CENTRAL LIMIT THEOREM

Learning Objectives

• Understand the concept of the Central Limit Theorem.

• Understand the application of the Central Limit Theorem to increase

the accuracy of measurements.
How does it help?

The
The Central
Central Limit
Limit Theorem
Theorem is:
is:
•the
•the key
key theoretical
theoretical link
link between
between
the
the normal
normal distribution
distribution and
and
sampling
sampling distributions.
distributions.
•the
•the means
means by by which
which almost
almost any
any
sampling
sampling distribution,
distribution, no no matter
matter
how
how irregular,
irregular, cancan be
be
approximated
approximated by by aa normal
normal
distribution
distribution ifif the
the sample
sample size
size is
is
large
large enough.
enough.
 IMPROVEMENT ROADMAP
Uses of the Central Limit Theorem

Common Uses
Phase 1: •The Central Limit Theorem
Measurement underlies all statistic
techniques which rely on
Characterization
normality as a fundamental
Phase 2: assumption
Analysis

Breakthrough
Strategy

Phase 3:
Improvement

Optimization

Phase 4:
Control
 KEYS TO SUCCESS

Focus on the practical application of the concept

WHAT IS THE CENTRAL LIMIT THEOREM?

Central Limit Theorem

For almost all populations, the sampling distribution of the mean
can be approximated closely by a normal distribution, provided the
sample size is sufficiently large.

Normal
How does it help?

What
What this
this means
means isis that
that no
no matter
matter what
what kind
kind of
of
distribution
distribution we
we sample,
sample, ifif the
the sample
sample size
size is
is
big
big enough,
enough, the
the distribution
distribution for
for the
the mean
mean isis
approximately
approximately normal.
normal.
This
This is
is the
the key
key link
link that
that allows
allows us
us to
to use
use much
much
of
of the
the inferential
inferential statistics
statistics we
we have
have been
been
working
working withwith so
so far.
far.
This
This is
is the
the reason
reason that
that only
only aa few
few probability
probability
and χχ2)) have
distributions 2
distributions (Z,(Z, tt and have such
such broad
broad
application.
application.

IfIf aa random
random event
event happens
happens aa great
great many
many times,
times,
the average results
the average results are
are likely
likely to
to be
be predictable.
predictable.
Jacob
Jacob Bernoulli
Bernoulli
 HOW DOES THIS WORK?

As you average a larger and

larger number of samples,
Parent you can see how the original
Population sampled population is
transformed..

n=2

n=5

n=10
 ANOTHER PRACTICAL ASPECT

This formula is for the standard error of the mean.

σx
sx = What that means in layman's terms is that this formula
is the prime driver of the error term of the mean.
n Reducing this error term has a direct impact on
improving the precision of our estimate of the mean.

The practical aspect of all this is that if you want to improve the precision of any test,
increase the sample size.
So, if you want to reduce measurement error (for example) to determine a better
estimate of a true value, increase the sample size. The resulting error will be reduced
by a factor of 1 goes for any significance testing. Increasing the sample
. The same
n a similar manner.
size will reduce the error in
DICE EXERCISE

•Break into 3 teams

•Team one will be using 2 dice
•Team two will be using 4 dice
•Team three will be using 6 dice

•Each team will conduct 100 throws of their dice and record the
average of each throw.

•Plot a histogram of the resulting data.

•Each team presents the results in a 10 min report out.

Learning Objectives

• Understand the concept of the Central Limit Theorem.

• Understand the application of the Central Limit Theorem to increase

the accuracy of measurements.