and numerical descriptive sta-
tistics. A separate graph and summary statistics are displayed for each vari-
able.
Example 11.7 Prepare the graphical summary for the following data:
23 25 20 16 19 55 42 25
28 29 36 26 27 35 41 55
20 24 29 26 37 38 24 26
34 36 38 39 32 33
Figure 11.11 MINITAB display of graphical summary for the data in Example 11.7.
Solution:
Example 11.3).
2. Select Stat from the Menu command.
3. Click Basic Statistics and then Graphical Summary from the
pull-down menus available in the Stat command menu.
The MINITAB output will appear in the Summary window, as shown in
Figure 11.11.
Bar Chart
Enter the data containing categories and frequencies in columns C1 and C2.
Or if the categories and frequencies are not given, enter all the categorical
data in column C1 for the following example. From the Menu command
select Graph Bar Chart. In the Bar Charts dialog box are three options
under Bars represent. Select option 1, Counts of unique values, if you
have one or more columns of categorical data (as you will in the following
example); select 2, A function of a variable, if you have one or more
columns of measurement data; or select option 3, Values from a table, if you
have one or more columns of summary data. For each of these options there
are several other options about the representation of the graph. Choose an
appropriate option and click OK. Now another dialog box appears, titled Bar
268 Chapter Eleven
Chart—[description]. Enter the variable name(s) under Categorical vari-

ables. If you have not entered the names of the variables in the data columns,
under Graph variables just enter C1, C2, and so forth and then click OK. A
separate graph is displayed for each variable. To display more than one graph
select Multiple Graphs and choose the desired display option.
Example 11.8 Prepare a bar graph for the following categorical data:
2 3 5 4 2 3 5 4
6 6 5 4 2 3 4 5
4 2 5 6 4 2 3 6
5 4 2 3 5 6
Solution:
3. Click Bar Chart from the pull-down menus available in the
Graph command menu.
4. Select Counts of Unique Values and Simple from the options.
5. Click OK.
6. Enter C1 into the Categorical variables box.
7. Click OK.
8. The MINITAB output will appear in the graph window, as
shown in Figure 11.12
Pie Chart
Enter the data containing categories and frequencies in columns C1 and C2.
If the categories and frequencies are not given, enter the categorical data in
column C1, as in the following example. From the Menu command select
Graph Pie Chart. Choose Chart raw data when each row in the column
represents a single observation and Chart variables from a table if the cat-
egories and frequencies are given. A slice in the pie is proportional to the
number of occurrences of a value in the column or the frequency of each cat-
egory. Enter column C1 in the box next to Categorical variables. A separate
pie chart for each column is displayed, on the same graph. To display more
than one graph select the Multiple Graphs option and choose the required
display option. When category names exist in one column and summary data
exist in another column, use the Chart values from a table option. Enter
columns for Categorical variable and Summary variables.
Figure 11.12 MINITAB display of bar graph for the data Example 11.8.
Example 11.9 Prepare a pie chart for the following categorical data:
2 3 5 4 2 3 5 4
6 6 5 4 2 3 4 5
4 2 5 6 4 2 3 6
5 4 2 3 5 6
Solution:
3. Click Pie Chart from the pull-down menus available in the
Graph command menu.
4. Select Chart raw data from the options.
5. Enter C1 into the Categorical variables box and click OK.
6. The MINITAB output will appear in the graph window, as
shown in Figure 11.13
11.1.3 Probability Distributions

To calculate various probabilities, select from the Menu command Calc
Probability Distributions and then the probability of choice. This will bring
up a dialog box where the choice of how the probabilities are calculated, such
270 Chapter Eleven
Figure 11.13 MINITAB display of pie chart for the data in Example 11.9.
as Probability Density, Cumulative Probability, or Inverse Probability, can be

selected. Based on the probability distribution being calculated, appropriate
parameter entries need to be made. The choices of probability distribution
include Uniform, Binomial, t, Chi-Square, Normal, F, Poisson, Exponential,
and others. We discuss a couple of these examples below. The technique for
other distributions is quite similar and self-explanatory.
Normal Distribution
Using MINITAB we can calculate three values related to the normal distri-
bution:
1. Probability density, which means finding an area under the
normal distribution curve.
2. Cumulative probability, which means finding the value of the
normal density function f(x).
3. Inverse cumulative probability, which means that the area under
the normal distribution curve below x is given, and we want to
find out the corresponding value of x.
To calculate any of the above probabilities proceed as follows:
From the Menu bar select Calc Probability Distributions
Normal. This will prompt a dialog box titled Normal Distribution to
appear. Click one of the options, which are Probability density,
Cumulative probability or Inverse cumulative probability. Enter the
value of the Mean and the Standard deviation to define the normal distri-
bution. Check the circle next to Input column (if you have more than one
value of x to enter in one of the data columns, say, C1) and enter C1 in the
box next to it. Or select the Input constant field if you have only one value
of x, and enter the value of that constant in the box next to it. If desired, in
the Optional storage enter the column in which you want to store the out-
put. Then click OK.
Example 11.10 Let a random variable be distributed as normal with mean
6 and standard deviation 4. Determine the probability P(8.0 X
14.0).
Solution: In order to determine the probability P(8.0 X 14.0), we
have to first find the probabilities P(X 8.0) and P(X 14.0). Then P(8.0
X 14.0) P(X 14.0) P(X 8.0). To find probabilities P(X 8.0)
and P(X 14.0) using MINITAB, we proceed as follows:
1. Enter the test values of 8 and 14 in column C1.
2. From the Menu bar select Calc Probability Distribution
Normal.
3. In the dialog box that appears, click the circle next to
Cumulative probability.
4. Enter 6 (the value of the mean) in the box next to Mean and 4
(the value of the standard deviation) in the box next to
Standard deviation.
5. Click the circle next to Input column and type C1 in the box
next to it.
6. Click OK.
7. In the session window, text will appear as follows, indicating
values of P(X 14.0) 0.977250 and P(X 8.0) 0.691462.
Thus, P(8.0 X 14.0) P(X 14.0) P(X 8.0)
0.977250-0.691462 0.285788.
Normal with mean 6 and standard deviation 4

x P( X x )
8 0.691462
14 0.977250
Binomial Distribution
For binomial probability distributions, the same options are available as for
the normal probability distribution: Probability, Cumulative probability,
and Inverse cumulative probability.
From the Menu bar select Calc Probability Distributions
Binomial. This will prompt a dialog box titled Binomial Distribution to
appear. Click one of the options, which are Probability density,
Cumulative probability, or Inverse cumulative probability. Enter the
Number of trials and Probability of success (0 p 1) to define the bino-
mial distribution. Check the circle next to Input column (if you have more
272 Chapter Eleven
than one value of x that you must enter in one of the data columns, say, C1)
and enter C1 in the box next to it. Or you may select the Input constant field
if you have only one value of x and enter that value in the box next to it. If
desired, use the Optional storage to enter the column in which you want to
store the output. Then click OK.
Example 11.11 The probability is 0.80 that a randomly selected Six Sigma
Green Belt will finish a project successfully. Let X be the number of Green
Belts who will finish successfully from a randomly selected group of 10
Green Belts. Find the probability distribution of the random variable X.
Solution: In order to find the probability distribution of the random vari-
able X we need to find the probability of X 0, 1, 2, ..., 10. To find these
probabilities using MINITAB we proceed as follows:
1. Enter the values 0, 1, 2, ...,10 in column C1.
2. From the Menu bar select Calc Probability Distributions
Binomial.
3. In the dialog box that appears, click the circle next to
Probability.
4. Enter 10 (the number of trials) in the box next to Number of
trials and 0.80 (the probability of success) in the box next to
Probability of success.
5. Click the circle next to Input column and type C1 in the box
next to it.
6. Click OK.
The desired probabilities will show up in the session window as:
Binomial with n 10 and p 0.8

x P( X x )
0 0.000000
1 0.000004
2 0.000074
3 0.000786
4 0.005505
5 0.026424
6 0.088080
7 0.201327
8 0.301990
9 0.268435
10 0.107374
11.1.4 Estimation and Testing of Hypotheses about Population

Mean and Proportion
1-Sample Z
From the Menu bar select Stat Basic Statistics 1-Sample Z. This will
prompt a dialog box titled 1-Sample Z (Test and Confidence Interval).
Check the circle next to Samples in columns if you have entered raw data
in columns. In the box below, select the columns containing the sample data.
Choose Summarized data if you have summary values for the sample size
and mean. Enter the Standard deviation and Test mean. If you selected
Summarized data, you must also enter Sample size and sample Mean.
Select Options then the Confidence Level and Alternative. The results also
provide the confidence intervals.
Example 11.12 Consider the following data from a population with an
unknown mean and standard deviation , which may or may not be known:
23 25 20 16 19 35 42 25
28 29 36 26 27 35 41 30
20 24 29 26 37 38 24 26
34 36 38 39 32 33 25 30
(a) Find a 95% confidence interval for the mean. (b) Test a hypothesis H0:
30 versus H1: 30 at the 5% level of significance.
Solution: Since the sample size n 32 is greater than 30, it is considered
to be a large sample. Therefore, either to find a confidence interval or to test
a hypothesis we use the Z-statistic. Also, when the sample size is large, the
population standard deviation , if it is unknown as in this example, can be
replaced with the sample standard deviation S. Note that we can find the con-
fidence interval and test the hypothesis by using the one procedure given
below.
1. Enter the data in column C1 of the Data window (Worksheet
window).
2. Since the population’s standard deviation is not known,
calculate the sample standard deviation of these data using one
of the MINITAB procedures discussed earlier. You will find S
6.83.
3. Select the Stat command and then click Basic Statistics 1-
Sample Z in the pull-down menu. This will prompt a dialog
box titled 1-Sample Z (Test and Confidence Interval).
4. Enter C1 in the box below Samples in columns. (If you had
summary statistics, sample mean and sample size, check the
circle next to Summarized data and enter in the boxes next to
it the appropriate values.) Enter the values of the standard
deviation (6.83 from Step 2).
274 Chapter Eleven
5. Enter the value of the test mean under the null hypothesis, in
this case 30. (If you are not testing any hypothesis, leave it
empty)
6. Check Options, which will prompt another dialog box to
appear. Enter the confidence level 95% in the box next to
Confidence level. Finally, next to Alternative, select one of the
three options; less than, not equal, or greater than. Click OK.
The MINITAB output will show up in the session window as:
One-Sample Z: C1
Test of mu 30 vs not 30
The assumed standard deviation 6.83
Variable N Mean StDev SE Mean 95% CI Z P
C1 32 29.6250 6.8285 1.2074 (27.2586, 31.9914) 0.31 0.756
Since the p-value for the test is 0.756, which is much greater than the
level of significance 5%, we do not reject the null hypothesis. The 95% con-
fidence interval is given as (27.2586, 31.9914). Also, note that since 95%
confidence interval contains the value of we were testing for, we do not
reject the null hypothesis at the 5% [(100-95)%] level of significance.
1-Sample t
In Chapters 9 and 10, we saw that if a small sample is taken from a normal
population with an unknown variance, we use t-statistic for finding a confi-
dence interval and testing a hypothesis about the mean. The MINITAB pro-
cedure for 1-Sample t is similar to the one for 1-Sample Z.
From the Menu bar select Stat Basic Statistics 1-Sample t. This
will prompt a dialog box titled 1-Sample t (Test and Confidence Interval)
to appear. Check the circle next to Samples in columns if you have entered
the raw data in columns. In the box below, select the columns containing the
sample data. Check the circle next to Summarized data if you have sum-
mary values for the sample, that is, sample size, sample mean, and sample
standard deviation, and enter those values. Enter the hypothesis test mean in
the box next to Test mean. Select Options to prompt another dialog box,
where you enter the confidence level and value of the mean under the alter-
native hypothesis in the boxes next to Confidence Level and Alternative,
respectively. Click OK in both dialog boxes. The MINITAB output, which
provides the confidence intervals and the p-value for the hypothesis testing,
will appear in the session window.
unknown mean and unknown standard deviation:
23 25 20 16 19 35 42 25
28 29 36 26 27 35 41 30
20 24 29 26 37 38 24 26
(a) Find a 95% confidence interval for the mean . (b) Test a hypothesis H0:
28 versus H1: 28 at the 5% level of significance.
Solution: Follow the procedure discussed in the preceding paragraph and
use the same steps as in 1-Sample Z procedure. The MINITAB output will
appear in the session window as:
One-Sample T: C1
Test of mu 28 vs not 28
Variable N Mean StDev SE Mean 95% CI T P
C1 24 28.3750 7.0761 1.4444 (25.3870, 31.3630) 0.26 0.797
Since the p-value for the test is 0.797, which is much greater than the 5%
level of significance, we do not reject the null hypothesis. The 95% confi-
dence interval is (25.3870, 31.3630).
Also, note that since 95% confidence interval contains the test value of
, we do not reject the null hypothesis at the 5% [(100 95)%] level of sig-
nificance.
1 Proportion
For testing a hypothesis about one population proportion and for finding con-
fidence intervals, use the following MINITAB procedure.
From the Menu bar select Stat Basic Statistics 1 Proportion. This
will prompt a dialog box entitled 1 Proportion (Test and Confidence
Interval) to appear. In the dialog box, check the circle next to Samples in
columns if you have entered the raw data in columns. Then, in the box
below, select the columns containing the sample data. Check circle next to
Summarized data if you have sample summary values for the number of tri-
als and successes (events) and enter those values. Select Options to prompt
another dialog box to appear. Enter the confidence level, value of the pro-
portion under the null, and the alternative hypotheses in the boxes next to
Confidence level, Test proportion, and Alternative, respectively. Check the
box next to Use test and interval based on normal population if the sam-
ple size is large, that is, if np and nq are greater than or equal to 5. If the sam-
ple size is not large, do not check this box. Click OK in both dialog boxes.
The MINITAB output, which provides the confidence intervals and the p-
value for the hypothesis testing will appear in the session window.
Example 11.14 Several studies show that many industrial accidents can be
avoided if all safety precautions are strictly enforced. One such study showed
that 35 out of 50 accidents in one kind of industry could have been avoided
if all safety precautions were taken. If p denotes the proportion of accidents
that could be avoided by taking all safety precautions, find a 95% confidence
interval for p and test the hypothesis H0: p 0.85 versus H1: p 0.85 at the
5% level of significance.
Solution: In this problem, sample summary values are given. Following
the procedure discussed in the above paragraph enter the appropriate values
276 Chapter Eleven
in boxes next to Number of trials, Number of events, Confidence level,

Proportion, and Alternative. Click OK in both dialog boxes. The
MINITAB output shown below will appear in the session window.
1. Select the Stat command and then click Basic Statistics 1
Proportion in the pull-down menu. This will prompt a dialog
box titled 1 Proportion (Test and Confidence Interval) to
appear.
2. In this example, we have summarized data, so click on the
circle next to Summarized Data and enter the values for the
Number of trials (50) and the Number of events (35).
3. Check Options, which will prompt another dialog box to
appear. Enter the confidence level 95% in the box next to
Confidence level. Next to Alternative, select one of the three
options: less than, not equal, or greater than. Enter the Test
proportion value (.85). Because this is a large sample, check
the box to use a normal distribution. Click OK twice.
The MINITAB output will show up in the session window as:
Test and CI for One Proportion

Test of p 0.85 vs p not 0.85
Sample X N Sample p 95% CI Z-Value P-Value
1 35 50 0.700000 (0.572980, 0.827020) 2.97 0.003
Since the p-value is 0.003, which is much smaller than the 5% level of
significance, we reject the null hypothesis. The 95% confidence interval is
(0.572980, 0.827020). Also, note that since 95% confidence interval does not
contain the value of p, we reject the null hypothesis at the 5% [(100 - 95)%]
level of significance.

Population Means and Proportions
2-Sample t
In Chapters 9 and 10 we saw that if small samples are taken from two nor-
mal populations with unknown variances, we use t-statistic for finding a con-
fidence interval for the difference of two population means and for testing a
hypothesis about the two population means. We can achieve this goal of find-
ing a confidence interval for the difference of two population means and for
testing a hypothesis about the two population means by using the MINITAB
procedure for 2-Sample t.
From the Menu bar select Stat Basic Statistics 2-Sample t. This
will prompt a dialog box titled 2-Sample t (Test and confidence interval)
to appear. Check the circle next to Samples in columns if you have entered
the raw data in a single column, differentiated by subscript values in a sec-

ond column. Enter columns C1 and C2 in boxes next to Samples and
Subscripts, respectively. Check the circle next to Samples in different
columns if the data for the two samples are entered in two separate columns.
Enter C1 and C2 in the boxes next to First and Second. If you have sum-
mary data, check the circle next to Summarized data and enter for the two
samples the sample size, sample mean, and sample standard deviation.
Check the box next to Assume equal variances only if the variances of the
two populations can be assumed to be equal. Then select Options to prompt
another dialog box to appear. Enter the confidence level and the value of the
mean difference under the null hypothesis in the box next to Confidence
level, Test difference, and, depending on the alternative hypothesis, choose
less than, greater than, or not equal to in the box next to Alternative. Then
click OK in both dialog boxes. The MINITAB output, which provides the
confidence intervals and the p-value for the hypothesis testing, will appear in
the session window.
Example 11.15 The following data give the summary statistics of scores
on productivity for two groups, one group who are Six Sigma Green Belts
and another group who are not:
Group Sample Size Sample Mean Sample Standard Deviation

Six Sigma Green Belts 25 93 2.1
Non-Six Sigma Green Belts 27 87 3.7
Find a 95% confidence interval for the difference between two population
means. Test a hypothesis H0: 1 2 0 versus H1: 1 2 0 at the 5%
level of significance. Assume that variances of the two populations are equal.
Solution: In this problem sample summary values are given. Following the
procedure discussed in the above paragraph, enter the appropriate values in
boxes of the dialog boxes. Then click OK in both dialog boxes. The overall
procedure is similar to that in Example 11.14. The MINITAB output will
appear in the session window as:
Two-Sample T-Test and CI

Sample N Mean StDev SE Mean
1 25 93.00 2.10 0.42
2 22 87.00 3.70 0.79
Difference mu (1) mu (2)
Estimate for difference: 6.00000
Continued
278 Chapter Eleven
Continued
95% CI for difference: (4.25931, 7.74069)

T-Test of difference 0 (vs not ): T-Value 6.94
P-Value 0.000 DF 45
Both use Pooled StDev 2.9565
This output gives the point estimate and a confidence interval for 1
2. The p-value for the test is 0.000, which is less than 5% the level of sig-
nificance. Thus, we reject the null hypothesis that the two groups have equal
productivity. Furthermore, both lower and upper limits of the confidence
interval are positive, which implies the average productivity score of the
group of Six Sigma Green Belts is significantly higher than the average score
of the other group.
Paired t
In Chapter 10, we saw that if we have a pair of data points on each individ-
ual, the samples are not independent. Therefore, in such problems, the 2-
sample t procedure discussed above cannot be used. In these situations, we
use a special test called the paired t-test.
From the Menu bar select Stat Basic Statistics Paired t. This will
prompt a dialog box titled Paired t (Test and Confidence Interval). In the
dialog box, check the circle next to Samples in columns if you have the raw
data, entered in two columns. Enter the column names in boxes next to First
Sample and Second Sample. If you have summary data, check the circle
next to Summarized data (differences) and enter the sample size, sample
mean, and sample standard deviation. Select Options to prompt another dia-
log box, where you enter the confidence level, the value of the mean differ-
ence under the null hypothesis, and, depending upon the alternative hypoth-
esis, where you choose less than, greater than, or not equal to in the box next
to Alternative. Click OK in both dialog boxes. The MINITAB output, which
provides the confidence intervals and the p-value for the hypothesis testing,
will appear in the session window.
Example 11.16 The following data give the test scores before and after a
two-week training of a group of 15 Six Sigma Green Belts:
Before 83 87 83 78 76 89 79 83 86 90 81 77 74 86 89
After 87 85 89 77 79 84 90 88 83 92 87 81 83 79 85
Test a hypothesis H0: d 0 versus H1: d 0 at the 5% level of signifi-

cance. Find a 95% confidence interval for the population means difference
between before and after test scores.
Solution: Since we have two test scores for each Green Belt, the two
samples are not independent. To test the hypothesis and to find the desired
confidence interval we use the paired t-statistic. Following the procedure

discussed in the above paragraph, and similar to the 2 Sample t, enter the
appropriate values in boxes of the dialog boxes. The biggest difference
here is that we are using raw data and must make references to the appro-
priate columns. The MINITAB output will appear in the session window
as:
Paired T-Test and CI: C1, C2

Paired T for C1 C2
N Mean StDev SE Mean
C1 15 82.7333 5.1056 1.3182
C2 15 84.6000 4.3556 1.1246
Difference 15 1.86667 5.31664 1.37275
95% CI for mean difference: (4.81092, 1.07759)
T-Test of mean difference 0 (vs not 0): T-Value 1.36
P-Value 0.195
This output gives a 95% confidence interval (4.81092, 1.07759) for the
population means difference between before and after test scores. The p-
value for the test is 0.195, which is greater than 5% the level of significance.
Thus, we do not reject the null hypothesis—the average scores before and
after the training are not significantly different. In other words, the training
program is not very effective.
2 Proportions
For testing a hypothesis about two population proportions and finding a con-
fidence difference between the two population proportions, use the following
MINITAB procedure.
From the Menu bar select Stat Basic Statistics 2 Proportions.
This will prompt a dialog box titled 2 Proportions (Test and Confidence
Interval) to appear. Check the circle next to Samples in columns if you have
entered raw data into a single column with a second column of subscripts
identifying the sample. Enter columns C1 and C2 in boxes next to Samples
and Subscripts, respectively. Check the circle next to Samples in different
columns if the data for the two samples are entered in two separate columns
and enter the appropriate column reference next to First and Second. If you
have summary data, check the circle next to Summarized data and enter
Number of trials and Number of events (successes) in the appropriate
spaces. Select Options to prompt another dialog box to appear. Enter the
confidence level, the value of the difference between the two proportions
under the null hypothesis, and, depending upon the alternative hypothesis,
choose less than, greater than, or not equal to in the box next to Alternative.
Check the box next to Use pooled estimate of p for test only if, under the
null hypothesis, two population proportions are equal. (If we reject the null
280 Chapter Eleven
hypothesis of equal proportions, to find the confidence interval do not check

the box for Use pooled estimate of p for test.) Then click OK in both dia-
log boxes. The MINITAB output, which provides the confidence intervals
and the p-value for the hypothesis testing, will appear in the session window.
Example 11.17 A manufacturing company has two plants A and B where
it manufactures motors for passenger cars. A random sample of 120 motors
from plant A revealed that 8 did not meet the specifications, while a random
sample of 150 motors from plant B revealed that 12 did not meet the specifi-
cations. Let p1 and p2 denote the true proportions of motors manufactured at
plant A and B, respectively, that do not meet the specifications. Test H0: p1
p2 0 versus H2: p1 p2 0 at the 1% level of significance. Find a 99%
confidence interval for p1 p2.
Solution: We are given the sample summary data. Following the procedure
discussed above, enter the appropriate values in boxes of the dialog boxes.
Because we are testing the null hypothesis that both proportions are the
same, be certain to check the box for Use pooled estimate of p for test.
Click OK in both dialog boxes. The MINITAB output will appear in the ses-
sion window as:
Test and CI for Two Proportions

Sample X N Sample p
1 8 120 0.066667
2 12 150 0.080000
Difference p (1) p (2)
Estimate for difference: 0.0133333
99% CI for difference: (0.0951614, 0.0684948)
Test for difference 0 (vs not 0): Z 0.42 P-Value 0.678
This output gives the point estimate and a 99% confidence interval for
p1 p2. The p-value for testing the hypothesis is 0.678, which is greater
than 1%, or the level of significance. Thus, we do not reject the null hypoth-
esis and conclude that the proportions of motors manufactured below spec-
ifications at the two plants are not significantly different.

Population Variances
In many applications dealing with two normal populations, quite frequently
we assume that the variances of two populations are equal. In such situations,
it is important that we verify whether that assumption is valid. Below, we dis-
cuss a MINITAB procedure to test whether the two variances are equal or not.
From the Menu bar select Stat Basic Statistics 2 Variances. This
will prompt a dialog box titled 2 Variances to appear. Check the circle next
to Samples in one column if you have entered data into a single column,
with a second column of subscripts identifying the samples, and enter the
column references for the data and the subscripts in those boxes. Check the
circle next to Samples in different columns if the data for the two samples
are entered in two separate columns, and enter those column references next
to First and Second. If you have summary data, check the circle next to
Summarized data and enter sample sizes and sample variances in the appro-
priate boxes. Select Options to prompt another dialog box to appear. In this
dialog box, enter the confidence level—any number between 0 and 100. By
default, it is 95%. Then click OK in both dialog boxes. The MINITAB out-
put, which provides the confidence intervals and the p-value for the hypoth-
esis testing, will appear in the session window.
Example 11.18 Let 12 and 22 denote the variances of the serum choles-
terol levels of elderly and young American men. For a sample of 32 elderly
American men, the sample standard deviation of serum cholesterol was 32.4;
for 36 young American men the sample standard deviation of serum choles-
terol was 21.7. Do these data support, at the 5% level of significance, the
assumption that the variations of cholesterol levels in the two populations
are the same?
Solution: We are given the sample summaries. Following the procedure
discussed above, enter the appropriate values in boxes of the dialog boxes.
Notice that the problem provides sample deviations rather than variance.
Click OK in both dialog boxes. The MINITAB output will appear in the ses-
sion window as:
Test for Equal Variances

95% Bonferroni confidence intervals for standard deviations
Sample N Lower StDev Upper
1 32 25.1974 32.4 44.9883
2 36 17.0998 21.7 29.4730
F-Test (normal distribution)
Test statistic 2.23, p-value 0.023
This MINITAB procedure not only tests a hypothesis of equal variance,

but also provides both numerical and graphical support (see Figure 11.12) in
the form of Bonferroni confidence intervals for the two standard deviations
at the desired level of confidence. In the above output, since the p-value for
the test is 0.023, which is smaller than 5%, the given level of significance,
we reject the null hypothesis of equal variances. This means that the varia-
tions of cholesterol levels in the two populations are significantly different.
282 Chapter Eleven
20 25 30 35 40 45
Figure 11.14 MINITAB printout of 95% Bonferroni confidence interval for standard
deviations.
11.1.7 Testing Normality

It is common to assume that the selected sample comes from a normal pop-
ulation. However, whenever we make this assumption it becomes necessary
to verify that assumption. Since if the assumption is not true, any conclusions
made about the data may not be valid.
From the Menu bar select Stat Basic Statistics Normality Test.
This will prompt a dialog box titled Normality Test to appear. Enter C1 in
the box next to Variable. Under Percentile lines check the circle next to
None. Then under Normality Test check one of the circles next to
Anderson-Darling, Ryan-Joiner, or Kolmogorov-Smirnov. Click OK.
The normal probability graph will appear in the graph window.
Example 11.19 Test at the 5% level of significance if the following sample
comes from a normal population:
23 25 20 16 19 55 42 25
28 29 36 26 27 35 41 55
20 24 29 26 37 38 24 26
34 36 38 39 32 33
Solution: Enter the data in column C1 of the data window, then follow the
steps discussed in the Normality Test procedure. The MINITAB output, the
normal probability graph shown in Figure 11.15, will appear in the graph
window. If all the data points fall almost on a straight line, we can conclude
that the sample comes from a normal population. The decision if all the
points fall almost on a straight line is somewhat subjective. Imagine a 10-
year-old child putting a finger on the straight line. If all the points are hidden
under the finger, we can say the data pass the normality test. In this example,
all the data points except the two points do fall on a straight line. Thus we
can assume that the data in this example passes the normality test. Moreover,
MINITAB also provides the p-value for one of the tests mentioned above.
For instance, we determined the p-value for the Anderson-Darling normality
test. Clearly the p-value is greater than 5%, the level of significance.
Therefore, we can assume the given data come from a normal population.
The normal probability plot can usually be created in two steps:
1. Arrange the data in the ascending order and rank them 1, 2, 3,
..., n, where n is the sample size.
2. Plot the ith-ranked observation against 100(i 0.5)/n on
special graph paper, called normal-probability graph paper (see
Figure 11.15). If the plotted points fall on a straight line, it
implies that the sample comes from a normal population.
Note that the horizontal axis contains the data values and the vertical axis
contains the values of 100(i 0.5)/n.
Figure 11.15 MINITAB display of normal probability graph for the data in Example
11.19.
284 Chapter Eleven
11.2 Using JMP, Version 5.1

JMP has the option of using commands from a menu bar, typing in script in
a script editor, or using a combination. As shown in Figure 11.16, JMP pro-
vides a look and feel familiar to users of other Windows-based products. As
in all Windows-based products, menus are used extensively to help you nav-
igate through the package and select features/options.
Once in the JMP environment, you will see windows with the headings
JMP-JMP starter, as is displayed in Figure 11.16.
The JMP Starter window is simply a tool to help new users become
familiar with the capabilities and features of the software. Brief text descrip-
tions, as well as icons of features and options, are provided in the JMP
Starter but are not as readily available in the main menu bars. The tabs on
the JMP starter window include File, Basic, Model, Multivariate,
Survival, Graph, Surface, QC, Tables, and Index. The File tab contains
the following options: New Data Table, Open Data Table, Open Database
Table, New Script, Open Script, Open Journal, and Preferences. The
JMP Starter may be turned off or disabled by the user under File
Preferences.
11.2.1 Getting Started with JMP

In this part of the chapter, we discuss briefly how to use the JMP pull-down
menus to analyze statistical data. Once you log on to your personal computer
Menu
commands
JMP starter
window
Figure 11.16 The screen that appears first in the JMP environment.
From the Menu bar

select File > New.
This gives the options to

create either a new
Data Table or a
script file.
Selecting Data Table

opens a new Table (an
empty Data window)
Selecting Script opens
a new Script window
for entering SAS code.
Figure 11.17 JMP menu command options.
and get into the JMP environment, you will see the image in Figure 11.16 on
your screen. The pull-down menus appear at the top of the screen.
Menu commands include
File Edit Tables Rows Cols DOE Analyze Graph Tools View Window
Help
By clicking any of these menu commands, we arrive at options included
in that command. For example, if we click on the File menu, we get the drop-
down menu as shown in Figure 11.17. The first option, New, allows us to
create a data table as displayed in Figure 11.17.
Creating a Data Table
New data are entered in a Data Table. The strength of JMP as a statistical
analysis software package is derived from its ability to process data in
columns, more so than in rows. Data can be entered in one or more columns
depending upon the setup of the problem. By default, one active column
appears in the Data Table window. To add more columns, double-click on the
blank space to the right of the last column that was created. The first column
on the far left serves as an index of the number of cells. Labels can be entered
for each column by double-clicking on the top cell of each column and enter-
ing a label such as Part Name, Shift, Lot Number, Operator, or Machine. In
the labeled cells you can enter data using a single cell for a single data point.
Saving a Data Table
Using the command File Save As function allows users to save the current
Data Table. When you enter this command, a dialog box entitled Save JMP
File As appears. Type the file name in the box next to File Name and then
286 Chapter Eleven
click Save. The file will be saved in the drive that you must choose before
you click Save.
Retrieving a Saved JMP Data Table
Using the command File Open Data Table will prompt the dialog box
Open Data Table to appear. Select the drive and directory where the file was
saved by clicking the down arrow next to the Look in box, enter the file
name in the box next to File Name, and click Open. The data will appear in
the same format it was last saved in.
Importing Data from the Internet
Using the command File Internet open... will prompt the dialog box
Internet Open Window to appear. The default protocol is HTTP: if you are
importing data from the Internet using an FTP site, then select ftp from the
drop-down menu. In the URL box type in the website address that contains
the data you want to import into JMP for analysis.
11.2.2 Calculating Descriptive Statistics

Column Statistics
First, enter the desired data in the active Data Table window. Then from the
Menu command select Table Summary. Select one or more data columns
in the box located on the left side of the dialog box to calculate descriptive
statistics. Then click on the Statistics button. A drop-down menu appears
with various options available to compute statistics for selected columns such
as the sum, mean, standard deviation, minimum, maximum, range, median,
sum of squares, N total, N nonmissing, and N missing. All these choices of
statistics appear in the dialog box shown in Figure 11.18. Then click OK.
listed in the dialog box titled Column Statistics, using the following data:
8976568989
Solution:
1. Open a new Data Table under File New Data Table.
2. Enter the data in column 1 of the Data Table window.
3. Select Tables from the Menu command.
4. Click Summary from the pull-down menu available in the
Tables command menu.
5. Select column 1 in the box located on the left side of the dialog
box.
6. Under the Statistics option on the right side of the window,
choose the statistics that you want included in the summary.
Repeat this step until you have selected all the statistics that you
would like to be included in the summary.
7. Click OK.
Dialog box Pull-down menu
Figure 11.18 JMP window showing input and output for Column Statistics.
288 Chapter Eleven
A Summary Table will appear with the summary of the statistics as

selected.
Graphs
JMP allows two ways of generating graphs—one under Graph Charts
and the second under Analyze Distribution. Choices under the Graph
menu include Chart, Overlay Plot, Spinning Plot, Contour Plot, Control
Chart, Variability/Gage Chart, Pareto Plot, and Ternary Plot, Next, we dis-
cuss some of these graphs.
Histogram
First, enter the data in the Data Table. For each variable use only one col-
umn. Then use the Menu Command Analyze Distribution. These com-
mands prompt a dialog box titled Distribution to appear as shown in Figure
11.19, which has three sections: Select Columns, Cast Selected Columns
into Roles, and Action. An option from each category must be selected.
Choose the appropriate variables to form a distribution by clicking on the
desired columns from the Select Columns Category. Then select Y,
Columns from Cast Selected Columns into Roles, and select the appropri-
ate action from the Action category. Click OK.
For example, choose column 1 from Select Columns and click on Y,
Columns from Cast Selected Columns into Roles. Click on OK from
Action. This results in a new window with the output, displaying the his-
togram, outlier box plot, quantiles, and summary statistics.
Example 11.21 Prepare a histogram for the following data:
23 25 20 16 19 18 42 25
28 29 36 26 27 35 41 18
20 24 29 26 37 38 24 26
34 36 38 39 32 33
Figure 11.19 JMP Distribution dialog box.

Figure 11.20 JMP display of histogram for the data given in Example 11.21.
Solution: Take the following steps to generate a histogram from the data set
in Example 11.21.
1. Enter the data in column 1 of the Data Table.
2. Select Tables from the Menu command.
3. Click Summary from the pull-down menu.
4. Select column 1 in the Select Columns box.
5. Select Y, Columns from Cast Selected Columns into Roles.
6. Click OK from Action.
To make the Graph layout horizontal, click on the red arrow to the left of
the column 1 title in the histogram window, shown in Figure 11.20. Select
Display Options Horizontal Layout.
Stem and Leaf
Prepare a stem and leaf diagram for the data in Example 11.21.
2. Select Analyze Distribution from the Menu command.
3. Click the column name under Select Columns.
6. Select the red arrow to the left of the column name.
7. Select Stem and Leaf from the drop-down menu.
290 Chapter Eleven
Figure 11.21 JMP printout of stem and leaf for the data given in Example 11.21.
The stem and leaf diagram for the data in Example 11.21 is shown in
Figure 11.21
Box Whisker Plot
Extending our discussion of the data in Example 11.21, JMP is capable of
generating a box whisker plot along with the histogram. In JMP, there are
two types of box plots: Outlier Box Plot and Quantile Box Plot. Outlier
Box Plot is generated by default. To generate the Quantile Box Plot, take
the following steps:
1. Right-click anywhere outside the histogram graph, shown in
Figure 11.20.
2. Select the Quantile Box Plot Option.
To set the graph in a horizontal position as shown in Figure 11.22, left-
click the red arrow to the left of the title Distributions above the graph and
select the stack option.
Displayed above the histogram, we see both outlier and quantile box
plots. Data points that are considered outliers are presented as individual
points in the tails of the graphic while the interquartile range is indicated by
the width of the box. The single vertical line within the box represents the
Outlier box plot Quantile box plot
Figure 11.22 JMP display of box plot with summary statistics for Example 11.21.
median of the data. The center of the diamond displays the mean, and the
width of the diamond indicates a 95% confidence interval for the mean. JMP
lists by default the quantiles and other related statistics (moments) such as
mean and standard deviation to the right of the graph.
Graphical Summary
First, enter the data in one or more columns of the Data Table depending
upon whether you have data on one or more variables. For each variable use
only one column. Then using the menu command, select Tables
Summary. These commands prompt a dialog box titled JMP: Summary to
appear. Select the appropriate columns by highlighting them. Under the
Statistics option select the appropriate statistics to display. Once all the sta-
tistics to have displayed are selected, select OK. This option provides both
graphical and numerical descriptive statistics. A separate graph and summa-
ry of statistics is displayed for each variable.
To fit a distribution to the histogram, click on the red arrow to the left of
Column 1 in the Distribution dialog box. This action provides a drop-down
menu. From the drop-down menu, select Fit Distribution Normal (if we
wanted to fit a normal distribution to the data, or choose any other desired
distributions such as Weibull, Exponential, or Poisson). Click the red arrow
by the side of Fitted Normal, and more options become available such as
Goodness of Fit Test and Density Curve.
Example 11.22 Prepare the graphical summary for the following data:
23 25 20 16 19 55 42 25
28 29 36 26 27 35 41 55
20 24 29 26 37 38 24 26
34 36 38 39 32 33 25
292 Chapter Eleven
Solution: Take the following steps to generate the graphical summary as

2. Under the Command Menu select Analyze.
3. Then select Distribution.
4. Select column 1 in the Select Columns box.
7. To fit a distribution to the data, right-click anywhere outside the
graph. That prompts a drop-down menu.
8. Select Fit Distribution.
9. Then select the desired Distribution from the list of
distributions available.
Note that from the Goodness-of-Fit Test we see that the p-value is quite
large, which indicates that the data fit well within the normal distribution.
Bar Chart
Enter the data containing categories and frequencies in column 1 and col-
umn 2, or if the categories and frequencies are not given, enter the categor-
ical data in column 1, and then from the Menu commands select Graph
Chart, which brings up a dialog box titled Chart. Three options are provid-
ed in the Options box. To construct a bar chart, from the Options box, select
Figure 11.23 JMP display of graphical summary for the data in Example 11.22.
Bar Chart. In the Cast Selected Columns into Roles box, select N from the
Statistics pull-down menu. Then select X, Level option and click OK. Note
that the type of data for the bar chart should be qualitative.
Example 11.23 Prepare a bar graph for the following categorical data:
2 3 5 4 2 3 5 4
6 6 5 4 2 3 4 5
4 2 5 6 4 2 3 6
5 4 2 3 5 6
Solution: Take the following steps to generate a bar chart as shown in Figure
11.24.
1. Enter the data in a column.
2. Under the Command Menu select Graph Chart.
3. A dialog box titled Chart appears.
4. Select the desired column from the Select Columns box.
5. Under the Options box in this window, select Bar Chart from
the drop-down menu.
Figure 11.24 JMP display of bar graph for the data in Example 11.23.
294 Chapter Eleven
6. Under Cast Selected Columns into Roles, click on the

Statistics button.
7. Select N.
8. Then select the X, Level option.
9. Then click OK.
Pie Chart
Enter the data containing categories and frequencies in column 1 and col-
umn 2, or if the categories and frequencies are not given, enter categorical
data in column 1. From the menu command, select Graph Chart, and a
dialog box titled Chart appears. Under the Select Columns box, select the
columns for which you want a pie chart formed. Then, in the Options box,
click on Vertical, and then select Pie. Select N from the Statistics drop-
down menu in the Cast Selected Columns into Roles box. Then select the
X, Level option and click OK. Note that the type of data for the pie chart
should be qualitative.
Example 11.24 Prepare a pie chart for the following categorical data:
2 3 5 4 2 3 5 4
6 6 5 4 2 3 4 5
4 2 5 6 4 2 3 6
5 4 2 3 5 6
Solution: Take the following steps to generate a pie chart as shown in Figure
11.25.
2. Under the Command Menu select Graph Chart.
3. A dialog box entitled Chart appears.
4. Select the desired column from the Select Columns box.
5. Under the Options box in this window, select Pie Chart from
the drop-down menu.
6. Under Cast Selected Columns into Roles, click on the
Statistics button.
7. Select N from the Statistics drop-down menu.
8. Then select the X, Level option.
9. Click OK.
Figure 11.25 JMP printout of pie chart for the data in Example 11.24.
11.2.3 Estimation and Testing of Hypotheses about One

Population Mean
1-Sample t
In Chapters 9 and 10, we saw that if a small sample is taken from a normal
population with an unknown variance, we can use the t-statistic for finding a
confidence interval and testing a hypothesis about the mean. We now discuss
the JMP procedure for 1-Sample t.
From the Menu bar select Distribution. This will prompt a dialog box
titled Distribution to appear. Select the desired column from the Columns
option, if you have entered the raw data in columns. Then select the Y,
Columns option from the Cast Selected Columns into Roles and click
OK. Select the red arrow to the left of the Column 1. Then select Test
mean. In the Specified Hypothesized Mean box, enter the hypothesized
value of the mean under the null hypothesis. The JMP output is shown in
Figure 11.26.
unknown mean and unknown standard deviation :
296 Chapter Eleven
23 25 20 16 19 35 42 25
28 29 36 26 27 35 41 30
20 24 29 26 37 38 24 26
Figure 11.26 JMP printout of 1 sample t-test for the data in Example 11.25.
(a) Find a 95% confidence interval for the mean .

(b) Test a hypothesis H0: 28 versus H1: 28 at the 5% level
of significance.
Solution: Take the following steps to perform the t-test.
2. Select Analyze Distribution from the Menu command.
3. Click the column name under Select Columns.
6. Select the red arrow to the left of the column name.
7. Select Test Mean from the drop-down menu.
8. Enter the value of the mean under the null hypothesis in the
dialog box that appears.
9. Then click OK.
Since the p-value for the test is 0.797, which is much greater than the 5%
level of significance, we do not reject the null hypothesis. The 95% confi-
dence interval is (25.38704, 31.36296).
1-Sample–z
If the sample size is large (n 30), we use z-statistic instead of t-statistic.
To perform a z-test in JMP, follow the steps for the t-test discussed earlier.
Select the red arrow to the left of the Column 1 in the Distribution box.
Select Test mean. In the Specify Hypothesized Mean box, enter the value
of the mean under the null hypothesis. Then enter the value of the standard
deviation in the box next to Enter True Standard Deviation to do z-test
rather than t-test. The t-test is specified by default.

unknown mean and standard deviation , which may or may not be known:
23 25 20 16 19 35 42 25
28 29 36 26 27 35 41 30
20 24 29 26 37 38 24 26
34 36 38 39 32 33 25 30
(a) Find a 95% confidence interval for the mean .

(b) Test a hypothesis H0 : 30 versus H1: 30 at the 5%
Solution: Since the sample size (n 32) is greater than 30, it is consid-
ered to be a large sample. Therefore, we use the z-statistic. Also, when the
sample size is large, the population standard deviation , if it is unknown, as
in this example, can be replaced with the sample standard deviation S. The
output is shown in Figure 11.27.
Since the p-value for the test is 0.756, which is much greater than the
level of significance 5%, we do not reject the null hypothesis. The 95% con-
fidence interval is given as (27.1630, 32.0869). Also, note that since 95%
confidence interval contains the value of we were testing for, we do not
reject the null hypothesis at the 5% [(100–95)%] level of significance.
2-Sample-t
For a 2-sample t-test, enter the data in one column by stacking. In the second
column, identify the sample for each observation that was entered in the first
Figure 11.27 JMP printout of 1 sample z-test for the data in Example 11.26.
298 Chapter Eleven
column. From the JMP starter window, select the 2-sample t-test. From
the Select Column option in the dialog box, select the column containing the
response, and then click on the Y Response in the Cast selected columns
into Roles box. Then select second column that contains the sample identi-
fication from the same dialog box in the Select Column options, and then
click on the X grouping option in the Cast selected columns into Roles
box. Click OK. For more options such as Displaying Quantiles, click on the
red arrow to the left of Oneway Analysis of Column 1 By Column 2.
Example 11.27 A company bought resistors from two suppliers, 26 resis-
tors from the first supplier and 19 from the second supplier. The following
data show the coded values of the resistance of the resistors bought by the
company. Assuming that the samples come from two normal populations,
determine whether the mean resistance of one population is significantly dif-
ferent from the other. Use 0.05. Also, find a 95% confidence interval for
difference of the two population means.
Sample 1 7.366 7.256 4.537 5.784 5.604 7.987 10.996 6.743 8.739 4.963 9.065 6.451 7.028
6.924 6.525 9.346 5.157 6.372 9.286 3.818 3.221 11.073 6.775 7.779 4.295 5.964
Sample 2 7.730 5.366 4.365 3.234 5.334 6.870 4.268 5.886 7.040 5.434 4.370 4.239 3.875
4.154 5.798 5.995 5.324 5.190 5.330
Solution:
1. Enter the data in a column in a stacked form.
2. In the second column, identify the sample for each observation
that was entered in the first column.
3. Under the JMP starter window, click two sample t-test.
4. In the Select Columns, select the data column, then click
Y,Response.
5. Select the sample identification column from Select Columns,
and then click X,Response.
6. Click OK.
The JMP output is as shown in Figure 11.28. The output gives a 95%
confidence interval (0.66840, 2.59939) for the difference of the two popula-
tion means. The p-value for the test is 0.0014, which is less than 5% the level
of significance. Thus, we reject the null hypothesis and conclude that the
mean resistances of the resistors supplied by the two suppliers are signifi-
cantly different.
Paired t
From the Menu bar select Analyze Matched Pairs Paired t. Choose
Samples in columns if you have entered raw data in two columns. Once the
columns have been selected in the Select Columns box, (select more than
Figure 11.28 JMP printout of 2-sample t-test for the data in Example 11.27.
one column by holding the Ctrl key), click on the Y, Paired Response but-
ton, and click OK.
A graphical display is provided for the paired t-test. Paired t evaluates
the first sample minus the second sample. The results also provide the confi-
dence intervals.
Example 11.28 The following data give the test scores before and after a
two-week training of a group of 15 Six Sigma Green Belts:
Before 83 87 83 78 76 89 79 83 86 90 81 77 74 86 89
After 87 85 89 77 79 84 90 88 83 92 87 81 83 79 85
Test a hypothesis H0: d 0 versus H1: d 0 at the 5% level of sig-

nificance. Find a 95% confidence interval for the difference in before and
after population means.
Solution:
that entered in the first column.
3. Under the JMP starter window, click the two sample t-test.
4. In the Select Columns, select the data column, then click
Y,Response.
6. Click OK.
300 Chapter Eleven
Figure 11.29 JMP printout of paired t-test for the data in Example 11.28.
The output is as shown in Figure 11.29.

This output gives a 95% a confidence interval (4.81092, 1.07759) for
the population means difference between before and after test scores. The p-
value for the test is 0.195, which is greater than 5% the level of significance.
Thus, we do not reject the null hypothesis—the average scores before and
after the training are not significantly different. In other words, the training
program is not very effective.

Population Variances
In many applications dealing with two normal populations, frequently we
assume that the variances of two populations are equal. In such situations, it
is important that we verify whether that assumption is valid. Below, we dis-
cuss a JMP procedure to test whether the two variances are equal or not.
Example 11.29 Consider the data from Example 11.27. Determine
whether the two population variances are equal.
Sample 1 7.366 7.256 4.537 5.784 5.604 7.987 10.996 6.743 8.739 4.963 9.065 6.451 7.028
6.924 6.525 9.346 5.157 6.372 9.286 3.818 3.221 11.073 6.775 7.779 4.295 5.964
Sample 2 7.730 5.366 4.365 3.234 5.334 6.870 4.268 5.886 7.040 5.434 4.370 4.239 3.875
4.154 5.798 5.995 5.324 5.190 5.330
Solution:
that was entered in the first column.
3. Under the JMP starter window, click two sample t-test.
Figure 11.30 JMP printout of test of equal variances in Example 11.29.
4. In Select Columns, select the data column, then click Y,

Response.
6. Click OK.
7. Click the red arrow to the left of Oneway Analysis of Column
1 By Column 2.
8. Select UnEqual Variances.
The output is shown in Figure 11.30
Since the p-value of the F Test 2-sided is 0.0167, which is less than 5%,
the level of significance, we reject the null hypothesis of equal variances.
11.2.5 Normality Test

In most applications it is common to assume that the selected sample comes
from a normal population. However, then it becomes necessary to verify that
assumption. If the assumption is not true, any conclusions made may not be
valid.
Example 11.30 Determine whether the following sample comes from a
normal population:
302 Chapter Eleven
23 25 20 16 19 55 42 25
28 29 36 26 27 35 41 55
20 24 29 26 37 38 24 26
34 36 38 39 32 33
Solution: We used the normal quantile plot to verify if the sample comes
from a normal population. To construct the normal quantile plot, take the fol-
lowing steps.
2. Under the Command Menu select Analyze.
3. Then select Distribution.
4. In Select Columns, select the data column, then click
Y,Columns.
5. Click OK.
6. Click the red arrow to the left of Column 1.
7. Select Normal Quantile Plot.
The output is shown in Figure 11.31.
The interpretation of the plot is as follows:
1. If the data points fall on the red straight line, it indicates that the
normality assumption is satisfactory.
2. If the points fall outside the dotted red curves, it indicates a
significant departure from the normality assumption.
3. The slope of the red line represents the standard deviation of the
distribution.
Quantile Plot
55
Dotted
50 straight line
45
40
Confidence interval for 35

normality
30
25
Dotted red
curves
20
15
-3 -2 -1 0 1 2 3
Slope represents
standard deviation Normal quantile
Figure 11.31 JMP display of normal quantile graph for the data in Example 11.30.
11.3 Web-based Computing Resources

We have devoted a substantial portion of this book to a discussion of PC-
based software for statistical support, namely JMP and MINITAB. We real-
ize that not all the readers of this book may have access to this software, as
inexpensive as it is intended to be. It is important to note that the calculations
discussed throughout this book can be completed by hand or with an inex-
pensive calculator. The reality of actually applying statistics in an operational
industrial environment is such that hand calculations inherently take too
much time and are prone to data entry or procedural errors. The question
becomes, are there are computer-based resources available to support statis-
tical analysis that are free, easy to access, and simple to use? The answer is,
fortunately, yes!
A search of the Internet using a phrase such as “statistical support” will
turn up thousands of sources related to applications of statistics. While many
of these sites would prove not to be useful in your efforts to complete statis-
tical analyses or Six Sigma works, you would quickly find a great many sites
that would be invaluable as they meet all the criteria previously mentioned
(i.e., free, easy to access, simple to use).
Online resources are roughly grouped into three primary categories: sta-
tistics calculated from public or private data (these types of resources are not
applicable for our purposes in this book), interactive calculators, and
texts/references. While there are more than 28 million statistics-related sites
online, you need only find one or two sites that are well prepared, stable, and
of course meet your needs.
One excellent example of an interactive calculator is at www.statpages.
net. Statpages.net offers more than 380 interactive statistical tools/tech-
niques/procedures for anyone to use. The statistical procedures are all
“applied” in nature in that they are active calculators, many of which offer
insights into assumptions, precautions, and interpretations associated with
the procedures. Statpages.com also offers free statistical support software,
statistics textbooks/references, statistical demonstrations/tutorials, and links
to other statistics-related pages.
An excellent example of a web-based text/reference is www.statsoftinc.
com. Statsoftinc.com is primarily a reference manual for explaining statisti-
cal terms, procedures, and related concepts. All the topics at this site are
linked to a comprehensive table of contents and index.
It is important to say that there are many, many more computer-based
resources available than we have the time or page count to address in this
book. In fact, there are so many web-based resources that information over-
load quickly becomes a consideration when directing anyone to these
resources; hence our advice is to limit your interest in these types of
resources to those few that meet your needs. Our most sincere advice regard-
ing use of computing resources to support applied statistics is to find one or
two tools that you like and that meet your needs, learn these tools and
resources as well as you can, and DO NOT keep looking for additional
resources.
About the Authors
Bhisham C. Gupta, M.A., M.S., Ph.D.

Bhisham C. Gupta is a professor of Statistics at the University of Southern
Maine in the United States. Bhisham has taught numerous topics of statistics,
including probability theory, statistical inference, biostatistics, linear models,
regression analysis, design of experiments, analysis of variance, sampling
techniques, quality control, nonparametric methods, and applied statistics for
engineers at undergraduate and graduate levels in the United States, Canada,
Brazil, and India.
Bhisham developed undergraduate and graduate programs at the Federal
University of Rio de Janeiro, Brazil, and at the University of Southern
Maine. He also organized the first Brazilian National Symposium of
Probability and Statistics.
Bhisham has published 35 research papers in well-reputed international
journals. His research interests include sampling theory, design of experi-
ments, and statistical quality control. Bhisham has also co-authored or
authored Regression and Analysis of Variance Techniques and Elements of
Probability Theory (in Portuguese) published by the Federal University of
Rio de Janeiro, Brazil. In addition, Bhisham has consulted in the semicon-
ductor industry, pulp and paper industry, and medical community.
H. Fred Walker, Ph.D., CQMgr, CQE, CQA, CSIT

H. Fred Walker is the department chair and graduate coordinator in the
Department of Technology at the University of Southern Maine. Fred devel-
ops and teaches graduate courses in applied research methods, engineering
economy, quality systems, statistical quality control, quality engineering,
design of experiment applications in manufacturing, manufacturing strate-
gies, and project management. He also develops and teaches undergraduate
courses in quality, industrial statistics, statistical quality control, cost analy-
sis and control, human resource management, project management, and tech-
nical writing.
331
332 About the Authors
Fred’s research agenda is focused on enhancing the competitiveness of

manufacturers through appropriate technology and operating practices. In
support of his research agenda, Fred has written nearly 30 refereed articles
published in national and international journals. Fred also co-edited and co-
authored the Certified Quality Engineering Handbook (2nd ed.) and co-
authored the Certified Quality Technician Handbook, both published by ASQ
Press.
Fred’s industrial experience includes 12 years with airborne weapons
systems integration and automation, supervision and administration, project
management, and program management in countries around the Pacific Rim,
Australia, and Africa. Fred’s consulting experience includes 25 years of con-
tinual involvement with international manufacturers in the semiconductor,
pulp and paper, biomedical equipment, food processing, printing, farm
implement, and machined component industries. This experience has
enabled Fred to earn Certified Quality Manager, Certified Quality Engineer,
Certified Quality Auditor, Certified Manufacturing Technologist, and
Certified Senior Industrial Technologist designations.
Fred is a Six Sigma Black Belt and continues to support Six Sigma
implementation and training needs in several companies.
Acknowledgments
W
e would like to thank Professors John Brunette and Cheng Peng of
the University of Southern Maine, and Ramesh Gupta and Pushpa
Gupta of the University of Maine, Orono, for reading the final draft
line-by-line. Their comments and suggestions have proven to be invaluable.
We would like to thank Professor Joel Irish of the University of Southern
Maine for help in writing a computer program in Mathematica that was used
to prepare all the figures in this book. We thank graduate students Mohamad
Ibourk, Seetha Shetty and Melanie Thompson for help preparing the chapter
on computer resources, as well as Mary Ellen Costello and Stacie
Santomango for general manuscript preparation. Also, we thank Laurie
McDermott, administrative assistant of the Department of Mathematics and
Statistics of the University of Southern Maine, for help in typing the various
drafts of the manuscript. We would like to thank the several anonymous
reviewers whose constructive suggestions greatly improved the presenta-
tions. We also want to thank Annemieke Hytinen, acquisition editor, and Paul
O’Mara, project editor, of ASQ Quality Press for their patience and cooper-
ation throughout the preparation of this project.
We thank Minitab Inc. for permitting us to print MINITAB® screen
shots in this book. MINITAB® and the MINITAB logo® are registered
trademarks of Minitab Inc.
We also thank SAS Institute Inc., of Cary, North Carolina, for permitting
us to reprint screen shots of JMP v. 5.1 (© 2004 SAS Institute Inc. SAS,
JMP and all other SAS Institute Inc. product or service names are registered
trademarks or trademarks of SAS Institute Inc. in the USA and other coun-
tries. ® indicates USA registration).
Most of all, the authors would like to thank their families. Bhisham is
grateful to his wife, Swarn, daughters Anita and Anjali, and son, Shiva, for
their deep love and support. He is grateful to his son-in-law, Mark, for his
expressed curiosity. Last but not least, he is grateful to his first grandchild,
xxii
Acknowledgments xxiii
Priya, for reminding him that there is always time for play. Fred would like
to sincerely thank his wife, Julie, and sons, Carl and George, for their love,
support, and patience as he worked on this and two previous books. Without
their encouragement, such projects would not be possible or meaningful.
—Bhisham C. Gupta
—H. Fred Walker
Bibliography
Selected Books on the Theory of

Probability and Statistics
Freund, John E. (1992). Mathematical Statistics, 5th ed. Englewood Cliffs,
NJ: Prentice Hall.
Hogg, Robert V., & Tanis, Elliot A. (1993). Probability and Statistical
Inference, 4th ed. New York: Macmillan.
Hoel, Paul G., Port, Sidney C., & Stone, Charles J. (1971). Introduction to
Probability Theory. Boston: Houghton Mifflin.
Hoel, Paul G., Port, Sidney C., & Stone, Charles J. (1971). Introduction to
Statistical Theory. Boston: Houghton Mifflin.
Hogg, Robert V., & Craig, Allen T. (1978). Introduction to Mathematical
Statistics, 4th ed. New York: Macmillan.
Ross, Sheldon. (2002). A First Course in Probability, 6th ed. Upper Saddle
River, NJ: Prentice Hall.
Ross, Sheldon M. (1996). Introductory Statistics. New York: McGraw-Hill.
Wackerly, D. D., Mendenhall, W., III, & Scheaffer, R. L. (2002).
Mathematical Statistics with Applications, 6th ed. Pacific Grove, CA:
Duxbury & Thomson Learning.
Selected Books on Engineering

Statistics/Special Topics
Daniel, Wayne W. (1990). Applied Nonparametric Statistics, 2nd ed. Pacific
Grove, CA: Duxbury Thomson Learning.
Devore, J. L. (2004). Probability and Statistics for Engineers and Sciences,
6th ed. Belmont, CA: Duxbury & Brooks/Cole.
Guttman, I., Wilks, S. S., & Hunter, J. S. (1982). Introductory Engineering
Statistics, 3rd ed. New York: John Wiley and Sons.
Johnson, Richard A. (2000). Miller & Freund’s Probability and Statistics for
Engineers, 6th ed. Upper Saddle River, NJ: Prentice Hall.
329
330 Bibliography
Montgomery, D. C., & Runger, G. C. (2003). Applied Statistics and

Probability for Engineers, 3rd ed. New York: John Wiley and Sons.
Ross, S. (2000). Introduction to Probability and Statistics for Engineers and
Scientists, 2nd ed. San Diego: Academic Press.
Sall, J., Creighton, L., & Lehman, A. (2005). JMP Start Statistics, 3rd ed.
Belmont, CA: Duxbury & Brooks/Cole.
Walpole, R. E., Myers, R. H., & Myers, S. L. (2002). Probability and
Statistics for Engineers and Scientists, 7th ed. Upper Saddle River, NJ:
Prentice Hall.
Practice Problem Solutions
Chapter 2
1. (a) quantitative
(b) qualitative
(c) quantitative
(d) quantitative
(e) qualitative
(f) qualitative
2. (a) quantitative
(b) qualitative
(c) quantitative
(d) qualitative
(e) quantitative
3. (a) ordinal
(b) nominal
(c) nominal
(d) ordinal
(e) nominal
4. (a) interval
(b.) ratio
(c.) ratio
(d.) ratio
5. (a) nominal
(b) ordinal
(c) nominal
(d) interval
(e) ratio
(f) ratio
6. Answers may vary:

(a.) nominal: Types of apples in an apple orchard
(b.) ordinal: Guide book rating of local restaurants: poor, fair, good
(c.) interval: Water temperature of Lake Michigan
(d.) ratio: Cost of tickets to a baseball game
7. (a.) nominal
(b.) ratio
(c.) ratio
(d.) ordinal
(e.) nominal
(f.) ratio
(g.) interval
8. (a.) descriptive
1
(b.) descriptive
(c.) inferential
(d.) inferential
(e.) inferential
(f.) descriptive
9. Population: A collection of all conceivable individuals, elements, numbers or entities which possess a
characteristic of interest
Sample: A portion of a population selected for study
Random Sample: A sample in which every element of the population has an equal chance of being
selected
Representative Sample: A sample that has approximately the same distribution of characteristics as
the population from which it was drawn
Descriptive Statistics: A branch of statistics that uses techniques to organize, summarize, present,
and interpret a data set to draw conclusions that do not go beyond the boundaries of the data
set.
10. (a.) inferential

(b.) descriptive
(c.) inferential
(d.) inferential
(e.) descriptive
11. (a.) population

(b.) sample
(c.) sample
(d.) sample
(e.) population
12. Population: All patients who were admitted to the hospital

Sample: 200 patients who were admitted to the hospital over the past several months
13. (a.) descriptive

(b.) inferential
14. (a.) population

(b.) sample
(c.) population
15. (a.) no
(b.) no
(c.) no
(d.) yes
(e.) yes
(f.) no, since of the person in the telephone book may not be the eligible voters.
2
Chapter 3
1. (a) & (b)
Number of Classes m = 1 + 3.3(log30) = 5.87 6.0

Range 20
Class Width = = = 3.33 4.0
m 6
Class Limit Freq. Rel. Freq. Percent

[40 – 44) 5 0.1667 16.67%
[44 – 48) 7 0.2333 23.33%
[48 – 52) 5 0.1667 16.67%
[52 – 56) 6 0.2000 20.0%
[56 – 60) 6 0.2000 20.0%
[60 – 64) 1 0.0333 3.33%
(c)
Histogram of Annual Salaries of Six Sigma Green Belt Workers
5
Frequency
0
39.5 43.5 47.5 51.5 55.5 59.5 63.5
Annual Salaries
2. (a)
Class Limit Freq.

2 9
3 11
4 12
5 5
6 3
3
(b
Bar Chart of the Number of Defective Items
12
10
Frequency
0
2 3 4 5 6
Number Of Defective Items
(c)
Dotplot of the Number of Defective Items
2 3 4 5 6
Number of Defective Items
(d) 50% of the shipments contained at least 4 defective items.
3. (a) & (b)
Number of Classes m = 1 + 3.3(log30) = 5.87 6.0

Range 30
Class Width = = = 5.0
m 6
4
Class Limit Freq. Rel. Freq. Percent
[40 – 45) 5 0.1667 16.67%
[45 – 50) 8 0.2667 26.67%
[50 – 55) 4 0.1333 13.33%
[55 – 60) 4 0.1333 13.33%
[60 – 65) 4 0.1333 13.33%
[65 – 70) 5 0.1667 16.67%
(c)
Histogram of the Number of Computers Assembled

9
6
Frequency
0
40 45 50 55 60 65 70
Number 0f Computers Assembled
(d)
Frequency Polygon of the Number of Computers Assembled

9
6
Frequency
0
42.5 47.5 52.5 57.5 62.5 67.5
Number of Computers Assembled
5
4. (a)
Bar Chart of R&D Budget

9
8
Budget in Millions of Dollars
0
Chicago Detroit Houston New York St Louis
Facility Locations
(b)
Class Freq Percentage No. of Degrees

Chicago 3.5 3.5 / 27.1 = 12.9% 0.129 x 360° = 46°
Detroit 5.4 19.9% 72°
Houston 4.2 15.5% 56°
New York 8.5 31.4% 113°
St. Louis 5.5 20.3% 73°
Pie Chart of R&D Budget
Chicago
St Louis 12.9%
20.3%
Detroit
19.9%
New York
31.4%
Houston
15.5%
6
5. (a) & (b)
Class
Freq. Rel. Freq. Percent
Limit
A 9 0.225 22.5%
B 12 0.300 30.0%
C 11 0.275 27.5%
D 8 0.200 20.0%
6. (a.)
Class Limit Freq.

1 10
2 10
3 13
4 17
(b.) 60% of the households own three or more TV sets

(c.) 20% of the households own only one TV set
7. Stem – and – Leaf Diagram of the Number of Computers Assembled

4 0: 40 assembled computers
4 0013355777799
5 01226689
6 33345679
7 0
There were 17 days where 50 or more computers were assembled.
8. Stem – and – Leaf Diagram of the Diameter of Ball Bearings

3 1: 31mm
3 11112233345666778999
4 0123344456799
5 0001111122233345555666799
6 00
65% of ball bearings have a diameter great than 40mm
7
9. (a) & (b)
Class Limit Freq. Cum. Freq.

[30 – 35) 10 10
[35 – 40) 10 20
[40 – 45) 8 28
[45 – 50) 5 33
[50 - 55) 15 48
[55 – 60) 12 60
(c)
Cumulative Frequency Histogram of the Diameter of Ball Bearings
60
50
Cumulative Frequency
40
30
20
10
0
30 35 40 45 50 55 60
Diameter of Ball Bearings (mm)
(d)
Ogive of the Diameter of Ball Bearings
60
50
Cumulative Frequency
40
30
20
10
0
32 37 42 47 52 57
Diameter of Ball Bearings (mm)
8
10. Stem – and – Leaf Diagram of the Amount of Gasoline Sold (in Gallons)
50 1: 501 gallons of gasoline
50 11355
51 002233579
52 0234579
53 2344445699
54 01456
55 024566
56 012356788
57 022246679
11. 501 501 503 505 505 510 510 512 512 513
513 515 517 519 520 522 523 524 525 527
529 532 533 534 534 534 534 535 536 539
539 540 541 544 545 546 550 552 554 555
556 556 560 561 562 563 565 566 567 568
568 570 572 572 572 574 576 576 577 579
12. Stem – and – Leaf diagram #1

3 0: 30
3 01111111122233344
3 556666777788888999
4 000000012222344444
4 555557788888999
5 00000111111122222222333333444444
Stem – and – Leaf Diagram #2

3 0: 30
3 011111111
3 222333
3 4455
3 66667777
3 88888999
4 00000001
4 22223
4 4444455555
4 77
4 88888999
5 000001111111
5 22222222333333
5 444444
Chapter 4
9
1. (a) mean = 120.02, median = 120.10
(b) standard deviation = 1.84
2. (a) mean = 12.026, variance = 0.289, standard deviation = 0.537

(b) Q1 = 11.753, median = 12.07, Q3 = 12.32, IQR = 12.32 – 11.753 = 0.567
3. (a) mean = 6.769, median = 6.79

(b) variance = 0.0837, standard deviation = 0.2894
(c) The difference between the mean tread depth from our sample (6.769 mm) and the desired tread
depth (7 mm) is 0.2315mm. Therefore the sample mean tread depth is less than one standard
deviation away from the desired tread depth indicating that quality of the tires appears to be
adequate.
4. (a) mean = 49.56, median = 48, mode = 58

(b) The distribution is right skewed
Boxplot of the Number of Parts Manufactured
60
Number of Parts Manufactured
55
50
45
40
5. The data set contains 3 outliers: 56, 58, and 59.
10
Boxplot of the Length of Rods in cm
60
50
Length of Rods in cm
40
30
20
6. (a) 60th percentile = 73.0

(b) 75th percentile = 75.0
(c) 5 data points fall between the 60th and 75th percentiles
7. (a) x1 = 25.667 , s1 = 2.82 , x 2 = 51.194 , s2 = 5.966

(b) cv1 = 10.99 , cv2 = 11.65
(c) The second set of data has a larger relative variability.
8. mean = x = 68.42 , st.dev. = s = 8.18

( )
x ± s = ( 68.42 8.18 ) , ( 68.42 + 8.18 ) = ( 60.24,76.60 )
data points = 28, expected number of data points = 24
( )
x ± 2s = ( 68.42 16.36 ) , ( 68.42 + 16.36 ) = ( 52.06,84.78 )
( )
x ± 3s = ( 68.42 24.54 ) , ( 68.42 + 24.54 ) = ( 43.88,92.96 )
The number of data points that fell within one, two, and three standard deviations of the mean is 25,
35, and 35 respectively. Using the empirical rule the expected number of data points that should fall
within one, two, and three standard deviations of the mean is 24, 34, and 36 respectively. This being
similar to the actual data points that fell within one, two, and three standard deviations we can say that
the shape of the distribution is approximately symmetrical.
9. Number of Classes m = 1 + 3.3(log36) = 6.13 6.0

Range 20
Class Width = = = 3.33 4.0
m 6
11
Class Limit Class Freq.
Mark
[40 – 44) 42 11
[44 – 48) 46 5
[48 – 52) 50 6
[52 – 56) 54 2
[56 – 60) 58 11
[60 – 64) 62 1
actual mean = 49.56, standard deviation = 7.00

mean of the grouped data = 49.5, standard deviation of the grouped data = 6.90
The mean and standard deviation of the grouped data is slightly lower, and therefore more
conservative than the actual mean and standard deviation of the data.
10. 68% of the salaries will fall between $51,100 and $60,100
95% of the salaries will fall between $46,600 and $64,600
99.7% of the salaries will fall between $42,100 and $69,100
11. The median would be a better measure of central tendency in this case due to the extreme values (140
& 281) in the data set. Unlike the mean, the median does not change if the extreme values change.
12. (a) mean = 43.25, median = 44, standard deviation = 9.66, coefficient of variation = 22.33
(b)
Boxplot of the Ages of Six Sigma Green Belt Employees
60
55
50
Age in Years
45
40
35
30
25
(c) 60 % of the ages are within one standard deviation of the mean
100% of the ages are within two standard deviations of the mean
100% of the ages are within three standard deviations of the mean
13. (a) mean = 37.65, median = 38, standard deviation = 1.748, coefficient of variation = 4.64
(b)
12
Boxplot of the Gestational Ages of 40 Children Born
40
39
Age in Weeks
38
37
36
35
(c) 65% of all the ages are within one standard deviation of the mean
100% of all the ages are within two standard deviations of the mean
100% of all the ages are within three standard deviations of the mean
(d) The distribution appears to be skewed left.
14.
Categories Freq.
35 5
36 8
37 6
38 7
39 5
40 9
mean of the grouped data = 37.65, standard deviation of the grouped data = 1.7475. In this case
note that the grouped mean and grouped standard deviation are equal to the actual mean and standard
deviation.
15. The box plots of the two data sets allow us to visually see the range of the data sets, the shape of their
distributions, median, and their quartile values, while also allowing us to draw both comparative and
individual conclusions. For example, the box plot of data set #1 shows that the data set has a range of
about 10, slightly left skewed distribution, the median lies at about 26, while Q1 and Q3 are about 24
and 28 respectively. The box plot of data set #2 shows that the data set has a range of about 18, the
shape of the distribution is some what left skewed, the median lies at about 51, while Q1 and Q3 are
about 46 and 57 respectively.
13
Boxplot of Data Set #1
30
28
26
24
22
20
Boxplot of Data Set #2
60
55
50
45
40
Chapter 5
1. (1) A B
(2) A B
(3) Ac B c
(4) ( ) (
A B c Ac B )
c
(5) ( A B)
2. (1) = {HHH, HHT, HTH, HTT, THH, THT, TTH, TTT}
(2) = {1H, 1T, 2H, 2T, 3H, 3T, 4H, 4T, 5H, 5T, 6H, 6T}
(3) = { (1,1) (1,2) (1,3) (1,4) (1,5) (1,6)

(2,1) (2,2) (2,3) (2,4) (2,5) (2,6)
14
(3,1) (3,2) (3,3) (3,4) (3,5) (3,6)
(4,1) (4,2) (4,3) (4,4) (4,5) (4,6)
(5,1) (5,2) (5,3) (5,4) (5,5) (5,6)
(6,1) (6,2) (6,3) (6,4) (6,5) (6,6) }
(4) = {MMM, FMM, MFM, MMF, FFM, FMF, MFF, FFF}
(5) = {0, 1, 2, 3, …, 10}
3. P(sum of 10, given different) = 0.066
4. P(3 or 5, given odd) = 0.667
5. P(2H, given 1H) = 0.428
6. P(soccer, given boy) = 0.7272
P ( A1 ) P ( B | A1 ) ( 0.2)( 0.4 ) 0.08

7. P ( A1 | B ) = = = = 0.2051
P ( A ) P ( B | A ) + ... + P ( A ) P ( B | A ) ( 0.2 ) ( 0.4 ) + ... + ( 0.3) ( 0.2 ) 0.39
1 1 4 4
P ( A2 | B ) = 0.05
P ( A3 | B ) = 0.6
P ( A4 | B ) = 0.15
P (W ) P ( m | W ) ( 0.35)( 0.2) 0.07

8. P (W | m ) = = = = 0.4746
P ( D ) P ( m | D ) + ... + P (W ) P ( m | W ) ( 0.4 ) ( 0.1) + ... + ( 0.35) ( 0.2 ) 0.1475
9.
P ( A2 ) P ( lost | A2 ) ( 0.25)( 0.3) 0.075
P ( A2 | lost ) = = = = 0.3333
P ( A ) P ( lost | A ) + ... + P ( A ) P ( lost | A ) ( 0.4 ) ( 0.15) + ... + ( 0.1) ( 0.4 ) 0.225
1 1 4 4
10. (i.)
(
P C2 | H = ) ( ) ( )
P C2 P H | C2
=
(0.25)(0.75) =
0.1875
= 0.2727
P ( C ) P ( H | C ) + ... + P ( C ) P ( H | C ) ( 0.25) ( 0.9 ) + ... + ( 0.25) ( 0.5) 0.6875
1 1 4 4
(ii.)
P (C4 ) P ( T | C4 ) ( 0.25)( 0.5) 0.125
P (C4 | T ) = = = = 0.4000
P (C ) P ( T | C ) + ... + P (C ) P ( T | C ) ( 0.25) ( 0.1) + ... + ( 0.25) ( 0.5) 0.3125
1 1 4 4
11. (i.)
P ( m ) P ( favor | m ) ( 0.55)( 0.75) 0.4125
P ( m | favor ) = = = = 0.6962
P ( m ) P ( favor | m ) + P ( f ) P ( favor | f ) ( 0.55) ( 0.75) + ( 0.45) ( 0.4 ) 0.5925
(ii.) P(f | no opinion) = 0.6207

15
(iii.) P(f | not favor) = 0.6716
12. Let the event a worker does not perform his/her job be denoted by np, then we have
P ( M1 ) P ( np | M1 ) ( 0.5)( 0.1) 0.05
P ( M1 | np ) = = = = 0.5155
P ( M1 ) P ( np | M1 ) + ... + P ( M 3 ) P ( np | M 3 ) ( 0.5) ( 0.1) + ... + ( 0.22 ) ( 0.15) 0.097
P ( M 2 | np ) = 0.1443
13. Let 0A = no accident , 1A = one accident, 2A = two or more accidents, A = accident :

P ( 0 A) P ( A | 0 A) ( 0.6)( 0.01) 0.006
P ( 0 A | A) = = = = 0.2105
P ( 0 A) P ( A | 0 A) + ... + P ( 2A) P ( A | 2A) ( 0.6 ) ( 0.01) + ... + ( 0.15) ( 0.1) 0.0285
14. W = White, AA = African American, H = Hispanic, A = Asian, Sci = Science Major
(i.)
P (W ) P ( Sci | W ) ( 0.4 )( 0.5) 0.2
P (W | Sci ) = = = = 0.4734
P (W ) P ( Sci | W ) + ... + P ( A) P ( Sci | A) ( 0.4 ) ( 0.5) + ... + ( 0.15) ( 0.75) 0.4225
( )
(ii.) P A | Sci = 0.2623
(iii.) P ( AA | Sci ) = 0.1420
15. (i.)
P ( A) P ( D | A) ( 0.45)( 0.05) 0.0225
P ( A | D) = = = = 0.6164
P ( A) P ( D | A) + ... + P (C ) P ( D | C ) ( 0.45) ( 0.05) + ... + ( 0.30 ) ( 0.03) 0.0365
(ii.) P ( B | D ) = 0.1370
(iii.) P (C | D ) = 0.2466
16. C1 = fair , C2 = fair , C3 = fair , C4 = two headed , C5 = two tailed

P (C4 ) P ( 2H | C4 ) ( 0.2)(1.0 ) 0.2
P (C4 | 2H ) = = = = 0..5714
P (C ) P ( 2H | C ) + ... + P (C ) P ( 2H | C ) ( 0.2 ) ( 0.25) + ... + ( 0.2 ) ( 0.0 ) 0.35
1 1 5 5
(
17. P A | D = c
) (
P ( A) P D c | A ) =
( 0.4 )( 0.98) =
0.392
= 0.4050
P ( A) P ( D | A) + ... + P (C ) P ( D | C ) ( 0.4 ) ( 0.98 ) + ... + ( 0.35) ( 0.96 ) 0.968
c c
Chapter 6
1. Use MINITAB or JMP n = 20, p = 0.80, q = 0.20

16
( ) ( ) ( ) ( ) ()
(a) P X > 12 = 1 P X 12 = 1 P 12 P 11 ... P 1 P 0 = 0.9679 ()
(b) P ( X < 15) = P (14 ) + P (13) + ... + P (1) + P ( 0 ) = 0.1958
(c) P ( X = 14 ) = 0.1091
(d) Let n = 20, p = 0.2, q = 0.80, since the probability of a car being from Maine is 0.2.
( )
P X = 8 = 0.0222
2. n = 12, p = 0.40, q = 0.60

( ) ( )
(a) P 4 X 6 = P X = 4 + P( X = 5) + P X = 6 = 0.617 ( )
(b) P ( X > 5) = 1 P ( X 5) = 1 P ( 5) P ( 4 ) ... P (1) P ( 0 ) = 0.3348
(c) P ( X < 8 ) = P ( 7 ) + P ( 6 ) + ... + P (1) + P ( 0 ) = 0.9427
(d) P ( X = 0 ) = 0.0022
(
3. mean = µ = np = 25 0.35 = 8.75 )
( )(
variance = 2 = npq = 25 0.35 0.65 = 5.6875 )
standard deviation = = npq = 5.6875 = 2.3848
4. n = 15, p = 0.70, q = 0.30

( ) ( ) ( ) () () ( )
(a) P X > 10 = 1 P X 10 = 1 P 10 P 9 ... P 1 P 0 = 0.5155
(b) P ( X < 8 ) = P ( 7 ) + P ( 6 ) + ... + P (1) + P ( 0 ) = 0.0500
(c) P (10 X 12 ) = P ( X 12 ) P ( X 9 ) = 0.8720 0.2731 = 0.5989
5. N = 100, n = 10, r = 8
8 92
(a) P ( X 1) = 1 P ( X = 0 ) = 1
0 10
= 1
(
1 7.21 1012 ) = 1 0.4166 = 0.5834
13
100 1.73 10
10
( )
(b) P X = 10 = 0.0000
(c) P ( X = 9 ) = 0.0000
(d) P ( X = 0 ) = 0.4166
8
6. mean = µ = np = 10 = 0.80
100
N n 100 10 8 92
variance = 2 = npq = 10 = 0.6691
N 1 100 1 100 100
N n
standard deviation = = npq = 0.6691 = 0.8180
N 1
17
7. N = 12, n = 5, a = 5, b = 7
5 7 5 7
0 5 1 4
(a) P ( X 2 ) = 1 P ( 0 ) P (1) = 1 = 1 0.0265 0.2210 = 0.7525
12 12
5 5
7 5 7 5 7 5
0 5 1 4 2 3
(b) P ( X 3) = 1 P ( 0 ) P (1) P ( 2 ) = 1
12 12 12
5 5 5
= 1 0.0013 0.0442 0.2652 = 0.6893
( ) ( ) () ()
(c) P X 2 = P 0 + P 1 + P 2 = 0.0013 + 0.0442 + 0.2652 = 0.3107
(d) P ( X = 0 ) = 0.0265
3
8. = ( 2000 ) = 6.0
1000
( ) ( ) ()
(a) P X 4 = 1 P X < 4 = 1 P 3 P 2 P 1 P 0 () () ()
= 1 0.0025 0.0149 0.0446 0.0892 = 0.8488
( ) ( ) () () ( )
(b) P X 10 = P 10 + P 9 + ... + P 1 + P 0 = 0.9574
(c) P (5 X 8) = P ( X 8) P ( X 4 ) = 0.874 0.446 = 0.428
(d) P ( X < 2 ) = P (1) + P ( 0 ) = 0.0174
(e) P ( X > 2 ) = 1 P ( 2 ) P (1) P ( 0 ) = 1 0.0446 0.0149 0.0025 = 0.9380
2
9. = ( 5) = 10.0
1
( ) () () () ( )
(a) P X < 8 = P 7 + P 6 + ... + P 1 + P 0 = 0.2202
(b) P ( X 4 ) = 1 P ( X < 4 ) = 1 P ( 3) P ( 2 ) P (1) + P ( 0 ) = 0.9897
(c) P ( 3 X 5) = P ( X 5) P ( X 2 ) = 0.067 0.003 = 0.063
(d) P ( X > 1) = 1 P ( X 1) = 1 P (1) P ( 0 ) = 0.9995
4
10. = ( 25) = 10.0
10
( ) ( ) ( ) () ( ) () ( )
(a) P X 5 = 1 P X < 5 = 1 P 4 P 3 P 2 P 1 P 0 = 0.9707
(b) P ( X 2 ) = P ( 2 ) + P (1) + P ( 0 ) = 0.0028
(c) P ( 2 X 6 ) = P ( X 6 ) P ( X 1) = 0.130 0.000 = 0.130
(d) P ( X < 6 ) = P (5) + P ( 4 ) + ... + P (1) + P ( 0 ) = 0.067
18
11. (a) This experiment can be studied using a binomial model because it satisfies all of the necessary
conditions: there are a fixed number of trials: trails are independent, each trail has only two
possible outcomes, and in each trial the probability of success is the same.
(b) This experiment cannot be studied using a binomial model.
(c) This experiment cannot be studied using a binomial model. By the definition of a binomial
experiment one of the conditions that needs to be satisfied is that each trial has only two possible
outcomes, success and failure. This particular experiment is only observing the number that
appears on the die which means there are six possible outcomes.
(d) This experiment cannot be studied using a binomial model because it fails to satisfy the condition
of having a fixed number of trials, since we are not given that from how many companies we are
selecting the manufacturing company.
12. n = 20, p = 0.60, q = 0.40

( ) ( ) () ()
(a) P X 5 = 1 P X < 5 = 1 P 5 P 4 ... P 1 P 0 = 0.9987() ( )
(b) P ( X 7 ) = P ( 7 ) + P ( 6 ) + ... + P (1) + P ( 0 ) = 0.021
(c) P (5 < X < 10 ) = P ( X 9 ) P ( X 5) = 0.128 0.057 = 0.071
(d) P ( X = 8 ) = 0.0355
(e) P ( X 9 ) = P ( 9 ) + P (8) + ... + P (1) + P ( 0 ) = 0.128
2
13. = (1000 ) = 4.0
500
e x e 4 4 5 ( 0.01832 ) (1024 )
(a) P ( X = 5) = = = = 0.1563
x! 5! 120
( ) ( ) () () () ( )
(b) (i) P X > 5 = 1 P X 5 = 1 P 5 P 4 ... P 1 P 0 = 0.2149
(ii) P ( X 6 ) = P ( 6 ) + P ( 5) + ... + P (1) + P ( 0 ) = 0.8893
(iii) P ( 4 X 8 ) = P ( X 8 ) P ( X < 4 ) = 0.97864 0.42247 = 0.5562
14. N = 500, n = 20, r = 60 (One can also find this probability very easily by using MINITAB or JMP)
60 440 60 440 60 440 60 440

0
20
1
19
2
18
3
17
P ( X 3) = P ( 0 ) + P (1) + P ( 2 ) + P ( 3) = + + +
500 500 500 500

20
20
20
20
= 0.07354 + 0.20961 + 0.27840 + 0.22904 = 0.7906
15. (a) = 5
( )
P X = 4 = 0.1755
(b) = ( 2 ) ( 5) = 10.0
P ( X > 7 ) = 1 P ( X 7 ) = 1 P ( 7 ) P ( 6 ) ... P (1) P ( 0 ) = 0.7798
19
5
(c) = ( 90 ) = 7.5
60
( ) () () ()
P( X 8) = 1 X 7 = 1 [P 7 + ... + P 1 + P 0 ] = 1 0.220 = 0.780
( )( )
(d) = 2 5 = 10.0
( ) ( ) ( )
P 5 < X < 10 = P X 9 P X 5 = 0.4579 0.0671 = 0.3908
16. n = 10, p = 0.60, q = 0.40

n 10
P ( X = 6 ) = p x q n x = ( 0.6 ) ( 0.4 )
6 10 6
= 0.2508
x 6
Chapter 7
1. µ = 20 , = 2
17 20 X 20 23 20
(a) P (17 < X < 23) = P < <
2 2 2
= P ( 1.5 < Z < 1.5)
= P ( Z < 1.5) P ( Z 1.5)
= 0.9332 0.0668 = 0.8664
18 20 X 20 22 20
(b) P (18 < X < 22 ) = P < <
2 2 2
= P ( 1 < Z < 1)
= P ( Z < 1) P ( Z 1)
= 0.8413 0.1587 = 0.6826
15 20 X 20 25 20
(c) P (15 < X < 25) = P < <
2 2 2
= P ( 2.5 < Z < 2.5)
= P ( Z < 2.5) P ( Z 2.5)
= 0.9938 0.0062 = 0.9876
2. µ = 15 , = 1.5
X 15 17 15
( )
(a) P X > 14 = P
1.5
>
1.5
( )
= P Z > 1.33 = 0.5 0.4082 = 0.0918
X 15 14 15
( )
(b) P X > 14 = P
1.5
>
1.5
( )
= P Z > 0.67 = 0.5 + 0.2486 = 0.7486
X 15 15 15
(c) P ( X < 15) = P < = P ( Z < 0 ) = 0.5000
1.5 1.5
20
µ = 33
=3
27 30 X 30 30 30
P ( 27 < X < 30 ) = P < <
(d) 3 3 3
= P ( 1 < Z < 0 )
= P ( Z < 0 ) P ( Z 1)
= 0.5000 0.1587 = 0.3413
3. µ = 33 , = 3
27 30 X 30 30 30
(a) P ( 27 < X < 30 ) = P < <
3 3 3
= P ( 1 < Z < 0 )
= P ( Z < 0 ) P ( Z 1)
= 0.5000 0.1587 = 0.3413
27 30 X 30 35 30
(b) P ( 27 < X < 35) = P < <
3 3 3
= P ( 1 < Z < 1.67 )
= P ( Z < 1.67 ) P ( Z 1.)
= 0.9525 0.1587 = 0.7938
32 33 X 33 39 33
(c) P ( 32 < X < 39 ) = P < <
3 3 3
= P ( 0.33 < Z < 2 )
= P ( Z < 2 ) P ( Z 0.33)
= 0.9772 0.3707 = 0.6065
4. µ = 0 , = 1
( )
(a) P 1 Z 1 = P(Z 1) P(Z 1) = 0.8413 0.1587 = 0.6826
(b) P ( 2 Z 2 ) = P ( Z 2 ) P ( Z < 2 ) = 0.9772 0.0228 = 0.9544
(c) P ( 3 Z 3) = P ( Z 3) P ( Z < 3) = 0.9987 0.0013 = 0.9974
5. From the empirical rule we know that approximately 68% of the data values will fall within one
standard deviation of the mean, 95% will fall within two standard deviations of the mean, and 99.7%
will fall within three standard deviations of the mean. It is clear to see that the results obtained in
problem 4 are similar to the results obtained using the empirical rule.
21
( )
6. (a) P Z 2.11 = 0.9826
(b) P ( Z 1.2 ) = 1 P ( Z < 1.2 ) = 0.8849
(c) P ( 1.58 Z 2.40 ) = P ( Z 2.40 ) P ( Z < 1.58) = 0.9918 0.0559 = 0.9359
(d) P ( Z 1.96 ) = 1 P ( Z < 1.96 ) = 1 0.9750 = 0.0250
(e) P ( Z 1.96 ) = 0.0250
7. = 1.5
( )
(a) P X > 2 = e x = e ( )( ) = e 3 = 0.0498
1.5 2
(b) P ( X < 4 ) = P ( X 3) = 1 e = 1 e = 0.9889

x 4.5
(c) P ( 2 < X < 4 ) = P ( X < 4 ) P ( X 2 ) = 0.9889 0.9502 = 0.0387

(d) P ( X < 0 ) = 0.0000
8. Mean = 12, which means = 1 / 12

(a) 0.3679
(b) 0.1353
(c) 0.2326
(d) 1.0000
1 1 1 1
9. mean = µ = 1 + = 1 + = (100 ) ( 2 ) = 200
0.01 0.5
1 1
2
2
variance = = 2 1 +
1 +

2

1 1
2
2
= 1 + 1+ = 10000 ( 20 ) = 200000
0.012 0.5 0.5

1
( ) =e ( ) 2 = 0.0012
( x ) 0.01( 4500 )

10. (a) P X > 4500 = e

1
=e (
0.01( 7000 )) 2
(b) P ( X > 7000 ) = e (
x )

= 0.00023
1 1 1 1
11. mean = µ = 1 + = 1 + = (1000 ) ( 0.886226 ) = 886.226
0.001 2
1
2
1 2
2
variance = = 2 1 +
1 +

1 1
2
2
= 1 + 1 + = (1000000 ) ( 0.2146034769 ) = 214603.4769
0.0012 2 2

22
12. (a) P ( X < 800 ) = P ( X 799 ) = 1 e ( ) = 1 e (
0.001( 799 ))
2
x
= 0.4719
(b) P ( X > 1000 ) = e ( ) = e (

0.001(1000 ))
2
x
= 0.3679
( 0.001(1500 ))
2
( 0.001(1000 ))
2
( ) (
)
(c) P 1000 < X < 1500 = P X 1500 P X 1000 = 1 e ( )
1 e
= 0.8943 0.6321 = 0.2622
13. = 0.2
( )
(a) P X > 7 = e x = e ()
0.2 7 1.4
= e = 0.2466
(b) P ( 7 < X < 10 ) = P ( X < 10 ) P ( X 7 ) = 0.8647 0.7534 = 0.1113
P ( X 8) P ( X > 5) P ( X 8) 0.2019
(c) P ( X 8 | X > 5) = = = = 0.5488
P ( X > 5) P ( X > 5) 0.36788
(d) P ( X < 7 ) = P ( X 7 ) = 1 0.2466 = 0.7534
( ) (
14. P X 5 + 9 5 = P X 9 = 0.4065)
15. = 0.00125
( )
(a) P X = 700 = 0.00 , since the probability for a continuous random variable to be equal to any
number is always zero.
( )
(b) P X > 850 = 0.3456
(c) P ( 600 < X < 900 ) = P ( X 900 ) P ( 600 ) = 0.6754 0.5274 = 0.1480
(d) P ( X 650 ) = 0.4437
Chapter 8
1. Because the sample size is large, the sampling distribution of x is approximately normal with mean
9
µ x = 28 and standard deviation x = = 1.5 .
36
2. mean = µ x = µ = 18
25 50 5
variance = 2 x = = 4.59, Note that population is finite and sample size is > 5% of the
5 50 1
population.
standard deviation = 2.1424

3. (a) standard error will decrease from to
6 8

(b) standard error will decrease from to
10 20
23

(c) standard error will decrease from to
9 18

(d) standard error will decrease from to
16 24
100
4. µ x = 3000 , x = = 25
16
2960 3000 X 3000 3040 3000
P ( 2960 < X < 3040 ) = P < <
25 25 25
= P ( 1.6 < Z < 1.6 ) = 0.9452 0.0548 = 0.8904
35
5. µ x = 140 , x = =5
49
X 140 145 140
(i) P ( X > 145) = P > = P ( Z > 1) = 1 P ( Z 1) = 1 0.8413 = 0.1587
5 5
( ) ( )
(ii) P X < 140 = P Z < 0 = 0.5000
(iii) P (132 < X < 148 ) = P ( 1.6 < Z < 1.6 ) = 0.9452 0.0548 = 0.8904
10
6. µ x = 120 , x = = 1.6667
36
X 120 122 120
(i) P ( X > 122 ) = P > = P ( Z > 1.20 ) = 1 P ( Z 1.20 ) = 1 0.8849 = 0.1151
1.6667 1.6667
( ) ( )
(ii) P X < 115 = P Z < 3.00 = 0.0013
(iii) P (116 < X < 123) = P ( 2.40 < Z < 1.80 ) = 0.9641 0.0082 = 0.9559
4
7. µ x = 70 , x = = 0.6667
36

X 70 75 70
(i) P ( X > 75) = P > = P ( Z > 7.50 ) = 1.0000
0.6667 0.6667
( ) ( )
(ii) P X < 70 = P Z < 0.00 = 0.5000
(iii) P ( 70 < X < 80 ) = P ( 0.00 < Z < 15.00 ) = P ( Z 15.00 ) P ( Z 0.0000 ) = 0.5000
8. (i) Since np > 5 and nq > 5, the sample proportion is approximately normal with
mean = µ p̂ = p = 0.4 and standard deviation = p̂ =

pq
=
( 0.4 )( 0.6) = 0.0775 .
n 40
(ii) Since np > 5 and nq > 5, the sample proportion is approximately normal with
24
pq
=
( 0.2)( 0.8) = 0.0566 .
n 50
(iii) Since np > 5 and nq > 5, the sample proportion is approximately normal with

pq
=
( 0.1)( 0.9) = 0.0335 .
n 80
9. (i) In this problem we are given n = 100 and p = 0.5. Thus, we have np > 5 and nq > 5, therefore, the
sample proportion p̂ is approximately normal with mean = µ p̂ = p = 0.5 and standard deviation
p̂ =
pq
=
(0.5)(0.5) = 0.05 .
n 100
p̂ 0.5 0.6 0.5
(
(ii) P p̂ > 0.60 = P )
0.05
>
0.05
( )
= P Z > 2.00 = 0.0228
10. (i) In this problem we are given n = 500 and p = 0.8. Thus, we have np> 5 and nq > 5, therefore, the
sample proportion is approximately normal with
mean µ p̂ = p = 0.8 and standard deviation p̂ =

pq
=
(0.8)(0.2) = 0.0179 .
n 500
p̂ 0.8 0.75 0.8
(ii) P ( p̂ 0.75) = P = P ( Z 2.80 ) = 0.9974
0.0179 0.0179
11. (i) In this problem we have n = 100 and p = 0.5. Thus, we have np > 5 and nq > 5, therefore, the
sample proportion p̂ is approximately normal with mean = µ p̂ = p = 0.5 and standard deviation
p̂ =
pq
=
(0.5)(0.5) = 0.05 .
n 100
p̂ 0.5 0.6 0.5
(
(ii) P p̂ > 0.60 = P )
0.05
>
0.05
( )
= P Z > 2.00 = 0.0228
( )
12. (i) P 152 24.9958 = 0.05
(ii) P ( 2
15
6.2621) = 0.975
(iii) P ( 2
15
6.2621) = 0.025
(iv) P ( 2
15
7.2609 ) = 0.95
(v) P ( 2
15
7.2609 ) = 0.05
13. (i.) t18,0.025 = 2.101

(ii.) t20,0.05 = 1.725
(iii.) t15,0.01 = 2.602
25
(iv.) t10,0.10 = 1.372
(v.) t12,0.005 = 3.055
14. (i) F6,8,0.05 = 3.58

(ii) F8,10,0.01 = 5.06
(iii) F6,10,0.05 = 3.22
(iv) F10,11,0.025 = 3.53
1
15. (i) F10,12,0.95 = = 0.3436
F12,10,0.05
1
(ii) F8,10,0.975 = = 0.2326
F10,8,0.025
1
(iii) F15,20,0.95 = = 0.4292
F20,15,0.05
1
(iv) F20,15,0.99 = = 0.3236
F15,20,0.01
Chapter 9
1.5
1. margin of error E = ±z0.025 = ±1.96 = ±0.49
n 36
( )
2. (a.) Since E X = µ , the sample mean X is always an unbiased estimator of the population mean µ .
Therefore, the point estimate of the population mean wage is 25.
4
(b.) standard error of the point estimate is = = 0.5714
n 49
4
(c.) margin of error E = ±z0.025 = ±1.96 = ±1.12
n 49
3. x = 12 , s = 0.6 , z = z0.005 = 2.58 , n = 64

2
99% confidence interval for the population mean:

s s 0.6 0.6
x ±z
µ x + z
=
12 2.58 µ 12 + 2.58
2 n 2 n 64 64
= (11.8065 µ 12.1935)
4. x1 = 203 , x 2 = 240 , 1 = 6 , 2 = 8.5 , n1 = 36 , n2 = 49
26
90% confidence interval for the difference of two population means:
12 22 62 8.52
(x 1
x 2 ) ± z
2
+
n1 n2
= ( 203 240 ) ± 1.645 +
36 49
= 37 ± 2.5877
= ( 39.5877 µ1 µ2 34.4123)
99% confidence interval for the difference of two population

12 22 62 8.52
means: ( x1 x 2 ) ± z + = ( 203 240 ) ± 2.58 + = 37 ± 4.0585
2 n1 n2 36 49
= ( 41.0585 µ1 µ2 32.9415)
5. x1 = 295,000 , x 2 = 305,000 , s1 = 10,600 , s2 = 12,800 , n1 = 100 , n2 = 121
98% confidence interval for the difference of two population means:
s12 s22 10,600 2 12,800 2

(x 1
x 2 ) ± z
2
+
n1 n2
= ( 295,000 305,000 ) ± 2.33
100
+
121
= 10,000 ± 3667.5485
= ( 13,667.5485 µ1 µ2 6,332.4515)
6. x1 = 10.17 , x 2 = 12.34 , s1 = 1.209 , s2 = 0.848 , n1 = 16 , n2 = 25
S 2
=
(n 1
1) s12 + ( n2 1) s22
=
(16 1)(1.209 ) + ( 25 1)( 0.848 ) = 1.0047
2 2
p
n1 + n2 2 16 + 25 2
95% confidence interval for the difference between two population means:
1 1 1 1
( )
x1 x2 ± tn + n 2, S p +
n1 n2
(
= 10.17 12.34 ± 2.021 1.0023 )
+ = 2.17 ± 0.6485
16 25
1 2 2
(
= 2.8185 µ1 µ2 1.5215 )
7. 95% confidence interval for the difference between two population means:
s12 s22 30 40
(x 1
x 2 ) ± z
2
+
n1 n2
= ( 79 86 ) ± 1.96 +
49 36
= 7 ± 2.573
= ( 9.573 µ1 µ2 4.427 )
98% lower confidence interval for the difference between two population means:
s12 s22 30 40
(x x ) z
1 2
+
n1 n2
( )
= 79 86 2.06 +
49 36
= 7 2.704 = 9.704
(
= 9.704 µ1 µ2 )
27
98% upper confidence interval for the difference between two population means:
s12 s22 30 40
(x x ) + z
1 2
+
n1 n2
( )
= 79 86 + 2.06 +
49 36
= 7 + 2.704 = 4.296
(
= µ1 µ2 4.4296 )
8. 95% confidence interval for the difference between two population means:
2
s12 s22
n + n
s12 s22 1 2
( x1 x2 ) ± tm, + where,
n1 n2
m= 2 2
2 s12 s22

n1
ns
+
n1 1 n2 1
2
1.212 0.852
16 + 25
= = 24.44 24
( ) +( )
2 2
1.212 0.852
16 25
16 1 25 1
tm, = t24,0.025 = 2.069

2
Then,
1.212 0.852
(10.17 12.34 ) ± 2.069 16 + 25 = 2.17 ± 0.7179 = ( 2.8879 µ1 µ2 1.4521)
18
9. A point estimate of p = p̂ = = 0.02 .
900
95% confidence interval for the population proportion:
p̂ ± z
p̂q̂
= 0.02 ± 1.96
(
0.02 0.98 ) (
= 0.02 ± 0.009 = 0.011 p 0.029 )
2
n 900
95% lower confidence limit for the population proportion:
p̂ z
p̂q̂
= 0.02 1.645
(
0.02 0.98 )
= 0.02 0.00767 = 0.01233 p 1( )
n 900
22
10. p̂ = = 0.055 , q̂ = 0.945 , n = 400
400
95% confidence interval for the population proportion:
0.055 ( 0.945)
= 0.055 ± 0.0223 = ( 0.0327 p 0.0773)
p̂q̂
p̂ ± z = 0.055 ± 1.96
2
n 400
28
95% lower confidence interval for the population proportion:
p̂ z
p̂q̂
= 0.055 1.645
0.055 0.945 ( ) (
= 0.055 0.0187 = 0.0363 p 1 )
n 400
95% upper confidence interval for the population proportion:
p̂ + z
p̂q̂
= 0.055 + 1.645
0.055 0.945 ( ) (
= 0.055 + 0.0187 = 0. p 0.0737 )
n 400
40 50
11. p̂1 = = 0.05 , q̂1 = 0.95 , p̂2 = = 0.083 , q̂2 = 0.917
800 600
95% confidence interval for the difference between two population proportions:
p̂1q̂1 p̂2 q̂2 0.05 ( 0.95) 0.083 ( 0.917 )
( p̂ p̂ ) ± z
1 2
n1
+
n2
= ( 0.05 0.083) ± 1.96
800
+
600
2
= 0.033 ± 0.0267 = ( 0.0597 p1 p2 0.0063)
72 110
12. p̂1 = = 0.6 , q̂1 = 0.40 , p̂2 = = 0.73 , q̂1 = 0.27
120 150
95% confidence interval for the difference between two population proportions:
p̂1q̂1 p̂2 q̂2 0.6 ( 0.4 ) 0.73 ( 0.27 )
( p̂ p̂ ) ± z
1 2
n1
+
n2
= ( 0.6 0.73) ± 1.96
120
+
150
2
(
= 0.13 ± 0.1128 = 0.2428 p1 p2 0.0205 )
2

13. n = 2
=
( )
z p̂q̂ 1.962 ( 0.02 ) ( 0.98 )
= 120.47 121
E2 ( )
2
0.025
2

14. n = 2
=
( )
z p̂q̂ 1.962 ( 0.02 ) ( 0.98 )
= 30.12 31
E2 ( )
2
0.05
When we increase the margin of error from 0.025 to 0.05 we see that the sample size decreases by 90
from 121 to 31.
width 20
15. E = = = 10 , z 2 = z0.02 2 = 2.33
2 2
n=
z 2 22
=
(
2.332 30 2 )( )
= 48.86 49
E2 10 2
29
16. When we decrease the confidence coefficient from 98% to 95% our new sample size is
n=
z 2 2 2
=
1.962 30 2 (
= 34.57 35
)( )
E2 10 2
When we increase the standard deviation from 30 to 50 our new sample size is:
n=
z 2 2 2
=
1.962 50 2 (
= 96.04 97
)( )
E2 10 2
17. (a) n =
(1.96 )( 0.5( 0.5) + 0.5( 0.5)) = 1200.5 1201
z2 2 p1q1 + p2 q2
=
2
E 2
( 0.04 ) 2
z p q + p q (1.96 ) ( 0.5 ( 0.5) + 0.5 ( 0.5))

2
2 1 1 2 2
2
(b) n = = = 1568
E 2
( 0.035 ) 2
z p q + p q (1.96 ) ( 0.5 ( 0.5) + 0.5 ( 0.5))

2
2 1 1 2 2
2
(c) n = = = 2134.22 2135

E 2
( 0.03 ) 2
18. (i) n =
z 2 2 2
=
(1.645 )( 40 ) = 10.82 11
2 2
E2 20 2
(ii) n =
z 2 22
=
(
1.6452 40 2 )( ) = 3.53 4
2
E 352
(iii) n =
z 2 2 2
=
( 1.6452 40 2 )( ) = 2.14 3
E2 452
(iv) n =
z 2 22
=
( 1.6452 40 2 )( ) = 1.02 2
2
E 652
19. n =
(
z2 2 s12 + s22 ) = ( 2.58 )(30 + 40 ) = 116.49 117
2
E2 22
20. Fn 1,n1 1,

= F14,9,0.05 = 3.03
2
95% upper confidence interval for the ratio of two variances:

s12 302

0, Fn2 1,n1 1, 2
= 0, F
s2 14,9,0.05 382
= 0,1.8885 ( )
21. 95% confidence interval for the population variance:

(
n1 1 s 2
2
2
)
n1 1 s 2 25 1 5 (
2
2
25 1 52) ( )( ) ( )( )
2 =
n1, 2 n1,1 2
39.3641 12.4011
30
(
= 15.2423 2 48.3828 )
95% confidence interval for the population standard deviation:
(
n 1 s2 ) n 1 s2 ( )
2
n1, 2
2
n1,1 2

(
= 15.2423 48.3828 = 3.9041 6.9557 ) ( )
95% lower confidence limit for the population standard deviation:

( n 1) s 2
=
( 25 1)(5 ) = 4.0591
2
n21, 36.4151
95% upper confidence limit for the population standard deviation:

( n 1) s 2
=
( 25 1)(5 ) = 6.5823
2
n21,1 13.8484
The lower one-sided confidence limit, 4.0591, is greater than the lower two-sided confidence limit,
3.9043. Also the upper one-sided confidence limit, 6.5823, is less than the upper two-sided confidence
limit, 6.9557. The difference in these confidence limits has to do with the way that alpha was used in
each of the equations. For the two sided confidence interval we used /2 on each sided and for the
one-sided confidence limits we used .
22. x1 = 27.5 , 1 = 1.96 , n1 = 10
95% confidence interval for the population variance:

( n1 1) 12
2 (
1 2
n1 1) 12 (10 1) 1.96
2
(2
1
( )
10 1) 1.962 ( )
=
2
n 1, 2 n 1,1 2
19.0228 2.7004
(
= 1.8175 12 12.8034 )
99% lower confidence interval for the population variance
( n1 1) 12
2

(10 1) 1.962
= 2 (

)

(
= 1.5958 12 )
1 1

2
n 1, 21.666
99% upper confidence interval for the population variance:

2 ( n1 1) 12 2
(10 1) 1.962 ( ) (
= 0 12 16.5594 )
0 1 = 0 1
2
n 1,1

2.0879
23. x 2 = 31.2 , 2 = 2.21 , n2 = 15
95% confidence interval for the population variance:
31
( n2 1) 22
2 (
2 2
n2 1) 22 (15 1) 2.21
2
2
2
(
(15 1) 2.212 ) ( )
=
2
n 1, 2 n 1,1 2
26.119 5.6287
(
= 2.618 22 12.148 )
99% lower confidence interval for the population variance
( n2 1) 22
2

(15 1) 2.212
= 2

(

)

= 2.3464 22 ( )
2
2

2
n 1, 29.1413
99% upper confidence interval for the population variance:

2 ( n2 1) 22 2
(15 1) 2.212 (
= 0 22 14.672
) ( )
0 2 = 0 2

2
n 1,1
4.6604
24. Fn = F14,9,0.025 = 3.80 , Fn = 1 = 1 = 0.3115

2 1,n1 1, 2 2 1,n1 1,1 2 Fn 1,n F9,14,0.025
1 2 1, 2
95% confidence interval for the ratio of two variances:

s2 1 12 s12 1.962 12 1.962
2
1
2 2 Fn 1,n 1, 2
= 0.3115 3.80
( ) ( )
s2 Fn1 1,n2 1, 2 2 s2
2
2 1
2.21 22 2.212
12
= 0.2450 2 2.988
2
25. 95% upper confidence interval for the ratio of two variances:
Fn 1,n 1, = F14,9,0.05 = 3.03
2 1
s12 1.962 1.962

0, Fn2 1,n1 1, 2 = 0, F14,9,0.05
s2
= 0, 3.03
2.212
(
2.212
)
= 0,2.3832 ( )
95% lower confidence interval for the ratio of two variances:

Fn 1,n 1,1 = 1 = 1 = 0.3773
2 1 Fn 1,n 1, F9,14,0.05
1 2
s2 1 1.962 1 1.962
2
s
1
F
, =
2.212
F
, = 2.212

0.3773 , = 0.2967,

( ) ( )
2 n1 1,n2 1, 9,14,0.05
Chapter 10
32
1. (a.) upper-tail test
(b.) lower-tail test
(c.) two tail test
{ } {
2. Rejection Region: RR = Z z = Z z0.01 = Z 2.33 } { }
Test Statistic:
X µ 7.5 7.0
Z= = = 2.5
s n 1.4 49
Since 2.5 > 2.33 , we reject the null hypothesis H 0 .
{ } { } {
3. (a.) Rejection Region: RR = Z z = Z z0.05 = Z 1.645 }
Test Statistic:
X µ 450 500
Z= = = 6.0
s n 50 36
Since 6.0 < 1.645 , we reject the null hypothesis H 0
(b.) Rejection Region: RR = Z z { 2 } = { Z > z } = { Z > 1.96}

0.025
Test Statistic:
X µ 500 450
Z= = = 6.0
s n 50 36
( ) ( )
4. (a.) p value = P Z z = P Z 6.0 = 0.0000 . Since the p value = 0.0000 < 0.05 = , we reject
the null hypothesis H 0 .
( )
(b.) p value = 2P Z z = 2P ( Z 6.0 ) = 2 ( 0.0000 ) = 0.0000 , Note that we multiply by 2 because
the test is a two-tail test. Since the p value = 0.0000 < 0.05 = , we reject the null
hypothesis H 0 .
{ } {
5. (a.) Rejection Region: RR = Z z = Z z0.01 = Z 2.33} { }
Test Statistic:
X µ 58.7 60
Z= = = 5.2
s n 2.5 100
Since 5.2 < 2.33 , we reject the null hypothesis H 0 .
p value = P ( Z < z ) = P ( Z < 5.2 ) = 0.0000

Since the p value = 0.0000 < 0.01 = , we reject the null hypothesis H 0 .
33
(b.) Rejection Region: RR = Z z { 2 } = { Z z } = { Z 2.58}
0.005
Test Statistic:
X µ 58.7 60
Z= = = 5.2
s n 2.5 100
( )
p value = 2P Z z = 2P ( Z 5.2 ) = 2 ( 0.0000 ) = 0.0000 . Note that we multiply by 2 because
the test is a two-tail test. Since the p value = 0.0000 < 0.01 = , we reject the null
hypothesis H 0 .
6. Rejection Region: RR = Z z{ 2 } = { Z z } = { Z 1.96}

0.025
Test Statistic:
X µ 18.2 18
Z= = = 1.33
s n 1.2 64
Since 1.33 < 1.96 , we do not reject the null hypothesis H 0 .
( )
p value = 2P Z z = 2P ( Z 1.33) = 2 ( 0.0918 ) = 0.1836
Since the p value = 0.1836 > 0.05 = , we do not reject the null hypothesis H 0 .
Power of the test:

µ µ µ µ
At µ = 18.5 ; 1 = 1 P 0 z < Z < 0 + z
s n 2 s n 2
18 18.5 18 18.5
= 1 P 1.96 < Z < + 1.96
1.2 64 1.2 64
= 1 P ( 5.29 < Z < 1.37 ) = 0.9147
7. (a.) Rejection Region: RR = Z z { 2 } = { Z z } = { Z 1.96}

0.025
Test Statistic:
Z= 1
( X X 2 ) ( µ1 µ2 ) = ( 73.54 74.29) 0 = 21.2132
s12 s22 0.22 0.152
+ +
n1 n2 50 50
( )
(b.) p value = 2P Z z = 2P ( Z 21.2132 ) = 2 ( 0.0000 ) = 0.0000
(c.) Since the p value = 0.000 < 0.05 = , we reject the null hypothesis H 0 .
{ } {
8. (a.) Rejection Region: RR = Z z = Z z0.05 = Z 1.645 } { }
34
Test Statistic:
Z= 1
( X X 2 ) ( µ1 µ2 ) = (68.8 81.5) 0 = 9.8918
s12 s22 5.12 7.4 2
+ +
n1 n2 49 49

(b.) Type II Error = P Z >
( µ1 µ2 )0 ( µ1 µ2 ) z = P Z > 05
1.645

s12 s22 5.12 7.4 2
+ +
n1 n2 49 49
= P ( Z > 5.5394 ) = 1.0000
Power of the Test:

( )
At µ = 5 ; 1 = 1 P Z > 5.5394 = 0.0000
9. (a.) H 0 : µ1 µ2 = 0 vs. H1 : µ1 µ2 0
{
Rejection Region: RR = Z z 2 } = { Z z } = { Z 1.96}
0.025
Test Statistic:
Z= 1
( X X 2 ) ( µ1 µ2 ) = (68,750 74,350 ) 0 = 5.8135
s12 s22 4,930 2 5,400 2
+ +
n1 n2 55 60
Since 5.8135 > 1.96 , we reject the null hypothesis H 0 . In other words, we conclude at the 0.05
significance level that two loan officers do not issue loans of equal value.
(b.) H 0 : µ1 µ2 = 0 vs. H1 : µ1 µ2 < 0

{ } {
Rejection Region: RR = Z z = Z z0.01 = Z 2.33} { }
Test Statistic:
Z= 1
( X X 2 ) ( µ1 µ2 ) = (68,750 74,350 ) 0 = 5.8135
s12 s22 4,930 2 5,400 2
+ +
n1 n2 55 60
Since 5.8135 < 2.33 , we reject the null hypothesis H 0 . In other words, we conclude at the 0.01
significance level that on the average loans issued by officer one is less than the average loans
issued by officer two.
{ } { } {
10. (a.) Rejection Region: RR = Z z = Z z0.01 = Z 2.33 }
Test Statistic:
35
Xµ 15.5 15
Z= = = 2.86
n 1.4 64

µ0 µ1 15 16
(b.) Type II Error = P Z < + z = P Z < + 2.33
1.4

n 64
= P ( Z < 3.38 ) = 0.0004
Power of the Test:

(
At µ = 16 ; 1 = 1 P Z < 3.38 = 0.9996 )
11. x = 25.4 , s = 3.57 , n = 10
{
(a.) Rejection Region: RR = T tn1, 2 } = { T t } = { T 3.25}
9,0.005
Test Statistic:
x µ 25.4 15
T= = = 9.21
s 3.57
n 10
( ) ( )
(b.) p value = P T t = 2P T 9.21 < 2P T 4.781 = 0.001 ( )
p value < 0.001
12. Assume that the sample come from a normal population.

{ } { } {
RR = T tn1, = T t15,0.05 = T 1.753 }
Test Statistic:
x µ 4,858 5,000
T= = = 0.99
s 575
n 16
Since 0.99 > 1.753 , we do not reject the null hypothesis H 0 .
p value = P ( T t ) = P ( T 0.99 ) > P ( T 1.341) = 0.100

p value > 0.100
13. Rejection Region: RR = T tm, { 2 } = {T t} = { T 2.797}

24,0.005
S 2
=
( n 1) s + ( n 1) s = (12 1)(9 ) + (14 1)(10 ) = 91.2917
1
2
1 2
2
2
2 2
p
n1 + n2 2 12 + 14 2
Test Statistic:
36
T=
(X 1
X 2 ) ( µ1 µ2 )
=
(110 115) 0 = 1.33
1 1 1 1
Sp + 9.5547 +
n1 n2 12 14
( ) ( ) (
p value = 2P T t = 2P T 1.33 2 P T 1.711 < P T 1.33 < P T 1.318 ) ( ) ( )
2 0.05 < P(T 1.33) < 0.100 ( )
0.100 < p value < 0.200
14. Rejection Region: RR = T tm, { 2 } = { T t 24,0.005 } = { T 2.797}

2 2
s12 s22 92 10 2
n +n 12 + 14
1 2
m= = = 23.93 = 24
( ) ( )
2 2 2 2
s12 s22 92 10 2
n n 12 14
1 s +
+ 12 1 14 1
n1 1 n2 1
Test Statistic:
T= 1
( X X 2 ) ( µ1 µ2 ) = (110 115) 0 = 1.34
s12 s22 92 10 2
+ +
n1 n2 12 14
( ) ( ) (
p value = 2P T t = 2P T 1.33 2 P T 1.711 < P T 1.34 < P T 1.318 ) ( ) ( )
2 0.05 < P(T 1.34) < 0.100 ( )
0.100 < p value < 0.200
15. (a.) Rejection Region: RR = Z z { 2 } = { Z z } = { Z 2.33}

0.01
Test Statistic:
Z= 1
(
X X 2 µ1 µ2
=
) (
30.25 41.27 0 ) (
= 4.84
)
12 22 4.52 6.22
+ +
n1 n2 12 11
( )
(b.) p value = 2P Z z = 2P ( Z 4.84 ) = 2 ( 0.0000 ) = 0.0000
Since the p value = 0.0000 0.02 = , we reject the null hypothesis H 0 . This is the same
conclusion that we arrived at it part (a.).
37
16. x = 16.05 , s = 2.198
(a.) H 0 : µ = 16 vs. H1 : µ 16
{ } {
(b.) Rejection Region: RR = T tn1, = T t18,0.05 = T 1.734 } { }
Test Statistic:
x µ 16.05 16
T= = = 0.0992
s 2.198
n 19
Since 0.0992 < 1.734 , we do not reject the null hypothesis H 0
( ) ( )
(c.) p value = P t18 0.0992 > P t18 1.330 = 0.10 . Thus, p-value > 0.10.
17. X d =
d i
=
70
=7
n 10

( d ) = ( 70 )
2
1
2
1
2
Sd = di2 i
540 = 5.5556
n 1 n 10 1 10

Sd = Sd2 = 5.5556 = 2.357
(a.) Hypothesis: H 0 : µ d = 0 vs. H1 : µ d > 0

{
Rejection Region: RR = T tn1, = T t9,0.05 = T 1.833} { } { }
Test Statistic:
X µd 70
T= d = = 9.3916
Sd 2.357
n 10
( ) (
(b.) p value = P t9 t = P t9 9.3916 < P t9 4.781 = 0.0005 ) ( )
p value < 0.0005
18. X d = 3.8 , Sd2 = 3.5111 , Sd = 1.874

(a.) Hypothesis: H 0 : µ d = 0 vs. H1 : µ d < 0
{ } {
(b.)Rejection Region: RR = T < tn 1, = T < t9,0.01 = {T < 2.821} }
Test Statistic:
X µd 3.8 0
T= d = = 6.4123
Sd 1.874
n 10
38
250 380
19. p̂1 = = 0.625 , p̂2 = = 0.76
400 500
X + X 2 250 + 380
p̂ = 1 = = 0.70
n1 + n2 400 + 500
(a.) Hypothesis: H 0 : p1 p2 = 0 vs. H1 : p1 p2 < 0
{ } {
Rejection Region: RR = Z z = Z z0.05 = Z 1.645 } { }
Test Statistic:
Z= 1
( ) (
p̂ p̂2 p1 p2
=
) (0.625 0.76) 0 = 4.3916
p̂q̂ p̂q̂ 0.7 ( 0.3) 0.7 ( 0.3)
+ +
n1 n2 400 500
(b.) Hypothesis: H 0 : p1 p2 = 0 vs. H1 : p1 p2 0
Rejection Region: RR = Z z { 2 } = { Z z } = { Z 2.33}
0.01
Test Statistic:
Z= 1
( p̂ p̂2 ) ( p1 p2 ) = ( 0.625 0.76) 0 = 4.3916
p1q1 p2 q2 0.7 ( 0.3) 0.7 ( 0.3)
+ +
n1 n2 400 500
( ) (
20. p value = P Z z = P Z 4.3916 = 0.0000 )
Since the p value = 0.0000 0.05 = , we reject the null hypothesis H 0 .
( )
p value = 2P Z z = 2P ( Z 4.3916 ) = 2 ( 0.0000 ) = 0.0000
Since the p value = 0.0000 0.01 = , we reject the null hypothesis H 0 .
Yes, we arrive at the same conclusion in problem 19 using the p-value approach.
21. (a.) Hypothesis: H 0 : p = 0.5 vs. H1 : p 0.5

(b.) Test Statistic:
p̂ p 0.3 0.5
Z= = = 4.0
pq 0.5 ( 0.5)
n 100
To find the level of significance at which the null hypothesis is rejected is equivalent to find the p-
value. p-value = 2P(Z 4 ) = 2P(Z 4) = 0.00 . Thus, the null hypothesis will be rejected at any
level.
21 24
22. p̂1 = = 0.07 , p̂2 = = 0.056
300 425
39
X1 + X 2 21 + 24
p̂ = = = 0.062
n1 + n2 300 + 425
Hypothesis: H 0 : p1 p2 = 0 vs. H1 : p1 p2 0
Rejection Region: RR = Z z { 2 } = { Z z } = { Z 1.96}
0.025
Test Statistic:
Z= 1
(
p̂ p̂2 p1 p2
=
) ( ) (0.07 0.056) 0 = 0.7818
p̂q̂ p̂q̂ 0.062 ( 0.938) 0.062 ( 0.938)
+ +
n1 n2 300 425
( )
p value = 2P Z z = 2P ( Z 0.78 ) = 2 ( 0.2177 ) = 0.4354
23. Hypothesis: H 0 : p = 0 vs. H1 : p > 0.10

{
Rejection Region RR = Z z = Z z0.05 = Z 1.645} { } { }
Test Statistic:
p̂ p 0.129 0.1
Z= = = 1.14
pq 0.1( 0.9 )
n 140
p value = P ( Z z ) = P ( Z 1.14 ) = 0.1271
24. Hypothesis: H 0 : 2 = 20 vs. H1 : 2 < 20

{
Rejection Region RR = X 2 < n21,1 = X 2 < 17,0.95
2
} {
= X 2 < 8.6718 } { }
Test Statistic:
X2 =
( n 1) s 2 = (18 1)(15.6) = 13.26
2 20
Since 13.26 > 8.6718 , we do not reject the null hypothesis H 0 .
25. n = 12 , x = 15.8583 , s = 0.4757
Rejection Region RR = X 2 n1,1

2
{
/2
or X 2 n1,
2
} { 2 } = { X } or { X
2 2
11,0.995
2 2
11,0.005 }
= { X 2.6032} or { X
2 2
26.7569 }
Test Statistic:
X 2
=
( n 1) s 2
=
(12 1)( 0.4757 ) = 12.446
2
2 0.2
Since 3.565 < 12.446 < 29.8194 , we do not reject then null hypothesis H 0 .
40

26. Rejection Region RR = F

1
Fn 1,n 1, 2
{
or F Fn1 1,n2 1, 2 }
2 1
1
= F
F35,24,0.025
{
or F F24,35,0.025 }

Note: Since neither 35 nor 24 can be found in the table we will use approximate values for F using a
method commonly known as interpolation method. Thus, we have
{
RR = F 1 / 2.15 0.4651 or F 2.02 } { }
Test Statistic:
S12 1.475
F= 2 = = 1.67995
S2 0.878
Since 0.4651 < 1.67995 < 2.02 , we do not reject the null hypothesis H 0 .
{
27. Rejection Region RR = F Fn 1.n
1 2 1, } = {F F 24,35,0.05 } = { F 1.82}
Note: Since neither 24 nor 35 can be found in the table we will use approximate value by looking the
value for 25 and 35 degrees of freedom. This will give us somewhat conservative rejection region.
Test Statistic:
S 2 1.475
F = 12 = = 1.67995
S2 0.878
28. Sample I: n1 = 12 , x1 = 21.075 , s1 = 1.8626

Sample II: n2 = 12 , x 2 = 22.5 , s2 = 1.3837

Rejection Region: RR = F
1
Fn 1,n 1,
{
or F Fn1 1,n2 1, 2 }
2 1 2

1
= F
F11,11,0.025
{
or F F11,11,0.025 }
{ } {
= F 0.2882 or F 3.47 }
Test Statistic:
S 2 1.86282
F = 12 = = 1.8124
S2 1.38372
Since 0.2882 < 1.8124 < 3.47 , we do not reject the null hypothesis H 0 .
29. Portfolio I: n1 = 12 , x1 = 1.125 , s1 = 1.5621

Portfolio II: n2 = 12 , x 2 = 0.733 , s2 = 2.7050

Rejection Region: RR = F
F
1
{
or F Fn1 1,n2 1, 2 }
n2 1,n1 1, 2
41
1
= F
F11,11,0.025
{
or F F11,11,0.025 }
{ } {
= F 0.2882 or F 3.47 }
Test Statistic:
S12 1.56212
F= 2 = = 0.3335
S2 2.70502
Since 0.2882 < 03335 < 3.47 , we do not reject the null hypothesis H 0 .
1 1
30. Rejection Region RR = F
F
= F
F
{
= F 0.3546}
n2 1.n1 1,
11,11,0.05
Test Statistic:
S 2 1.56212
F = 12 = = 0.3335
S2 2.70502
Since 03335 < 0.3546 , we reject the null hypothesis H 0 .
Chapter 11
1. Frequency Distribution Table for Problem #1
Classes Frequency Rel.Freq. Cumul.Freq.

34 - 40 7 7/40 7
40 - 46 5 5/40 12
46 - 52 7 7/40 19
52 - 58 5 5/40 24
58 - 64 6 6/40 30
64 - 70 4 4/40 34
70 - 76 6 6/40 40
Total 40 1
Note: The Frequency distribution table can vary depending upon how many classes you choose.
42
43
2. Descriptive Statistics for Data from Problem #1
Variable Mean StDev Variance CoefVar Median IQR

Prob. 1 53.80 12.54 157.14 23.30 53.00 22.25
44
3. (i) Probabilities for x = 0, 1, 2, … , 30 when n = 30 and p = 0.2
Row r P(r)
1 0 0.001238
2 1 0.009285
3 2 0.033656
4 3 0.078532
5 4 0.132522
6 5 0.172279
7 6 0.179457
8 7 0.153821
9 8 0.110559
10 9 0.067564
11 10 0.035471
12 11 0.016123
13 12 0.006382
14 13 0.002209
15 14 0.000671
16 15 0.000179
17 16 0.000042
18 17 0.000009
19 18 0.000002
20 19 0.000000
21 20 0.000000
22 21 0.000000
23 22 0.000000
24 23 0.000000
25 24 0.000000
26 25 0.000000
27 26 0.000000
28 27 0.000000
29 28 0.000000
30 29 0.000000
31 30 0.000000
45
(ii) Cumulative Probabilities for x = 0, 1, 2, … , 30 when n = 30 and p = 0.2
Row r P(r <= r)

1 0 0.00124
2 1 0.01052
3 2 0.04418
4 3 0.12271
5 4 0.25523
6 5 0.42751
7 6 0.60697
8 7 0.76079
9 8 0.87135
10 9 0.93891
11 10 0.97438
12 11 0.99051
13 12 0.99689
14 13 0.99910
15 14 0.99977
16 15 0.99995
17 16 0.99999
18 17 1.00000
19 18 1.00000
20 19 1.00000
21 20 1.00000
22 21 1.00000
23 22 1.00000
24 23 1.00000
25 24 1.00000
26 25 1.00000
27 26 1.00000
28 27 1.00000
29 28 1.00000
30 29 1.00000
31 30 1.00000
46
4. (a) Random Sample of size 100 from a Binomial Population with n = 60 and p = 0.7.
44 35 44 41
38 45 38 41
41 38 35 42
45 42 43 41
45 45 42 48
41 51 40 38
43 42 38 44
47 48 45 39
39 44 42 42
47 43 43 37
46 45 43 37
46 42 43 46
30 40 38 32
41 45 41 45
39 39 42 41
47 46 43 43
31 45 42 36
37 41 38 43
48 41 43 44
36 45 42 41
43 40 40 47
40 47 35 39
43 41 40 50
44 39 37 36
40 43 42 45
Note: Each time you generate random data using MINITAB, JMP, or, in
fact, any other software the data will be different. You should use
the above data to calculate some of the descriptive measures.
47
(b) Random Sample of size 100 from a Standard Normal Population
-1.21981 -2.37602 1.29775 0.00277 2.36307
0.75201 -1.78136 -0.15683 0.60029 0.81729
-0.63226 -0.59754 1.43915 1.09275 -0.65072
1.31089 -1.61429 1.67827 -0.73676 1.44223
-1.13921 -0.42632 -1.32405 -0.89732 0.27543
0.31205 1.09948 -1.50948 -0.35195 -1.53494
-0.07543 -0.47851 -0.05165 0.73783 -1.01755
-0.40007 -0.33038 1.47401 -1.80159 -1.52018
-1.18923 -0.27756 1.11539 -0.84455 0.74224
-1.45352 -1.63088 0.22896 -0.44742 1.18517
1.64296 2.03639 -0.66084 -0.51547 2.55221
0.76959 -0.02838 1.02326 0.04541 1.39261
0.57836 0.48845 -0.14035 1.03660 0.64137
0.32206 -0.22875 -0.13656 -1.37834 -0.13024
-0.20022 -0.93577 -2.05991 -1.08695 1.39269
-0.21355 -0.13393 1.13944 -0.13758 0.47625
-1.51160 -2.84154 1.12404 0.83947 -0.39440
-0.47810 -1.18853 0.61019 -0.05268 0.48313
-0.60043 -0.95162 -1.55669 -1.50416 -0.09011
0.10925 0.17342 -0.07181 -0.11341 -2.11343
48
5. (i) Find cumulative probabilities,
P(z 1.645) = 0.95
P(z 1.96) = 0.9750
P(z 2.575) = 0.9950
Inverse Cumulative Distribution Function
(ii) Find the value of z0 such that,

P ( z z0 ) = 0.025 where z0 = -1.96
P ( z z0 ) = 0.05 where z0 = -1.645
P ( z z0 ) = 0.10 where z0 = -1.28
P ( z z0 ) = 0.90 where z0 = 1.28
P ( z z0 ) = 0.95 where z0 = 1.6445
P ( z z0 ) = 0.975 where z0 = 1.9600
6. One-Sample Z, since the sample size is 40 which is large (>30)

(a).
Variable N Mean StDev SE Mean 90% CI

Prob. #1 40 53.8000 12.5355 1.9820 (50.5398, 57.0602)

Prob. #1 40 53.8000 12.5355 1.9820 (49.9153, 57.6847)

Prob. #1 40 53.8000 12.5355 1.9820 (48.6946, 58.9054)
(b).
Variable N Mean St Dev SE Mean 90% CI

Prob. 4b 100 -0.110786 1.098759 0.109876 (-0.291515,
0.069944)
49
Prob. 4b 100 -0.110786 1.098759 0.109876 (-0.326139,
0.104568)

Prob. 4b 100 -0.110786 1.098759 0.109876 (-0.393807,
0.172236)
Note: The confidence intervals in problem 6 (b) are strictly for the data set generated in problem
4(b). If you generate another data set then your confidence intervals will be different from the ones
shown above.
7. (a) Construct a 95% confidence interval
Two-Sample t-Test and CI: Sample 1, Sample 2
2-sample-t for Sample 1 Vs Sample 2

Sample 1 15 4.35 1.03 0.27
Sample 2 15 4.40 0.816 0.21
Difference = mu (Sample 1) - mu (Sample 2)

Point Estimate for difference = 4.35 - 4.40 = -0.05
95% CI for difference: (-0.752233, 0.645566)
Interpretation: Since the confidence interval includes 0 we do not reject the null hypothesis that two
population means are equal, at 5% level of significance.
(b) Construct a 99% confidence interval
Two-Sample t-Test and CI: Sample 1, Sample 2
2-sample-t for Sample 1 vs Sample 2

Sample 1 15 4.35 1.03 0.27
Sample 2 15 4.40 0.816 0.21
50
Point Estimate for difference = 4.35 - 4.40 = -0.05
99% CI for difference: (-0.998122, 0.891456)
Interpretation: Since the confidence interval includes 0 we do not reject the null hypothesis that two
population means are equal, at 1% level of significance.
8. (a) H 0 : µ1 µ2 = 0 versus H a : µ1 µ2 0 . Let = 0.05 .
Two-Sample t-Test: Sample 1, Sample 2
Two-sample T for Sample 1 Vs Sample 2

Sample 1 15 4.35 1.03 0.27
Sample 2 15 4.40 0.816 0.21

point Estimate for difference = 4.35 - 4.40 = -0.05
T-Test H 0 : µ1 µ2 = 0 Vs H1 : µ1 µ2 0 , T-Value = -0.16 P-Value = 0.877

DF = 26
Interpretation: Since the p-value = 0.877 > = 0.05 , we cannot reject Ho.
(b) H 0 : µ1 µ2 = 0 versus H a : µ1 µ2 > 0 . Let = 0.05 .
Two-Sample T-Test and CI: Sample 1, Sample 2
Sample 1 15 4.35 1.03 0.27

Sample 2 15 4.40 0.816 0.21

51
T-Test H 0 : µ1 µ2 = 0 Vs H1 : µ1 µ2 > 0 , T-Value = -0.16 P-Value = 0.562
DF = 26
Interpretation: Since the p-value = 0.562 > = 0.05 , we do not reject Ho.
(c) H 0 : µ1 µ2 = 0 versus H a : µ1 µ2 < 0 . Let = 0.05 .
Two-Sample T-Test and CI: Sample 1, Sample 2
Sample 1 15 4.35 1.03 0.27

Sample 2 15 4.40 0.816 0.21
T-Test H 0 : µ1 µ2 = 0 Vs H1 : µ1 µ2 < 0 , T-Value = -0.16 P-Value = 0.438

DF = 26
Interpretation: Since the p-value = 0.438 > = 0.05 , we do not reject Ho.
9(a) Random Sample of size 100 from a Binomial population B(40, 0.4)
12 17 11 13 14 14 12 18 13 16
12 10 11 21 15 12 16 16 21 18
18 15 19 20 19 15 19 17 16 18
14 10 15 17 14 16 16 23 17 14
14 12 17 15 14 13 9 16 19 14
17 13 13 15 15 17 15 15 10 15
16 15 15 15 12 15 19 11 17 16
15 17 20 7 12 15 15 16 21 16
16 16 10 19 16 19 19 16 16 15
15 15 18 22 21 18 15 15 23 11
52
(b)
5 7 10 3 2 8 6 2 9 4
11 4 10 6 2 4 4 1 3 3
6 9 4 4 4 3 6 5 7 4
6 2 5 2 4 4 4 5 3 1
6 4 5 4 5 2 5 7 0 4
4 4 6 6 6 3 3 3 6 8
4 8 3 5 7 6 4 3 2 2
1 6 1 7 3 4 3 7 8 4
7 4 4 6 7 7 5 3 7 6
6 1 8 5 4 3 4 6 6 5
(c)
0.92686 1.05933 4.86450 0.89129 1.34490
4.58611 4.23555 0.72925 3.10352 9.80666
1.06287 0.48886 0.78756 1.14476 0.41525
0.99962 0.53098 0.58796 0.87946 6.17721
6.04005 3.52215 0.70621 4.47782 2.82171
2.20250 0.26019 0.49498 3.48382 0.51510
3.94087 0.63957 2.24939 3.60930 0.02941
2.20857 1.86662 5.91489 2.39399 2.11482
0.28320 1.70997 0.20455 1.72291 2.57827
3.19872 6.59576 2.73302 2.44231 0.24167
0.98836 0.85113 2.08334 0.55120 1.56717
2.43075 0.45812 2.49099 3.71435 1.19253
0.61162 0.19957 1.40573 1.93952 0.01378
2.31370 1.07929 1.46698 1.31533 1.86552
1.99617 1.79145 0.87150 0.02049 2.14500
5.15758 3.72229 1.65200 2.35870 2.27768
1.20566 5.05366 4.95891 2.73776 0.11289
2.93519 0.69056 0.20431 1.79161 1.47690
1.53913 0.11944 1.65551 0.94907 1.02282
5.37658 2.80358 0.28814 2.71166 2.00077
53
10. (a)
Stem-and-Leaf Display for the Data in Problem # 1
Stem Leaf Unit = 1.0
7 3 4 6 7 7 8 9 9
18 4 1 2 2 3 4 6 7 7 8 8 9
(7) 5 1 3 3 4 6 7 8
15 6 0 1 1 3 3 5 6 7 9
6 7 0 2 2 3 5 6
(b)
Boxplot of Data from Problem #1

80
70
60
Data
50
40
30
54
11.
Pie Chart of Data from Problem #11

Category
2
6 3
16.7% 2 4
20.0%
5
6
5 3
23.3% 16.7%
4
23.3%
12. (a) Cumulative Distribution Function

Binomial with n = 21 and p = 0.3
x P( X <= x )
9 0.932427
(b) ( ) ( ) ( )
P 5 X 15 = P X 15 P X 4 = 0.999983 0.198381 = 0.801602
Cumulative Distribution Function
Binomial with n = 21 and p = 0.3
x P( X <= x )
15 0.999983
x P( X <= x )
4 0.198381
13. (a) P(X 12) = 0.995549 with = 5.5

Poisson with mean = 5.5
x P( X <= x )
55
12 0.995549
(b) P(7 X 25) = P( X 25) P( X 6) = 1.00000 – 0.686036 = 0.313964 with = 5.5

Poisson with mean = 5.5
x P( X <= x )
25 1.00000
x P( X <= x )
6 0.686036
14. (a) µ = 20 and = 6

P(7 X 33) = 0.9849 – 0.0151 = 0.9698

Normal with mean = 20 and standard deviation = 6
x P( X <= x )
33 0.9849
x P( X <= x )
7 0.0151
(b) µ = 12 and = 4
P(8 Z 16) = 0.8413 – 0.1587 = 0.6826

x P( X <= x )
16 0.8413
x P( X <= x )
8 0.1587
(c) µ = 0 and = 1
P(-1.96 Z 1.96) = 0.9750 – 0.0250 = 0.95

x P( X <= x )
1.96 0.9750
x P( X <= x )
-1.96 0.0250
(d) µ = 0 and = 1
P(-1.645 Z 1.645) = 0.9500 – 0.0500 = 0.90
56
x P( X <= x )
1.645 0.9500
x P( X <= x )
-1.645 0.0500
(e) µ = 0 and = 1
P(-2.575 Z 2.575) = 0.9950 – 0.0050 = 0.99

x P( X <= x )
2.575 0.9950
x P( X <= x )
-2.575 0.0050
15. (a) Find a 95% Confidence Interval

Problem 15 32 29.6250 6.8285 1.2071 (27.1630, 32.0870)
(b) H 0 : µ = 30 versus H a : µ 30 . Let = 0.05 .
One-Sample - Z: Problem 15
Test µ = 30 Versus µ 30
Problem 15 32 29.6250 6.8285 1.2071 (27.1630, 32.0870)
T P
0.31 0.758
Interpretation: Since the p-vale = 0.758 > = 0.05 , we do not reject the null hypothesis.
57
16. Two-Sample T-Test and CI
Sample N Mean St Dev SE Mean
1 25 93.00 2.10 0.42
2 27 87.00 3.70 0.71
Difference = µ1 µ2
Estimate for µ1 µ2 : 93.00 – 83.00 = 6.00000
95% CI for µ1 µ2 : (4.30579, 7.69421)
T-Test for µ1 µ2 = 0 versus µ1 µ2 0 T-Value = 7.11
P-Value = 0.000 DF = 50
Both use Pooled Standard Deviation = 3.0390
The 95% confidence interval does not include 0, therefore, we reject the null hypothesis that two
population means are equal.
Also, the p-value = 0.000 < = 0.05 , we reject the null hypothesis and conclude that the difference
between the population means is not equal to zero.
58
In loving memory of my parents, Roshan Lal and Sodhan Devi.
—Bhisham
In loving memory of my father, Carl Ellsworth Walker.

—Fred
Glossary
Alpha ( )—Probability of rejecting a null hypothesis when it is true.

alternative hypothesis—A hypothesis formulated using new information.
arithmetic mean—The average of a data set.
bar graph—A graph representing categories in a data set with bars of height
equal to the frequencies of the corresponding categories.
Bernoulli trial—A trial that has only two possible outcomes, such as suc-
cess and failure.
Beta ()—Probability of not rejecting a null hypothesis when the alternative
is true.
binomial model or binomial distribution—A discrete distribution that is
applicable whenever an experiment consists of n independent Bernoulli
trials and the probability of an outcome, say, success, is constant through-
out the experiment.
bimodal distribution—A distribution that has two modes; a distribution
with more modes is called multimodal distribution; a distribution with one
mode is called unimodal.
bound on error of estimation—Maximum difference between the estimat-
ed value and the true value of a parameter.
bimodal data—A data set that has two modes.
box and whisker plot—A plot that helps detect any outliers in the data and
shows whether the data are skewed.
central limit theorem—A theorem that states that irrespective of shape of
the distribution of a population, the distribution of sample means is
approximately normal when the sample size is large.
Chi-square distribution—Probability distribution of sum of squares of n
independent normal variables.
class—An interval that includes all observations in a quantitative data set
within two values (for qualitative data, classes are generally defined by
categories).
class frequency—Number of data points of a data set that belong to a cer-
tain class.
class limits—The two values that determine a class interval. The smaller
value is the lower limit, and the larger value is the upper limit.
class midpoint—Class midpoint is the average of the lower and upper class
limits; also called class mark.
class width—The difference between the upper and lower class limits.
coefficient of variation (CV)—Ratio of the standard deviation to the mean,
expressed as a percentage.
305
306 Glossary
complement event—An event that consists of all those sample points that
are in the sample space but not in the given event.
conditional probability—The probability of one event happening given that
another event has already happened.
contingency table—A two-dimensional table that contains frequencies or
count data that belong to various categories according to the classification
dictated by two attributes.
continuous distribution—Probability distribution of a continuous random
variable.
continuous random variable—A random variable that can take any value
in one or more intervals.
correction factor of continuity—A correction made when a discrete distri-
bution is approximated with a continuous distribution.
correlation coefficient—A unitless measure that measures the strength of
the association between two numerical variables.
critical point—The point that separates the rejection region from the accept-
ance region.
cumulative frequency—The frequency of a class that includes the frequen-
cies of that class and of all the preceding classes.
data set—A collection of values collected through experimentation, sample
surveys, or observations.
degrees of freedom—Number of variables in a sample that can independ-
ently vary.
dependent events—Events when the probability of occurrence of certain
events changes when the information about the occurrence of other events
is taken into consideration.
descriptive statistics—A group of methods used for organizing, summariz-
ing, and representing data using tables, graphs, and summary statistics.
design of experiment (DOE)—A well-structured plan that designs an
experiment in which the experimenter can control the factors that might
influence the outcome of the experiment.
discrete distribution—Probability distribution of a discrete random vari-
able.
discrete random variable—A random variable that can take finite or count-
ably infinite number of values.
empirical rule—A rule that gives the percentage of data points, which falls
within a given number of standard deviation of the mean of data set that
is normally distributed.
equally likely event—Events when no event can occur in preference to any
other event.
estimation—Procedure to find an estimator of an unknown parameter.
estimator—A rule (sample statistic) that tells us how to find a single value
known as an estimate of an unknown parameter.
error of estimation—The difference between the estimated value and the
true value of a parameter.
event—A set of one or more outcomes of a random experiment.
expected value—The weighted average of all the values that a random vari-
able takes.
Glossary 307
expected frequencies—Frequencies with which different categories in a

contingency table would occur if the given null hypothesis is true.
experiment—A procedure that produces observations.
exponential distribution—Continuous probability distribution of times
between random occurrences that follow the Poisson process.
F-distribution—A continuous probability distribution of the ratio of two
independent chi-square random variables.
first quartile—The value such that at most 25% of the data values fall below
and at most 75% of the data values fall above it.
frequency distribution—A summary of data presented in a table that lists
all the classes or categories along with their corresponding frequencies.
frequency histogram, relative frequency histogram, and cumulative fre-
quency histogram—A graph in which classes are marked on the hori-
zontal axis and frequencies, relative frequencies, or cumulative frequen-
cies are marked on the vertical axis. The frequencies, relative frequencies,
or cumulative frequencies are represented by bars or rectangles that are
drawn back to back.
frequency polygon—A graph prepared by joining the midpoint at the top of
adjacent bars or rectangles of a histogram.
grouped data—Summarized data produced by a frequency distribution.
hypergeometric distribution—Probability distribution of random occur-
rences when the sampling is done without replacement from a binary pop-
ulation.
independent events—Events when the occurrence of one event does not
change the probability of the occurrence of the other event.
independent samples—Samples in which elements of one are related to the
elements in another sample only by chance.
inferential statistics—A set of techniques used to arrive at a conclusion
about a population based upon the information contained in a sample
taken from that population.
intersection—The portion that is common in two or more sets.
interval data—Quantitative data in which multiplication and division are
not allowed.
interval estimate—An interval that contains the true value of a parameter
with certain probability, called confidence coefficient.
interquartile range—Difference between the third (upper) and the first
(lower) quartile.
level of significance ( )—The probability of committing a type I error.
lower inner fence—The value that is used in a box and whisker plot and that
is equal to first quartile minus 1.5 IQR.
lower outer fence—The value that is used in a box and whisker plot and that
is equal to first quartile minus 3.0 IQR.
marginal probability—The probability of one variable without taking into
account the other variables.
mean square error (MSE)—The average of the squared errors (squared
residuals).
mean—One of the measures of central tendency calculated by dividing the
sum of all the observations; also known as the expected value.
308 Glossary
measures of central tendency—Statistics (e.g., mean, median, mode) used

to provide information about the location of the center of a data set.
measures of variability—Statistics (e.g., range, standard deviation) that
provide information about the spread of a data set; also known as meas-
ures of dispersion.
median—A value such that at most 50% of the data values fall below and at
most 50% fall above it.
mode—The value or values that occur most frequently in a data set.
mutually exclusive events—Events that do not have any common outcomes
and, therefore, the probability of occurrence of such events together is
always zero.
nominal data—Weakest data in which observation are denoted by names or
symbols.
nonparametric statistics—Statistical techniques that make no assumption
about the distribution of a population.
normal probability distribution—The most widely used continuous prob-
ability distribution with a bell-shaped frequency curve; also known as
bell-shaped or Gaussian distribution.
null hypothesis—A hypothesis formulated without taking into consideration
any new information or formulated based upon the belief that what
already exists is true.
observations—Values obtained from outcomes of an experiment or sample
survey or simply by observing a phenomenon.
observed level of significance—The smallest value of for which the null
hypothesis is rejected; also known as the p-value.
Ogive curve—The curve obtained by joining the midpoints at the top of
adjacent bars or rectangles of a cumulative frequency histogram.
one-tail test—A statistical test when the rejection region falls under one tail
only.
operating characteristics curve (OC-curve)—Used in testing of statistical
hypotheses. It is a graph obtained by plotting the type II errors versus var-
ious values of the parameter under the alternative hypothesis.
ordinal data—Data values arranged by rank or order. It is stronger than
nominal data but weaker than interval or ratio data.
outliers—Data values that lie far below or above the majority of the values
in the data set.
p-value—The observed level of significance.
paired data—Data collected from pairs of subjects that have common char-
acteristics or from the same subject before and after a treatment; also
known as before and after data.
parameter—A descriptive measure calculated using population data.
percentiles—Measures that divide the ranked data into 100 equal parts
(numerical).
pie chart—A circle divided into pizza slices that represent the percentage
breakdown of data into different categories.
point value—A value obtained by using sample data, which replaces the true
value of an unknown parameter.
Poisson distribution—A discrete probability distribution of rare events.
Glossary 309
population—A collection of all conceivable items, objects, or persons of

interest.
power—Probability of rejecting a null hypothesis when it is not true.
power curve—A graph used in testing of statistical hypotheses. It is
obtained by plotting power (complement of type II errors) versus various
values of the parameter under the alternative hypothesis.
process—A series of steps required to complete a procedure.
qualitative data—Data that measures the quality characteristic of a subject;
also called categorical data (e.g., nominal data and ordinal data).
quality control—A set of techniques or methods used to maintain the qual-
ity of a product.
quantitative data—Data that measures characteristics of a subject quantita-
tively; also known as numerical data.
quartiles—Measures that divide the ranked data into four equal parts.
random sample—A sample drawn such that each element of the population
has the same chance of being included in the sample; also called simple
random sample.
random variable—A variable that assigns some real values to the outcomes
of a random experiment.
range—The difference between the largest and the smallest data value in a
data set.
rejection region—The null hypothesis is rejected when the value of the test
statistic falls in that region.
relative frequency—The frequency of a class or category divided by the
total frequency.
sample—A part of a population of interest.
sample space—A complete listing of all possible outcomes of a random
experiment.
sample statistic—A measure calculated by using sample data (e.g., sample
mean, sample standard deviation); also simply called a statistic.
sample survey—A technique used to collect data through mail, telephone,
or personal interviews.
sampling distribution—Probability distribution of a statistic.
second quartile—A value such that at most 50% of the data values fall below
and at most 50% fall above it; also called the middle quartile or median.
simple event—An event that contains only one possible outcome of random
experiment.
Six Sigma—A measure of process quality wherein the distance between the
target value and the upper or lower specification limit is at least six stan-
dard deviations.
skewed data—Data whose frequency curve has a longer tail either to the left
(left skewed) or to the right (right skewed).
standard deviation—A measure of dispersion that is equal to the positive
square root of the variance.
standard error—The standard deviation of a sample statistic (e.g., sample
mean or sample proportion).
standard normal distribution—A normal distribution with a mean of 0 and
a standard deviation of 1.
310 Glossary
stem and leaf diagram—A diagram in which each observation is broken

into two parts; a stem and a leaf.
sure event—An event that has the probability of occurrence 1.
symmetric data—Data whose frequency curve is identical on both sides of
its center.
t-distribution—A continuous distribution of the ratio of two independent
random variables—a standard normal and a chi-square.
third quartile—A value such that at most 75% of the data values fall below
it and at most 25% of the data values fall above it.
test statistic—A statistic used to make a decision whether to reject the null
hypothesis.
two-tail test—A statistical test when the rejection region falls under both the
tails.
type I error—Probability of rejecting a null hypothesis when it is true.
type II error—Probability of not rejecting a null hypothesis when it is false.
uniform distribution—A continuous distribution with its frequency curve
shaped as a rectangle; also called the rectangular distribution.
upper inner fence—The value that is used in a box and whisker plot and is
equal to the third quartile plus 1.5 IQR.
upper outer fence—The value that is used in a box and whisker plot and is
equal to the third quartile plus 3.0 IQR.
unbiased estimator—An estimator with its expected value equal to the true
value of the parameter that is being estimated.
variable—A characteristic of interest that takes different values for different
elements.
variance—A measure of dispersion that is equal to the average of the
squared deviation from the mean of the data set.
Venn diagram—A diagram used for representing the sample space and
events.
weighted mean—Mean of a data set where each observation is given a rel-
ative importance expressed numerically by a set of numbers called
weights.
Z distribution—Another name of a standard normal distribution.
z score—The location of any value in a data set relative to the mean
expressed in terms of the units of standard deviation.
Figures
Figure 1.1 The normal distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Figure 1.2 Six Sigma (Motorola definition) . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Figure 1.3 Current Six Sigma implementation flow chart . . . . . . . . . . . . . . . . 4
Figure 1.4 Six Sigma support personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Figure 1.5 Histogram . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Figure 2.1 Classifications of statistical data . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Figure 3.1 Dot plot for the data on defective motors that are received in
20 shipments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Figure 3.2 Pie chart for defects associated with manufacturing process
steps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Figure 3.3 Bar chart for annual revenues of a company over the period
of five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Figure 3.4 Bar graph for the data in Example 3.7 . . . . . . . . . . . . . . . . . . . . . . 26
Figure 3.5 Bar charts for types of defects in auto parts manufactured in
Plant I (P1) and Plant II (P2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Figure 3.6 Frequency histogram for survival time of parts under extreme
operating conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Figure 3.7 Relative frequency histogram for survival time of parts under
extreme operating conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Figure 3.8 Frequency polygon for the data in Example 3.9 . . . . . . . . . . . . . . . 30
Figure 3.9 Relative frequency polygon for the data in Example 3.9 . . . . . . . . 31
Figure 3.10 A typical frequency distribution curve . . . . . . . . . . . . . . . . . . . . . . 31
Figure 3.11 Three types of frequency distribution curves . . . . . . . . . . . . . . . . . 32
Figure 3.12 Cumulative frequency histogram for the data in Example 3.9 . . . . 32
Figure 3.13 Ogive curve for the survival data in Example 3.9 . . . . . . . . . . . . . 33
Figure 3.14 Line graph for the data on lawn mowers given in
Example 3.10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Figure 3.15 Ordinary and ordered stem and leaf diagram for the data
on survival time for parts in extreme operating conditions
in Example 3.9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Figure 3.16 Ordered stem and leaf diagram for the data in Table 3.10 . . . . . . . 37
Figure 3.17 Ordered two-stem and leaf diagram for the data in Table 3.12 . . . 38
Figure 3.18 Ordered five-stem and leaf diagram . . . . . . . . . . . . . . . . . . . . . . . . 38
xiii
xiv Figures
Figure 3.19 MINITAB display depicting eight degrees of correlation: (a)

represents strong positive correlation, (b) represents strong negative
correlation, (c) represents positive perfect correlation, (d) represents
negative perfect correlation, (e) represents positive moderate
correlation, (f) represents negative moderate correlation, (g)
represents a positive weak correlation, and (h) represents a negative
weak correlation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Figure 4.1 Frequency distributions showing the shape and location of
measures of centrality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Figure 4.2 Two frequency distribution curves with equal mean, median
and mode values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Figure 4.3 Application of the empirical rule . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Figure 4.4 Amount of soft drink contained in a bottle . . . . . . . . . . . . . . . . . . . 62
Figure 4.5 Dollar value of units of bad production . . . . . . . . . . . . . . . . . . . . . 62
Figure 4.6 Salary data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Figure 4.7 Quartiles and percentiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Figure 4.8 Box-whisker plot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Figure 4.9 Example box plot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Figure 4.10 Box plot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Figure 5.1 Tree diagram for an experiment of testing a chip, randomly
selecting a part, and testing another chip . . . . . . . . . . . . . . . . . . . . 76
Figure 5.2 Venn diagram representing the sample space S and the event
A in S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Figure 5.3 Venn diagram representing the union of events A and B
(shaded area) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Figure 5.4 Venn diagram representing the intersection of events A and B
(shaded area) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Figure 5.5 Venn diagram representing the complement of an event A
(shaded area) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Figure 5.6 Venn diagram–representing A∪B – {1, 4, 5, 6, 7, 8, 9, 10},
A∩B {7}, A {2, 3, 5, 9, 10}, B {1, 2, 3, 4, 6, 8} . . . . . . . . 82
Figure 5.7 Two mutually exclusive events, A and B . . . . . . . . . . . . . . . . . . . . 83
Figure 5.8 Venn diagram showing the phenomenon of P(A∪B)
P(A) P(B) P(A∩B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Figure 6.1 Graphical representation of probability function in Table 6.2 . . . . 96
Figure 6.2 Graphical representation of probability function f(x) in
Table 6.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Figure 6.3 Graphical representation of the distribution function F(x) in
Example 6.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Figure 6.4 Location of mean and the end point of interval
( 2, 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Figure 6.5 Binomial probability distribution with n 10, p 0.80 . . . . . . . . 105
Figure 7.1 An illustration of a density function of a continuous
random variable X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Figure 7.2 Graphical representation of F(x) P(X x) . . . . . . . . . . . . . . . . 117
Figure 7.3 Uniform distribution over the interval (a, b) . . . . . . . . . . . . . . . . . 118
Figure 7.4 Probability P(x1 X x2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Figure 7.5 The normal density function curve with mean and
standard deviation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Figure 7.6 Curves representing the normal density function with
different means, but with the same standard deviation . . . . . . . . . . 122
Figure 7.7 Curves representing the normal density function with different
standard deviations, but with the same mean . . . . . . . . . . . . . . . . . 123
Figures xv
Figure 7.8 The standard normal density function curve . . . . . . . . . . . . . . . . . 123

Figure 7.9 Probability (a Z b) under the standard normal curve . . . . . . . 124
Figure 7.10 Shaded area equal to P(1 Z 2) . . . . . . . . . . . . . . . . . . . . . . . . 125
Figure 7.11 Two shaded areas showing P(1.50 Z 0)
P(0 Z 1.50) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Figure 7.12 Two shaded areas showing P(2.2 Z 1.0)
P(1.0 Z 2.2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Figure 7.13 Showing P(1.50 Z .80) P(1.50 Z 0)
P(0 Z 0.80) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Figure 7.14 Shaded area showing P(Z 0.70) . . . . . . . . . . . . . . . . . . . . . . . . . 126
Figure 7.15 Shaded area showing P(Z 1.0) . . . . . . . . . . . . . . . . . . . . . . . . 126
Figure 7.17 Shaded area showing P(Z 2.15) . . . . . . . . . . . . . . . . . . . . . . . 127
Figure 7.18 Converting normal N(6,4) to standard normal N(0,1) . . . . . . . . . . 128
Figure 7.19 Shaded area showing P(0.5 Z 2.0) . . . . . . . . . . . . . . . . . . . . . 128
Figure 7.20 Shaded area showing P(1.0 Z 1.0) . . . . . . . . . . . . . . . . . . . 128
Figure 7.21 Shaded area showing P(-1.50 Z 0.50) . . . . . . . . . . . . . . . . 129
Figure 7.22 Graphs of exponential density function for
0.1, 0.5,
1.0, and 2.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
Figure 7.23 Curves of three hazard rate functions . . . . . . . . . . . . . . . . . . . . . . . 132
Figure 7.24 Hazard function h(t) with 1; 0.5, 1, 2 . . . . . . . . . . . . . . . 133
Figure 7.25 Weibull density function (a) 1, 0.5 (b) 1, 1
(c) 1, 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Figure 8.1 Shaded area showing P(2 Z 2) . . . . . . . . . . . . . . . . . . . . . . 142
Figure 8.2 Shaded area showing P(Z 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Figure 8.3 Shaded area showing P(2.28 Z 2.28) . . . . . . . . . . . . . . . . . 143
Figure 8.7 Shaded area showing P(2 Z 2) . . . . . . . . . . . . . . . . . . . . . . 144
Figure 8.10 Chi-square distribution with different degrees of freedom . . . . . . . 149
Figure 8.11 Chi-square distribution with upper-tail area . . . . . . . . . . . . . . . . 149
Figure 8.12 Chi-square distribution with upper-tail area 0.05 . . . . . . . . . . 150
Figure 8.13 Chi-square distribution with lower-tail area . . . . . . . . . . . . . . . . 150
Figure 8.14 Chi-square distribution with lower-tail area 0.10 . . . . . . . . . . 151
Figure 8.15 Frequency distribution function of t-distribution with, say n 15
degrees of freedom and standard normal distribution . . . . . . . . . . 154
Figure 8.16 t-distribution with shaded area under the two tails equal to
P(T tn,) P(T tn,) . . . . . . . . . . . . . . . . . . . . . . . . . . 154
Figure 8.17 A typical probability density function curve of F1, 2 . . . . . . . . . 156
Figure 8.18 Probability density function curve of F1, 2 with upper-tail
area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
Figure 8.19 Probability density function curve of F1, 2 with lower-tail
area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
Figure 8.20 Comparison of histograms for various binomial distributions
(n 15, p 0.2, 0.3, 0.4, 0.5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
Figure 8.21 (a) Showing the normal approximation to the binomial.
(b) Replacing the shaded area contained in the rectangles by the
shaded area under the normal curve . . . . . . . . . . . . . . . . . . . . . . . . 163
Figure 9.1 An interpretation of a confidence interval . . . . . . . . . . . . . . . . . . . 172
Figure 9.2 Standard normal-curve with tail areas equal to /2 . . . . . . . . . . . . 174
xvi Figures
Figure 9.3 (a) Standard normal curve with lower-tail area equal to
(b) Standard normal curve with upper-tail area equal to . . . . . . . 175
Figure 9.4 Student’s t-distribution with tail areas equal to /2 . . . . . . . . . . . . 178
Figure 9.5 Chi-square distribution with two tail areas each equal to 0.025 . . . 197
Figure 9.6 F-distribution curve (a) shaded area under two tails each
equal to 0.025 (b) shaded area under left tail equal to 0.05
(c) shaded area under the right tail equal to 0.05 . . . . . . . . . . . . . . 200
Figure 10.1 Critical points dividing the sample space of ˆ in two regions, the
rejection region and the acceptance region . . . . . . . . . . . . . . . . . . . 204
Figure 10.2 OC-curves for different alternative hypotheses . . . . . . . . . . . . . . . 206
Figure 10.3 Power curves for different hypotheses . . . . . . . . . . . . . . . . . . . . . . 207
Figure 10.4 Rejection regions for hypotheses (i), (ii), and (iii) . . . . . . . . . . . . . 209
Figure 10.5 Lower-tail rejection region with 0.01 . . . . . . . . . . . . . . . . . . . 210
Figure 10.6 Two-tail rejection region with 0.01 . . . . . . . . . . . . . . . . . . . . . 211
Figure 10.7 Power curve for the test in example 10.2 . . . . . . . . . . . . . . . . . . . . 213
Figure 10.8 Rejection regions for hypotheses (i), (ii), and (iii) . . . . . . . . . . . . . 214
Figure 10.9 Rejection region under the lower test with 0.05 . . . . . . . . . . . 215
0.05 level of significance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217
Figure 10.11 Rejection region under the upper tail with 0.05 . . . . . . . . . . . 218
Figure 10.12 Rejection regions under the two tails with 0.05 . . . . . . . . . . . 219
Figure 10.13 Rejection regions for testing hypotheses (i), (ii), and (iii) at
Figure 10.14 Rejection regions for a two-tail test with 0.05 . . . . . . . . . . . . 222
Figure 10.16 Rejection region under the lower tail with 0.05 . . . . . . . . . . . 225
the given . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
the level of significance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
Figure 10.22 Rejection region under the upper tail with 0.025 . . . . . . . . . . 234
Figure 10.23 Rejection regions for testing the hypotheses (i), (ii), and (iii) at
the level of significance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236
Figure 10.24 The rejection region under the two tails with 0.01 . . . . . . . . . 237
the 0.05 level of significance . . . . . . . . . . . . . . . . . . . . . . . . . 244
Figure 10.28 Rejection region under the chi-square distribution curve for testing
hypotheses (i), (ii), and (iii) at the level of significance . . . . . . . 245
Figure 10.30 Rejection region under the F-distribution curve for testing
hypotheses (i), (ii), and (iii) at the level of significance . . . . . . . 247
Figure 10.31 Rejection region under the two tails with 0.05 . . . . . . . . . . . . 249
Figure 10.32 Rejection region under the right tail with 0.05 . . . . . . . . . . . . 249
Figure 11.1 The screen that appears first in the MINITAB environment . . . . . 256
Figure 11.2 MINITAB window showing the menu command options . . . . . . . 257
Figure 11.3 MINITAB window showing input and output for Column
Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259
Figures xvii
Figure 11.4 MINITAB window showing various options available

under Stat command . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260
Figure 11.5 MINITAB display of histogram for the data given in
example 11.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261
Figure 11.6 MINITAB window showing Edit Bars dialog box . . . . . . . . . . . . 262
Figure 11.7 MINITAB display of histogram with 5 classes for the data
in Example 11.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263
Figure 11.8 MINITAB output of Dotplot for the data in Example 11.4 . . . . . . 264
Figure 11.9 MINITAB output of Scatterplot for the data given in
Example 11.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265
Figure 11.10 MINITAB display of box plot for the data in Example 11.6 . . . . . 266
Figure 11.11 MINITAB display of graphical summary for the data in
example 11.7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267
Figure 11.12 MINITAB display of bar graph for the data in Example 11.8 . . . . 269
Figure 11.13 MINITAB display of pie chart for the data in Example 11.9 . . . . . 270
Figure 11.14 MINITAB printout of 95% Bonferroni confidence interval for
standard deviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282
Figure 11.15 MINITAB display of normal probability graph for the data in
example 11.19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283
Figure 11.16 The screen that appears first in the JMP environment . . . . . . . . . . 284
Figure 11.17 JMP menu command options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285
Figure 11.18 JMP window showing input and output for Column Statistics . . . 287
Figure 11.19 JMP Distribution dialog box . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288
Figure 11.20 JMP display of histogram for the data given in
Example 11.21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289
Figure 11.21 JMP printout of stem and leaf for the data given in
Example 11.21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290
Figure 11.22 JMP display of box plot with summary statistics for
Example 11.21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291
Figure 11.23 JMP display of graphical summary for the data in
Example 11.22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292
Figure 11.24 JMP display of bar graph for the data in Example 11.23 . . . . . . . . 293
Figure 11.25 JMP printout of pie chart for the data in Example 11.24 . . . . . . . . 295
Figure 11.26 JMP printout of 1 sample t-test for the data in
Example 11.25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296
Figure 11.27 JMP printout of 1 sample z-test for the data in
Example 11.26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297
Figure 11.28 JMP printout of 2-sample t-test for the data in
Example 11.27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299
Figure 11.29 JMP printout of paired t-test for the data in Example 11.28 . . . . . 300
Figure 11.30 JMP printout of test of equal variances in Example 11.29 . . . . . . . 301
Figure 11.31 JMP display of normal quantile graph for the data in
Example 11.30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302
Tables
Table 1.1 Process step completion times . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Table 1.2 Descriptive statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Table 3.1 Annual revenues of 110 small to midsize companies in the
midwestern United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Table 3.2 Frequency distribution table for 110 small to midsize
companies in the midwestern United States . . . . . . . . . . . . . . . . . . 17
Table 3.3 Complete frequency distribution table for the 110 small to
midsize companies in the midwestern United States . . . . . . . . . . . 17
Table 3.4 Complete frequency distribution table for the data in
Example 3.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Table 3.5 Frequency table for the data on rod lengths . . . . . . . . . . . . . . . . . . 20
Table 3.6 Understanding defect rates as a function of various
process steps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Table 3.7 Frequency distribution table for the data in Example 3.7 . . . . . . . . 25
Table 3.8 Frequency distribution table for the survival time of parts . . . . . . . 28
Table 3.9 Data on survival time (in hours) in Example 3.9 . . . . . . . . . . . . . . 35
Table 3.10 Number of parts produced by each worker per week . . . . . . . . . . . 37
Table 3.11 Cholesterol levels and systolic BP of 30 randomly selected
U.S. men . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Table 4.1 Age distribution of group of 40 people watching a basketball
game . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Table 5.1 Classification of technicians by qualification and gender . . . . . . . 89
Table 5.2 Classification of technicians by qualification and gender . . . . . . . 91
Table 6.1 Probability distribution of a random variable X . . . . . . . . . . . . . . . 95
Table 6.2 Probability distribution of random variable X defined in
Example 6.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Table 6.3 Probability function of X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Table 6.4 Portion of Table I of the appendix for n 5 . . . . . . . . . . . . . . . . . 106
Table 6.5 Portion of Table II of the appendix . . . . . . . . . . . . . . . . . . . . . . . . . 114
Table 7.1 A portion of standard normal distribution Table III
of the appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
Table 8.1 Population with its distribution for the experiment of rolling
a fair die . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
Table 8.2 All possible samples of size 2 with their respective means . . . . . . 139
Table 8.3 Different sample means with their respective probabilities . . . . . . 139
xviii
Tables xix
Table 8.4 A portion of the t-table giving the value of tn, for certain
values of n and . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Table 8.5 Comparison of approximate probabilities to the exact
probabilities (n 5, p 0.4, 0.5) . . . . . . . . . . . . . . . . . . . . . . . . . 161
Table 8.6 Showing the use of continuity correction factor under different
scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
Table 10.1 Presenting the view of type I and type II errors . . . . . . . . . . . . . . . 205
Table 10.2 Confidence intervals for testing various hypotheses . . . . . . . . . . . 252
Table I Binomial probabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314
Table II Poisson probabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317
Table III Standard Normal Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319
Table IV Critical values of 2 with degrees of freedom . . . . . . . . . . . . . . . 320
Table V Critical values of t with degrees of freedom . . . . . . . . . . . . . . . . 322
Table VI Critical values of F with numerator and denominator degrees of
freedom 1, 2 respectively ( 0.10) . . . . . . . . . . . . . . . . . . . . . 323
THE
NORMAL
LAW OF ERROR
STANDS OUT IN THE
EXPERIENCE OF MANKIND
AS ONE OF THE BROADEST
GENERALIZATIONS OF NATURAL
PHILOSOPHY • IT SERVES AS THE
GUIDING INSTRUMENT IN RESEARCHES
IN THE PHYSICAL AND SOCIAL SCIENCES AND
IN MEDICINE AGRICULTURE AND ENGINEERING •
IT IS AN INDISPENSIBLE TOOL FOR THE ANALYSIS AND THE
INTERPRETATION OF THE BASIC DATA OBTAINED BY OBSERVATION AND EXPERIMENT
—W. J. Youden
Appendix
Table I Binomial probabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312

Table II Poisson probabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315
Table III Standard normal distribution. . . . . . . . . . . . . . . . . . . . . . . . 317
Table IV Critical values of 2 with degrees of freedom. . . . . . . . . . 318
Table V Critical values of t with degrees of freedom. . . . . . . . . . . 320
Table VI Critical values of F with numerator and
denominator degrees of freedom 1, 2
respectively ( 0.10). . . . . . . . . . . . . . . . . . . . . . . . . . . . 321
311
312 Appendix
Table I Binomial probabilities.
Tabulated values are P (X = x ) = n ( )

x p (1− p )
x n −x
p
n x .05 .10 .20 .30 .40 .50 .60 .70 .80 .90 .95
1 0 .950 .900 .800 .700 .600 .500 .400 .300 .200 .100 .050
1 .050 .100 .200 .300 .400 .500 .600 .700 .800 .900 .950
2 0 .902 .810 .640 .490 .360 .250 .160 .090 .040 .010 .003
1 .095 .180 .320 .420 .480 .500 .480 .420 .320 .180 .095
2 .003 .010 .040 .090 .160 .250 .360 .490 .640 .810 .902
3 0 .857 .729 .512 .343 .216 .125 .064 .027 .008 .001 .000
1 .136 .243 .384 .441 .432 .375 .288 .189 .096 .027 .007
2 .007 .027 .096 .189 .288 .375 .432 .441 .384 .243 .135
3 .000 .001 .008 .027 .064 .125 .216 .343 .512 .729 .857
4 0 .815 .656 .410 .240 .130 .062 .025 .008 .002 .000 .000
1 .171 .292 .410 .412 .346 .250 .154 .076 .026 .004 .001
2 .014 .048 .154 .265 .345 .375 .346 .264 .154 .048 .014
3 .000 .004 .025 .075 .154 .250 .346 .412 .409 .292 .171
4 .000 .000 .001 .008 .025 .063 .129 .240 .409 .656 .815
5 0 .774 .591 .328 .168 .078 .031 .010 .002 .000 .000 .000
1 .204 .328 .410 .360 .259 .156 .077 .028 .006 .001 .000
2 .021 .073 .205 .309 .346 .312 .230 .132 .051 .008 .001
3 .001 .008 .051 .132 .230 .312 .346 .308 .205 .073 .021
4 .000 .000 .006 .028 .077 .156 .259 .360 .410 .328 .204
5 .000 .000 .000 .003 .010 .031 .078 .168 .328 .590 .774
6 0 .735 .531 .262 .118 .047 .016 .004 .001 .000 .000 .000
1 .232 .354 .393 .302 .187 .094 .037 .010 .002 .000 .000
2 .031 .098 .246 .324 .311 .234 .138 .059 .015 .001 .000
3 .002 .015 .082 .185 .276 .313 .277 .185 .082 .015 .002
4 .000 .001 .015 .059 .138 .234 .311 .324 .246 .098 .031
5 .000 .000 .002 .010 .037 .094 .186 .302 .393 .354 .232
6 .000 .000 .000 .001 .004 .015 .047 .118 .262 .531 .735
7 0 .698 .478 .210 .082 .028 .008 .002 .000 .000 .000 .000
1 .257 .372 .367 .247 .131 .055 .017 .004 .000 .000 .000
2 .041 .124 .275 .318 .261 .164 .077 .025 .004 .000 .000
3 .004 .023 .115 .227 .290 .273 .194 .097 .029 .003 .000
4 .000 .003 .029 .097 .194 .273 .290 .227 .115 .023 .004
5 .000 .000 .004 .025 .077 .164 .261 .318 .275 .124 .041
6 .000 .000 .000 .004 .017 .055 .131 .247 .367 .372 .257
7 .000 .000 .000 .000 .002 .008 .028 .082 .210 .478 .698
8 0 .663 .430 .168 .058 .017 .004 .001 .000 .000 .000 .000
1 .279 .383 .335 .198 .089 .031 .008 .001 .000 .000 .000
2 .052 .149 .294 .296 .209 .109 .041 .010 .001 .000 .000
3 .005 .033 .147 .254 .279 .219 .124 .048 .009 .000 .000
4 .000 .005 .046 .136 .232 .273 .232 .136 .046 .005 .000
5 .000 .000 .009 .047 .124 .219 .279 .254 .147 .033 .005
6 .000 .000 .001 .010 .041 .110 .209 .296 .294 .149 .052
7 .000 .000 .000 .001 .008 .031 .089 .198 .335 .383 .279
8 .000 .000 .000 .000 .001 .004 .017 .057 .168 .430 .664
9 0 .630 .387 .134 .040 .010 .002 .000 .000 .000 .000 .000
1 .298 .387 .302 .156 .061 .018 .004 .000 .000 .000 .000
2 .063 .172 .302 .267 .161 .070 .021 .004 .000 .000 .000
3 .008 .045 .176 .267 .251 .164 .074 .021 .003 .000 .000
4 .001 .007 .066 .172 .251 .246 .167 .073 .017 .001 .000
5 .000 .001 .017 .073 .167 .246 .251 .172 .066 .007 .001
6 .000 .000 .003 .021 .074 .164 .251 .267 .176 .045 .008
7 .000 .000 .000 .004 .021 .070 .161 .267 .302 .172 .063
8 .000 .000 .000 .000 .004 .018 .060 .156 .302 .387 .298
9 .000 .000 .000 .000 .000 .002 .010 .040 .134 .387 .630
Continued
Appendix 313

p
n x .05 .10 .20 .30 .40 .50 .60 .70 .80 .90 .95
10 0 .599 .349 .107 .028 .006 .001 .000 .000 .000 .000 .000
1 .315 .387 .268 .121 .040 .010 .002 .000 .000 .000 .000
2 .075 .194 .302 .234 .121 .044 .011 .001 .000 .000 .000
3 .010 .057 .201 .267 .215 .117 .042 .009 .001 .000 .000
4 .001 .011 .088 .200 .251 .205 .111 .037 .006 .000 .000
5 .000 .002 .026 .103 .201 .246 .201 .103 .026 .002 .000
6 .000 .000 .006 .037 .111 .205 .251 .200 .088 .011 .001
7 .000 .000 .001 .009 .042 .117 .215 .267 .201 .057 .011
8 .000 .000 .000 .001 .011 .044 .121 .234 .302 .194 .075
9 .000 .000 .000 .000 .002 .010 .040 .121 .268 .387 .315
10 .000 .000 .000 .000 .000 .001 .006 .028 .107 .349 .599
11 0 .569 .314 .086 .020 .004 .001 .000 .000 .000 .000 .000
1 .329 .384 .236 .093 .027 .005 .001 .000 .000 .000 .000
2 .087 .213 .295 .200 .089 .027 .005 .001 .000 .000 .000
3 .014 .071 .222 .257 .177 .081 .023 .004 .000 .000 .000
4 .001 .016 .111 .220 .237 .161 .070 .017 .002 .000 .000
5 .000 .003 .039 .132 .221 .226 .147 .057 .010 .000 .000
6 .000 .000 .010 .057 .147 .226 .221 .132 .039 .003 .000
7 .000 .000 .002 .017 .070 .161 .237 .220 .111 .016 .001
8 .000 .000 .000 .004 .023 .081 .177 .257 .222 .071 .014
9 .000 .000 .000 .001 .005 .027 .089 .200 .295 .213 .087
10 .000 .000 .000 .000 .001 .005 .027 .093 .236 .384 .329
11 .000 .000 .000 .000 .000 .001 .004 .020 .086 .314 .569
12 0 .540 .282 .069 .014 .002 .000 .000 .000 .000 .000 .000
1 .341 .377 .206 .071 .017 .003 .000 .000 .000 .000 .000
2 .099 .230 .283 .168 .064 .016 .003 .000 .000 .000 .000
3 :017 .085 .236 .240 .142 .054 .012 .002 .000 .000 .000
4 .002 .021 .133 .231 .213 .121 .042 .008 .001 .000 .000
5 .000 .004 .053 .159 .227 .193 .101 .030 .003 .000 .000
6 .000 .001 .016 .079 .177 .226 .177 .079 .016 .001 .000
7 .000 .000 .003 .029 .101 .193 .227 .159 .053 .004 .000
8 .000 .000 .001 .008 .042 .121 .213 .231 .133 .021 .002
9 .000 .000 .000 .001 .013 .054 .142 .240 .236 .085 .017
10 .000 .000 .000 .000 .003 .016 .064 .168 .283 .230 .099
11 .000 .000 .000 .000 .000 .003 .017 .071 .206 .377 .341
12 .000 .000 .000 .000 .000 .000 .002 .014 .069 .282 .540
13 0 .513 .254 .055 .010 .001 .000 .000 .000 .000 .000 .000
1 .351 .367 .179 .054 .011 .002 .000 .000 .000 .000 .000
2 .111 .245 .268 .139 .045 .010 .001 .000 .000 .000 .000
3 .021 .010 .246 .218 .111 .035 .007 .001 .000 .000 .000
4 .003 .028 .154 .234 .185 .087 .024 .003 .000 .000 .000
5 .000 .006 .069 .180 .221 .157 .066 .014 .001 .000 .000
6 .000 .001 .023 .103 .197 .210 .131 .044 .006 .000 .000
7 .000 .000 .006 .044 .131 .210 .197 .103 .023 .001 .000
8 .000 .000 .001 .014 .066 .157 .221 .180 .069 .006 .000
9 .000 .000 .000 .003 .024 .087 .184 .234 .154 .028 .003
10 .000 .000 .000 .001 .007 .035 .111 .218 .246 .100 .021
11 .000 .000 .000 .000 .001 .010 .045 .139 .268 .245 .111
12 .000 .000 .000 .000 .000 .00 .011 .054 .179 .367 .351
13 .000 .000 .000 .000 .000 .000 .001 .0100 .055 .254 .513
14 0 .488 .229 .044 .007 .001 .000 .000 .000 .000 .000 .000
1 .359 .356 .154 .041 .007 .001 .000 .000 .000 .000 .000
2 .123 .257 .250 .113 .032 .006 .001 .000 .000 .000 .000
3 .026 .114 .250 .194 .085 .022 .003 .000 .000 .000 .000
4 .004 .035 .172 .229 .155 .061 .014 .001 .000 .000 .000
5 .000 .008 .086 .196 .207 .122 .041 .007 .000 .000 .000
6 .000 .001 .032 .126 .207 .183 .092 .023 ..002 .000 .000
7 .000 .000 .009 .062 .157 .210 .157 .062 .010 .000 .000
8 .000 .000 .002 .023 .092 .183 .207 .126 .032 .001 .000
Continued
314 Appendix
Continued

p
n x .05 .10 .20 .30 .40 .50 .60 .70 .80 .90 .95
9 .0000 .0000 .0003 .0066 .0408 .1222 .2066 .1963 .0860 .0078 .000
10 .000 .000 .000 .001 .014 .061 .155 .229 .172 .035 .004
11 .000 .000 .000 .000 .003 .022 .085 .194 .250 .114 .026
12 .000 .000 .000 .000 .001 .006 .032 .113 .250 .257 .123
13 .000 .000 .000 .000 .000 .001 .007 .041 .154 .356 .359
14 .000 .000 .000 .000 .000 .000 .001 .007 .044 .229 .488
15 0 .463 .206 .035 .005 .001 .000 .000 .000 .000 .000 .000
1 .366 .343 .132 .031 .005 .001 .000 .000 .000 .000 .000
2 .135 .267 .231 .092 .022 .003 .000 .000 .000 .000 .000
3 .031 .129 .250 .170 .063 .014 .002 .000 .000 .000 .000
4 .005 .043 .188 .219 .127 .042 .007 .001 .000 .000 .000
5 .001 .011 .103 .206 .186 .092 .025 .003 .000 .000 .000
6 .000 .002 .043 .147 .207 .153 .061 .012 .001 .000 .000
7 .000 .000 .014 .081 .177 .196 .118 .035 .004 .000 .000
8 .000 .000 .004 .035 .118 .196 .177 .081 .014 .000 .000
9 .000 .000 .001 .012 .061 .153 .207 .147 .043 .002 .000
10 .000 .000 .000 .003 .025 .092 .186 .206 .103 .011 .001
11 .000 .000 .000 .001 .007 .042 .127 .219 .188 .043 .005
12 .000 .000 .000 .000 .002 .014 .063 .170 .250 .129 .031
13 .000 .000 .000 .000 .000 .003 .022 .092 .231 .267 .135
14 .000 .000 .000 .000 .000 .001 .005 .031 .132 .343 .366
15 .000 .000 .000 .000 .000 .000 .001 .005 .035 .206 .463
Appendix 315
Table II Poisson probabilities.

e −λ λ x
Tabulated values are P (X = x ) =
x!
x 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0
0 .905 .819 .741 .670 .607 .549 .497 .449 .407 .368
1 .091 .164 .222 .268 .303 .329 .348 .360 .366 .368
2 .005 .016 .033 .054 .076 .099 .122 .144 .165 .184
3 .000 .001 .003 .007 .013 .020 .028 .038 .049 .061
4 .000 .000 .000 .000 .002 .003 .005 .008 .011 .015
5 .000 .000 .000 .000 .000 .000 .001 .001 .002 .003
6 .000 .000 .000 .000 .000 .000 .000 .000 .000 .001
7 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000
x 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0
0 .333 .301 ..273 .247 .223 .202 .183 .165 .150 .135
1 .366 .361 .354 .345 .335 .323 .311 .298 .284 .271
2 .201 .217 .230 .242 .251 .258 .264 .268 .270 .271
3 .074 .087 .100 .113 .126 .138 .150 .161 .171 .180
4 .020 .026 .032 .040 .047 .055 .064 .072 .081 .090
5 .005 .006 .008 .011 .014 .018 .022 .026 .031 .036
6 .001 .001 .002 .003 .004 .005 .006 .008 .010 .012
7 .000 .000 .000 .001 .001 .001 .002 .002 .003 .003
8 .000 .000 .000 .000 .000 .000 .000 .001 .001 .001
9 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000
x 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 3.0
0 .123 .111 .100 .091 .082 .074 .067 .061 .055 .050
1 .257 .244 .231 .218 .205 .193 .182 .170 .160 .149
2 .270 .268 .265 .261 .257 .251 .245 .238 .231 .224
3 .189 .197 .203 .209 .214 .218 .221 .223 .224 .224
4 .099 .108 .117 .125 .134 .141 .149 .156 .162 .168
5 .042 .048 .054 .060 .067 .074 .080 .087 .094 .101
6 .015 .017 .021 .024 .028 .032 .036 .041 .046 .050
7 .004 .006 .007 .008 .010 .012 .014 .016 .019 .022
8 .001 .002 .002 .003 .003 .004 .005 .006 .007 .008
9 .000 .000 .001 .001 .001 .001 .001 .002 .002 .003
10 .000 .000 .000 .000 .000 .000 .000 .001 .001 .001
11 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000
12 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000
Continued
316 Appendix
Continued
Table II Poisson probabilities.
x 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 5.0
0 .017 .015 .014 .012 .011 .010 .009 .008 .007 .007
1 .068 .063 .058 .054 .050 .046 .043 .040 .037 .034
2 .139 .132 .125 .119 .113 .106 .101 .095 .089 .084
3 .190 .185 .180 .174 .169 .163 .157 .152 .146 .140
4 .195 .194 .193 .192 .190 .188 .185 .182 .179 .176
5 .160 .163 .166 .169 .171 .173 .174 .175 .175 .176
6 .109 .114 .119 .124 .128 .132 .136 .140 .143 .146
7 .064 .069 .073 .078 .082 .087 .091 .096 .100 .104
8 .033 .036 .039 .043 .046 .050 .054 .058 .061 .065
9 .015 .017 .019 .021 .023 .026 .028 .031 .033 .036
10 .006 .007 .008 .009 .010 .012 .013 .015 .016 .018
11 .002 .003 .003 .004 .004 .005 .006. .006 .007 .008
12 .009 .001 .001 .001 .002 .002 .002 .003 .003 .003
13 .000 .000 .000 .001 .001 .001 .001 .001 .001 .001
14 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000
15 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000
x 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 6.0
0 .006 .006 .005 .005 .004 .004 .003 .003 .003 .002
1 .031 .029 .027 .024 .022 .021 .019 .018 .016 .015
2 .079 .075 .070 .066 .062 .058 .054 .051 .048 .045
3 .135 .129 .124 .119 .113 .108 .103 .099 .094 .089
4 .172 .168 .164 .160 .156 .152 .147 .143 .138 .134
5 .175 .175 .174 .173 .171 .170 .168 .166 .163 .161
6 .149 .151 .154 .156 .157 .158 .159 .160 .161 .161
7 .109 .113 .116 .120 .123 .127 .130 .133 .135 .138
8 .069 .073 .077 .081 .085 .089 .093 .096 .100 .103
9 .039 .042 .045 .049 .052 .055 .059 .062 .065 .069
10 .020 .022 .024 .026 .029 .031 .033 .036 .039 .041
11 .009 .010 .012 .013 .014 .016 .017 .019 .021 .023
12 .004 .005 .005 .006 .007 .007 .008 .009 .010 .011
13 .002 .002 .002 .002 .003 .003 .004 .004 .005 .005
14 .001 .001 .001 .001 .001 .001 .002 .002 .002 .002
15 .000 .000 .000 .000 .000 .000 .001 .001 .001 .001
16 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000
17 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000
x 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 7.0
0 .002 .002 ,002 .002 .002 .001 .001 .001 .001 .001
1 .014 .013 .012 .011 .010 .010 .008 .008 .007 .007
2 .042 .040 .036 .034 .032 .029 .028 .026 .024 .022
3 .085 .081 .077 .073 .069 .065 .062 .058 .055 .052
4 .129 .125 .121 .116 .112 .108 .103 .099 .095 .091
5 .158 .155 .152 .149 .145 .142 .139 .135 .131 .128
6 .160 .160 .159 .159 .158 .156 ,155 .153 .151 .149
7 .140 .142 .144 .145 .146 .147 .148 .149 .149 .149
8 .107 .110 .113 .116 .119 .122 .124 .126 .128 .130
9 .072 .076 .079 .083 .086 .089 .092 .095 .098 .101
10 .044 .047 .050 .053 .056 .059 .062 .065 .068 .071
11 .024 .026 .029 .031 .033 .035 .038 .040 .043 .045
12 .012 .014 .015 .016 .018 .019 .021 .023 .025 .026
13 .006 .007 .007 .008 .009 .010 .011 .012 .013 .014
14 .003 .003 .003 .004 .004 .005 .005 .006 .006 .007
15 .001 .001 .001 .002 .002 .002 .002 .003 .003 .003
16 .000 .001 .001 .001 .001 .001 .001 .001 .001 .001
17 .000 .000 .000 .000 .000 .000 .000 .000 .001 .001
18 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000
19 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000
Appendix 317
Table III Standard normal distribution.
Tabulated values are P (0 Z z) shaded area under the standard normal curve
−3 0 z 3
z .00 .01 .02 .03 .04 .05 .06 .07 .08 .09
0.0 .0000 .0040 .0080 .0120 .0160 .0199 .0239 .0279 .0319 .0359
0.1 .0398 .0438 .0478 .0517 .0557 .0596 .0636 .0675 .0714 .0753
0.2 .0793 .0832 .0871 .0910 .0948 .0987 .1026 .1064 .1103 .1141
0.3 .1179 .1217 .1255 .1293 .1331 .1368 .1406 .1443 .1480 .1517
0.4 .1554 .1591 .1628 .1664 .1700 .1736 .1772 .1808 .1844 .1879
0.5 .1915 .1950 .1985 .2019 .2054 .2088 .2123 .2157 .2190 .2224
0.6 .2257 .2291 .2324 .2357 .2389 .2422 .2454 .2486 .2517 .2549
0.7 .2580 .2611 .2642 .2673 .2704 .2734 .2764 .2794 .2823 .2852
0.8 .2881 .2910 .2939 .2967 .2995 .3023 .3051 .3078 .3106 .3133
0.9 .3159 .3186 .3212 .3238 .3264 .3289 .3315 .3340 .3365 .3389
1.0 .3413 .3438 .3461 .3485 .3508 .3531 .3554 .3577 .3599 .3621
1.1 .3643 .3665 .3686 .3708 .3729 .3770 .3790 .3810 .3830 .3830
1.2 .3849 .3869 .3888 .3907 .3925 .3962 .3980 .3997 .4015 .4015
1.3 .4032 .4049 .4066 .4082 .4099 .4131 .4147 .4162 .4177 .4177
1.4 .4192 .4207 .4222 .4236 .4251 .4279 .4292 .4306 .4319 .4319
1.5 .4332 .4345 .4357 .4370 .4382 .4406 .4418 .4429 .4441 .4441
1.6 .4452 .4463 .4474 .4484 .4495 .4505 .4515 .4525 .4535 .4545
1.7 .4554 .4564 .4573 .4582 .4591 .4599 .4608 .4616 .4625 .4633
1.8 .4641 .4649 .4656 .4664 .4671 .4678 .4686 .4693 .4699 .4706
1.9 :4713 .4719 .4726 .4732 .4738 .4744 .4750 .4756 .4761 .4767
2.0 .4772 .4778 .4783 .4788 .4793 .4798 .4803 .4808 .4812 .4817
2.1 .4821 .4826 .4830 .4834 .4838 .4842 .4846 .4850 .4854 .4857
2.2 .4861 .4864 .4868 .4871 .4875 .4878 .4881 .4884 .4887 .4890
2.3 .4893 .4896 .4898 .4901 .4904 .4906 .4909 .4911 .4913 .4916
2.4 .4918 .4920 .4922 .4925 .4927 .4929 .4931 .4932 .4934 .4936
2.5 .4938 .4940 .4941 .4943 .4945 .4946 .4948 .4949 .4951 .4952
2.6 .4953 .4955 .4956 .4957 .4959 .4960 .4961 .4962 .4963 .4964
2.7 .4965 .4966 .4967 .4968 .4969 .4970 .4971 .4972 .4973 .4974
2.8 .4974 .4975 .4976 .4977 .4977 .4978 .4979 .4979 .4980 .4981
2.9 .4981 .4982 .4982 .4983 .4984 .4984 .4985 .4985 .4986 .4986
3.0 .4987 .4987 .4987 .4988 .4988 .4989 .4989 .4989 .4990 .4990
For negative values of z the probabilities are found by using the symmetric property.
318 Appendix
Table IV Critical values of 2 with degrees of freedom.
χ 2α
0.995
2
0.990
2
0.975
2
0.950
2
0.900
2
11 0.00004 0.00016 0.00098 0.00393 0.01589

12 0.0100 0.0201 0.0506 0.1026 0.2107
13 0.0717 0.1148 0.2158 0.3518 0.5844
14 0.2070 0.2971 0.4844 0.7107 1.0636
15 0.4117 0.5543 0.8312 1.1455 1.6103
16 0.6757 0.8720 1.2373 1.6354 2.2041
17 0.9893 1.2390 1.6899 2.1674 2.8331
18 1.3444 1.6465 2.1797 2.7326 3.4895
19 1.7349 2.0879 2.7004 3.3251 4.1682
110 2.1559 2.5582 3.2470 3.9403 4.8652
111 2.6032 3.0535 3.8158 4.5748 5.5778
112 3.0738 3.5706 4.4038 5.2260 6.3038
113 3.5650 4.1069 5.0087 5.8919 7.0415
114 4.0747 4.6604 5.6287 6.5706 7.7895
115 4.6009 5.2294 6.2621 7.2609 8.5468
116 5.1422 5.8122 6.9077 7.9616 9.3122
117 5.6972 6.4078 7.5642 8.6718 10.085
118 6.2648 7.0149 8.2308 9.3905 10.865
119 6.8440 7.6327 8.9066 10.1170 11.6509
120 7.4339 8.2604 9.5908 10.8508 12.4426
121 8.0337 8.8972 10.2829 11.5913 13.2396
122 8.6427 9.5425 10.9823 12.3380 14.0415
123 9.2604 10.1957 11.6885 13.0905 14.8479
124 9.8862 10.8564 12.4011 13.8484 15.6587
125 10.5197 11.5240 13.1197 14.6114 16.4734
126 11.1603 12.1981 13.8439 15.3791 17.2919
127 11.8076 12.8786 14.5733 16.1513 18.1138
128 12.4613 13.5648 15.3079 16.9279 18.9392
129 13.1211 14.2565 16.0471 17.7083 19.7677
130 13.7867 14.9535 16.7908 18.4926 20.5992
140 20.7065 22.1643 24.4331 26.5093 29.0505
150 27.9907 29.7067 32.3574 34.7642 37.6886
160 35.5346 37.4848 40.4817 43.1879 46.4589
170 43.2752 45.4418 48.7576 51.7393 55.3290
180 51.1720 53.5400 57.1532 60.3915 64.2778
190 59.1963 61.7541 65.6466 69.1260 73.2912
100 67.3276 70.0648 74.2219 77.9295 82.3581
Continued
Appendix 319
Continued
Table IV Critical values of 2 with degrees of freedom.
0.100
2
0.050
2
0.025
2
0.010
2
0.005
2
111 2.7055 3.8415 5.0239 6.6349 7.8794

112 4.6052 5.9915 7.3778 9.2103 10.5966
113 6.2514 7.8147 9.3484 11.3449 12.8381
114 7.7794 9.4877 11.1433 13.2767 14.8602
115 9.2364 11.0705 12.8325 15.0863 16.7496
116 10.6446 12.5916 14.4494 16.8119 18.5476
117 12.0170 14.0671 16.0128 18.4753 20.2777
118 13.3616 15.5073 17.5346 20.0902 21.9550
119 14.6837 16.9190 19.0228 21.6660 23.5893
110 15.9871 18.3070 20.4831 23.2093 25.1882
111 17.2750 19.6751 21.9200 24.7250 26.7569
112 18.5494 21.0261 23.3367 26.2170 28.2995
1~3 19.8119 22.3621 24.7356 27.6883 29.8194
114 21.0642 23.6848 26.1190 29.1413 31.3193
115 22.3072 24.9958 27.4884 30.5779 32.8013
116 23.5418 26.2962 28.8454 31.9999 34.2672
117 24.7690 27.5871 30.1910 33.4087 35.7185
118 25.9894 28.8693 31.5264 34.8053 37.1564
119 27.2036 30.1435 32.8523 36.1908 38.5822
120 28.4120 31.4104 34.1696 37.5662 39.9968
121 29.6151 32.6705 35.4789 38.9321 41.4010
122 30.8133 33.9244 36.7807 40.2894 42.7956
123 32.0069 35.1725 38.0757 41.6384 44.1813
124 33.1963 36.4151 39.3641 42.9798 45.5585
125 34.3816 37.6525 40.6465 44.3141 46.9278
126 35.5631 38.8852 41.9232 45.6417 48.2899
127 36.7412 40.1133 43.1944 46.9630 49.6449
128 37.9159 41.3372 44.4607 48.2782 50.9933
129 39.0875 42.5569 45.7222 49.5879 52.3356
130 40.2560 43.7729 46.9792 50.8922 53.6720
140 51.8050 55.7585 59.3417 63.6907 66.7659
150 63.1671 67.5048 71.4202 76.1539 79.4900
160 74.3970 79.0819 83.2976 88.3794 91.9517
170 85.5271 90.5312 95.0231 100.4251 104.2148
180 96.5782 101.8795 106.6285 112.3288 116.3210
190 107.5650 113.1452 118.1360 124.1162 128.2290
100 118.4980 124.3421 129;5613 135.8070 140.1697
320 Appendix
Table V Critical values of t with degrees of freedom.
t v, α
t.100 t.050 t.025 t.010 t.005 t.0005

1 3.078 6.314 12.706 31.821 63.657 636.619
2 1.886 2.920 4.303 6.965 9.925 31.599
3 1.638 2.353 3.182 4.541 5.841 12.924
4 1.533 2.132 2.776 3.747 4.604 8.610
5 1.476 2.015 2.571 3.365 4.032 6.869
6 1.440 1.943 2.447 3.143 3.707 5.959
7 1.415 1.895 2.365 2.998 3.499 5.408
8 1.397 1.860 2.306 2.896 3.355 5.041
9 1.383 1.833 2.262 2.821 3.250 4.781
10 1.372 1.812 2.228 2.764 3.169 4.587
11 1.363 1.796 2.201 2.718 3.106 4.437
12 1.356 1.782 2.179 2.681 3.055 4.318
13 1.350 1.771 2.160 2.650 3.012 4.221
14 1.345 1.761 2.145 2.624 2.977 4.140
15 1.341 1.753 2.131 2.602 2.947 4.073
16 1.337 1.746 2.120 2.583 2.921 4.015
17 1.333 1.740 2.110 2.567 2.898 3.965
18 1..330 1.734 2.101 2.552 2.878 3.922
19 1.328 1.729 2.093 2.539 2.861 3.883
20 1.325 1.725 2.086 2.528 2.845 3.850
21 1.323 1.721 2.080 2.518 2.831 3.819
22 1.321 1.717 2.074 2.508 2.819 3.792
23 1.319 1.714 2.069 2.500 2.807 3.768
24 1.318 1.711 2.064 2.492 2.797 3.745
25 1.316 1.708 2.060 2.485 2.787 3.725
26 1.315 1.706 2.056 2.479 2.779 3.707
27 1.314 1.703 2.052 2.473 2.771 3.690
28 1.313 1.701 2.048 2.467 2.763 3.674
29 1.311 1.699 2.045 2.462 2.756 3.659
30 1.310 1.697 2.042 2.457 2.750 3.646
40 1.303 1.684 2.021 2.423 2.704 3.551
60 1.296 1.671 2.000 2.390 2.660 3.460
80 1.292 1.664 1.990 2.374 2.639 3.416
100 1.290 1.660 1.984 2.364 2.626 3.390
120 1.289 1.658 1.980 2.358 2.617 3.373
1.282 1.645 1.960 2.326 2.576 3.291
Critical points of t for lower tail areas are found by using the symmetric property.
Appendix 321
Table VI Critical values of F with numerator and denominator degrees of freedom 1, 2
respectively ( 0.10).
F v1, v2, α
1 2 3 4 5 6 7 8 9 10
1 39.86 49.50 53.59 55.83 57.24 58.20 58.91 59.44 59.86 60.19
2 8.53 9.00 9.16 9.24 9.29 9.33 9.35 9.37 9.38 9.39
3 5.54 5.46 5.39 5.34 5.31 5.28 5.27 5.25 5.24 5.23
4 4.54 4.32 4.19 4.11 4.05 4.01 3.98 3.95 3.94 3.92
5 4.06 3.78 3.62 3.52 3.45 3.40 3.37 3.34 3.32 3.30
6 3.78 3.46 3.29 3.18 3.11 3.05 3.01 2.98 2.96 2.94
7 3.59 3.26 3.07 2.96 2.88 2.83 2.78 2.75 2.72 2.70
8 3.46 3.11 2.92 2.81 2.73 2.67 2.62 2.59 2.56 2.54
9 3.36 3.01 2.81 2.69 2.61 2.55 2.51 2.47 2.44 2.42
10 3.29 2.92 2.73 2.61 2.52 2.46 2.41 2.38 2.35 2.32
11 3.23 2.86 2.66 2.54 2.45 2.39 2.34 2.30 2.27 2.25
12 3.18 2.81 2.61 2.48 2.39 2.33 2.28 2.24 2.21 2.19
13 3.14 2.76 2.56 2.43 2.35 2.28 2.23 2.20 2.16 2.14
14 3.10 2.73 2.52 2.39 2.31 2.24 2.19 2.15 2.12 2.10
15 3.07 2.70 2.49 2.36 2.27 2.21 2.16 2.12 2.09 2.06
16 3.05 2.67 2.46 2.33 2.24 2.18 2.13 2.09 2.06 2.03
17 3.03 2.64 2.44 2.31 2.22 2.15 2.10 2.06 2.03 2.00
18 3.01 2.62 2.42 2.29 2.20 2.13 2.08 2.04 2.00 1.98
19 2.99 2.61 2.40 2.27 2.18 2.11 2.06 2.02 1.98 1.96
20 2.97 2.59 2.38 2.25 2.16 2.09 2.04 2.00 1.96 1.94
25 2.92 2.53 2.32 2.18 2.09 2.02 1.97 1.93 1.89 1.87
30 2.88 2.49 2.28 2.14 2.05 1.98 1.93 1.88 1.85 1.82
35 2.85 2.46 2.25 2.11 2.02 1.95 1.90 1.85 1.82 1.79
40 2.84 2.44 2.23 2.09 2.00 1.93 1.87 1.83 1.79 1.76
45 2.82 2.42 2.21 2.07 1.98 1.91 1.85 1.81 1.77 1.74
50 2.81 2.41 2.20 2.06 1.97 1.90 1.84 1.80 1.76 1.73
60 2.79 2.39 2.18 2.04 1.95 1.87 1.82 1.77 1.74 1.71
70 2.78 2.38 2.16 2.03 1.93 1.86 1.80 1.76 1.72 1.69
80 2.77 2.37 2.15 2.02 1.92 1.85 1.79 1.75 1.71 1.68
90 2.76 2.36 2.15 2.01 1.91 1.84 1.78 1.74 1.70 1.67
100 2.76 2.36 2.14 2.00 1.91 1.83 1.78 1.73 1.69 1.66
2.71 2.30 2.08 1.94 1.85 1.77 1.72 1.67 1.63 1.60
Continued
322 Appendix
Continued
dId 11 12 13 14 15 20 25 30 40 50 75 100
1 60.47 60.71 60.90 61.07 61.22 61.74 62.05 62.26 62.53 62.69 62.90 63.01 63.33
2 9.40 9.41 9.41 9.42 9.42 9.44 9.45 9.46 9.47 9.47 9.48 9.48 9.49
3 5.22 5.22 5.21 5.20 5.20 5.18 5.17 5.17 5.16 5.15 5.15 5.14 5.13
4 3.91 3.90 3.89 3.88 3.87 3.84 3.83 3.82 3.80 3.80 3.78 3.78 3.76
5 3.28 3.27 3.26 3.25 3.24 3.21 3.19 3.17 3.16 3.15 3.13 3.13 3.11
6 2.92 2.90 2.89 2.88 2.87 2.84 2.81 2.80 2.78 2.77 2.75 2.75 2.72
7 2.68 2.67 2.65 2.64 2.63 2.59 2.57 2.56 2.54 2.52 2.51 2.50 2.47
8 2.52 2.50 2.49 2.48 2.46 2.42 2.40 2.38 2.36 2.35 2.33 2.32 2.30
9 2.40 2.38 2.36 2.35 2.34 2.30 2.27 2.25 2.23 2.22 2.20 2.19 2.16
10 2.30 2.28 2.27 2.26 2.24 2.20 2.17 2.16 2.13 2.12 2.10 2.09 2.06
11 2.23 2.21 2.19 2.18 2.17 2.12 2.10 2.08 2.05 2.04 2.02 2.01 1.97
12 2.17 2.15 2.13 2.12 2.10 2.06 2.03 2.01 1.99 1.97 1.95 1.94 1.90
13 2.12 2.10 2.08 2.07 2.05 2.01 1.98 1.96 1.93 1.92 1.89 1.88 1.85
14 2.07 2.05 2.04 2.02 2.01 1.96 1.93 1.91 1.89 1.87 1.85 1.83 1.80
15 2.04 2.02 2.00 1.99 1.97 1.92 1.89 1.87 1.85 1.83 1.80 1.79 1.76
16 2.01 1.99 1.97 1.95 1.94 1.89 1.86 1.84 1.81 1.79 1.77 1.76 1.72
17 1.98 1.96 1.94 1.93 1.91 1.86 1.83 1.81 1.78 1.76 1.74 1.73 1.69
18 1.95 1.93 1.92 1.90 1.89 1.84 1.80 1.78 1.75 1.74 1.71 1.70 1.66
19 1.93 1.91 1.89 1.88 1.86 1.81 1.78 1.76 1.73 1.71 1.69 1.67 1.63
20 1.91 1.89 1.87 1.86 1.84 1.79 1.76 1.74 1.71 1.69 1.66 1.65 1.61
25 1.84 1.82 1.80 1.79 1.77 1.72 1.68 1.66 1.63 1.61 1.58 1.56 1.52
30 1.79 1.77 1.75 1.74 1.72 1.67 1.63 1.61 1.57 1.55 1.52 1.51 1.46
35 1.76 1.74 1.72 1.70 1.69 1.63 1.60 1.57 1.53 1.51 1.48 1.47 1.41
40 1.74 1.71 1.70 1.68 1.66 1.61 1.57 1.54 1.51 1.48 1.45 1.43 1.38
45 1.72 1.70 1.68 1.66 1.64 1.58 1.55 1.52 1.48 1.46 1.43 1.41 1.35
50 1.70 1.68 1.66 1.64 1.63 1.57 1.53 1.50 1.46 1.44 1.41 1.39 1.33
60 1.68 1.66 1.64 1.62 1.60 1.54 1.50 1.48 1.44 1.41 1.38 1.36 1.29
70 1.66 1.64 1.62 1.60 1.59 1.53 1.49 1.46 1.42 1.39 1.36 1.34 1.27
80 1.65 1.63 1.61 1.59 1.57 1.51 1.47 1.44 1.40 1.38 1.34 1.32 1.24
90 1.64 1.62 1.60 1.58 1.56 1.50 1.46 1.43 1.39 1.36 1.33 1.30 1.23
100 1.64 1.61 1.59 1.57 1.56 1.49 1.45 1.42 1.38 1.35 1.32 1.29 1.21
1.57 1.55 1.52 1.50 1.49 1.42 1.38 1.34 1.30 1.26 1.21 1.18 1.00
To find the critical value of F when is under the lower tail denoted by F1,2,1– we use the
following formula: F . Example: Fv ,v ,1−.10= 1

ν1,ν2,1−α = 1 1 2 Fv ,v ,.10
Fν ,ν ,α 2 1
2 1
Appendix 323
dfd 1 2 3 4 5 6 7 8 9 10
1 161.45 199.50 215.71 224.58 230.16 233.99 236.77 238.88 240.54 241.88
2 18.51 19.00 19.16 19.25 19.30 19.33 19.35 19.37 19.38 19.40
3 10.13 9.55 9.28 9.12 9.01 8.94 8.89 8.85 8.81 8.79
4 7.71 6.94 6.59 6.39 6.26 6.16 6.09 6.04 6.00 5.96
5 6.61 5.79 5.41 5.19 5.05 4.95 4.88 4.82 4.77 4.74
6 5.99 5.14 4.76 4.53 4.39 4.28 4.21 4.15 4.10 4.06
7 5.59 4.74 4.35 4.12 3.97 3.87 3.79 3.73 3.68 3.64
8 5.32 4.46 4.07 3.84 3.69 3.58 3.50 3.44 3.39 3.35
9 5.12 4.26 3.86 3.63 3.48 3.37 3.29 3.23 3.18 3.14
10 4.97 4.10 3.71 3.48 3.33 3.22 3.14 3.07 3.02 2.98
11 4.84 3.98 3.59 3.36 3.20 3.09 3.01 2.95 2.90 2.85
12 4.75 3.89 3.49 3.26 3.11 3.00 2.91 2.85 2.80 2.75
13 4.67 3.81 3.41 3.18 3.03 2.92 2.83 2.77 2.71 2.67
14 4.60 3.74 3.34 3.11 2.96 2.85 2.76 2.70 2.65 2.60
15 4.54 3.68 3.29 3.06 2.90 2.79 2.71 2.64 2.59 2.54
16 4.49 3.63 3.24 3.01 2.85 2.74 2.66 2.59 2.54 2.49
17 4.45 3.59 3.20 2.96 2.81 2.70 2.61 2.55 2.49 2.45
18 4.41 3.55 3.16 2.93 2.77 2.66 2.58 2.51 2.46 2.41
19 4.38 3.52 3.13 2.90 2.74 2.63 2.54 2.48 2.42 2.38
20 4.35 3.49 3.10 2.87 2.71 2.60 2.51 2.45 2.39 2.35
25 4.24 3.39 2.99 2.76 2.60 2.49 2.40 2.34 2.28 2.24
30 4.17 3.32 2.92 2.69 2.53 2.42 2.33 2.27 2.21 2.16
35 4.12 3.27 2.87 2.64 2.49 2.37 2.29 2.22 2.16 2.11
40 4.09 3.23 2.84 2.61 2.45 2.34 2.25 2.18 2.12 2.08
45 4.06 3.20 2.81 2.58 2.42 2.31 2.22 2.15 2.10 2.05
50 4.03 3.18 2.79 2.56 2.40 2.29 2.20 2.13 2.07 2.03
60 4.00 3.15 2.76 2.53 2.37 2.25 2.17 2.10 2.04 1.99
70 3.98 3.13 2.74 2.50 2.35 2.23 2.14 2.07 2.02 1.97
80 3.96 3.11 2.72 2.49 2.33 2.21 2.13 2.06 2.00 1.95
90 3.95 3.10 2.71 2.47 2.32 2.20 2.11 2.04 1.99 1.94
100 3.94 3.09 2.70 2.46 2.31 2.19 2.10 2.03 1.97 1.93
∞ 3.84 3.00 2.60 2.37 2.21 2.10 2.01 1.94 1.88 1.83
Continued
324 Appendix
Continued
dId 11 12 13 14 15 20 25 30 40 50 75 100
1 243.0 243.9 244.7 245.4 246.0 248.0 249.3 250.1 251.1 251.8 252.6 253.0 254.3
2 19.40 19.41 19.42 19.42 19.43 19.45 19.46 19.46 19.47 19.48 19.48 19.49 19.50
3 8.76 8.74 8.73 8.71 8.70 8.66 8.63 8.62 8.59 8.58 8.56 8.55 8.53
4 5.94 5.91 5.89 5.87 5.86 5.80 5.77 5.75 5.72 5.70 5.68 5.66 5.63
5 4.70 4.68 4.66 4.64 4.62 4.56 4.52 4.50 4.46 4.44 4.42 4.41 4.37
6 4.03 4.00 3.98 3.96 3.94 3.87 3.83 3.81 3.77 3.75 3.73 3.71 3.67
7 3.60 3.57 3.55 3.53 3.51 3.44 3.40 3.38 3.34 3.32 3.29 3.27 3.23
8 3.31 3.28 3.26 3.24 3.22 3.15 3.11 3.08 3.04 3.02 2.99 2.97 2.93
9 3.10 3.07 3.05 3.03 3.01 2.94 2.89 2.86 2.83 2.80 2.77 2.76 2.71
10 2.94 2.91 2.89 2.86 2.85 2.77 2.73 2.70 2.66 2.64 2.60 2.59 2.54
11 2.82 2.79 2.76 2.74 2.72 2.65 2.60 2.57 2.53 2.51 2.47 2.46 2.40
12 2.72 2.69 2.66 2.64 2.62 2.54 2.50 2.47 2.43 2.40 2.37 2.35 2.30
13 2.63 2.60 2.58 2.55 2.53 2.46 2.41 2.38 2.34 2.31 2.28 2.26 2.21
14 2.57 2.53 2.51 2.48 2.46 2.39 2.34 2.31 2.27 2.24 2.21 2.19 2.13
15 2.51 2.48 2.45 2.42 2.40 2.33 2.28 2.25 2.20 2.18 2.14 2.12 2.07
16 2.46 2.42 2.40 2.37 2.35 2.28 2.23 2.19 2.15 2.12 2.09 2.07 2.01
17 2.41 2.38 2.35 2.33 2.31 2.23 2.18 2.15 2.10 2.08 2.04 2.02 1.96
18 2.37 2.34 2.31 2.29 2.27 2.19 2.14 2.11 2.06 2.04 2.00 1.98 1.92
19 2.34 2.31 2.28 2.26 2.23 2.16 2.11 2.07 2.03 2.00 1.96 1.94 1.88
20 2.31 2.28 2.25 2.22 2.20 2.12 2.07 2.04 1.99 1.97 1.93 1.91 1.84
25 2.20 2.16 2.14 2.11 2.09 2.01 1.96 1.92 1.87 1.84 1.80 1.78 1.71
30 2.13 2.09 2.06 2.04 2.01 1.93 1.88 1.84 1.79 1.76 1.72 1.70 1.62
35 2.07 2.04 2.01 1.99 1.96 1.88 1.82 1.79 1.74 1.70 1.66 1.63 1.56
40 2.04 2.00 1.97 1.95 1.92 1.84 1.78 1.74 1.69 1.66 1.61 1.59 1.51
45 2.01 1.97 1.94 1.92 1.89 1.81 1.75 1.71 1.66 1.63 1.58 1.55 1.47
50 1.99 1.95 1.92 1.89 1.87 1.78 1.73 1.69 1.63 1.60 1.55 1.52 1.44
60 1.95 1.92 1.89 1.86 1.84 1.75 1.69 1.65 1.59 1.56 1.51 1.48 1.39
70 1.93 1.89 1.86 1.84 1.81 1.72 1.66 1.62 1.57 1.53 1.48 1.45 1.35
80 1.91 1.88 1.84 1.82 1.79 1.70 1.64 1.60 1.54 1.51 1.45 1.43 1.32
90 1.90 1.86 1.83 1.80 1.78 1.69 1.63 1.59 1.53 1.49 1.44 1.41 1.30
100 1.89 1.85 1.82 1.79 1.77 1.68 1.62 1.57 1.52 1.48 1.42 1.39 1.28
1.79 1.75 1.72 1.69 1.67 1.57 1.51 1.46 1.39 1.35 1.28 1.24 1.00

ν1,ν2,1−α = 1 1 2 Fv ,v ,.10
Fν ,ν ,α 2 1
2 1
Appendix 325
1 2 3 4 5 6 7 8 9 10
1 647.79 799.50 864.16 899.58 921.85 937.11 948.22 956.66 963.28 968.63
2 38.51 39.00 39.17 39.25 39.30 39.33 39.36 39.37 39.39 39.40
3 17.44 16.04 15.44 15.10 14.88 14.73 14.62 14.54 14.47 14.42
4 12.22 10.65 9.98 9.60 9.36 9.20 9.07 8.98 8.90 8.84
5 10.01 8.43 7.76 7.39 7.15 6.98 6.85 6.76 6.68 6.62
6 8.81 7.26 6.60 6.23 5.99 5.82 5.70 5.60 5.52 5.46
7 8.07 6.54 5.89 5.52 5.29 5.12 4.99 4.90 4.82 4.76
8 7.57 6.06 5.42 5.05 4.82 4.65 4.53 4.43 4.36 4.30
9 7.21 5.71 5.08 4.72 4.48 4.32 4.20 4.10 4.03 3.96
10 6.94 5.46 4.83 4.47 4.24 4.07 3.95 3.85 3.78 3.72
11 6.72 5.26 4.63 4.28 4.04 3.88 3.76 3.66 3.59 3.53
12 6.55 5.10 4.47 4.12 3.89 3.73 3.61 3.51 3.44 3.37
13 6.41 4.97 4.35 4.00 3.77 3.60 3.48 3.39 3.31 3.25
14 6.30 4.86 4.24 3.89 3.66 3.50 3.38 3.29 3.21 3.15
15 6.20 4.77 4.15 3.80 3.58 3.41 3.29 3.20 3.12 3.06
16 6.12 4.69 4.08 3.73 3.50 3.34 3.22 3.12 3.05 2.99
17 6.04 4.62 4.01 3.66 3.44 3.28 3.16 3.06 2.98 2.92
18 5.98 4.56 3.95 3.61 3.38 3.22 3.10 3.01 2.93 2.87
19 5.92 4.51 3.90 3.56 3.33 3.17 3.05 2.96 2.88 2.82
20 5.87 4.46 3.86 3.51 3.29 3.13 3.01 2.91 2.84 2.77
25 5.69 4.29 3.69 3.35 3.13 2.97 2.85 2.75 2.68 2.61
30 5.57 4.18 3.59 3.25 3.03 2.87 2.75 2.65 2.57 2.51
35 5.49 4.11 3.52 3.18 2.96 2.80 2.68 2.58 2.50 2.44
40 5.42 4.05 3.46 3.13 2.90 2.74 2.62 2.53 2.45 2.39
45 5.38 4.01 3.42 3.09 2.86 2.70 2.58 2.49 2.41 2.35
50 5.34 3.97 3.39 3.05 2.83 2.67 2.55 2.46 2.38 2.32
60 5.29 3.93 3.34 3.01 2.79 2.63 2.51 2.41 2.33 2.27
70 5.25 3.89 3.31 2.97 2.75 2.59 2.47 2.38 2.30 2.24
80 5.22 3.86 3.28 2.95 2.73 2.57 2.45 2.35 2.28 2.21
90 5.20 3.84 3.26 2.93 2.71 2.55 2.43 2.34 2.26 2.19
100 5.18 3.83 3.25 2.92 2.70 2.54 2.42 2.32 2.24 2.18
5.02 3.69 3.12 2.79 2.57 2.41 2.29 2.19 2.11 2.05
Continued
326 Appendix
Continued
dId 11 12 13 14 15 20 25 30 40 50 75 100
1 973.0 976.7 979.8 982.5 984.9 993.1 998.1 1001.4 1005.6 1008.1 1011.5 1013.2
2 39.41 39.41 39.42 39.43 39.43 39.45 39.46 39.46 39.47 39.48 39.48 39.49
3 14.37 14.34 14.30 14.28 14.25 14.17 14.12 14.08 14.04 14.01 13.97 13.96
4 8.79 8.75 8.71 8.68 8.66 8.56 8.50 8.46 8.41 8.38 8.34 8.32
5 6.57 6.52 6.49 6.46 6.43 6.33 6.27 6.23 6.18 6.14 6.10 6.08
6 5.41 5.37 5.33 5.30 5.27 5.17 5.11 5.07 5.01 4.98 4.94 4.92
7 4.71 4.67 4.63 4.60 4.57 4.47 4.40 4.36 4.31 4.28 4.23 4.21
8 4.24 4.20 4.16 4.13 4.10 4.00 3.94 3.89 3.84 3.81 3.76 3.74
9 3.91 3.87 3.83 3.80 3.77 3.67 3.60 3.56 3.51 3.47 3.43 3.40
10 3.66 3.62 3.58 3.55 3.52 3.42 3.35 3.31 3.26 3.22 3.18 3.15
11 3.47 3.43 3.39 3.36 3.33 3.23 3.16 3.12 3.06 3.03 2.98 2.96
12 3.32 3.28 3.24 3.21 3.18 3.07 3.01 2.96 2.91 2.87 2.82 2.80
13 3.20 3.15 3.12 3.08 3.05 2.95 2.88 2.84 2.78 2.74 2.70 2.67
14 3.09 3.05 3.01 2.98 2.95 2.84 2.78 2.73 2.67 2.64 2.59 2.56
15 3.01 2.96 2.92 2.89 2.86 2.76 2.69 2.64 2.59 2.55 2.50 2.47
16 2.93 2.89 2.85 2.82 2.79 2.68 2.61 2.57 2.51 2.47 2.42 2.40
17 2.87 2.82 2.79 2.75 2.72 2.62 2.55 2.50 2.44 2.41 2.35 2.33
18 2.81 2.77 2.73 2.70 2.67 2.56 2.49 2.44 2.38 2.35 2.30 2.27
19 2.76 2.72 2.68 2.65 2.62 2.51 2.44 2.39 2.33 2.30 2.24 2.22
20 2.72 2.68 2.64 2.60 2.57 2.46 2.40 2.35 2.29 2.25 2.20 2.17
25 2.56 2.51 2.48 2.44 2.41 2.30 2.23 2.18 2.12 2.08 2.02 2.00
30 2.46 2.41 2.37 2.34 2.31 2.20 2.12 2.07 2.01 1.97 1.91 1.88
35 2.39 2.34 2.30 2.27 2.23 2.12 2.05 2.00 1.93 1.89 1.83 1.80
40 2.33 2.29 2.25 2.21 2.18 2.07 1.99 1.94 1.88 1.83 1.77 1.74
45 2.29 2.25 2.21 2.17 2.14 2.03 1.95 1.90 1.83 1.79 1.73 1.69
50 2.26 2.22 2.18 2.14 2.11 1.99 1.92 1.87 1.80 1.75 1.69 1.66
60 2.22 2.17 2.13 2.09 2.06 1.94 1.87 1.82 1.74 1.70 1.63 1.60
70 2.18 2.14 2.10 2.06 2.03 1.91 1.83 1.78 1.71 1.66 1.59 1.56
80 2.16 2.11 2.07 2.03 2.00 1.88 1.81 1.75 1.68 1.63 1.56 1.53
90 2.14 2.09 2.05 2.02 1.98 1.86 1.79 1.73 1.66 1.61 1.54 1.50
100 2.12 2.08 2.04 2.00 1.97 1.85 1.77 1.71 1.64 1.59 1.52 1.48
1.99 1.94 1.90 1.87 1.83 1.71 1.63 1.57 1.48 1.43 1.34 1.30

ν1,ν2,1−α = 1 1 2 Fv ,v ,.10
Fν ,ν ,α 2 1
2 1
Appendix 327
dId 1 2 3 4 5 6 7 8 9 10
1 4052 5000 5403 5625 5764 5859 5928 5981 6022 6056
2 98.50 99.00 99.17 99.25 99.30 99.33 99.36 99.37 99.39 99.40
3 34.12 30.82 29.46 28.71 28.24 27.91 27.67 27.49 27.35 27.23
4 21.20 18.00 16.69 15.98 15.52 15.21 14.98 14.80 14.66 14.55
5 16.26 13.27 12.06 11.39 10.97 10.67 10.46 10.29 10.16 10.05
6 13.75 10.92 9.78 9.15 8.75 8.47 8.26 8.10 7.98 7.87
7 12.25 9.55 8.45 7.85 7.46 7.19 6.99 6.84 6.72 6.62
8 11.26 8.65 7.59 7.01 6.63 6.37 6.18 6.03 5.91 5.81
9 10.56 8.02 6.99 6.42 6.06 5.80 5.61 5.47 5.35 5.26
10 10.04 7.56 6.55 5.99 5.64 5.39 5.20 5.06 4.94 4.85
11 9.65 7.21 6.22 5.67 5.32 5.07 4.89 4.74 4.63 4.54
12 9.33 6.93 5.95 5.41 5.06 4.82 4.64 4.50 4.39 4.30
13 9.07 6.70 5.74 5.21 4.86 4.62 4.44 4.30 4.19 4.10
14 8.86 6.51 5.56 5.04 4.69 4.46 4.28 4.14 4.03 3.94
15 8.68 6.36 5.42 4.89 4.56 4.32 4.14 4.00 3.89 3.80
16 8.53 6.23 5.29 4.77 4.44 4.20 4.03 3.89 3.78 3.69
17 8.40 6.11 5.18 4.67 4.34 4.10 3.93 3.79 3.68 3.59
18 8.29 6.01 5.09 4.58 4.25 4.01 3.84 3.71 3.60 3.51
19 8.18 5.93 5.01 4.50 4.17 3.94 3.77 3.63 3.52 3.43
20 8.10 5.85 4.94 4.43 4.10 3.87 3.70 3.56 3.46 3.37
25 7.77 5.57 4.68 4.18 3.85 3.63 3.46 3.32 3.22 3.13
30 7.56 5.39 4.51 4.02 3.70 3.47 3.30 3.17 3.07 2.98
35 7.42 5.27 4.40 3.91 3.59 3.37 3.20 3.07 2.96 2.88
40 7.31 5.18 4.31 3.83 3.51 3.29 3.12 2.99 2.89 2.80
45 7.23 5.11 4.25 3.77 3.45 3.23 3.07 2.94 2.83 2.74
50 7.17 5.06 4.20 3.72 3.41 3.19 3.02 2.89 2.78 2.70
60 7.08 4.98 4.13 3.65 3.34 3.12 2.95 2.82 2.72 2.63
70 7.01 4.92 4.07 3.60 3.29 3.07 2.91 2.78 2.67 2.59
80 6.96 4.88 4.04 3.56 3.26 3.04 2.87 2.74 2.64 2.55
90 6.93 4.85 4.01 3.53 3.23 3.01 2.84 2.72 2.61 2.52
100 6.90 4.82 3.98 3.51 3.21 2.99 2.82 2.69 2.59 2.50
6.63 4.61 3.78 3.32 3.02 2.80 2.64 2.51 2.41 2.32
Continued
328 Appendix
Continued
dId 11 12 13 14 15 20 25 30 40 50 75 100
1 6056 6106 6130 6140 6157 6209 6240 6261 6287 6303 6320 6334
2 99.41 99.42 99.42 99.43 99.43 99.45 99.46 99.47 99.47 99.48 99.49 99.49
3 27.13 27.05 26.98 26.92 26.87 26.69 2658 26.50 26.41 26.35 26.28 26.24
4 14.45 14.37 14.31 14.25 14.20 14.02 13.91 13.84 13.75 13.69 13.61 13.58
5 9.96 9.89 9.82 9.77 9.72 9.55 9.45 9.38 9.29 9.24 9.17 9.13
6 7.79 7.72 7.66 7.61 7.56 7.40 7.30 7.23 7.14 7.09 7.02 6.99
7 6.54 6.47 6.41 6.36 6.31 6.16 6.06 5.99 5.91 5.86 5.79 5.75
8 5.73 5.67 5.61 5.56 5.52 5.36 5.26 5.20 5.12 5.07 5.00 4.96
9 5.18 5.11 5.05 5.01 4.96 4.81 4.71 4.65 4.57 4.52 4.45 4.41
10 4.77 4.71 4.65 4.60 4.56 4.41 4.31 4.25 4.17 4.12 4.05 4.01
11 4.46 4.40 4.34 4.29 4.25 4.10 4.01 3.94 3.86 3.81 3.74 3.71
12 4.22 4.16 4.10 4.05 4.01 3.86 3.76 3.70 3.62 3.57 3.50 3.47
13 4.02 3.96 3.91 3.86 3.82 3.66 3.57 3.51 3.43 3.38 3.31 3.27
14 3.86 3.80 3.75 3.70 3.66 3.51 3.41 3.35 3.27 3.22 3.15 3.11
15 3.73 3.67 3.61 3.56 3.52 3.37 3.28 3.21 3.13 3.08 3.01 2.98
16 3.62 3.55 3.50 3.45 3.41 3.26 3.16 3.10 3.02 2.97 2.90 2.86
17 3.52 3.46 3.40 3.35 3.31 3.16 3.07 3.00 2.92 2.87 2.80 2.76
18 3.43 3.37 3.32 3.27 3.23 3.08 2.98 2.92 2.84 2.78 2.71 2.68
19 3.36 3.30 3.24 3.19 3.15 3.00 2.91 2.84 2.76 2.71 2.64 2.60
20 3.29 3.23 3.18 3.13 3.09 2.94 2.84 2.78 2.69 2.64 2.57 2.54
25 3.06 2.99 2.94 2.89 2.85 2.70 2.60 2.54 2.45 2.40 2.33 2.29
30 2.91 2.84 2.79 2.74 2.70 2.55 2.45 2.39 2.30 2.25 2.17 2.13
35 2.80 2.74 2.69 2.64 2.60 2.44 2.35 2.28 2.19 2.13 2.06 2.02
40 2.73 2.66 2.61 2.56 2.52 2.3 7 2.27 2.20 2.11 2.06 1.98 1.94
45 2.67 2.61 2.55 2.51 2.46 2.31 2.21 2.14 2.05 2.00 1.92 1.88
50 2.63 2.56 2.51 2.46 2.42 2.27 2.17 2.10 2.01 1.95 1.87 1.82
60 2.56 2.34 2.44 2.39 2.19 2.03 2.10 1.86 1.76 1.88 1.79 1.75
70 2.51 2.45 2.40 2.35 2.31 2.15 2.05 1.98 1.87 1.83 1.74 1.70
80 2.48 2.42 2.36 2.31 2.27 2.12 2.01 1.94 1.85 1.79 1.70 1.65
90 2.45 2.39 2.33 2.27 2.24 2.09 1.99 1.92 1.82 1.76 1.67 1.62
100 2.43 2.37 2.31 2.27 2.22 2.07 1.97 1.89 1.80 1.74 1.65 1.60
2.25 2.18 2.12 2.08 2.04 1.88 1.77 1.70 1.59 1.52 1.42 1.36

ν1,ν2,1−α = 1 1 2 Fv ,v ,.10
Fν ,ν ,α 2 1
2 1
INDEX
Index Terms Links
absolute probability 89
acceptance regions 204
aging factors 129 131
Alpha, defined 305
alternative hypotheses 202 203 305
alternatives, two-tail 203
Analyze phase, tools/techniques
associated xxi
arithmetic mean 305
See also mean
association, measures of 39
associations, perfect 41
axiomatic approach to probability theory 86
bar charts 23 267 292 305

before and after data, hypothesis testing with. 237
bell-shaped curves 2
Bernoulli distribution 102
Bernoulli populations 147
Bernoulli random variable 102
Bernoulli trials 101 305
Beta, defined 305
beta function 153
bias in point estimators 167 310
bimodal data 305
bimodal distribution 305
This page has been reformatted by Knovel to provide easier navigation.

Index Terms Links
binomial distribution mean

calculating in MINITAB 270 271
criteria for applying 102
defined 305
mean 106
normal approximation to 159
point 102
Poisson approximation to 111 158
sampling with replacement and 107
standard deviation 106
binomial probabilities, tables of 105 314
bivariate data 39 41
black belts, responsibilities of 5
BMDP software 255
bound on error of estimation 168 192 305 307
box-whisker plots 66 264 290 305
categorical data, graphical representation 22

cdf (cumulative distribution function) 97 117
central limit theorem 121 141 305
central tendency, measures of. See measures
of centrality
chance 71
charts. See also JMP; MINITAB
bar charts 23 267 292 305
box-whisker plots 66 264 290 305
categorical data 22
control charts 33
dot plots 20 39 262
frequency distribution tables 15
histograms 27 35 260 288
307
JMP 291
Index Terms Links
charts. See also JMP; MINITAB (Cont.)

line graphs 33 39
Pareto chart 24
pie chart 22 268 294 309
probability function 97
scatter plots 21 39
Six Sigma implementation flow 4
stem and leaf diagrams 27 34 310
summary information 266 291
time series graph 33
tree diagram 75
Venn diagrams 310
chi-square critical values table 320
chi-square distributions 148 270 305 320
classes 20 306
coefficient of variation (CV) 52 57 306
combination 77 79
complement 80 306
composite hypotheses 203
conditional probability 88 306
confidence coefficients 171
confidence intervals
See also interval estimation defined 165 171
differences between two population means 180
hypothesis testing 250 275
for large sample sizes 173 180 187
one-sided 174 176
pivotal quantities and 172
for population proportions 187
for population variances 195
for ratio of two population variances 198
for small sample sizes 177 183
Students t-distribution and 180
two-sided 173 176

Index Terms Links
confidence limits 171

contingency tables 306
continuity correction factor 160 306
continuous distribution 115 306
continuous random variables 94 115 117 306
control charts 33
Control phase, tools/techniques associated xxi
correction factors 140 160 168 306
correlation coefficient 40 306
critical points 204 306
critical regions 204
cumulative distribution function (cdf) 97 117
cumulative frequencies 16 306
cumulative frequency histograms 32 307
cumulative probabilities 96
curves
bell-shaped 2
frequency distribution 31
Ogive 32 308
operating characteristic 206 308
power 309
CV (coefficients of variation) 52 57 306
data
before and after 237
bimodal 305
bivariate 39 41
categorical 22
converting to information 6
defined 6
grouped 20 57 307
interval 12 307
nominal 12 308
Index Terms Links
data (Cont.)
numerical. See numerical data
ordinal 12 308
paired 237 309
qualitative 12 15 22 309
quantitative
See quantitative data
ratio 12
sets of 15 306
skewed 51 52 310
symmetric 51 310
types of 11
ungrouped 20
defects per million opportunities
(DPMO) 1
Define, Measure, Analyze, Improve, and
Control (DMAIC) xvii 5
Define phase, tools/techniques
associated xxi
degrees of freedom 148 154 306
density functions. See probability
functions
dependent events 91 306
descriptive statistics 10 15 306
design of experiments (DOE) 306
deterministic experiments 72
diagrams. See charts
dichotomized populations 107
discrete distributions 306
discrete random variables 93 94 97 99
306
discrete sample space 74
dispersion, measures of 2 45 52 60
64

Index Terms Links
distribution functions
continuous random variables 117
cumulative 97 117
frequency 153
distributions
Bernoulli 102
bimodal 305
binomial. See binomial distributions
calculating in MINITAB 269
chi-square 148 270 305 320
continuous 115 306
discrete 93 14 306
exponential 129 270 307
F- 155 270 307
hypergeometric 107 10 307
normal. See normal distributions
Poisson 110 14 270 309
probability 95
rectangular distributions 118
of sample mean 140
sampling. See sampling distributions
shapes of 51 67
skewedsymmetric 67
Snedecor’s F- 155
Students t- 153 230
tables 15 34 39 307
uniform 118
Weibull 132
Z 311
DMAIC (Define, Measure, Analyze, Improve,
and Control) xvii 5
DOE (design of experiments) 306
dot plots 20 39 262
DPMO (defects per million opportunities) 1

Index Terms Links
empirical rule 60 66 70 307

equally likely events 307
errors
of estimation 168 192 305 307
in hypothesis testing. 204 212
margin of 168 192
mean square 308
of point estimation 168 192 305 307
standard 140 310
type I 205 212 310
type 11 205 212 310
estimators 137 307
See also point estimation
events
defined 74 307
dependent 91 306
equally likely 307
independent 89 307
mutually exclusive 83 90 308
null 75 79
of random experiments 73
rare 110
representations of 75
simple 73 75 309
sure 75 80 310
expected frequencies 307
expected values 99 307
experiments
defined 307
deterministic 72
random. See random experiments
exponential distributions 129 270 307

Index Terms Links
exponential models 131

extreme values 48 66 67 308
F critical values table 323

F-distributions 155 270 307
failure rate function 132
finite correction factors 168
finite populations 11 140
first quartile 307
flow chart, Six Sigma implementation 4
freedom, degrees of 148 154 306
frequencies, class 306
frequencies, cumulative 16 306
frequencies, expected 307
frequencies, relative 16 83 309
frequency distribution curves 3 1
frequency distribution functions 153
frequency distributions. See distributions
frequency histograms 27 32 34 307
frequency polygons 27 30 33 307
glossary 305 11
Gosset, W. S. 153
graphical representations. See charts
graphs. See charts
green belts, responsibilities of, xvii 5
grouped data 20 57 307
hazard rate function 132

Index Terms Links
histograms 27 35 260 288

307
hypergeometric distributions 107 10 307
hypotheses, types of 202 209 305 308
See also hypothesis testing
hypothesis testing
before and after data 237
confidence intervals 250 275
errors in 204 212
general concepts 203
in JMP 295 300
large samples 208 240 252 273
295
in MINITAB 273
normal population 238 253 254
one population mean 208 223 238 250
295
one population proportion 240
one population variance 244
paired t-test 237
probability model for 201
purpose 201
small samples 223 250 274 296
steps in 207
two population means 216 229 276
two population proportions 242 276
two population variances 247 280 300
Improve phase, tools/techniques

associated xxi
independent events 89 307
independent samples 307
inertia, moments of 101
Index Terms Links
inferential statistics 10 307

infinite populations 11
information 6 7
inter-quartile range (IQR) 52 64 308
intersection 80 307
interval data 12 307
interval estimation 165 171 192 307
See also hypothesis testing; point
estimation
IQR (inter-quartile range) 52 64 308
JMP
basic functions 284
calculating statistics 286
displaying bar charts 292
displaying box-whisker plots 290
displaying graphical summaries 291
displaying histograms 288
displaying pie charts 294
displaying stem and leaf diagrams 289
hypothesis testing 295 300
normality testing 301
paired t-test 298
LCL (lower confidence limits) 171

left skewed data 51
left skewed distributions 67
level of significance 205 308
limits, class 306
limits, confidence 171
limits, specification 2

Index Terms Links
line graphs 33 39
location, measures of 2 3 63
lower confidence limits (LCL) 171
lower fences 308
lower-tail hypotheses 209
MAIC (Measure, Analyze, Improve, and

Control) 5
margin of error 168 192
marginal probability 308
marks, class 20
mean square error (MSE) 308
mean
arithmetic 305
binomial distribution 106
continuous random variable 120
defined 308
discrete random variable 99
exponential distribution 130
for grouped data 58
hypergeometric distribution 110
Poisson distribution 114
population 138
sample 138
uniform distribution 120
Weibull distribution 133
weighted 311
Measure, Analyze, Improve, and Control
(MAIC) 5
Measure phase, tools/techniques
associated, xxi
measures of association 39
Index Terms Links
measures of centrality
defined 45 308
for grouped data 57
limitations of 52
mean. See mean
median 48 51 58 308
mode 50 59 308
measures of dispersion 2 45 52 60
64
measures of location 2 3 63
measures of variability 308
median 48 51 58 308
memory-less properties 130
midpoints, class 20 306
MINITAB
calculating distributions 269
calculating statistics 258
displaying bar charts 267
displaying box-whisker plots 264
displaying dot plots 262 264
displaying graphical summaries 266
displaying graphs, generally 260
displaying histograms 260
displaying pie charts 268
displaying scatter plots 263 265
general use 255
hypothesis testing about population mean
and proportion 273
hypothesis testing about two population
means and proportions 276
hypothesis testing about two population
variances 280 82
normality testing 282
paired t-test 278

Index Terms Links
mode 50 59 308
moment of inertia 101
Motorola definition of Six Sigma 3
MSE (mean square error) 308
multiplication rule 77 90
mutually exclusive events 83 90 308
nominal data 12 308

nonconditional probability 89
nonparametric statistics 308
normal distribution
chi-square distributions and 148
defined 121 123 308 310
empirical rule 60
examples 124
generally 121
standard deviation and 2
Students t-distribution and 153
tables 123 319
normality testing
JMP 301
MINITAB 282
null event 75 79
null hypotheses 202 308
numerical data
graphical representations 20 27 66
interval estimation and 171
measures of 52
point estimation and 166
numerical measures 45
See also measures of
centrality; measures of dispersion
Index Terms Links
observations 308
observed level of significance 205 308
OC (operating characteristic)
curves 206 308
Ogive curves 32 308
one-tail alternatives 203
one-tail tests 308
operating characteristic (OC)
curves 206 308
opportunities for defects 1
ordered stem and leaf diagrams 36
See also
stem and leaf diagrams
ordinal data 12 308
outliers 48 66 67 308
p-values 210 309

paired data 237 309
paired t-test 237 278 298
parameters 45 137 165 309
Pareto chart 24
Pearson correlation
coefficient 40
Pearson, Karl 40
percentiles 63 309
perfect association 41
permutations 77
pie charts 22 268 294 309
pivotal quantities 172
point binomial distribution 102

Index Terms Links
point estimation
See also hypothesis testing;
interval estimation
bias in 167 310
defined 165
description 166 69
errors of 168 192 305 307
examples 169
variance of 167 169
point value 309
Poisson approximation to binomial
distribution 111 158
Poisson distribution 110 270 309
Poisson probability tables 114 317
Poisson process 111 131
population means
confidence intervals for large samples 180
confidence intervals for small samples 183
differences between 216
sample mean and 138
population proportions
confidence intervals 187
difference between two 242
estimating unknown 195
hypothesis testing and 240 273
population variances
confidence intervals 195
formula for 54
for grouped data 60
hypothesis testing with known 208 216 223 229
250
hypothesis testing of one 244
hypothesis testing of two 247 280 300
hypothesis testing with unknown 213 219 226 232

Index Terms Links
populations
defined 10 309
types of 11 107 140 147
power curve, defined 309
power, defined 309
power of the test 205
probability
absolute 89
axiomatic approach 86
conditional 88 306
defined 71 72
defining by relative frequency 83
marginal 308
nonconditional 89
random experiments 72
statistics and 72
theoretical 85
probability distributions. See distributions
probability functions
Bernoulli 102
Binomial 103
continuous random variables 115
exponential distributions 129
formula for 95
graphical representations 97
hypergeometric 108
normal 121
Poisson distributions 111
Snedecor’s F-distributions 156
uniform 118
Weibull 132
probability tables, Poisson 114 317
problem-solving methodologies xix
process, defined 309

Index Terms Links
process improvement using Six Sigma 3
qualitative data
defined 12 309
graphical representations 22
quality control, defined 309
quantitative data
defined 12 309
graphical representations 20 27 34 66
interval estimation and 171
measures of 52
point estimation and 166
quartiles 64 307 309
random experiments defined 307

events of 73
probability and 72
random samples 11 309
random variables
Bernoulli 102
continuous 94 115 117 306
defined 93 309
discrete 93 94 97 99
306
standard normal 122
types 93 115
range spaces 95
range 52 53 309

Index Terms Links
range, interquartile 52 64
rare events 110
ratio data 12
rectangular distribution 118
rejection regions 204 205 309
relative frequencies 16 83 309
relative frequency approach 85
relative frequency histogram 27 307
relative frequency polygon 30
replacement, sampling and 107
research hypotheses 202
right skewed data 52
right skewed distributions 67
root cause analysis xix
sample mean, probability distributions of 140

sample points 73 77
sample sizes, determining 192
sample space 73 79 309
sample statistics 309
sample survey 309
sample variance 54 60
sampled populations 11
samples
defined 11 309
independent 307
replacement and 107
sampling distributions. See also central limit
theorem
defined 309
of sample mean 138
of sample proportion 147
Students t-distribution 153
Index Terms Links
SAS software 255

scatter plots 21 39 263 265
second quartile 309
Set Theory 80
significance, level of 205 308
simple events 73 75 309
simple hypotheses 203
single-valued frequency distribution tables 18
Six Sigma
defined 1 310
implementation flow chart 4
methodology xix 3
Motorola definition 3
statistical concept 1
steps in xvii
tools/techniques xxi
skewed data 310
Snedecor’s F-distribution 155
software for statistical analysis 255 303
See also JMP; MINITAB
specification limits 2
SPSS software 255
standard deviation
binomial distribution 106
continuous random variable 120
defined 310
discrete random variable 99
exponential distribution 130
for grouped data 60
hypergeometric distribution 110
Poisson distribution 114
uniform distribution 120
standard error 140 310

Index Terms Links
standard normal distribution. See normal

distribution
standard normal random variables 122
statistical tools 255 303
See also JMP;
MINITAB
statistics
calculating in JMP 286
defined 9 45 137
descriptive 10 15 306
goals of 165
inferential 10 307
nonparametric 308
probability and 72
sample 309
Statpages.net 303
Statsoftinc.com 303
stem and leaf diagrams 27 34 289 310
Students t-distribution 153 180 226 230
310
Sturge’s formula 19
sure events 75 80 310
survey, sample 309
symmetric data 51 310
symmetric distribution 67
SYSTAT software 255
t critical values table 322

t-distributions 153 180 226 230
t-test, paired 237 278 298
tables
binomial probability 105 159 314
Index Terms Links
tables (Cont.)
chi-square distribution 149 320
F critical value 323
frequency distribution 15 34 39 307
normal distribution 123 319
Poisson probability 114 317
Snedecor’s F-distribution 157
Students t-distribution 154
t critical values 322
target populations 11
test statistic 310
testing statistical
hypotheses 202
tests, types of 310
theoretical probability 85
third quartile 310
time series graphs 33
tree diagrams 75
two-tail alternatives 203
two-tail hypotheses 209
two-tail tests 310
type I error 205 212 310
type II error 205 212 310
UCL (upper confidence limits) 171

unbiased estimators 167 310
ungrouped data 20
uniform distributions 118 270 310
union 80
upper confidence limits (UCL) 171
upper fences 310
upper-tail hypotheses 209

Index Terms Links
values
chi-square 320
expected 99 307
extreme 48 66 67 308
F critical 323
p- 210 309
point 309
t critical 322
variability, measures of 308
variables
defined 310
in frequency distribution tables 16
variances
defined 310
of point estimators 167 169
population. See population variances
sample 54 60
variation within a process 3
Venn diagram 79 310
web-based statistical tools 303

Weibull distribution 132
weighted mean 311
width, class 306
Z distribution 311
z-scores 123 311

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Applied Statistics

for the Six Sigma

ASQ Quality Press

Printed on acid-free paper

Table 1 Applied statistics and the Six Sigma methodology.

In Chapter 10 we study another component of inferential statistics,

Sigma training are expected to pass a written and/or computer-based exami-

List of Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii

Chapter 1 Setting the Context for Six Sigma . . . . . . . . . . . . . . . . 1

3.2.5 Line Graph . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

6.3 The Bernoulli Trials and the Binomial Distribution . . . . . . . . . 101

9.4.1 Large Sample Conﬁdence Interval for the

Chapter 11 Computing Resources to Support Applied

1.1 Six Sigma Defined as a Statistical Concept

Not to worry! We can readily understand the meaning of this 6 concept

1.2 Now, Six Sigma Explained

Figure 1.1 The normal distribution.

LSL 0 +-1.5 σ USL

3.4 DPMO Cp=2 Cpk=1.5 3.4 DPMO

Figure 1.2 Six Sigma (Motorola definition).

1.3 Six Sigma as a Comprehensive Approach

Commitment made to implement Six Sigma

Verify financial Have financial Reconsider

Complete project involvement and documentation

Figure 1.3 Current Six Sigma implementation flow chart.

more to a comprehensive approach and methodology for problem solving

1.4 Understanding the Role of the Six Sigma

6σ Master Black Belts

Process operators and service

Figure 1.4 Six Sigma support personnel.

responsibility for day-to-day operation of 6 efforts. So we see a redeﬁni-

1.5 Converting Data into Useful Information

Table 1.1 Process step completion times.

Table 1.2 Descriptive statistics.

17.5 20 22.5 25 27.5 30 32.5

Figure 1.5 Histogram.

techniques. In this case we can use simple descriptive statistics to help us

2.1 What Is Statistics?

8. The R&D budget of our pharmaceutical division is higher than

2.2 Populations and Samples

Definition 2.1 A population is a collection of all conceivable indi-

For example, if we are interested in the ability of employees of a certain

Populations can be ﬁnite or inﬁnite. A population where all the elements

Definition 2.2 A portion of a population selected for study is called

The population from which a sample is selected is called a sampled pop-

2.3 Classification of Various Types of Data

satisfaction, thoughts of employees, or perceptions of suppliers, or we may

Each of these categories can be further subdivided into two subcate-

Nominal Ordinal Interval Ratio

Figure 2.1 Classifications of statistical data.

The classiﬁcation of data as nominal, ordinal, interval, and ratio is

2.3.1 Nominal Data

2.3.2 Ordinal Data

certain companies can be ranked according to the quality of their product;

2.3.3 Interval Data

2.3.4 Ratio Data

3.1 Frequency Distribution Table

3.1.1 Qualitative Data

Definition 3.1 A variable is a characteristic of the data under con-

The information provided in frequency distribution Table 3.1 can be

Category number Tally Category/Class frequency

Category Relative Cumulative

Category Relative Cumulative