MEDITERRANEAN SCHOOL OF BUSINESS

C O U R S E : M B M B U S I N E S S S T A T I S TI C S A N D D E C I S I O N M O D E L S (Q M M 5 1 1 )

PROFESSORS: Dr. Amor Messaoud

DATE: July 2020

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Chapter
SAMPLING DISTRIBUTIONS

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Table of contents
1. Sampling distributions of sample means
2. Sampling distributions of sample proportions

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Section 1
SAMPLING DISTRIBUTIONS FOR SAMPLE MEANS

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Sampling distribution of the sample mean
Sampling distribution of the sample mean is a probability distribution of all
possible means of a given sample size

To compute and assign the probability of occurrence of particular values of a

sample mean, the researcher must know the distribution of the sample means

One way to examine the distribution is to take a population with a particular

distribution, randomly select samples of a given size, compute the sample
means, and attempt to determine how the means are distributed

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Example: Developing a Sampling Distribution
Assume there is a population … D
A B C

Population size N=4

Random variable, X,
is age of individuals

Values of X: 18, 20,

22, 24 (years)

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 Example: Developing a Sampling Distribution
Summary Measures for the Population Distribution:

μ 
 Xi P(x)
N .3

18  20  22  24 .2
  21
4 .1

σ 
 (X i  μ) 2

 2.236
18
A B
20
C
22
D
24 x
N
Uniform Distribution

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Example: Developing a Sampling Distribution
Now consider all possible samples of size n=2
16 Sample Means
1st 2nd Observation
Obs
18 20 22 24
18 18,18 18,20 18,22 18,24 1st 2 n d O b s e r v a tio n
20 20,18 20,20 20,22 20,24 Obs 18 20 22 24
22 22,18 22,20 22,22 22,24 18 18 19 20 21
24 24,18 24,20 24,22 24,24 20 19 20 21 22
16 possible samples 22 20 21 22 23
(sampling with
replacement)
24 21 22 23 24
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Example: Developing a Sampling Distribution
Sampling Distribution of All Sample Means

16 Sample Means Sample Means

Distribution
1st 2nd Observation _
Obs 18 20 22 24 P(X)
.3
18 18 19 20 21
.2
20 19 20 21 22
22 20 21 22 23 .1

24 21 22 23 24 0
18 19 20 21 22 _23 24
X
(no longer uniform)
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Example: Developing a Sampling Distribution
Summary Measures of this Sampling Distribution:

18  19  19    24
μX   21
16
(18 - 21) 2
 (19 - 21) 2
   (24 - 21) 2
σX   1.58
16

Note: Here we divide by 16 because there are 16

different samples of size 2.

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 Comparing the Population Distribution
to the Sample Means Distribution
Population Sample Means Distribution
N=4 n=2
μ  21 σ  2.236 μ X  21 σ  1.58
X
_
P(X) P(X)
.3 .3

.2 .2

.1 .1

0
18 20 22 24 X
0
18 19 20 21 22 23 24
_
X
A B C D
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 Sampling Distribution of The Mean
Suppose a small finite population consists of N=8 numbers {54, 55, 59, 63, 64, 68, 69, 70}

We take all possible samples of size n=2 from this population with replacement
For each sample, we compute the mean

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 Sampling Distribution of The Mean
The distribution of these sample means can be represented using an histogram

• shape of the histogram for sample means is quite unlike the shape of the
histogram for the population

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Sampling distribution of the sample
mean
 We examined two populations with different distributions
 Different samples of the same size from the same population will yield
different sample means
 The mean of the sample means is exactly equal to the population mean
X  X
 The dispersion of the sampling distribution of sample means is narrower than
the population distribution 
 X

n
 The sample means for samples taken from these populations appear to be
approximately normally distributed (bell-shaped)

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Standard error of the mean
 A measure of the variability in the mean from sample to sample (this
assumes that sampling is with replacement or sampling is without
replacement from an infinite population)

σX
σX 
n
 Note that the standard error of the mean decreases as the sample size
increases

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Central limit theorem
1. If samples of size n are drawn randomly from a population that has a mean of
μ and a standard deviation of σ, the sample means are approximately
normally distributed fror sufficiently large sample sizes regardless of the shape
of the population distribution
2. If the population is normally distributed, the sample means are normally
distributed for any size sample

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Central Limit Theorem
How large must a sample be for the central limit theorem to
apply?
The sample size necessary varies according to the shape of
the population. However, in this text (as in many others), a
sample of size 30 or larger will suffice.
Recall that if the population is normally distributed, the
sample means are normally distributed for sample sizes as
small as n = 2.

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July 2020 MEDITERRANEAN SCHOOL OF BUSINESS 18
Developing a sample distribution
http://onlinestatbook.com/stat_sim/sampling_dist/index.html (last accessed on
November 2018)

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Developing a sample distribution
http://onlinestatbook.com/stat_sim/sampling_dist/index.html (last accessed on
November 2018)

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Example : Tire Store
Suppose, for example, that the mean expenditure
per customer at a tire store is $85.00, with a standard deviation of $9.00.
What is the probability that the sample average expenditure per customer for
this sample will be $87.00 or more if a random sample of 40 customers
is taken?

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Example: Tire Store
Because the sample size is greater than 30, the central limit theorem can be
used, and the sample means are normally distributed
With μ= $85.00, σ = $9.00, and the z formula for sample means, z is computed as
shown next

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Example: Tire Store

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 Example: Tire Store
P o p u la tio n P a ra m e te rs :   8 5 ,   9  
 
S a m p le S iz e : n  4 0 87  85 
 P Z 
 87   X   9 
P ( X  87)  P  Z    
 40 
 X 
 P Z  1 . 41 
 
 87     . 5  ( 0  Z  1 . 41 )
 P Z  
 . 5  . 4207
  
 n   . 0793

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 Example: Tire Store
9
 X
  1
40
.5000 .5000
 1 . 42

.4207 .4207

85 87 X 0 1.41 Z

X - 87  85 2 Equal Areas
Z=    1. 41
 9 1. 42 of .0793

n 40

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Sampling from a finite population
• The central limit theorem is based on the assumption that the
popultation was infinite or extremely large
• In cases of a finite population, a statistical adjustment can be
made to the z formula for sample means. The adjustment is called
the finite correction factor. It operates on the standard deviation
of sample mean:

X  
Z 
 N  n Correction
factor
n N  1

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Sampling from a finite population
As the size of the finite population becomes larger in relation to
sample size, the finite correction factor approaches 1
In theory, whenever researches are working with a finite
population, they can use the finite correction factor
If the sample size is less than 5% of the finite population size
(n/N<0.05), the finite correction factor does not significantly modify
the solution

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Exercise: Cans of Salmon
The manufacturer of cans of Salmon that are supposed to have a net weight of
6 ounces tells you that the net weight is actually a normal random variable with
a mean of 6.05 ounces and a standard deviation of 0.18 ounces. Suppose that
you draw a random sample of 36 cans.
1. Find the probability that the mean weight of the sample is less than 5.97
ounces.
2. Suppose your random sample of 36 cans of salmon produced a mean weight
that is less than 5.97 ounces. Comment on the statement made by the
manufacturer.

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Exercise: Cans of Salmon (continued)
Ditribution of Xbar
N(6.05, 0.03)
Distribution of X 0.03 is the sampling
N(6.05, 0.18) error of xbar

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Section 2
SAMPLING DISTRIBUTIONS OF SAMPLE PROPORTIONS

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Population proportion
 Let p be the proportion of the population having a characteristic of interest (0
≤ p ≤ 1)
 p is usually unknown
 N (population size) is usually unknown
 Examples: proportion of students having GPA ≥2.0

X number of items in the population having the characteri stic of interest

p 
N population size

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Sample proportions
 Let p̂ be the proportion of the sample having the characteristic of interest
 Sample proportion ( p̂ ) provides an estimate of p:

X number of items in the sample having the characteri stic of interest

p̂  
n sample size

 X is the number of successes: X ~ Bin ( n , p )

 0≤ p̂ ≤1
 E(X)=? and Var(X)=?

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Sampling distribution of a sample
proportion
 The central limit theorem applies to sample proportions in that the normal
distribution approximates the shape of the distribution of sample proportions p̂
if
 np ≥ 5,
 nq ≥ 5 (q=1-p).

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 Sampling Distribution of p̂
Approximated by a Sampling Distribution
normal distribution if:
P ( pˆ )
.3
◦ np  5 .2
and .1
0
n(1  p )  5 0 .2 .4 .6 8 1 p

Where and p (1  p )
μ p̂  p σ p̂ 
n
◦ p is the population proportion

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 Example
• If 10% of a population of parts is defective,
what is the probability of randomly selecting 80 parts and finding that
12 or more parts are defective?

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 Solution
Population Parameters
 . 15  P
P = 0 . 10 P Z 
P  Q
Q = 1 - P  1  . 10  . 90 n

Sample . 15  . 10
 P Z 
n = 80 (. 10 ) (. 90 )
80
X  12
0 . 05
X 12  P Z 
p    0 . 15 0 . 0335
n 80  P ( Z  1 . 49 )
. 15   p

  . 15 )  P( Z 
P(p )
 p

 . 0681

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Solution
 p
 0 . 0335  1
.5000 .5000

.4319 .4319

^
0.10 0.15 p 0 1.49 Z

p  P 0 . 15  0 . 10 0 . 05
Z =    1 . 49
P Q (. 10 ) (. 90 ) 0 . 0335
n 80
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Example 3
In the last election, a state representative received 52% of the
votes cast. One year after the election, the representative
organized a survey that asked a random sample of 300
people whether they would vote for him in the next election. If
we assume that his popularity has not changed
◦ What is the probability that more than half of the sample would
vote for him?
◦ What is the probability that less than 20% of the sample would
vote for him?

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 Chapter Summary
Introduced sampling distributions
Described the sampling distribution of the mean
◦ For normal populations
◦ Using the Central Limit Theorem
Described the sampling distribution of a proportion
Calculated probabilities using sampling distributions

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