UNI

T1:
INTRODUCTI
ON

Cont
ent
s
1.
0Ai
msandObj
ect
ives
1.
1Int
roduct
ion
1.
2St
ati
sti
csDef
ined
1.
3Impor
tanceofSt
ati
sti
cs
1.
4Ty
pesofSt
ati
sti
cs
1.
4.1 Descr
ipt
iveSt
ati
sti
cs
1.
4.2I
nfer
ent
ial
Stat
ist
ics
1.
5Model
Exami
nat
ionQuest
ions

1.
0AI
MSANDOBJECTI
VES

Thi
s uni
twi
l
lint
roduce y
ou t
o st
ati
sti
cs and i
ts uses and i
mpor
tance.Af
ter
compl
eti
ngt
heuni
tyouwi
l
lbeabl
eto:
 def
inest
ati
sti
cs
 i
dent
if
ythet
ypesofst
ati
sti
cs
 knowt
hebenef
it
sofmanager
ial
stat
ist
ics.

1.
1INTRODUCTI
ON

Gov
ernment
s,busi
nesses,
resear
cher
sandsci
ent
ist
sint
heNat
uralorSoci
alsci
ence
needi
nfor
mat
ionf
ort
hei
ract
ivi
ti
es.Mostoft
hesei
nfor
mat
ionr
equi
rement
sar
e
quant
it
ati
veandneedasci
ent
if
icappr
oachort
echni
quet
ogat
heranduse.

1.
2STATI
STI
CSDEFI
NED

Thewor
ldst
ati
sti
csi
sanI
tal
i
anwor
dcomposedoft
wowor
ds,st
ato,whi
chmeans
t
hest
ateand st
ati
sta-
ref
erst
o aper
soni
nvol
ved wi
tht
heaf
fai
rsoft
hest
ate.
Ther
efor
est
ati
sti
cswasmeantt
hecol
l
ect
ionoff
act
susef
ult
othest
ate.

Nowaday
sst
ati
sti
csi
nnotr
est
ri
ctedt
oinf
ormat
ionaboutt
hest
ate.I
text
endst
o
al
mostev
eryr
eal
m ofhumanendeav
or.

1
St
ati
sti
csi
sdef
inedasasci
enceorpr
ocessofcol
l
ect
ing,or
gani
zi
ng,pr
esent
ing,
anal
yzi
ngandi
nter
pret
ingdat
atoassi
sti
nmaki
ngef
fect
ivedeci
sion.

1.
3IMPORTANCEOFSTATI
STI
CS

St
ati
sti
csi
susef
ulf
or:

- Gov
ernmentof
fi
cial
sformaki
ngpol
i
cydeci
sionsi
nunempl
oyment
,inf
lat
ion,
heal
th,
educat
ion,
inf
rast
ruct
ureet
c…
- Fi
nanci
alpl
anner
sfort
rendanal
ysi
s,st
ockmar
ket
,fut
urei
nvest
mentet
c..
- Busi
nesses,
forpr
oductdev
elopment
,cust
omersat
isf
act
ion,
Risk
- Pr
oduct
ionsuper
visor
sforqual
i
tycont
rol
,i
mpr
ovepr
oductqual
i
tyet
c.
- Pol
i
tici
ansf
orl
egi
slat
ioncampai
gnst
rat
egy
- Phy
sici
ansandHospi
tal
sonef
fect
ivenessofdr
ugsanddi
seasesur
vei
l
lance
et
c.

Manager
ialst
ati
sti
calanal
ysi
sofdat
ausedt
ohel
pini
mpr
ovi
ngbusi
nesspr
ocesses
t
o.
1-Demonst
rat
etheneedf
ori
mpr
ovement
s
2-I
dent
it
yway
stomakei
mpr
ovement
s
3-Assesweat
herornoti
mpr
ovementact
ivi
ti
eshav
ebeensuccessf
uland
4-Est
imat
ethebenef
it
sofi
mpr
ovementst
rat
egi
es
St
ati
sti
calmet
hodsar
eusedf
orl
ear
ningaboutpopul
ati
on,whi
chi
sasetof
exi
sti
nguni
ts(
peopl
e,obj
ect
sorev
ent
s)

Of
tent
hepopul
ati
ont
hatwewantt
ost
udyi
sver
ylar
ge,
timeconsumi
ngorcost
lyt
o
conductacensus.I
nsuchasi
tuat
ionwesel
ectandanal
yzeasubset(
orpor
ti
on)of
t
hepopul
ati
onuni
ts.Thi
ssubsetoft
heuni
tsi
napopul
ati
oni
scal
l
edsampl
e.

1.
4TYPEOFSTATI
STI
CS

Ther
ear
etowt
ypesofSt
ati
sti
cs
1.
4.1Descr
ipt
iveSt
ati
sti
cs
I
tist
hesci
enceofdescr
ibi
ngt
hei
mpor
tantaspect
sofasetofmeasur
ement
seg.I
f

2
wear
est
udy
ingasetofst
art
ingsal
ari
eswemi
ghtwi
sht
odescr
ibe.
- Howl
argeorsmal
ltheyt
endt
obe
- Whatat
ypi
cal
Sal
aryshoul
dbe
- Howmucht
hesal
ari
esdi
ff
erf
rom eachot
her

Whent
hepopul
ati
onofi
nter
esti
ssmal
landwecanconductacensusoft
he
popul
ati
on we wi
l
lbe abl
eto di
rect
ly descr
ibe t
he i
mpor
tantaspect
s oft
he
popul
ati
on measur
ement
. The subj
ectar
ea ofdescr
ipt
ive st
ati
sti
cs i
ncl
udes
pr
ocedur
es used t
o summar
ize masses of dat
a and pr
esent t
hem i
n an
under
standabl
emanner
.Howev
eri
thasnot
hingt
odowi
tht
hef
utur
e.

1.
4.2I
nfer
ent
ialSt
ati
sti
cs
AConcl
usi
ondr
awnaboutapopul
ati
onbasedoni
nfor
mat
ioni
nasampl
edr
awn
f
rom t
hepopul
ati
oni
scal
l
edst
ati
sti
cal
inf
erence.St
ati
sti
csi
susual
l
yconcer
nedwi
th
i
nfer
ence.Thepopul
ati
onwewantt
ost
udyi
susual
l
ylar
geori
nfi
nit
e.Soweneedt
o
sel
ectasampl
esi
ncei
tisi
mpossi
blet
ost
udyt
hepopul
ati
on.

1.
5 MODELEXAMI
NATI
ONQUESTI
ONS

Answert
hef
oll
owi
ngquest
ions.Donotl
ooki
ntot
het
extwhi
l
ewr
it
ingt
heanswer
s.
Howev
eratt
heendr
efert
othet
extandseehowy
ouanswer
edt
hequest
ions.
a)Whygov
ernment
s,busi
nesses,
resear
cher
sneedi
nfor
mat
ion?
b)Def
inest
ati
sti
cs.
c)Whatar
ethet
ypesofst
ati
sti
cs?
d)Whatar
ethepar
ti
cul
arbenef
it
sori
mpor
tanceofmanager
ialst
ati
sti
csi
n
i
mpr
ovi
ngbusi
nesspr
ocesses?

3
UNI
T2:
PROBABI
LITYANDPROBABI
LITYDI
STRI
BUTI
ON

Cont
ent
s
2.
0Ai
msandObj
ect
ives
2.
1Int
roduct
ion
2.
2Pr
obabi
l
ityDef
ined
2.
3Appr
oachesi
nPr
obabi
l
ity
2.
3.1 Obj
ect
ivePr
obabi
l
ity
2.
3.1.
1 Cl
assi
cpr
obabi
l
ity
2.
3.1.
2 Long-
ter
m Rel
ati
veFr
equencyPr
obabi
l
ity
2.
3.2 Subj
ect
ivePr
obabi
l
ity
2.
4Sampl
eSpaceandSampl
eSpaceOut
come
2.
5Pr
obabi
l
ityRul
e
2.
5.1 Addi
ti
onRul
eforI
ndependentEv
ent
s
2.
5.2 Addi
ti
onRul
eforMut
ual
l
yEx
clusi
veEv
ent
s
2.
6Compl
ementofanEv
ent
2.
7Condi
ti
onal
Probabi
l
ityandSt
ati
sti
cal
Independence
2.
7.1 Condi
ti
onal
Probabi
l
ity
2.
7.2 St
ati
sti
cal
Independence
2.
7.3I
ndependentandMut
ual
l
yEx
clusi
veEv
ent
s
2.
7.3.
1 Mul
ti
pli
cat
ionRul
efori
ndependentEv
ent
s
2.
7.3.
2 Uni
onRul
eforI
ndependentEv
ent
s
2.
8TheTot
alPr
obabi
l
ityandBay
e’sTheor
em
2.
8.1 Tot
alPr
obabi
l
ity
2.
8.2 Bay
e’sTheor
em
2.
9Answer
stoCheckYourpr
ogr
ess
2.
10Model
Exami
nat
ionQuest
ions

4
2.
0AI
MSANDOBJECTI
VES

Pr
obabi
l
ityt
heor
yfor
mst
hebasi
sfori
nfer
ent
ialst
ati
sti
csaswel
lasot
herf
iel
dst
hat
r
equi
requant
it
ati
veassessmentofchanceoccur
rences;suchasqual
i
tycont
rol
,
managementdeci
sionanal
ysi
s;andi
nar
easoft
henat
uralsci
ences,engi
neer
ing,
economi
cset
c.

Af
tercompl
eti
ngt
hisuni
t,y
ouwi
l
lbeabl
eto
 def
inepr
obabi
l
ity
 def
inei
mpor
tantt
ermsi
npr
obabi
l
ity
 i
dent
if
ytheappr
oachesi
npr
obabi
l
ity
 l
i
stsampl
espaceofanexper
iment
 i
dent
if
ythet
ypesofev
ent
s
 cal
cul
atepr
obabi
l
iti
esusi
ngdef
erentr
ules.

2.
1INTRODUCTI
ON

Si
ncel
i
fei
sful
lofuncer
tai
nti
es,peopl
ehav
eal
way
sbeeni
nter
esti
nev
aluat
ing
pr
obabi
l
iti
es.Thet
heor
yofpr
obabi
l
ityi
sani
nindi
spensabl
etooli
ntheanal
ysi
sof
si
tuat
ionsi
nvol
vi
nguncer
tai
nty
.

2.
2PROBABI
LITYDEFI
NED

Pr
obabi
l
itycanbedef
inedas
- Amat
hemat
ical
meansofst
udy
inguncer
tai
ntyandv
ari
abi
l
ity
.
- Anumbert
hatconv
eyst
hest
rengt
hofourbel
i
efi
ntheoccur
renceofan
uncer
tai
nev
ent

Fr
om t
he abov
e def
ini
ti
ons y
ou can di
ff
erent
iat
e pr
obabi
l
ityt
o chances or
possi
bil
i
ties.Ast
hel
att
ercannotbequant
if
ied.

Pr
obabi
l
ityi
sanumberbet
weenzer
oandonei
ncl
usi
ve.Thepr
obabi
l
ityofzer
o
r
epr
esent
ssomet
hingt
hatcannothappenandt
hepr
obabi
l
ityofoner
epr
esent
s
somet
hingt
hati
scer
tai
ntohappen.Thecl
oserapr
obabi
l
ityi
stozer
o,t
hemor
e

5
i
mpr
obabl
eiti
sthatsomet
hingwi
l
lhappent
hecl
osert
hepr
obabi
l
ityi
stoonet
he
mor
esur
ewear
eitwi
l
lhappen.Whenpr
obabi
l
ityi
s0.
5uncer
tai
ntywi
l
lreachi
ts
maxi
mum.
I
mpor
tantTer
ms
1.Exper
iment
A pr
ocesst
hatl
eadst
otheoccur
renceofoneandonl
yoneofsev
eralpossi
ble
obser
vat
ionsor
A pr
ocess ofobser
vat
ion t
hathas an uncer
tai
n out
come.eg Tossi
ng a coi
n;
answer
ingaquest
ionwher
etheanswercanbecor
rectori
ncor
rect
;dr
awi
ngacar
d
f
rom adeckofpl
ayi
ngcar
d.
2.Ev
ent
Acol
l
ect
ionofoneormor
eout
comesofanexper
imentor
Anexper
iment
alout
comet
hatmayormaynotoccur
.Ift
heexper
imenti
stossi
nga
coi
ntheev
ent
sar
eHead,
orTai
l
.
3.Out
come
Apar
ti
cul
arr
esul
tofanexper
iment
.Incaseoft
ossi
ngacoi
n,I
fheadf
aceupwewi
l
l
consi
derheadast
heoutcomeoft
heexper
iment
.

2.
3APPROACHESI
NPROBABI
LITY

2.
3.1Obj
ect
ivePr
obabi
li
ty
2.
3.3.
1 Cl
assi
cPr
obabi
li
ty
I
tispr
obabi
l
itybasedont
hesy
mmet
ryofgamesofchanceorsi
mil
arsi
tuat
ions.Thi
s
pr
obabi
l
ityi
sbasedont
hei
deat
hatcer
tai
noccur
rencesar
eequal
l
yli
kel
y.E.
g.The
number
s1,
2,3,
4,5,
and6onf
airdi
ear
eequal
l
yli
kel
ytooccuri
.et
heydohav
eequal
chanceofoccur
rence.

2.
3.1.
2Long-
ter
m Rel
ati
veFr
equencyPr
obabi
li
ty
Thepr
obabi
l
ityofanev
enthappeni
ngi
nthel
ong-
ter
misdet
ermi
nedbyobser
ving
whatf
ract
ionoft
het
imesi
mil
arev
ent
shappenedi
nthepast
.Weof
tent
hinkofa
pr
obabi
l
ityi
nter
msoft
heper
cent
ageoft
het
imet
heev
entwoul
doccuri
nmany
r
epet
it
ionoft
heexper
iment
.Supposet
hatAi
sanev
entt
hatmi
ghtoccurwhena

6
par
ti
cul
arexper
imenti
sper
for
medt
hent
hepr
obabi
l
ityt
hatt
heev
entAwi
l
loccur
,P
(
A),canbei
nter
pret
edt
obet
henumbert
hatwoul
dbeappr
oachedbyt
her
elat
ive
f
requencyoft
heev
entAI
fweper
for
mtheexper
imentani
ndef
ini
tel
ylar
genumberof
t
imes.

eg.Whenwesayt
hatt
hepr
obabi
l
ityofobt
aini
ngaheadwhenwet
ossacoi
nis0.
5
wear
esay
ingt
hat
,whenwer
epeat
edl
ytosst
hecoi
nani
ndef
ini
tel
ylar
genumberof
t
imes,
wewi
l
lobt
ainahead50%oft
her
epet
it
ion.
I
nter
msoff
ormul
a
Pr
obabi
l
ityofanev
enthappeni
ng= Numberofti
mesoccurr
edi
npast
Tot
alnumberofobser
vat
ion

I
fat
ruckoper
atorexper
ienced5acci
dent
soutof50t
ruckl
asty
ear
,thent
he
pr
obabi
l
ityt
hatat
ruckwi
l
lhav
eanacci
dentnexty
earcanbe5/
50=0.
10

2.
3.2Subj
ect
ivePr
obabi
li
ty
Whent
her
eisnopastexper
ienceorl
i
ttl
eonwhi
cht
obaseapr
obabi
l
ity
,per
sonal
j
udgment
,exper
ience,
int
uit
ionorexper
ti
seoranyot
hersubj
ect
iveev
aluat
ioncr
it
eri
a
wi
l
lbeappl
i
edt
oest
imat
ingorassi
gni
ngpr
obabi
l
ity
.Thi
spr
obabi
l
ityi
ssubj
ect
ive
pr
obabi
l
ity
.

I
tis al
so cal
l
ed per
sonalpr
obabi
l
ity
.Unl
i
ke obj
ect
ive pr
obabi
l
ity one per
son’
s
subj
ect
ive pr
obabi
l
itymayv
erywel
ldi
ff
erentf
rom anot
herper
son’
s subj
ect
ive
pr
obabi
l
ityoft
hesameev
ent
.

eg.Aphy
sici
anassessi
ngt
hepr
obabi
l
ityofapat
ient
’sr
ecov
eryandanexper
tint
he
nat
ionalbankassessi
ng pr
obabi
l
ityofcur
rencydev
aluat
ion ar
e bot
h maki
ng a
per
sonalj
udgmentbasedonwhatt
heyknowandf
eelaboutt
hesi
tuat
ionandot
her
gr
oupofphy
sici
ansorexper
tswi
l
lar
ri
vewi
thdi
ff
erentpr
obabi
l
ity
,thoughbot
hcan
empl
oyeei
dent
ical
techni
quesorappr
oachesandi
nfor
mat
ion.

Bot
hcl
assi
candl
ong-
ter
mrel
ati
vef
requencypr
obabi
l
iti
esar
eobj
ect
ivei
nthesense
t
hatnoper
sonal
judgmenti
sinv
olv
ed.

What
evert
heki
ndofpr
obabi
l
ityi
nvol
ved/
subj
ect
iveorobj
ect
ive/t
hesamesetof

7
mat
hemat
ical
rul
eshol
dsf
ormani
pul
ati
ngandanal
yzi
ngpr
obabi
l
ity
.

8
2.
4SAMPLESPACEANDSAMPLESPACEOUTCOME

I
nor
dert
ocal
cul
ateandi
nter
pret
erpr
obabi
l
iti
esi
tisi
mpor
tantt
ounder
standand
uset
hei
deaofsampl
espace.

Thesampl
espaceofanexper
imenti
sthesetofal
loft
hedi
sti
nctpossi
bleout
comes
oft
heexper
iment
.Eachdi
sti
nctoutcomei
scal
l
edsampl
espaceoutcomeor
sampl
epoi
ntorel
ement
aryev
ent
.

Exampl
e1

Anewl
ymar
ri
edcoupl
epl
anst
ohav
etwochi
l
dren.Nat
ural
l
y,t
heyar
ecur
iousabout
whet
hert
hei
rchi
l
drenwi
l
lbeboy
sorgi
rl
s.Ther
efor
e,weconsi
dert
heexper
imentof
hav
ingt
wochi
l
dren.

I
nor
dert
ofi
ndt
hesampl
espacesoft
hisexper
iment
,ofhav
ingt
wochi
l
dren,wel
et
‘
B’denot
ethatchi
l
disaboyand‘
G’denot
est
hatchi
l
disagi
rl
.

Thi
sex
per
imenti
sat
wo-
steppr
ocessi
.ehav
ingt
hef
ir
stchi
l
d,whi
chcoul
dbeaboy
oragi
rlandhav
ingt
hesecondchi
l
d,whi
chcoul
dal
sobeei
theraboyoragi
rl
.
Thi
scanbeconst
ruct
edbyat
reedi
agr
am.Eachbr
anchoft
het
reel
eadsust
oa
di
sti
nctsampl
espaceout
come.

9
 BBSample
Boy
(B) outcome

BG-samples
Gi
rl(
G) space
Boy(
B) outcomes

GBsample
Boy
(B) space
Gi
rl(
G)
outcome
Gi
rl(
G)

1stChi
l
d GGsampl
e
2ndChi
l
d

Weseet
hatt
her
ear
efoursampl
espaceout
comes.Ther
efor
ethesampl
espace(
i.
e
t
hesetofal
loft
hedi
sti
nctsampl
esspaceout
comesi
sBBBGGBGG.

I
nor
dert
oconsi
dert
hepr
obabi
l
iti
esoft
heseout
comes,
supposet
hatboy
sandgi
rl
s
ar
eequal
i
tyl
i
kel
yeacht
imeachi
l
disbor
n.Thi
ssay
sthateachoft
hesampl
espace
outcomesi
sequal
l
yli
kel
y.i
.e.
P(
BB)=p(
BG)
=p(
GB)
=p( =1/
GG) 4Thi
ssay
sthatt
her
eisa25%,chancet
hateachof
t
heseout
comeswi
l
loccur
.Si
ncewear
ecer
tai
nthatt
her
eisnoot
heropt
ionor
combi
nat
ionr
emai
ning,t
hepr
obabi
l
ityt
hatt
hecoupl
ewi
l
lhav
eanyoneoft
he
sampl
espaceout
comesi
sone.i
.e.P(
BB)+P(
BG)+P(
EB)+P(
EG)=1

Not
icet
hatt
hesepr
obabi
l
iti
essum onei
.et
hesum oft
hepr
obabi
l
iti
esofal
lsampl
e
spaceout
comesi
sone.

Ther
efor
ethesampl
espace(
thati
s,t
hesetofal
loft
hedi
sti
nctsampl
espaceout
comes)i
sBB,
BG,
GB,
GG

Exampl
e2
Ast
udentt
akesaqui
zthatconsi
stoft
hreet
rueorf
alsequest
ions.I
fweconsi
derour
exper
imentt
obeanswer
ingt
het
hreequest
ions,eachquest
ioncanbeanswer
ed
cor
rect
lyori
ncor
rect
ly.

10
Letcdenot
eanswer
ingaquest
ioncor
rect
lyandIdenot
eanswer
ingaquest
ion
i
ncor
rect
ly.Thenwecandepi
ctat
reedi
agr
am oft
hesampl
espaceoutcomef
ort
he
exper
iment
. CCC

Cor
rect(
c) CCI
I
ncor
rect(
I)

Cor
rect(
c) Cor
rect(
c) CI
I
I
ncor
rectI
Incor
rect(
I)
Cor
rect(
c)
CI
I
I
CC
c)

Cor
rect(
c)
ect(

I
ncor
rect(
I) I
CI
r
Cor

I
ncor
rectI
I
IC
StepI Cor
rect(
c)
Answeri
ng I
ncor
rect(
I)
the 1st I
II
StepI
I
quest
ion Answeri
ng I
ncor
rect(
I)Sampl
espace
the 2nd
StepI
II
quest
ion Answeri
ng
the 3rd
quest
ion

Thi
sdi
agr
am por
tray
stheexper
imentasat
hree-
steppr
ocess
St
epI–answer
i he1stquest
ngt ion(
Cor
rect
lyori
ncor
rect
ly)(
CorI
)
St
epI
I–answer
i he2ndquest
ngt ion(
Cor
rect
lyori
ncor
rect
ly)
.
St
epI
II–answer
i he3rdquest
ngt ion(
Cor
rect
lyori
ncor
rect
ly)
.

Thet
reedi
agr
am hasei
ghtdi
ff
erentbr
anchesandt
heei
ghtdi
sti
nctsampl
espace
out
comesar
eli
stedatt
heendoft
hebr
anches.Weseet
hesampl
espacei
s

CCC CCICI
CCI
I
I
CCI
CII
ICI
II
Nowsupposet
hatt
hest
udentwast
otal
l
yunpr
epar
edf
ort
het
est
,andhast
obl
i
ndl
y
guesst
heanswert
oeachquest
iont
hati
sthest
udenthasa50-
50chanceor0.
5
pr
obabi
l
ityofcor
rect
lyanswer
ingeachquest
ion.Thi
smeanst
hateachoft
heei
ght
sampl
espaceout
comesi
sequal
l
yli
kel
ytooccur
.
i
.e

11
P(
ccc)=P(
ccI
)--
--
--
P(I
II
)=1/
8
Her
eal
sot
hesum oft
hepr
obabi
l
iti
esoft
hesampl
espaceoutcomesi
sone.
I
nGener
alt
hesum oft
hepr
obabi
l
iti
esofal
lthesampl
espacei
sequal
to1.

Fi
ndi
ngPr
obabi
li
ti
esbyusi
ngSampl
eSpace
I
fal
loft
hesampl
espaceoutcomesar
eequal
l
yli
kel
y,t
hent
hepr
obabi
l
ityt
hatan
ev
entwi
l
loccuri
sequal
tot
her
ati
o:

Thenumberofsampl
espaceout
comest
hatcor
respondt
otheev
ent
Thet
otal
numberofsampl
espaceout
comes.

Consi
dert
hecoupl
epl
anni
ngt
ohav
etwochi
l
drent
ofi
ndt
hepr
obabi
l
ityoft
woboy
s
f
ir
stwehav
etof
indt
hesampl
espaceout
comecor
respondi
ngt
otheev
entofhav
ing
t
hef
ir
stchi
l
daboyandt
hesecondchi
l
dal
soaboy
.

Ther
eisonl
yonesampl
espaceout
comecor
respondi
ngt
othi
sev
enti
.e.BBsot
he

pr
obabi
l
itywi
l
lbe: =0.
25t
hepr
obabi
l
ityt
hatt
hecoupl
ewi
l
lhav
eaboyandagi
rl
s

i
ssi
mil
arl
ycal
cul
atedbyf
ir
sti
dent
if
yingt
hesampl
espaceout
comescor
respondi
ng
t
otheev
entofhav
ingaboyandagi
rl
s.Thesampl
espaceout
comesar
eBGandGB.

Sot
hepr
obabi
l
itywi
l
lbe =0.
5

Of
tent
imei
tmaybepr
act
ical
l
yimpossi
blet
oli
stal
lpossi
blesampl
espace
out
comesofanexper
iment
.Undersuchci
rcumst
anceswecanf
indt
hepr
obabi
l
ityof
anev
entbyi
dent
if
yingt
henumberofsampl
espaceout
comes/
wit
houtl
i
sti
ng/
cor
respondi
ngt
otheev
ent
.

Exampl
e-Supposet
hat650.
000of1,
000,
000househol
dsi
nAddi
ssubscr
ibet
oa
newspapercal
l
ed Addi
s Zemen,and consi
derr
andoml
y sel
ect
ing one oft
he
Househol
dsi
nthi
sci
ty.Thati
sconsi
der
ingsel
ect
ingonehousehol
d&gi
vi
ngeach
andev
eryhousehol
dint
heci
tyt
hesamechanceofbei
ngsel
ect
ed.LetAbet
he
ev
entt
hatt
her
andoml
ysel
ect
edhousehol
dsubscr
ibest
otheAddi
sZemen.Then
si
ncet
hesampl
espaceoft
hisexper
imentconsi
stsof1,
000,
000 equal
l
yli
kel
y

12
sampl
espaceout
comes(
househol
ds)
.Itf
oll
owst
hat
P(
A)=t
henumberofHouseholdsthatsubscr
ibetot
heAddi
sZemen
Thetot
alnumberofhousehol
dsinthecit
y

=650,000=0.
65
1000,
000
Now al
sosupposet
hat500,
000househol
dsi
ntheci
tysubscr
ibet
otheEt
hiopi
an
Her
ald(
H)andf
urt
hersupposet
hat250,
000 househol
dssubscr
ibet
o bot
hthe
newspaper
s.

We consi
derr
andoml
ysel
ect
ing one househol
dint
he ci
ty,and we def
ine t
he
f
oll
owi
ngev
ent
s
A = Ther
andom ofsel
ect
edhousehol
dsubscr
ibest
otheAddi
sZemen.
Ā = Ther
andoml
ysel
ect
ed,
hosehol
ddoesnotsubscr
ibet
otheAddi
sZemen.
H= Ther
andoml
ysel
ect
edhousehol
dsubscr
ibest
otheEt
hiopi
anHer
ald.
= Ther
andoml
ysel
ect
edhousehol
ddoesnotsubscr
ibet
heHer
ald.
Usi
ngt
henot
ati
onAnHt
odenot
ebot
hA&Hweal
sodef
ine.

AnH=Ther
andoml
ysel
ect
edhousehol
dsubscr
ibesbot
htoAddi
sZemen&Her
ald.
Si
nce650,
000oft
he1,
000,
0000househol
dssubscr
ibet
otheAddi
sZemen(
thati
s
cor
respondt
otheev
entOccur
ri
ng)
.Then350,
000househol
dsdonotsubscr
ibet
o
Zemen(
Ā)i
.e.1,
000,
000–650,
000.

Si
mil
arl
ysi
nce500,
000househol
dssubscr
ibet
oHer
ald(
H)500,
000househol
dsdo
notsubscr
ibet
oher
ald( )
.

Nextconsi
dert
heev
ent
s
An =t
her
andoml
ysel
ect
edhousehol
dsubscr
ibest
oZemenanddoesnot
subscr
ibet
oHer
ald;

ĀnH=t
her
andoml
ysel
ect
edhousehol
ddoesnotsubscr
ibet
oZemenanddoes
subscr
ibet
oHer
ald.

Asummar
yoft
henumberofhousehol
dscor
respondi
ngt
otheev
ent
sA,
Ā,H,
andAnH

13
 Ev
ent
s Subscr
ibet
o Doesnot Tot
al
Her
ald subscr
ibet
o
Her
ald
Subscr
ibe&Addi
sZemen 250,
000 650,
000
Doesnotsubscr
ibet
o 350,
000
Addi
sZemen
Tot
al 500,
000 500,
000 1,
000,
000

Def
inet
heev
entĀn ,
Ān =t
her
andoml
ysel
ect
edhousehol
ddoesnotsubscr
ibet
obot
hnewspaper
.
Si
nce 650,
000 househol
ds subscr
ibe t
othe Addi
s Zemen (
A) and 250,
000
househol
dssubscr
ibet
obot
hZemenandHer
ald(
AnH)i
tfol
l
owst
hat650,
000–
250,
000=40,
000househol
dssubscr
ibet
oAddi
sZemenbutdonotsubscr
ibet
o
Her
ald,
(An )
.Thi
ssubt
ract
ioni
sil
l
ust
rat
edi
nthet
abl
ebel
ow.
Bysi
mil
arl
ogi
c
a.500,
000–250,
000=25,
000househol
dsdonotsubscr
ibet
oAddi
sZemenbut
dosubscr
iget
oHer
ald(
ĀnH)
b.350,
000–250,
000=100,
000househol
dsdonotsubscr
ibet
heAddi
sZemen
andal
sodonotsubscr
ibet
heHer
ald(
Ān )
c.Subt
ract
ingt
ofi
ndt
henumberofhousehol
dscor
respondi
ngt
otheev
ent
s.
d.AnH,
An ,

Ev
ent H
A 250,
000 650,
000-
250,
000 650,
000
Ā 350,
000
Tot
al 500,
000 500,
000 1,
000,
000
e.(
ĀnH)=5000,
000-
250,
000
=250,
000
f
(Ān )=350,
000–250,
000
=100,
000

14
 Acont
ingencyt
abl
esummar
izi
ngsubscr
ipt
iondat
aforAddi
sZemenand
Her
ald
Ev
ent Subscr
ibet
o DoesnotSubscr
ibet
o Tot
al
Her
ald Her
ald
(
H) ( )
Subscr
ibet
oAddi
sZemen 250,
000 400,
000 650,
000
(
A)
Doesnotsubscr
ibet
o 250,
000 100,
0000 350,
000
Addi
sZemen(
Ā)
Tot
al 500,
000 500,
000 1,
000,
000

Nowsi
ncewewi
l
lrandoml
ysel
ectonehousehol
d(maki
ngal
lthehousehol
dsequal
l
y
l
i
kel
ytobechosen)
,thepr
obabi
l
ityofanyoft
hepr
evi
ousl
ydef
inedev
ent
sist
he
r
ati
onoft
henumberofhousehol
dscor
respondi
ngt
otheev
ent
’soccur
rencet
othe
t
otal
numberofhousehol
dsi
ntheci
ty.
Ther
efor
e
P(
A)= 650,
000=0.
65
1,
000,
000

P(
H)=500,000=0.
5
1,
000,000

P(
AnH)=250,
000=0.
25
1,
000,
000

Nextl
ett
ingAUHdenot
eei
therAorH,
weconsi
derf
indi
ngt
hepr
obabi
l
ityoft
heev
ent
AUH=t
her
andoml
ysel
ect
edhousehol
dsubscr
ibest
oei
thert
heAddi
sZemenor
Her
ald.(
i.
esubscr
ibet
oatl
eastoneoft
het
wonewspaper
s).

Weseet
hatt
hehousehol
dssubscr
ibi
ngt
oei
therAddi
sZemenorHer
ald:
a)The400,
000househol
dst
hatsubscr
ibet
oonl
yAddi
sZemen,
An
b)The250,
000househol
dst
hatsubscr
ibet
oonl
ytheHer
ald,
ĀnHand
c)The250,
000househol
dst
hatsubscr
ibest
obot
hAddi
sZemenandHer
ald,
AnH.Ther
efor
esi
nceat
otal
of900,
000househol
dssubscr
ibet
oei
thert
he
Addi
sZemenorHer
aldi
tfol
l
ows:
-

15
 P(
AUH)=900,000=0.9
1,000,000

i
.e90%oft
hehousehol
dsi
ntheci
tysubscr
ibet
oei
therAddi
sZemenorHer
ald.

Not
icet
hatP(
AUH)=0.
9doesnotequal
P(
A)+P(
H)=0.
65+0.
5=1.
15
Logi
cal
l
yther
easonf
ort
hisi
sthatbot
hP(
A)=0.
65andP(
H)=0.
5countt
he25%of
t
hehousehol
dst
hatsubscr
ibet
obot
hnewspaper
s.Ther
efor
e;
t
hesum ofP(
A)andP(
H)count
sthi
s25%oft
hehousehol
dsoncet
oof
ten
I
tfol
l
owst
hati
fwesubt
ractP(
AnH)=0.
25f
rom t
hesum ofP(
A)andP(
H)t
henwe
wi
l
lobt
ainP(
AuH)i
.e

P(
AuH)=P(
A)+P(
H)–P(
AnH)
=0.
65+0.
5-0.
25=0.
90
Thei
nter
sect
ionanduni
onofTwoev
ent
s.
Gi
vent
woev
ent
sA&B
1)TheI
nter
sect
ionofA&Bi
stheev
entconsi
sti
ngoft
hesampl
espaceout
comes
bel
ongi
ng t
o bot
h A&B,denot
ed AnB.Fur
thermor
e P(
AnB)denot
es t
he
pr
obabi
l
ityt
hatBot
hA&Bwi
l
lsi
mul
taneousl
yOccur
.
2)The uni
on ofA&B i
sthe ev
entconsi
sti
ng of sampl
e space out
comes
bel
ongi
ngt
oei
therAorB.Theuni
oni
sdenot
edAUBFur
thermor
eP(
AUB)
denot
est
hepr
obabi
l
ityt
hatei
therAorBwi
l
loccur
.
2.
5PROBABI
LITYRULES

2.
5.1TheAddi
ti
onRul
e
2.
5.1.
1Addi
ti
onRul
efort
woDependentEv
ent
s
LetAandBbeev
ent
sthent
hepr
obabi
l
ityt
hatei
therAorBwi
l
loccuri
s
P(
AUB)=P(
A)+P(
B)-
P(AnB)

2.
5.1.
2Addi
ti
onRul
eforTwoMut
ual
lyExcl
usi
veEv
ent
s
Twoev
ent
sar
esai
dmut
ual
l
yexcl
usi
vei
ftheyhav
enosampl
espaceout
comesi
n
common.I
nthi
scaset
heev
entA&Bcannotoccursi
mul
taneousl
yandt
hus.
P(
AnB)=0

16
 LetA&BMut
ual
l
yexcl
usi
veev
ent
sthen,
thepr
obabi
l
ityt
hatei
therAorBwi
l
loccur
i
s
P(
AUB)=P(
A)+P(
B)
Exampl
e-consi
derr
andoml
ysel
ect
ingacar
dfr
om ast
andar
ddeckof52pl
ayi
ng
car
dsanddef
inet
heev
ent
s.
J,
arandoml
ydr
awncar
disJack;
Q,ar
andoml
ydr
awncar
disQueen;
andK,
a
r
andoml
ydr
awncar
disaki
ng.
Si
ncet
her
ear
e4Jacks,
4Queensand4Ki
ngsi
nthedeck.
P(
Q)= P(
K)= P(
J)=

Si
ncet
her
eisnocar
dthati
sbot
haJ&Qt
heev
entJandQar
emut
ual
l
yexcl
usi
ve
andt
husP(
JnQ)=0i
tfol
l
owst
hatt
hepr
obabi
l
ityt
hatt
her
andoml
ysel
ect
edcar
dis
ei
therJorQi
s
P(
JUQ)=P(
T)+PQ
=4/
52+4/
52=2/
13

2.
5.1.
3TheAddi
ti
onRul
eforNmut
ual
lyexcl
usi
veev
ent
s.
Theev
entA1,
A2,
---
--
-Anar
emut
ual
l
yexcl
usi
vei
fnot
wooft
heev
ent
shav
eany
sampl
espaceoutcomei
ncommon.I
nthi
scasenot
wooft
heev
ent
scanoccur
si
mul
taneousl
yand
P(
A1UA2U-
--
--
UAn)=P(
A1)
+P(
A2)
+--
--
-+P(
An)
Exampl
eP(
JuQUKUni
ne)=
P(
J)+P(
Q)+P(
K)+P(
nine)

=4/ 4
52+ /
4
52+ /
4
52+ /52=

2.
6THECOMPLEMENTOFANEVENT

Gi
venanev
entA,
thecompl
ementofAi
stheev
entconsi
sti
ngofal
lsampl
espace
out
comest
hatdonotcor
respondt
otheoccur
renceofA.
Thecompl
ementofAi
sdenot
edĀ
Fur
ther
mor
eP(
Ā)denot
est
hepr
obabi
l
ityt
hatAwi
l
lnotoccur
.

17
 I
nanypr
obabi
l
itysi
tuat
ion,
eit
heranev
entAori
tscompl
i
mentAmustoccur
.
Ther
efor
ewehav
e
P(
A)+P(
Ā)=1
Thi
simpl
i
es
P(
Ā)=1-
P(A)

Exampl
e–I
fteam AandBar
epl
ayi
ngf
oraf
inal
cupwecansayt
hatt
heev
ent
sthat
t
eam.Awi
l
lwi
niscompl
ementt
otheev
entt
hatBwi
l
lwi
n.i
.e.
,i
fAwi
nsBwi
l
llose.
Undernoci
rcumst
ancet
hatAwi
l
lwi
nandl
oosesatt
hesamet
imewi
nni
ngand
l
osi
ngar
emut
ual
l
yexcl
usi
ve.

2.
7CONDI
TIONALPROBABI
LITYANDI
NDEPENDENCE

2.
7.1Condi
ti
onalPr
obabi
li
ty

Pr
obabi
l
ityi
scondi
ti
onaluponi
nfor
mat
ion.Wemaydef
inet
hepr
obabi
l
ityofev
entA
condi
ti
onal
upont
heoccur
renceofev
entB.

I
fwet
hinkaboutt
woadj
acentr
ooms,
R1andR2,
thepr
obabi
l
ityt
hatR1wi
l
lbecaught
byf
ir
eishi
ghl
ycondi
ti
onal
ont
hepr
obabi
l
ityoft
heot
herr
oom.

Exampl
e1.Supposet
hatwer
andoml
ysel
ectahousehol
d,andt
hatt
hechosen
househol
drepor
tsi
tsubscr
ibest
oHer
ald.Gi
vent
hisnew i
nfor
mat
ionwewi
sht
o
f
ind t
he pr
obabi
l
ityt
hatt
his househol
d subscr
ibes t
o Addi
s Zemen.The new
pr
obabi
l
ityi
scal
l
edacondi
ti
onal
probabi
l
ity
.

Thepr
obabi
l
ityoft
heev
entA,gi
vent
hecondi
ti
ont
hatt
heev
entHhasoccur
red,i
s
wr
it
ten
P(
A/H)=t
hepr
obabi
l
ityofAgi
venH.Weof
tenr
efert
osuchapr
obabi
l
ityast
he
condi
ti
onal
probabi
l
ityofAgi
venH.

I
nor
dert
ofi
ndt
hecondi
ti
onalpr
obabi
l
ityt
hatahousehol
dsubscr
ibest
oAddi
s
Zemengi
vent
hati
tsubscr
ibest
oHer
aldweknow t
hatwear
econsi
der
ingoneof
500,
000 househol
ds.Si
nce 250,
000 oft
hese 500,
000 Her
ald subscr
iber
s al
so
subscr
ibet
oAddi
sZemenwehav
e

18
 P(
A/H/=250,000=0.
5
500,000

i
.e50%oft
heHer
aldsubscr
iber
sal
sosubscr
ibet
oAddi
sZemen:
Exampl
e2.Nextsupposet
hatwer
andoml
ysel
ectanot
herhousehol
dfr
om t
he
1,
000,
000househol
dsandsupposet
hatt
hisnewl
ychosenhousehol
drepor
tst
hati
t
subscr
ibest
oAddi
sZemen
Nowf
indt
hepr
obabi
l
ityt
hatt
hishousehol
dsubscr
ibest
oHer
ald
P(
H/A)
=250,
000=0.
3846
650,
000
Thi
ssay
sthatt
hepr
obabi
l
ityt
hatt
her
andoml
ysel
ect
edhousehol
dsubscr
ibest
o
her
aldgi
vent
hatt
hehousehol
dsubscr
ibest
oAddi
sZemeni
s0.
3846.i
e.,38.
46%of
Addi
sZemensubscr
iber
sal
sosubscr
ibet
oHer
ald.
Wehav
e
P(
A)=650,
000=0.
65
1,
000,
000

P(
AnH)=250,
000=0.
25
1,
000,
000

P(
H/A)=250,
000=0.
3846
650,
000

P(
H)=500,000=0.
5
1,
000,000

P(
A/H)=250,
000=0.
5
500,
000

I
fwedi
vi
debot
hthenumer
atoranddenomi
nat
orofeachcondi
ti
onal
probabi
l
ity
by1,
000,
000
P(
A/H)=250,
000=250,
000/1,
000,
000=P(
AnH)
500,
000 500,
000/
1,000,
000 P(
H)

P(
H/A)=250,
000=250,
000/1,
000,
000=P(
AnH)
650,
000 650,
000/
1,000,
000 P(A)

Weexpr
esst
hesecondi
ti
onal
probabi
l
iti
esi
nter
msofP(
A),
P(H)andP(
AnH)

19
 Gi
vent
hesampl
espaceout
comesar
eequal
l
yli
kel
y.
P(
A/H)=P(
AnH),t
henP(
AnH)=P(
H)P(
A/H)
,bysi
mpl
ecr
ossmul
ti
pli
cat
ion
P(H)

P(
H/A)=P(AnH)=t
henP(
AnH)=P(
A)P(
H/A)
P(A)

TheGener
alMul
ti
pli
cat
ionRul
e
(
twoway
stocal
cul
ateP(
AnH)
P(
AnH)=P(
A)P(
H/A)
=P(
H)P(
A/H)

Exampl
e1.I
naf
ir
m 20%oft
heempl
oyeeshav
eanaccount
ingbackgr
ound,
whi
l
e5%
oft
he empl
oyees ar
e execut
ives and hav
e an account
ing backgr
ounds.I
fan
empl
oyeehasaccount
ingbackgr
ound,
whati
sthepr
obabi
l
ityt
hatt
heempl
oyeei
san
execut
ive.
Letusdef
inet
heev
ent
s
E,
anempl
oyeei
sanexecut
iveand
A,
anempl
oyeehasanaccount
ingbackgr
ound
P(
A)=0.
2
P(
AnE)=0.
05
t
hen
P(
E/A)=P(AnE)=0.
05=0.
25
P(A) 0.2
Exampl
e2.A cont
ract
ori
sbi
ddi
ngf
ort
wopr
oject
swi
thCo.A andCo.B.The
cont
ract
orest
imat
est
hatt
hepr
obabi
l
ityofobt
aini
ngt
hepr
ojectwi
thCo.Ai
s0.
45.
Heal
sof
ell
sthati
fheshoul
dgett
hepr
ojectwi
thCo.A t
hent
her
eisa0.
90
pr
obabi
l
ityt
hatCo.Bwi
l
lal
sogi
vehi
mthepr
oject
.Whatar
ethecont
ract
or’
schances
ofget
ti
ngbot
hpr
oject
s?

Sol
uti
on:Wear
egi
ven
P(
A)=0.
45
P(
B/A)=0.
90andwear
elooki
ngf
orP(
AnB)
,whi
chi
sthepr
obabi
l
ityt
hatbot
h
AandBwi
l
loccur
.Fr
om t
heequat
ionwehav
e
P(
AnB)=P(
B/A)P(
A)=0.
9x0.
45=0.
405

20
CheckYourPr
ogr
ess–2

21%oft
heexecut
ivei
nal
argef
ir
m ar
eatt
het
opsal
aryl
evel
.Iti
sfur
therknownt
hat
40% ofal
ltheexecut
ivesatt
hef
ir
m ar
ewomen.Al
so6.
4% ofal
lexecut
ivesar
e
womenandar
eatt
het
opsal
aryl
evel
.Recent
lyamongexecut
ivesatt
hef
ir
m ar
osea
quest
ionast
owhet
hert
her
eisanyev
idenceofsal
aryi
nequal
i
ty.Check.
Cl
ue.Tosol
vet
hispr
obl
em,poseaquest
ioni
nter
msofpr
obabi
l
iti
es.I
.e.
,ask
whet
hert
hepr
obabi
l
ityt
hatt
heexecut
ivewi
l
lbeatt
het
opsal
aryl
evelgi
vent
he
execut
ivei
sawoman.I
fthi
spr
obabi
l
ityi
slesst
han16% (
theav
erage)y
oucan
concl
udet
hatsal
aryi
nequi
tydoesexi
stbecauseofgender
.

2.
7.2St
ati
sti
calI
ndependence

I
ftheoccur
renceofev
ent
sAandBhav
enot
hingt
odowi
theachot
her
,thenweknow
t
hatAandBar
eindependentev
ent
s.

i
.et
hepr
obabi
l
ityofoccur
renceofAwel
lnoti
nfl
uencet
hepr
obabi
l
ityofoccur
rence
ofB.
Thi
simpl
i
est
hat
P(
A/B)
=p(
A)andt
hat
P(
B/A)=p(
B)
Fur
thermor
ethegener
almul
ti
pli
cat
ionr
ulet
ell
sust
hat
,foranyt
woev
ent
sAandB
wecansayt
hat
P(
AnB)=p(
A)p(
B/A)t
her
efor
eifp(
B/A)
=p(
B)i
ffol
l
owst
hat
P(
AnB)=p(
A)p(
B)
Thi
siscal
l
edt
hemul
ti
pli
cat
ionr
ulef
ort
woi
ndependentev
ent
s.

Howev
er,i
fthepr
obabi
l
ityofanev
enti
sinf
luencedbywhet
herornotanot
herev
ent
occur
s,wesayt
het
woev
ent
sar
edependent
.
eg.Def
inet
heev
ent
sCandPasf
oll
ows
C=y
ourf
avor
it
ecol
l
egef
oot
bal
lteam wi
l
lwi
nit
sfi
rstmat
chnextseason.
P=Yourf
avor
it
epr
ofessi
onal
foot
bal
lteam wi
l
lwi
nit
sfi
rstmat
chnextseason.

Supposet
haty
oubel
i
evet
hatf
ornextseasonp(
c)=0.
6andp(
p)=0.
6thensi
ncet
he

21
out
comesofacol
l
egef
oot
bal
lgamesandapr
ofessi
onalf
oot
bal
lgamewoul
d
pr
obabl
yhav
enot
ingt
odowi
theachot
her
,iti
sreasonabl
etoassumet
hatCandP
ar
eindependentev
ent
s.
I
tfol
l
owst
hat:
Bot
hyourf
avor
it
eteamswi
l
lwi
nthei
rfi
rstmat
chnextseason,
P(
CnP)
=p(
c)p(
p)=0.
6(0.
6)=0.
36
Whent
woev
ent
sar
eindependent
,nei
therar
ethei
rcompl
ement
s.

2.
7.3I
ndependentandMut
ual
lyExcl
usi
veEv
ent
s
Whent
woev
ent
sar
emut
ual
l
yexcl
usi
vet
heyar
enoti
ndependent
.Inf
actt
heyar
e
v
erydependentev
ent
sint
hesenset
hati
fonehappenst
heot
hercannothappen.The
i
nter
sect
ionoft
wo mut
ual
l
yexcl
usi
veev
ent
siszer
o butt
hepr
obabi
l
ityoft
he
i
nter
sect
ionoft
woi
ndependentev
ent
sisnotzer
o.I
tisequalt
othepr
oductoft
he
pr
obabi
l
iti
esoft
hesepar
ateev
ent
s.

2.
7.3.
1Themul
ti
pli
cat
ionr
ulef
orNi
ndependentev
ent
s
Theev
ent
sA1,A2 ….Anar
eindependentev
ent
sift
heoccur
renceoft
heseev
ent
s
hav
enot
hingt
odowi
theachot
her
.ifev
ent
sA1,A2,…,An ar
eindependentev
ent
s,
t
hen
P(
A1nA2n...nAn)
=P(
A1)P(
A2)
...P(
An)
Exampl
e1.Anel
ect
roni
cdev
isehasf
ouri
ndependentcomponent
sC1,C2,C3,C4,
wi
thar
eli
abi
l
ityof0.
85each.Thedev
icewor
ksonl
yifal
lfourcomponent
sar
e
f
unct
ional
.

Whati
sthepr
obabi
l
ityt
hatt
hedev
icewi
l
lwor
kwhenneeded?

P(
thedev
icewi
l
lwor
k)=P(
all
component
swi
l
lwor
k)=P(
c1,
nc2,
nc3,
nc4)
=p(
C1)p(
C2)p(
C3)p(
C4)
=0.
85x0.
85x0.
85x0.
85
=0.
85x0.
85x0.
85x0.
85=0.
522
Exampl
e2.Ther
ateofdef
ect
sincor
ksofwi
nei
s0.
75.Assumi
ngi
ndependence,i
f
f
ourbot
tl
esar
eopened (
B1,B2,B3,B4)
,whati
spr
obabi
l
ityt
hatf
ourcor
ksar
e
def
ect
ive.
P(
all
4ar
edef
ect
ive)
=P(
B1nB2nB3nB4)=P(
B1)P(
B2)P(
B3)P(
B4)

22
 =0.
75x0.
75x0.
75x0.
75=0.
316
2.
7.3.
2Uni
onr
ule
Theuni
onofsev
erali
ndependentev
ent
sist
heev
entt
hatatl
eastoneoft
heev
ent
s
happens.
Thepr
obabi
l
ityoft
heuni
onofsev
eral
independentev
ent
sAl,
A2,
…Ani
s
P(
A,uA2u...uAn)=1-P(
Ā1)P(
Ā2)
...p(
Ān)

Exampl
e1:Adev
icesi
mil
art
otheabov
eonehast
hreecomponent
s,butt
hedev
ice
wor
ksasl
ongasatl
eastoneoft
hecomponent
sisf
unct
ional
.Ther
eli
abi
l
ityoft
he
component
sar
e0.
96,0.
91and0.
80whati
sthepr
obabi
l
ityt
hatt
hedev
icewi
l
lwor
k
whenneeded?
P(
The dev
ice wi
l
lwor
k) = p(
atl
eastone wi
l
lwor
k) = 1 – p(
allwi
l
lfai
l
)
=1–p( )
P( )
P( )=1-
(0.
04)(
0.09)
0.02

Exampl
e3:I
nthedev
elopi
ngwor
ldawoman’
saddsofdy
ingf
rom pr
obl
emsr
elat
ed
t
opr
egnancyi
s1i
n51.I
fthr
eewomenar
epr
egnantwhati
sthepr
obabi
l
ityt
hatat
l
eastonewi
l
ldi
e
p(
atl
eastonewi
l
ldi
e)=1-p(
all
wil
lsur
viv
e)
3
1-
(50/
51)=0.
0577

2.
8THETOTALPROBABI
LITYANDBYE’
STHEOREM

2.
8.1Tot
alPr
obabi
li
ty
Whatev
ermaybet
her
elat
ionshi
pbet
weent
woev
ent
swecanal
way
ssayt
hatt
he
pr
obabi
l
ityofAi
sequalt
othepr
obabi
l
ityoft
hei
nter
sect
ionofAandBpl
ust
he
pr
obabi
l
ityoft
hei
nter
sect
ionofAandt
hecompl
ementofB(
event
B)
P(
A)=P(
AnB)+P(
AnB)
Tot
alpr
obabi
l
ity
Consi
dert
hehousehol
dssubscr
ibi
ngt
othet
wonewspaper
s.
P(
A)=0.
65
Thi
spr
obabi
l
ityi
ncl
udest
hehousehol
dssubscr
ibi
ngt
obot
hthenewspaper
sP(
AnB)
ort
hehousehol
dssubscr
ibi
ngt
oAddi
sZemenandnotf
orHer
ald.I
.e.
,

23
 P(
A)=P(
AnN)+P(
AnH)
=0.
25+0.
40
=0.
65
Thel
awoft
otalpr
obabi
l
itymaybeext
endedt
omor
ecompl
exsi
tuat
ions,wher
ethe
sampl
espaceXi
spor
ti
onedi
ntomor
ethent
woev
ent
s.Saywepar
ti
ti
ont
hesampl
e
spacei
ntoacol
l
ect
ionofnset
sB1,
B2…BnThel
awoft
otal
probabi
l
ityi
nthi
ssi
tuat
ion
i
s

P(
A)= (
AnBi)

Exampl
e1:SupposeAi
stheev
entt
hatapi
ctur
ecar
disdr
awnoutofast
andar
d
deckof52car
dsLet
ti
ngH.
C.DandSdenot
etheev
ent
sthatt
hecar
ddr
awni
saHear
t,
Cl
ub,
DiamondorSpader
espect
ivel
y.

I
nast
andar
ddeckt
her
ear
e12pi
ctur
ecar
ds.Thepr
obabi
l
itywi
l
lthenbe12/
52.

Fol
l
owi
ngt
hel
awoft
otalpr
obabi
l
ity
.Thi
spr
obabi
l
itycanbeobt
ainedast
hesampl
e
oft
hei
nter
sect
ionsoft
hef
ourev
ent
swi
thA.I
nthedeckt
her
ear
ethr
eepi
ctur
ed
car
dsandHear
t(Jackhear
t,queenhear
tsandki
nghear
t),t
hreepi
ctur
edandcl
ub;
t
her
epi
ctur
edanddi
amondandt
hreepi
ctur
edandatt
hesamet
imespade.
Wef
indt
hepr
obabi
l
ityofapi
ctur
ecar
d,P(
A)
P(
A)=P(
AnH)+P(
AnC)+P(
AnD)+P(
AnS)
=3/ 3
52+ /
3
52+ /
12
52= / 52

Thel
aw oft
otalpr
obabi
l
itycanbeext
endedusi
ngt
hedef
ini
ti
onofcondi
ti
onal
pr
obabi
l
ity
.

P(
AnB)=P(
A/B)p(
B)si
mil
arl
y
P(
AnB)=P(
A/B)p(
B)
Subst
it
uti
ngt
hisf
ormul
atot
headdi
ti
on
i
.eP(
A)=p(
AnB)+p(
AnB)
P(
A)=P(
A/B)p(
B)+p(
A/B)
(B)
Formor
ethant
woset
s

24
 P(
A)= (
A/Bi)p(
Bi)

Wher
ether
ear
enset
sint
hepar
ti
ti
on

Exampl
e1:Ananal
ystbel
i
evest
hatt
hemar
kethasa0.
75pr
obabi
l
ityofgoi
ngupi
n
t
henexty
eari
ftheeconomyshoul
ddowel
l
,anda0.
30pr
obabi
l
ityofgoi
ngupi
fthe
economyshoul
dnotdowel
ldur
ingt
hey
ear
.Theanal
ystf
urt
herbel
i
evest
her
eisa
0.
80pr
obabi
l
ityt
hatt
heeconomywi
l
ldowel
li
nthecomi
ngy
ear
.

Whati
sthepr
obabi
l
ityt
hatt
hemar
ketwi
l
lgoupnexty
ear
?
Def
inet
heev
ent
s
P(U/W)=0.75 I
fP(
W)=0.
8
U=TheMar
ketwi
l
lgoup then
W=Theeconomywi
l
ldowel
l P(W)=0.80 P( =1–0.
8=0.
2
Fi
ndp(
U) P(U/ )=0.3

P(
u)=P(
u/W)
p(w)+p(
u/
w)p(
w)
=0.
75(
080)+03(
0.2)
=0.
66
Thi
smeanst
hemar
ketcangoupi
ntwoway
si.
eift
heeconomywi
l
ldowel
landt
he
mar
ketwi
l
lgoupandi
ftheeconomywi
l
lnotdowel
landt
hemar
ketwi
l
lgoup.

2.
8.2Bay
e’sTheor
em

Bay
e’sTheor
em i
sav
eryi
mpor
tantt
heor
em t
orev
isepr
obabi
l
iti
esusi
ngsome
addi
ti
onal
inf
ormat
ion.Fi
rstl
etusdef
inet
oimpor
tantt
erms.

2.
8.2.
1Pr
iorPr
obabi
li
ty/
Ini
ti
alPr
obabi
li
ty)

I
tisagi
venpr
obabi
l
itybef
oreanyempi
ri
cal
dat
aisobser
ved

2.
8.2.
2Post
eri
orPr
obabi
li
ty
I
srev
isedpr
obabi
l
itybasedonnewi
nfor
mat
ion.Pr
iorpr
obabi
l
iti
escanber
evi
i
zedas
wehav
eaddi
ti
onal
ornewi
nfor
mat
ionaboutt
heev
ent
s.

25
 Der
ivat
ion
P(
B/A)=P(
AnB)
P(A)

Byanot
herdef
ini
ti
on
i
.e.
,P(
AnB)=P(
A/B)P(B)
P(A)

Fr
om t
hel
awoft
otal
probabi
l
ity

P(
A)=P(
A/B)P(
B)+p(
A/B)P(
B)
Subst
it
uti
ngt
hisexpr
essi
onf
orP(
A)i
nthedenomi
nat
or
P(
B/A)= P( A/B)p(B)
Bay
e’sTheor
em
P(
A/B)p(
B)+p(A/B)
p(B)

Thepr
obabi
l
iti
esp(
B)andp(
B)ar
ecal
l
edpr
iorpr
obabi
l
iti
esoft
heev
ent
sBandB.
Thepr
obabi
l
ityP(
B/A)i
scal
l
edt
hepost
eri
orpr
obabi
l
ityofB.

Thet
heor
em al
l
owsust
orev
erset
hecondi
ti
onal
itofev
ent
s.
Wecanobt
aint
hepr
obabi
l
ityofBgi
venAf
rom t
hepr
obabi
l
ityofAgi
venB.
Bay
e’st
heor
em maybev
iewedasameansoft
ransf
ormi
ngonepr
iorpr
obabi
l
ityof
an ev
entB i
nto a post
eri
orpr
obabi
l
ityoft
he ev
entB post
eri
ort
othe known
occur
renceofev
entA.

Exampl
e1.LetAbet
heev
entt
hatar
andoml
ysel
ect
edAmer
icanhast
hedeadl
y
di
seaseAI
DS.Andl
etAbet
heev
entt
hatt
her
andoml
ysel
ect
edAmer
icandoesnot
hav
eAI
DS.Si
ncei
tisest
imat
edt
hat0.
6per
centoft
heAmer
icanpopul
ati
onhav
e
AI
DS.
P(
A)=0.
006andP(
A)
=0.
994
Ther
eisat
estt
hatat
tempt
stodet
ectwhet
heraper
sonhasAI
DS.Accor
dingt
o
hi
stor
ical
dat
a99.
9%ofpeopl
ewi
thAI
DSr
eactposi
ti
vel
y(RP)t
othet
est
.
i
.eP(
RA/
A)=0.
999
Fur
thermor
e1%ofpeopl
ewi
thoutAI
DSr
eactposi
ti
vel
y.
i
.e.
,P(
RP/
A)=0.
01

26
I
fwegi
vear
andoml
ysel
ect
edAmer
icant
het
estandt
heper
sonr
eact
sposi
ti
vel
y,
whati
sthepr
obabi
l
ityt
hatt
heper
sonact
ual
l
yhasAi
ds?

Thei
deaofBay
’est
heor
em i
sthatwecanf
indP(
A/RP)byt
hinki
ngasf
oll
ows.A
per
sonwi
l
lreactposi
ti
vel
y(RP)i
ftheper
sonr
eactposi
ti
vel
yandact
ual
l
yhasAI
DS
(
AnRP)ori
ftheper
sonr
eactposi
ti
vel
yanddoesnotact
ual
l
yhav
eAI
DS.
(
AnRP)
Ther
efor
e,
P(
RP)=P(
AnRP)+P(
AnRP)
Thi
simpl
i
est
hat
P(
A/RP)
=P(AnRP)
P(RP)

=P(AnRP)
P(
AnRP)+p(AnRP)

=P(A)P(
RP/A)
P(
A)p(
RP/A)+P(A)P(
RP/
A)

=(0.006)(
0.999)
(
0.006)(
0.999)+(
0.994)
(0.
01)
=0.
38
Thi
spr
obabi
l
itysay
sthat
,ifal
lAmer
icanswer
egi
venanAI
DSt
estonl
y38%oft
he
peopl
ewhowoul
dreactposi
ti
vel
ytot
het
estwoul
dact
ual
l
yhav
eAI
DS.

Bay
’est
heor
em maybeext
endedt
oapar
ti
ti
onofmor
ethant
woset
s.Thi
sisdone
usi
ngt
hel
awoft
otal
probabi
l
ityi
nvol
vi
ngapar
ti
ti
onofset
sB1,
B2,
....Bn.

Thet
heor
em gi
vest
hepr
obabi
l
ityofoneoft
heset
sint
hepar
ti
ti
onB,Gi
vent
he
occur
renceofev
entA.
Ext
endedBay
es’
theor
em.

P(
B1/
A)=

Exampl
e1.AnEconomi
stbel
i
evest
hatdur
ingper
iodsofhi
gheconomi
cgr
owt
hthe

27
U.
Sdol
l
arappr
eci
ateswi
thpr
obabi
l
ity0.
70;
inper
iodsofmoder
ateeconomi
cgr
owt
h
t
hedol
l
arappr
eci
ateswi
thpr
obabi
l
ity0.
40;anddur
ingper
iodsofl
ow economi
c
gr
owt
hthedol
l
arappr
eci
ateswi
thpr
obabi
l
ity0.
20.Dur
inganyper
iodoft
imet
he
pr
obabi
l
ityofhi
gheconomi
cgr
owt
his0.
30,t
hepr
obabi
l
ityofmoder
ategr
owt
his
0.
50andt
hepr
obabi
l
ityofl
oweconomi
cgr
owt
his0.
2.Supposet
hedol
l
arhasbeen
appr
eci
ati
ngdur
ingt
hepr
esentper
iod.Whati
sthepr
obabi
l
ityt
hatt
heeconomyi
s
exper
ienci
ngaper
iodofhi
ghgr
owt
h.Def
inet
het
hreeev
ent
s,
Hi
gheconomi
cgr
owt
h(H)
Moder
ateeconomi
cgr
owt
h(M)
Loweconomi
cgr
owt
h(L)

Thepr
iorpr
obabi
l
iti
esoft
het
hreest
atesoft
heeconomyar
eP(
H)=0.
3P(
M)=0.
5
P(
L)=0.
2LetAdenot
etheev
entt
hatt
hedol
l
arappr
eci
ate.Wehav
ethef
oll
owi
ng
condi
ti
onal
probabi
l
iti
es.
P(
A/H)
=0.
70P(
A/M)=0.
40 P(
A/L)
=0.
20
Fi
ndP(
H/A)
= P(
H/A)=P(
A/H)P(
H) = P(
A/H)P(
H)
P(
A/H)P(
H)+P(
A/M)
+P(
M)+P(
M)+P(
A/L)
P(L) P(
AnH)+P(
AnM)+
P(
AnL)
= 0.
70(
0.30)
0.
70(
0.30)+0.
4(0.
5)+0.
2(0.
2)
=0.
467

Wecanobt
aint
hisansweral
ongwi
thpost
eri
orpr
obabi
l
iti
esoft
heot
hert
wost
ates
oft
heeconomyM andL.i
.eP(
M/A)andP(
L/A)

Ev
ent Pr
ior Condi
ti
onal Joi
nt Post
eri
orpr
obabi
li
ty
_
___
___
___
_ pr
obabi
li
ty pr
obabi
li
ty pr
obabi
li
ty
H P(
H)0.
30 P(
A/H)
=70 P(
(AnH)
=0.
21 P(
H/A)
=0.
21=0.
467
+ 0.
45
M P(
M)=0.
50 P(
A/M)
=0.
40 P(
AnM)=0.
20 P(
M/A)
=0.
20= 0.
444
0.
45
+

28
L P(
L)=0.
20 P(
A/L)=0.
2 P(
AnL)
=0.
04 P(
L/A)
=0.
04=0.
089
0.
45
=
Sum 1 P(
A)=0.
45 Sum =1

Not
ethatbot
hthepr
iorpr
obabi
l
iti
esandt
hepost
eri
orpr
obabi
l
iti
esoft
het
hree
st
atesaddt
oone.
Tr
eeDi
agr
am f
ort
heabov
eexampl
e
Post
eri
or
pr
obabi
l
iti
es
Joi
ntPr
obabi
l
iti
es
Condi
ti
onal
prob. P(
HnA)=(
0.3)
(0.
7)=0.
21 P(
H/A)= =0.
467

P(
A/H)=0.
70
Pr
ior
pr
obabi
l
iti
es
P(A

P(
H)=0.
30
P(
M/A)= =
P(
MnA)(
0.5)
(0.
4)=0.
20
0.
444
P(
A/M)
=0.
4
P(
M)=0.
50
P(
L/A)= =0.
089
A/M)
P( =0.
6
P(
L)=0.
2
P(
LnA) (
0.2)
(0.
2)=0.
04
P(
A/L)
=0.
2
Sum 1 Sum =1
P(
A)=0.
45
P(
A/
L)=0.
8

2.
9ANSWERSTOCHECKYOURPROGRESS

B
1)
B
B
G
B
G
G
B

29
 G B G
B
G

b)1)BBB, GGG
2)GBG, BGG,GGB
3)BBG BGB GBB
4)BBB P

2)a) P
N
P P
N
P
N N
P
N
N P
P
N
N
P

b)1)PNPP,
PPNP,
PPPN,
NPPP
2)NNNN,
NNNP,
NNPN,
NPNN,
PNNN,
NNPP,
NPNP,
PNNP,
PPNN,
NPPN,
PPNN
3)NNNP,NNPN,NPNN,PNNN,NNPP,NPNP,PNNP,PPNN,NPPN,PPNN,PNPP,
PPNP,
PPPN,
NPPP,
PPPP.
4)PPPP,
NNNN

2.
10MODELEXAMI
NATI
ONQUESTI
ON

30
Par
tI.Def
inet
hef
oll
owi
ngt
ermsofwor
ds

1.Pr
obabi
l
ity
2.anexper
iment
3.anev
en
4.anout
come
5.obj
ect
ivepr
obabi
l
ity
6.i
ssubj
ect
ivepr
obabi
l
ity
7.sampl
espaceout
come
8.sampl
espace
9.mut
ual
l
yexcl
usi
veev
ent
s
10.
Independentev
ent
s
11.
Dependentev
ent
s
12.
Compl
ementofanev
ent
13.
Pri
orpr
obabi
l
iti
es
14.
Post
eri
orpr
obabi
l
iti
es.

Par
tII
.Wor
koutt
hef
oll
owi
ngquest
ions
Cl
ear
lyshowt
hest
eps
1.Anewl
yest
abl
i
shedcompanyi
spl
anni
ngt
orecr
uitt
rai
neesf
orf
ourj
obsi
nthe
mar
ket
ing depar
tment
.The mar
ket
ing managercont
act
ed an empl
oyment
agency
.The agencyhas sel
ect
ed f
ourcandi
dat
es and send t
hem t
othe
Company
.
Thecompanywi
l
lhi
ret
hosewhof
ulf
il
lther
equi
rementoft
hej
ob.Assumi
ng
t
hatacandi
dat
e’schancet
opasst
hef
inal
eval
uat
ioni
s0.
5.
a.Li
stal
lthesampl
espaceout
comesoft
heexper
iment
b.I
dent
it
ythesampl
espaceout
comescor
respondi
ngt
othef
oll
owi
ngev
ent
s
i
. Al
loft
hem wi
l
lqual
i
fy
i
i
.Onl
ytwooft
hem wi
l
lqual
i
fy
i
i
i.Noneoft
hem wi
l
lqual
i
fy
i
v.Ther
eoft
hem wi
l
lqual
i
ty
c.Assumi
ngt
hepr
obabi
l
ityt
hatacandi
dat
ewi
l
lbequal
i
fiedf
orj
obi
s0.
5,

31
 f
indt
hepr
obabi
l
ityf
ort
heev
ent
sli
stedi
npar
tD.
2.Theper
sonnelmanagerofacompanyconst
ructt
hef
oll
owi
ngsummar
ytabl
e
aboutt
heef
fi
ciencyofCompanyempl
oyees.
Ev
ent Ef
fi
ciency
Hi
gh,
H Av
erage,
A Low,
L Tot
al
Men 120 100 80 300
Women 45 35 20 100
Tot
al 165 135 100 400
Fi
ndt
hepr
obabi
l
ityt
hatar
andoml
ysel
ect
edempl
oyee
a)hashi
ghef
fi
ciency
b)hasav
erageef
fi
ci
ency
c)hasl
owef
fi
ciency
d)hashi
ghef
fi
ciencygi
vent
hatt
hisempl
oyeei
s
i
. aman
i
i
.awoman
e)i
sawomanandhashi
ghef
fi
ciency
f
)isamanandhasl
owef
fi
ci
ency
g)hashi
ghorl
owef
fi
ciency

3.Af
ir
mispl
anni
ngt
oint
roduceanewpr
oduct
.Thepr
obabi
l
ityt
hatt
hepr
oduct
wi
l
lbesuccessf
uli
facompet
it
ordoesnotcomeupwi
thasi
mil
arpr
oducti
s
0.
67.Thepr
obabi
l
ityt
hatt
henewpr
oductwi
l
lbesuccessf
uli
nthepr
esenceof
acompet
it
ornew pr
oducti
s0.
42.Thepr
obabi
l
ityt
hatt
hecompet
ingf
ir
m wi
l
l
comeoutwi
thanewpr
oductdur
ingt
heper
iodi
squest
ioni
s0.
35.
Whati
sthepr
obabi
l
ityt
hatt
hepr
oductwi
l
lbeasuccess?
4.25%ofcol
l
egecl
assgr
aduat
edwi
thhonor
s,whi
l
e20%oft
hecl
asswer
ehonor
s
gr
aduat
esandobt
ainedgoodj
obs.Whati
sthepr
obabi
l
ityt
hataper
songota
goodj
obi
fhegr
aduat
edwi
thhonor
s?
5.Acont
ract
ori
sbi
ddi
ngf
orf
our
-const
ruct
ionpr
oject
.Heassesseshi
schances
ofwi
nni
ngt
hepr
oject
sat0.
6,0.
75,
0.9and0.
5.Assumi
ngi
ndependence.
a)Whati
sthepr
obabi
l
ityt
hatt
hecont
ract
orwi
l
lwi
nal
lpr
oject
s?

32
 b)Whati
sthepr
obabi
l
ityt
hatt
hecont
ract
orwi
l
lwi
natl
eastonepr
oject
?
c)Whati
sthepr
obabi
l
ityt
hathewi
l
lwi
nnoneoft
hepr
oject
s?
6.A packageofdocument
sneedst
obesentt
oagi
vendest
inat
ionandi
tis
i
mpor
tantt
hati
tar
ri
vewi
thi
noneday
.Tomaxi
mizet
hechanceofont
ime
del
i
ver
y,t
hreecopi
esoft
hedocumentar
esentv
iat
hreedi
ff
erentdel
i
ver
y
ser
vices.Ser
viceAi
sknownt
ohav
ea90% ont
imedel
i
ver
yrecor
d,ser
viceB
hasan88% ont
imedel
i
ver
yrecor
d,andser
viceChas91% ont
imedel
i
ver
y
r
ecor
d.Whati
sthepr
obabi
l
ityt
hatatl
eastonecopyoft
hedocument
swi
l
l
ar
ri
veati
tsdest
inat
ionont
ime?
7.Thr
eesecr
etar
ies,S1,S2 andS3 doof
fi
cewor
kforacompany
,mai
nlyf
il
li
ng
paper
s,ofal
lthepaper
sthatcomei
ntot
heof
fi
ce,
S1f
il
es50%S2f
il
es30%and
S3 f
il
est
her
est
.Eachsecr
etar
yoccasi
onal
l
ymi
sfi
l
esapaperS1 mi
sfi
l
es5%of
t
hepaper
sshef
il
es,S2 mi
sfi
l
es7%oft
hepaper
sshef
il
esandS3mi
sfi
l
es10%
oft
hepaper
sshef
il
es.Themanagerhasbeenl
ooki
ngf
orapar
ti
cul
arpaperand
hasf
oundt
hati
thasbeenmi
sfi
l
ed.Hedeci
dest
ogi
vewar
ningt
otheonewho
mostl
i
kel
yfi
l
edi
t.Whomostl
i
kel
yfi
l
edi
t?Dr
awat
reedi
agr
am.
8.A manuf
act
uri
ngCo.pur
chasesacomponentf
ormt
hreedi
ff
erentsuppl
i
ers.
Whencomponent
sar
ri
veatt
hewar
ehouseoft
heco.t
heyar
epl
acedi
nabi
n
wi
thouti
nspect
ionorot
her
wisei
dent
if
iedbysuppl
i
er.Themat
eri
alsmanager
doesknowt
hat45%oft
hecomponent
sar
epur
chasedf
rom S1,
35%pur
chased
f
rom S2 andt
her
emai
ningf
rom S3.Fr
om pastr
ecor
dsi
tisal
soknownt
hat6%
ofcomponent
spur
chasedf
orm S1 ar
ebel
ow st
andar
d,8%oft
hecomponent
s
pur
chasedf
rom S2 ar
ebel
owst
andar
dand11%oft
hecomponent
spur
chased
f
rom S3 ar
e bel
ow st
andar
d.The mat
eri
als managerr
andoml
y sel
ect
sa
componentandf
oundi
tbel
owst
andar
d.Fr
om whi
chsuppl
i
ert
hecomponenti
s
mostl
i
kel
ypur
chased?Dr
awat
reedi
agr
am.

33
UNI
T3:
PROBABI
LITYDI
STRI
BUTI
ON

Cont
ent
s
3.
0Ai
msandObj
ect
ives
3.
1Int
roduct
ion
3.
2Random v
ari
abl
es
3.
2.1 Di
scr
eteRandom Var
iabl
e
3.
2.2 Cont
inuousRandom Var
iabl
e
3.
3Di
scr
etePr
obabi
l
ityDi
str
ibut
ion
3.
3.1 Const
ruct
ingPr
obabi
l
ityDi
str
ibut
ion
3.
3.2 MeanandAdv
anceofaDi
scr
etePr
obabi
l
ityDi
str
ibut
ion
3.
3.3 Bi
nomi
alPr
obabi
l
ityDi
str
ibut
ion
3.
3.4 Hy
per
geomet
ri
cPr
obabi
l
ityDi
str
ibut
ion
3.
3.5 Poi
ssonPr
obabi
l
ityDi
str
ibut
ion
3.
4Cont
inuous/
Nor
mal
/Pr
obabi
l
ityDi
str
ibut
ion
3.
4.1 Nor
mal
Appr
oxi
mat
iont
otheBi
nomi
al
3.
4.2 Nor
mal
Appr
oxi
mat
iont
othePoi
sson
3.
5Answer
stoCheckYourPr
ogr
ess
3.
6Model
Exami
nat
ionQuest
ion

3.
0AI
MSANDOBJECTI
VES

34
I
nthi
suni
t,y
ouwi
l
lbei
ntr
oducedt
orepeat
edexper
iment
swher
ether
esul
toft
he
exper
imentpr
oducest
wodi
ff
erentandmanypossi
bleout
comes.Youwi
l
llear
nhow
t
ocomput
epr
obabi
l
iti
esi
nvol
vi
ngt
wo-
out
comesi
tuat
ionusi
ngspeci
alpr
obabi
l
ity
f
ormul
as.

Af
tercompl
eti
ngt
hisuni
tyouwi
l
lbeabl
e:
t
ounder
standt
het
ypesofr
andom v
ari
abl
es
t
ocal
cul
atet
heexpect
edv
alueandv
ari
anceofadi
scr
eter
andom v
ari
abl
e
t
oident
it
ythechar
act
eri
sti
csoft
hebi
nomi
al,hy
pergeomet
ri
cand poi
son
pr
obabi
l
itydi
str
ibut
ions
t
ocal
cul
atepr
obabi
l
iti
esf
orr
andom v
ari
abl
esf
oll
owi
ngt
hebi
nomi
al,hy
per
geomet
ri
candpoi
sondi
str
ibut
ions
t
o cal
cul
atet
he mean and v
ari
ance oft
he bi
nomi
al,hy
pergeomet
ri
cand
posi
ti
ondi
str
ibut
ion
t
oident
it
ythechar
act
eri
sti
csoft
hecont
inuouspr
obabi
l
itydi
str
ibut
ionandi
ts
accompany
ingnor
mal
cur
ve
t
ocal
cul
atepr
obabi
l
iti
esofacont
inuousr
andom v
ari
abl
e
t
o appr
oxi
mat
ethe nor
maldi
str
ibut
ion t
othe bi
nomi
aland t
he poi
son
di
str
ibut
ions.

3.
1INTRODUCTI
ON

Pr
obabi
l
itydi
str
ibut
ioni
sli
sti
ngal
lpossi
blev
aluesoft
her
andom v
ari
abl
ewi
th
cor
respondi
ngpr
obabi
l
iti
es.Theout
comeoft
heexper
imenti
sei
therasuccessor
f
ail
ure.Thenumberofway
stogetcer
tai
nnumberofsuccesseswi
l
ldet
ermi
net
he
v
aluet
hatt
her
andom v
ari
abl
ewi
l
lassume.

3.
2RANDOM VARI
ABLE

Random v
ari
abl
eisav
ari
abl
ewhosev
aluei
sdet
ermi
nedbyt
heoutcomeofan
exper
iment
.Thati
srandom v
ari
abl
erepr
esent
sanuncer
tai
nout
comeori
tcanbe
def
ined asaquant
it
yresul
ti
ngf
rom ar
andom exper
imentt
hatbychance,can
assumedi
ff
erentv
alues.

35
Ar
andom v
ari
abl
emaybeei
therdi
scr
eteorcont
inuous

3.
2.1Di
scr
eteRandom Var
iabl
e
I
sav
ari
abl
ethatcanassumeonl
ycer
tai
ncl
ear
lysepar
atedv
aluesr
esul
ti
ngf
rom
accountofsomei
tem ofi
nter
est
?
Exampl
e:
- TheNo.ofempl
oyeesabsenti
nagi
venday
- Tosst
wocoi
nsandcountt
henumberofheads
- Numberofdef
ect
ivepr
oduct
spr
oducedi
naf
act
oryatagi
venshi
ftordayor
mont
h.
- Numberofcust
omer
sent
eri
ngt
oabanki
nanhourt
ime.

I
sshoul
dbenot
edt
hatadi
scr
eter
andom v
ari
abl
ecani
nsomecasesassume
f
ract
ionalordeci
malv
alues.Thesev
aluesmustbesepar
atedi
.ehav
edi
stance
bet
weent
hem eg.Thescor
eofast
udenti
nagi
vent
estcanbe8.
5or7.
5suchv
alues
ar
edi
scr
eteb/
set
her
eisadi
stanceb/
nscor
es.Ther
eisaf
ixedgapbet
weenscor
es.
You can easi
l
yli
stal
lpossi
blev
aluescl
ear
lyand separ
atel
y.I
fthenumberof
st
udent
sinacl
assr
oom i
s35,
youknowt
henextsucceedi
ngv
aluewi
l
lbe36t
her
eis
noanot
herv
aluei
nbet
ween.

3.
2.2Cont
inuousRandom Var
iabl
e
Av
ari
abl
ethatcanassumeanyv
aluei
nani
nter
val
.Itcanassumeoneofani
nfi
nit
ely
l
argenumberofv
alues.Most
lyr
esul
tsofmeasur
ement
Exampl
e -Thedi
stanceb/
ntwoci
ti
es
-Thewei
ghtofaper
son.
-Ther
ateofr
etur
noni
nvest
ment
-Thet
imet
hatacust
omermustwai
ttor
ecei
vehi
schanges.

Thev
aluesar
enotcl
ear
lysepar
ated.I
tisnotpossi
blet
oexhaust
ivel
yli
stpossi
ble
v
aluesoft
her
andom v
ari
abl
e.I
fthedi
stancebet
weent
woci
ti
esi
s300km.You
cannotest
imat
eori
dent
if
ythenexthi
gherdi
stance.Ther
ear
einf
ini
tel
yver
ylar
ge
numberofv
alues.

36
3.
3DI
SCRETEPROBABI
LITYDI
STRI
BUTI
ONS

Thev
aluesassumedbyadi
scr
eter
andom v
ari
abl
edependsupont
heoutcomeofan
exper
iment
.Si
nce t
he outcome oft
he exper
imentwi
l
lbe uncer
tai
nthe v
alue
assumedbyt
her
andom v
ari
abl
ewi
l
lal
sobeuncer
tai
n.

The pr
obabi
l
ity di
str
ibut
ion ofa di
scr
eter
andom v
ari
abl
eisl
i
sti
ng ofal
lthe
out
comesofanexper
imentandt
hepr
obabi
l
iti
esassoci
atedwi
theachoutcomeThe
pr
obabi
l
itydi
str
ibut
ionofadi
scr
eter
andom v
ari
abl
eisat
abl
e,gr
aphorf
ormul
athat
gi
vest
hepr
obabi
l
ityassoci
atedwi
theachpossi
blev
aluet
hatar
andom v
ari
abl
ecan
assumeori
fweor
gani
zet
hev
alueofadi
scr
eter
andom v
ari
abl
einapr
obabi
l
ity
di
str
ibut
iont
hedi
str
ibut
ioni
scal
l
edaDi
scr
etePr
obabi
l
itydi
str
ibut
ion.I
nthi
suni
twe
wi
l
ldi
scusst
hreet
ypesofdi
scr
etepr
obabi
l
itydi
str
ibut
ion.

Bi
nomi
al,
Hypergeomet
ri
candPoi
sson
Wedenot
epr
obabi
l
itydi
str
ibut
ionofar
andom v
ari
abl
exasp(
x).Wecansomet
imes
uset
hesampl
espaceofanexper
imentandpr
obabi
l
ityr
ules.

Exampl
e:Consi
derat
estconsi
sti
ngoft
hreet
rueorf
alsequest
ions
Thesampl
espaceconsi
sts
CCC CC|C|
C |
CC
C|
| |
C||
|C |
||

Weassume;
- Thest
udentbl
i
ndl
yguessest
heanswert
oeachquest
ion.Theneachoutcome
wi
l
lbeequal
l
yti
ckl
yi.
eeachhav
ingapr
obabi
l
ity1/
8.
- Si
ncet
hest
udentguessesbl
i
ndl
ythent
hepr
obabi
l
ityofanswer
ingeach
quest
ioncor
rect
lyi
s½andt
hepr
obabi
l
ityofanswer
ingi
ncor
rect
lyi
sal
so½
- Si
nceeachquest
ionwi
l
lbeanswer
edi
ndependent
lyi
tfol
l
owst
hatwecan
obt
aint
hepr
obabi
l
ityofeachsampl
espaceoutcomebymul
ti
ply
ingt
oget
her
t
hepr
obabi
l
iti
esofcor
rect
ly(ori
ncor
rect
ly)answer
ingi
ndi
vi
dual
quest
ions.
- Ther
efor
e,byi
ndependence,
thepr
obabi
l
ityoft
hesampl
esspaceoutcome.

37
 CCC,
answer
ingal
lthet
hreequest
ionscor
rect
ly,
P(
CCC)=p(
c)p(
c)p(
c)=(
½)( ½)=1/
½)( 8

Si
mil
arl
ythepr
obabi
l
ityoft
hesampl
espaceout
comeCCIi
s
P(
CCI
)=(
1/2)(
1/2)(
1/2)
=1/
8
Wedef
inet
her
andom v
ari
abl
eXt
obet
henumberofquest
ionst
hatt
hest
udent
answer
scor
rect
ly.Xcanassumet
hev
alues0,
1,2,
or3.Theni
fx=1onequest
ion
wi
l
lbeanswer
ed
Cor
rect
lyi
fandonl
yifweobt
ainoneoft
hesampl
espaceout
comesC|
| |
C| ||
C
t
hen
P(
X=1)=P(
C||
)+P(
|C|
)+P(
||C)
=1/
8+1/
8+1/
8=3/
8
Fi
ndi
ngt
hepr
obabi
l
itydi
str
ibut
ion

Val
ueofX Sampl
espace pr
obabi
li
tyofsampl
e P(
X)=pr
obabi
li
tyoft
he
=TheNo.ofcor
rect outcomes spaceoutcome v
alueofX
Answer
s cor
respondi
ng
t
oX
X=0(
nocor
rectanswer
) |
|| ½ x½x½=1/
8 P(
0)=1/
8
X=1(
onecor
rectanswer
) C|
| ½ x½x½=1/
8
|
C| ½ x½x½=1/
8 P(
1)= 1/
8 + 1/
8 +1/
8
=3/
8
|
|C ½ x½x½=1/
8
X=2(
two cor
rect CC1 ½ x½x½=1/
8
answer
s)

38
 C1C ½ x½x½=1/
8 P(
2)= 1/
8 + 1/
8 +1/
8
=3/
8
1CC ½ x½x½=1/
8
X=3(
thr
ee cor
rect CCC ½ x½x½=1/
8 P(
3)=1/
8
answer
s)
Summar
y:pr
obabi
l
itydi
str
ibut
ionofx

X,
numberofquest
ion P(
X),
probabi
li
tyofX
Answer
edcor
rect
ly
0 P(
0)=P(X=0)1/
8
1 P(
1)=P(
X=1)1/
8
2 P(
2)=P(
X=2)1/
8
3 P(
3)=P(
X=3)1/
8
Sum I
Exampl
e:2Supposet
hatt
hest
udentt
aki
ngt
het
esthasst
udi
edhar
danddoesnot
hav
etoguessatt
heanswer
,supposet
hatt
her
eisnow a90% chancet
hatt
he
st
udentwi
l
lanswereachoft
hequest
ionscor
rect
ly.Thepr
obabi
l
itydi
str
ibut
ionwi
l
l
be:

X Sampl
e Pr
obabi
li
tyofsampl
e P(
X)
space space
X=0 111 0.
1X0.
1X0.
1=0.
001 P(
0)=0.
001
X=1 C11 0.
9X0.
1X0.
1=0.
009
1C1 0.
1X0.
9X0.
1=0.
009 P(
1)=0.
009+0.
009+0.
009 =
0.
027
11C 0.
1X0.
1X0.
9=0.
009
X=2 CC1 0.
9X0.
9X0.
1=0.
081 P(
2)=0.
081 +0.
081 +0.
081=

39
 0.
243
C1C 0.
9x0.
1x0.
9=0.
081
1CC 0.
1x0.
9x0.
9=0.
081
X=3 CCC 0.
9x0.
9x0.
9=0.
729 P(
3)=0.
729
Si
mil
arl
ythedi
str
ibut
ioncanbesummar
ized Sum 1
X P(
X)
0 P(
0)=P(
X=0)0.
001
1 P(
1)=P(
X=1)0.
027
2 P(
2)=P(
X=2)0.
243
3 P(
3)=P(
X=3)0.
729
Sum 1
Pr
oper
ti
esofdi
scr
etepr
obabi
l
itydi
str
ibut
ion
1.P(
X)0f
oreachv
alueofX
2.P(
X)=1

CheckYourPr
ogr
ess-
1
Supposeanewl
ymar
ri
edcoupl
epl
anst
ohav
efourchi
l
dren.Nat
ural
l
ytheyar
e
cur
iousaboutt
hesexoft
hei
rchi
l
drenandwantt
oest
imat
etheout
come.Def
ini
ng
t
heev
ent‘
G’t
hatt
hechi
l
dwi
l
lbeagi
rland‘
B’t
hatt
hechi
l
disaboy
,const
ructt
he
pr
obabi
l
itydi
str
ibut
ionf
ort
henumberofBoy
sandGi
rl
s.

3.
3.2TheMean,Var
iance,andSt
andar
dDev
iat
ionofaDi
scr
etePr
obabi
li
ty
Di
str
ibut
ion

3.
3.2.
1Mean

I
fthev
aluesoft
her
andom v
ari
abl
eXar
eobser
vedont
her
epet
it
ionandr
ecor
ded,
wewoul
d obt
aint
hepopul
ati
onofal
lpossi
bleobser
ved v
aluesoft
her
andom
v
ari
abl
eX.Thi
spopul
ati
onhasameanorexpect
edv
alueofX.

40
xdenot
est
hemeanoft
her
andom v
ari
abl
eX.I
tisal
socal
l
edt
heexpect
edVal
ueof
Xasdenot
edbyE(
x)

x =Mul
ti
plyeachv
alueofX byi
tspr
obabi
l
ityP(
X)andt
hensum t
her
esul
ti
ng
pr
oduct
sov
eral
lpossi
blev
alueofX.
Thati
s
x =

Exampl
e.Acardeal
erhasest
abl
i
shedt
hef
oll
owi
ngpr
obabi
l
itydi
str
ibut
ionf
ort
he
numberofcar
sheexpect
stosel
lonapar
ti
cul
arSat
urday
.

Numberofcar
ssol
d(X) Pr
obabi
l
ityP(
x)
0 0.
10
1 0.
20
2 0.
30
3 0.
30
4 0.
10
Sum .
1
Onat
ypi
cal
Sat
urday,
howmanycar
sshoul
dthedeal
erexpectt
osel
l
?
=E(
x)=[
xp(
x)]
=0.
(0.
1)+1(
0.2)+2(
0.3)+3(
0.3)+4(
0.1)=2.
1car
s.
I
nthel
ongr
unt
hedeal
erexpect
stosel
l2.
1car
s.Onal
argenumberofSat
urday
s.

Exampl
e2:
Mont
hlysal
esofacer
tai
npr
oductar
ebel
i
evedt
ofol
l
ow t
hef
oll
owi
ngpr
obabi
l
ity
di
str
ibut
ion.Supposet
hatt
hecompanyhasf
ixedmont
hlypr
oduct
ioncost$8,
000
andt
hateachi
tem br
ings$2.Fi
ndt
heexpect
edmont
hlypr
ofi
tfr
om pr
oductsal
es
No.ofi
temsx p(
x)
5000 0.
2
6000 0.
3

41
 7000 0.
2
8000 0.
2
9000 0.
1
1
E/
h(x)=

Sol
uti
on:
h(
x)=2x–8000
x h(
x) p(
x) h(
x)p(
x)
5000 2000 0.
2 400
6000 4000 0.
3 1200
7000 6000 0.
2 1200
8000 8000 0.
2 1600
9000 10000 0.
1 1000
1E[
h(x
)]=5400
Theexpect
edv
alueofal
i
nearf
unct
ionofar
andom v
ari
abl
e
E(
ax+b)=aE(
x)+b
Wher
eaandbar
efi
xednumber
sonceweknow t
heexpect
edv
alueofx,t
he
expect
edv
alueofax+bi
sjustaE(
x)+b.

I
ntheabov
eexampl
ewecoul
dhav
eobt
ainedt
heexpect
edpr
ofi
tbyf
indi
ngt
hemean
ofxf
ir
standt
henmul
ti
ply
ingt
hemeanofxby2andsubt
ract
ingf
rom t
hist
hef
ixed
costof8000.

Themeani
s6,
700andt
heex
pect
edpr
ofi
tist
her
efor
eE[
h(x)
]=
E(
2x–8000)=2E(
x)–8000=2(
67,
000)–8000=5400
3.
3.2.
2Var
ianceandSt
andar
dDevi
ati
onoft
heDi
scr
etePr
obabi
li
tyDi
str
ibut
ion

Themeandoesnotdescr
ibet
heamountofspr
eadorv
ari
ati
onofadi
str
ibut
ion.The
v
ari
ance and st
andar
d dev
iat
ion al
l
ows us t
o compar
ethe v
ari
ati
on i
ntwo
di
str
ibut
ionshav
ingt
hesamemeanbutdi
ff
erentspr
ead.

Thef
ormul
afort
hev
ari
anceofadi
scr
etepr
obabi
l
itydi
str
ibut
ioni
s

42
 2 2
 =[
(x-)p(
x)] =

or
x2)–[
E( E(x)
]2
wher
e
Ex2=t
heexpect
edv
alueofx2i
.e.
,x2p(
x)
E(
x)=t
heexpect
edv
alueofx
Exampl
e.Fort
hecardeal
erf
indt
hev
ari
anceandst
andar
ddev
iat
ion
2 2
X p(
x) (
x-) (
x-) (
x-)p(
x)
0 0.
1 0–2.
10 4.
41 0.
441
1 0.
2 1–2-
10 1.
21 0.
224
2 0.
3 2–2.
10 0.
01 0.
003
3 0.
3 3–2.
10 0.
81 0.
243
4 0.
1 4–2.
1 3.
61 0.
361
2
1  =1.
29
2
 =1.
29
=
=1.
136car
s
Usi
ngt
heot
herf
ormul
awewi
l
lhav
ethesamev
ari
anceandst
andar
ddev
iat
ion
X p(
x) x2 xp(
x) x2p(
x)
0 0.
10 0 0 0
1 0.
20 1 0.
2 0.
2
2 0.
30 4 0.
6 1.
20
3 0.
30 9 0.
9 1.
70
4 0.
10 16 0.
4 1.
60
=2.
1 Ex2=5.
7
2
 x2)–[
=E( E(x)
]2

2
=5.
7–(
2.1)
=5.
7–4.
41
=1.
29
= =1.
136

43
CheckYourPr
ogr
ess–2
Fi
nd t
he v
ari
ance and st
andar
d dev
iat
ion oft
he di
str
ibut
ion ofcor
rectanswer
answer
ed byt
he st
udentwi
th 0.
90 pr
obabi
l
ityofanswer
ing each oft
he t
hree
quest
ionscor
rect
ly.

3.
3.3TheBi
nomi
alDi
str
ibut
ion
Thebi
nomi
aldi
str
ibut
ioni
sadi
scr
etepr
obabi
l
itydi
str
ibut
ion
Thebi
nomi
aldi
str
ibut
ionhast
hef
oll
owi
ngchar
act
eri
sti
cs.
1.Theexper
imentconsi
stsofNi
dent
icalt
ri
alsandt
hedat
acol
l
ect
ed
ar
ether
esul
tsofcount
s.
2.Anoutcomeofanexper
imenti
scl
assi
fi
edi
ntooneoft
womut
ual
l
y
excl
ucl
ecat
egor
iesasuccessorf
ail
ure.i
.eeacht
ri
alr
esul
tsi
na
successorf
ail
ure.
3.Thepr
obabi
l
ityofsuccessr
emai
nst
hesamef
oreacht
ri
al.Sodoes
t
hepr
obabi
l
ityofaf
ail
ure.Thi
simpl
i
est
hatt
hepr
obabi
l
ityoff
ail
ure
ofanyt
ri
ali
s1-(
probabi
l
ityofsuccess)
.Pr
obabi
l
ityofsuccessi
s
denot
edbypandpr
obabi
l
ityoff
ail
urebyqoft
henq=1-p
4.Thet
ri
alsar
eindependenti
.et
heout
comeofonet
ri
aldoesnot
af
fectt
heout
comeofanyot
hert
ri
al.

Exampl
e1.Supposet
hat40%ofal
lcust
omer
swhoent
eradepar
tmentst
oremakea
pur
chase.
Whati
sthepr
obabi
l
ityt
hat2oft
henext3cust
omer
swi
l
lmakeapur
chase?
Not
ethatt
hispr
obl
em qual
i
fiesal
lthechar
act
eri
sti
csoft
hebi
nomi
aldi
str
ibut
ion
- Thet
ri
alsar
ethr
eeandeachoft
het
hreecust
omer
swi
l
lei
therpur
chaseornot
pur
chasesot
het
hreet
ri
alsar
eident
ical
- Theout
comeofeacht
ri
alwi
l
lresul
tinei
therapur
chase(
success)ornot
pur
chase(
fai
l
ure)
- Thepr
obabi
l
ityofpur
chasei
sthesame0.
4foreachoft
het
hreecust
omer
s.
Andpr
obabi
l
ityoff
ail
ure(
notpur
chase)wi
l
lbe1–0.
4=0.
6foreach.
- Thedeci
sionofonecust
omerwi
l
lnotaf
fectt
hedeci
sionofot
her
s.I
.e.
,deci
sion
t
opur
chaseornott
opur
chasebyeachcust
omeri
sindependent
.

44
Thesampl
espaceoft
hist
ri
alconsi
stofei
ght
-sampl
espaceoutcomes.
SSS SSF SFS FSS
FFS FSF SFF FFF
Si
sasuccess(
pur
chase)
Fi
saf
ail
ure(
notpur
chase)

Twooutoft
hreecust
omer
smakeapur
chasei
foneoft
hesampl
espaceoutcome
SSF,
SFS,
FSSoccur
s.Byi
ndependent
2
P(
SSF)
=P(
S)P(
S)P(
F)=(
4)(
4)(
.6)=(
0.4)(0.
6)
2
P(
SFS)
=P(
S)P(
F)P(
S)=(
0.4)(
0.6)(
0.4)=(
0.4)(0.
6)
2
P(
SSF)
=P(
F)P(
S)P(
S)=(
0.6)(
0.4)(
0.4)=(
0.4)(0.
6)
Thent
hepr
obabi
l
ityt
hatt
wooutoft
het
hreecust
omer
smakeapur
chasei
s
P(
SSF)+P(
SFS)+P(
FSS)
2 2 2
=(
0.4)(0.
6)+(
0.4)(0.
6)+(
0.4)(0.
6)
2
=3(
0.4)(0.
6)
Not
ethat
:
1. The3i
sthenumberofsampl
espaceoutcome(
SSF,SFSandFSS)t
hat
cor
respond t
otheev
enti
.e.
,two outoft
het
hreecust
omer
smakea
pur
chase.Thi
sequal
sthenumberofway
swecanar
ranget
wosuccesses
amongt
hreet
ri
als.
2. 0.
4isP,
thepr
obabi
l
ityt
hatacust
omermakesapur
chase
3. 0.
6isq=1–P,
thepr
obabi
l
ityt
hatacust
omerdoesnotmakeapur
chase.

Ther
efor
e,t
hepr
obabi
l
ityt
hatt
wooft
henextt
hreecust
omer
smakeapur
chasei
s
=(
thenumberofway
stoar
range2successamong3t
ri
als)P2q1

Not
icet
hatSSF,SFS,FSSeachoft
hesesampl
espaceoutcomesconsi
stsoft
wo
successesandonef
ail
ure.Thepr
obabi
l
ityofeachoft
hesesampl
espaceoutcomes
equal
s( 4)2(
0. 0. 1
6)=p2q1
Pi
srai
sedt
oapowert
hatequal
sthenumberofsuccesses(
2)i
nthet
hreet
ri
alsand
qi
srai
sedt
oapoweroff
ail
ures(
1)i
nthet
hreet
ri
als.

45
I
ngener
al,eachoft
hesampl
espaceoutcomesdescr
ibi
ngt
heoccur
renceofX
successes(
pur
chase)i
nnt
ri
alsr
epr
esent
sadi
ff
erentar
rangement
sofXsuccessi
n
nt
ri
als.Howev
ereachoft
hesesampl
espaceout
comesconsi
stofXsuccessesand
n–Xf
ail
ures.Ther
efor
e,t
hepr
obabi
l
ityofeachsampl
espaceout
comei
s

Pxqn-x i
tfol
l
owsbyanal
ogyt
hatt
hepr
obabi
l
ityt
hatX oft
henextnt
ri
alsar
e
successes(
pur
chase)i
s
x n-
x
(
Thenumberofway
stoar
rangeXsuccessesamongnt
ri
als)(
Pq )
Thenumberofway
stoar
rangeXsuccessesamongnt
ri
alsequal
s.

n!i
sreadnf
act
ori
al

n!=n(
n–1)(
n–2)…(
n–n)
!
(
n–n)=0;
0!=1bydef
ini
ti
on
Thenwecal
lxabi
nomi
alr
andom v
ari
abl
eandt
hepr
obabi
l
ityofobt
aini
ngXsuccess
i
nnt
ri
alsi
s

P(
X)=  TheBi
nomi
alf
ormul
a

Fort
heabov
eexampl
ewecansol
vef
orp(
x=2)asf
oll
ows
n=3
p=0.
4
q=0.
6

p(
x=2)= 420.
0. 61

=0.
288

Exampl
e2:Anexami
nat
ionconsi
stsoff
ourt
rueorf
alsequest
ionandst
udenthas
noknowl
edgeoft
hesubj
ectmat
ter
.Thechancet
hatt
hest
udentwi
l
lguesst
he
cor
rectanswert
othef
ir
stquest
ioni
s0.
5.a)Whati
sthepr
obabi
l
ityofget
ti
ngexact
ly
noneoutoff
ourcor
rect
?

N=4 p=0.
5 q=0.
5 x=0

P(
X)= n! Pxqn-x

46
 x!
(n–x)!

4!
0 4
P(
X=0)= 0!
(4-
0)! 0.
5 0.
5 =0.
0625

b)Whati
sthepr
obabi
l
ityofget
ti
ngexact
lyoneoutoff
ourcor
rect
P(
1)= 4!(0.51)(
1-0.
5)4-
1
=0.
2500
1!(
4-1)
!
Thepr
obabi
l
ityofget
ti
ngexact
ly0,1,2,3or4cor
rectoutofat
otaloff
our
quest
ionsi
sshowni
nthet
abl
efort
heBi
nomi
alpr
obabi
l
itydi
str
ibut
ion.

Numberofcor
rectguess Pr
obabi
l
ity(
x)
(
x)
0 1/
6=0.
625
1 4/
16=0.
2500
2 6/
16=0.
3750
3 4/
16=0.
2500
4 1/
16=0.
0625
Tot
al 16/
16= 1

CheckYourPr
ogr
ess–3
At
ruckoper
atorhasdet
ermi
nedt
hatacarr
epai
rshopder
iver
smai
ntai
nedt
ruckson
schedul
e60% oft
het
ime.I
ftheoper
atorhas6 t
rucksundermai
ntenance(
a)
const
ructt
hepr
obabi
l
itydi
str
ibut
ionf
ort
henumberoft
ruckt
obedel
i
ver
edont
ime.
(
b)Fi
ndt
heexpect
edv
alueandt
hest
andar
ddev
iat
ionoft
hedi
str
ibut
ion.

Usi
ngt
heBi
nomi
alPr
obabi
li
tyTabl
e:
A bi
nomi
alpr
obabi
l
itydi
str
ibut
ioni
sat
heor
eti
caldi
str
ibut
ion,canbegener
ated
mat
hemat
ical
l
y.Howev
erexceptf
orpr
obl
emsi
nvol
vi
ngsmal
lnt
hecal
cul
ati
onsf
or
t
hepr
obabi
l
iti
esof0,1,2successcanber
athert
edi
ous.Asanai
dinf
indi
ngt
he
neededpr
obabi
l
iti
esof0,
1,
2,
3...successesf
orv
ari
ousv
aluesofnandP an
ext
ensi
vet
abl
ehasbeendev
eloped.

47
 Thet
abl
ehasupt
on=25or30
Pf
rom 0.
05.
0.1,
0.2...0.
90,
0.99
X=f
rom 0-
25or30
Exampl
e.25%ofcol
l
egest
udent
sinacl
assr
oom j
oint
heHI
VAI
DSpr
event
ioncl
ub.I
f
20st
udent
sar
eenr
oll
edi
nthecl
ass,
whati
sthepr
obabi
l
ityt
hatt
woorf
ewerwi
l
ljoi
n
t
hecl
ub?

Sol
uti
on:
P=0.
25
n=20t
hen
p(
x2)=p(
0)+p(
1)+p(
2)f
rom t
het
abl
e
p(
0)=0.
0032
p(
1)=0.
0211
p(
2)=0.
0660
Sum =p(
x2)=0.
0909
I
nsi
mil
arf
ashi
ony
oucanf
indt
hepr
obabi
l
ityf
oranyv
alueofxusi
ngt
het
abl
e.

Themean,
var
ianceandst
andar
ddev
iat
ionofaBi
nomi
alRandom Var
iabl
e
I
fXi
sabi
nomi
alRandom v
ari
abl
ethenx =np t
hemean,oft
hedi
str
ibut
ioni
s
equal
tonp

Themeani
sequalt
othenumberoft
ri
alsn,t
imest
hepr
obabi
l
ityofsuccessi
na
si
ngl
etr
ial
,p.
Exampl
e1.Thenumberofheadsappear
ingi
nfi
vet
ossesofaf
aircoi
n.
E(
x)=np=5(
0.5)=2.
5

Asal
ongr
unav
erage,weexpectt
hat2.
5outof5t
osses ofaf
aircoi
nwi
l
lresul
tin
heads.

Thev
ari
anceofabi
nomi
alXi
s,2and2=npq

Thest
andar
ddev
iat
ioni
s= =

Exampl
e2.35% oft
hest
udent
sregi
ster
edi
nthe1stsemest
erj
oint
hemar
ket
ing

48
depar
tment
.If1000st
udent
sar
eregi
ster
ed,
(
a)Howmanyoft
hem ar
eexpect
edt
ojoi
nthemar
ket
ingdepar
tment
=np
-1000(
0.35)=560
(
b)Whati
sthest
andar
ddev
iat
ion?
=

3.
3.4Hy
perGeomet
ri
cDi
str
ibut
ion
Thebi
nomi
aldi
str
ibut
ioni
sappr
opr
iat
ewhenwear
esampl
i
ngf
rom apopul
ati
ont
hat
i
smuchl
argert
hant
hesampl
e.TheBi
nomi
alassumessampl
i
ngwi
thr
epl
acement
.

Wesampl
eani
tem,whet
heri
tisasuccessorf
ail
ure,r
etur
neorputi
tbackt
othe
popul
ati
onbef
oret
henexti
tem i
ssel
ect
edf
ort
hesampl
e,t
henwear
esampl
i
ngwi
th
r
epl
acement
.

Sampl
i
ngwi
thr
epl
acementi
snotaf
requent
lyusedpr
ocedur
eandmostsampl
i
ngi
s
done wi
thoutr
epl
acement
.Thus t
he out
comes ar
e noti
ndependentand t
he
pr
obabi
l
ityf
oreachsuccessi
veobser
vat
ionort
ri
alwi
l
lchange.

Si
ncet
hepr
obabi
l
ityofsuccess,doesnotr
emai
nthesamef
rom t
ri
alt
otr
ialt
he
bi
nomi
aldi
str
ibut
ionshoul
dnotbeused.

Exampl
e.I
fyoudr
aw acar
d(wi
thoutr
epl
acement
)fr
om ast
andar
ddeckof52
pl
ayi
ngcar
dswhati
sthepr
obabi
l
ityofget
ti
ngt
hef
ir
stcar
daki
ngandt
heseconda
1stkn2ndQ)
queen?P(

=p( Q/1stk)=
k)p(

Not
ethatpr
obabi
l
ityofsuccessf he1stcar
ort dwas whi
l
ef he2ndcar
ort d i
.e.
,

pr
obabi
l
ityofsuccesschanges.

I
fasampl
eissel
ect
edf
rom asmal
lpopul
ati
onwi
thoutr
epl
acementt
hehy
per

49
geomet
ri
cdi
str
ibut
ionshoul
dbeappl
i
ed.

Si
ncewesampl
efr
om al
argepopul
ati
ont
hehy
pergeomet
ri
cdi
str
ibut
ioni
slessuse
f
ull
thant
hebi
nomi
al.

Der
ivat
ionoft
hehy
pergeomet
ri
cdi
str
ibut
ion
Consi
deracol
l
ect
ionofNobj
ect
swhi
chSoft
heseobj
ect
shav
eacer
tai
nat
tri
but
e
andt
her
emai
ningN–Sobj
ect
sdonothav
ethi
sat
tri
but
e.I
fasampl
eofnobj
ect
sis
chosenatr
andom andwi
thoutr
epl
acementf
rom t
hiscol
l
ect
ionofobj
ect
s,t
hent
he
numberofobj
ect
sint
hesampl
ehav
ingt
heat
tri
but
eisar
andom v
ari
abl
ehav
inga
hy
pergeomet
ri
cdi
str
ibut
ion.

Tof
indt
hepr
obabi
l
itydi
str
ibut
ionf
orXwef
oll
owt
hef
oll
owi
ngar
gument
s.
Si
ncet
henobj
ect
sar
echosenr
andoml
yfr
om t
heNobj
ect
sav
ail
abl
e,t
her
ear
e

NCndi
ff
erentpossi
blesubsetofnobj
ect
sthatcoul
dbechosen.Tof
indp(
x)weneed
t
oknowt
henumberoft
hesesubset
sthathav
eXobj
ect
shav
ingt
heat
tri
but
e(andn
–xobj
ect
snothav
ingt
heat
tri
but
e).Ther
ear
eSCX way
sofchoosi
ngXobj
ect
sfr
om
t
heShav
ingt
heat
tri
but
eint
hepopul
ati
on.

S C n-
N- x waysofchoosi
ngn–xobj
ect
sfr
om t
heN-
Snothav
ingt
heat
tri
but
e.The
quant
it
iesn,
NandSandpar
amet
ersoft
hisdi
str
ibut
ionasi
ndi
cat
edbyt
hef
oll
owi
ng
not
ati
on
P(X)=SCX(N-sCn–X)
C
Nn
Wher
e:
N:
thesi
zeoft
hepopul
ati
on
S-t
henumberofsuccess(
obj
ect
swi
thcer
tai
nat
tri
but
es)i
sthepopul
ati
on
X-t
henumberofsuccess(
ofi
nter
est
)obj
ect
sint
hesampl
ehav
ingt
heat
tri
but
en
i
sthesi
zeoft
hesampl
e(obj
ect
schosenr
andoml
yfr
om t
hepopul
ati
on)

Exampl
e1.Ani
nspect
ori
stoexami
neapopul
ati
onof20shi
ppi
ngor
der
stocheck
f
oraut
hor
izedcr
edi
tappr
oval
.If15oft
hesehav
eaut
hor
izedcr
edi
tappr
ovalandi
fa
sampl
eof4or
der
sist
ober
andoml
ychosen,whati
sthepr
obabi
l
ityt
hatexact
ly3
wi
l
lhav
eaut
hor
izedcr
edi
tappr
oval
?

50
Si
ncet
heor
der
sar
echosen,atr
andom,weknow t
hatal
lsubset
sof4or
der
sfr
om
t
he20ar
eequal
l
yli
kel
ytobechosen.Byusi
ngt
heequal
l
yli
kel
yout
comesappr
oach,
weseet
hatt
her
ear
e
20C4= 20! = 20! =4845
4!
(20-
4)! 4!(
16!
)

Way
sthatasampl
eoff
ourcanbechosenoutof20.
Ther
ear
e15C3 =455way
sthatt
hreecr
edi
tappr
ovedor
der
scanbesel
ect
edf
rom 15
cr
edi
tappr
ovedor
der
sand

SC1 =5wayst
hatonenon–appr
ovedor
dercanbesel
ect
edf
rom f
ivenon-
appr
oved
or
derconsequent
ly.
P(
x=3)=(
15C3)(5C1)=455(
5)=0.
4696
20c4 4845

Exampl
e2.Supposet
hataut
omobi
l
esar
ri
veatadeal
er'
sshopi
nlot
sof10andt
hat
f
ort
imeandr
esour
ceconsi
der
ati
onsonl
y5outofeach10ar
einspect
edf
orsaf
ety
.
The5car
sar
erandoml
ychosenf
rom t
he10i
nthel
ot.

I
f2outoft
he10car
sint
hel
otar
ebel
l
owst
andar
dsf
orsaf
ety
,whati
sthepr
obabi
l
ity
t
hatatl
east1outoft
he5car
stobei
nspect
edwi
l
lbef
oundnotmeet
ingt
hesaf
ety
st
andar
d?
N=10 P(
x=1)=2C1(10-2C5-1)=0.
556
S=2 10C5
N=5 p(
x=2)=2c2( 2C
10- 2)
5. =0.
222
X=atl
eastonei
.e.
,oneort
wo 10C5

p(
atl
eastone)=p(
1)+p(
2)
=0.
556+0.
222=0.
778

CheckYourPr
ogr
ess–4
Suppose50TVset
swer
emanuf
act
ureddur
ingt
heweek.40oper
atedper
fect
lyand
10hadatl
eastonedef
ect
.

51
Asampl
eof5i
ssel
ect
edatr
andom.Whati
sthepr
obabi
l
ityt
hat4oft
he5wi
l
l
oper
ateper
fect
ly?

3.
3.5ThePoi
sonPr
obabi
li
tyDi
str
ibut
ion
Thet
hir
dimpor
tantdi
scr
etepr
obabi
l
itydi
str
ibut
ioni
sthePoi
sson.ThePoi
sson
di
str
ibut
ioncount
sthenumberofsuccessesi
naf
ixedi
nter
valoft
imeorwi
thi
n
speci
fi
edr
egi
ons.
Eg.Thenumberofmachi
nef
ail
urei
naweek
- t
henumberoft
raf
fi
cacci
dent
spermont
hint
own
- t
henumberofemer
gencypat
ient
sar
ri
vi
ngatahospi
tal
inanhour
- t
henumberofor
der
srecei
vedperday
- t
henumberofdef
ect
sinasquar
emet
eremet
alsheet
.
Toappl
ythePoi
ssondi
str
ibut
iont
hef
oll
owi
ngcondi
ti
onar
erequi
red
1. Thepr
obabi
l
ityofsuccessi
n a shor
tint
erv
aloft
ime(
orspace)i
s
pr
opor
ti
onalt
othesi
zeoft
hei
nter
val
.Ifwecount6pat
ient
sar
ri
vi
ngi
n
anhourt
henweexpect3i
nhal
fanhourand2i
n20mi
nut
es.
2. I
nav
erysmal
lint
erv
al,t
hepr
obabi
l
ityofsuccessesi
scl
oset
ozer
o.I
f6
pat
ient
sar
ri
vei
nanhourweexpectnonei
n10seconds.
3. Thepr
obabi
l
ityofsuccessi
nagi
veni
nter
vali
sindependentofwher
ethe
i
nter
val
begi
ns.
4.Thepr
obabi
l
ityofsuccessov
eragi
veni
nter
vali
sindependentoft
he
numberoft
heev
ent
sthatoccur
redpr
iort
othei
nter
val
.
ThePoi
ssondi
str
ibut
ioni
sdescr
ibedmat
hemat
ical
l
ybyt
hef
ormul
a.

P(x)=xe-
X!

Wher
e;
i
sthemeannumberofsuccess/
aver
ager
ate/
ei
sthebaseofnat
ural
logar
it
hm ormat
hemat
ical
const
antwi
thv
alue2.
7183
Xi
sthenumberofsuccessi
nthei
nter
val
P(
X)i
sthepr
obabi
l
ityofXsuccessesi
nani
nter
val

ThePoi
ssondi
str
ibut
ioncanbeusedt
oappr
oxi
mat
ethebi
nomi
aldi
str
ibut
ionwhen

52
t
hepr
obabi
l
ityofasuccessi
ssmal
landt
henumberoft
ri
ali
sver
ylar
ge.

Usual
l
ythepr
obabi
l
ityofsuccessbecomequi
tesmal
laf
terf
ewoccur
rencesast
he
r
andom v
ari
abl
eXf
oraPoi
ssondi
str
ibut
ionassumeani
nfi
nit
enumberofv
alues.

Exampl
e1.Assumet
hatbi
l
li
ngcl
erksr
arel
ymakeer
ror
sindat
aent
ryont
hebi
l
li
ng
st
atement
sofaco.Manyst
atement
shav
enomi
stakes;somehav
eone,av
eryf
ew
hav
etowmi
stakes;r
arel
ywi
l
last
atementhav
ethr
eemi
stakes;andsoon.Ar
andom
sampl
eof1000 st
atement
srev
eal
ed 300 er
ror
s.Whati
sthepr
obabi
l
ityofno
mi
stakesappear
ingi
nast
atement=300/
1000=0.
3
P( 30(
0)=0. 2. -
7183)0.
3
=0.
7408
0!

Exampl
e2.Abankmangerwant
stopr
ovi
dedpr
omptser
vicef
orcust
omer
satt
he
banksdr
iveupwi
ndow.Thebankcur
rent
lycanser
veupt
o10cust
omer
sper15-
mi
nut
eper
iodwi
thoutsi
gni
fi
cantdel
ay.Theav
eragear
ri
valr
atei
s7cust
omer
sper
15mi
nut
eper
iod.Aassumi
ngXhasaPoi
ssondi
str
ibut
ionf
indt
hepr
obabi
l
ityt
hat10
cust
omer
s.Wi
l
lar
ri
vei
napar
ti
cul
ar15-
minut
eper
iod.

=7
X=10
10)=7102.
P( 7183-7=0.
710
10!

CheckYourPr
ogr
ess–5
At
elephonecompany
’sgoal
isnott
ohav
emor
ethant
her
eli
nef
ail
uresi
napar
ti
cul
ar
1km l
i
ne.Cur
rent
lyt
hecompanyi
sexper
ienci
ngf
ourl
i
nef
ail
uresi
n1km l
i
ne.
a)whati
sthepr
obabi
l
ityt
hatt
hecompanywi
l
lmeeti
tsgoal
?
b)whati
sthepr
obabi
l
ityt
hatt
hecompanywi
l
lnotmeeti
tsgoal
?

Var
ianceandst
andar
ddev
iat
ionoft
hepassi
onpr
obabi
li
tydi
str
ibut
ion
Thev
ari
anceoft
hepoi
sondi
str
ibut
ioni
sequal
tot
hemeanoft
hedi
str
ibut
ion.
2
 =t
hen

53
 =

3.
4THENORMAL/CONTI
NIOUS/PROBABI
LITYDI
STRI
BUTI
ON

Asnot
edear
li
eri
nthi
suni
tacont
inuousr
andom v
ari
abl
eisonet
hatcanassumean
i
nfi
nit
enumberofpossi
blev
alueswi
thi
naspeci
fi
edr
ange.I
tusual
l
yresul
tsf
rom
measur
ingsomet
hing.

I
tisnotpossi
blet
oli
stev
erypossi
blev
alueoft
hecont
inuousr
andom v
ari
abl
eal
ong
wi
thacor
respondi
ngpr
obabi
l
ity
.

Themostconv
eni
entappr
oachi
stoconst
ructapr
obabi
l
itycur
ve.Thepr
opor
ti
onof
ar
ea i
ncl
uded bet
ween anyt
wo poi
ntundert
he pr
obabi
l
itycur
vei
dent
if
ied t
he
pr
obabi
l
ityt
hatar
andoml
ysel
ect
edcont
inuousv
ari
abl
ehasav
aluebet
weent
hose
poi
nts.

Char
act
eri
sti
csofanor
malpr
obabi
l
itydi
str
ibut
ionandi
tsaccompany
ingnor
mal
cur
ve
1.Thenor
malcur
vei
sbel
l–shapedandhasasi
ngl
epeakatt
heexactcent
erof
t
hedi
str
ibut
ion.Thear
it
hmet
icmeanmedi
anandt
hemodear
eequalandar
e
l
ocat
edatpeak.Thushal
fthear
eaundert
hecur
vei
sabov
ethi
scent
erpoi
nt,
andt
heot
herhal
fisbel
owi
t.
2.Thenor
malpr
obabi
l
itydi
str
ibut
ioni
ssy
mmet
ri
calabouti
tsmean.I
fwecut
t
henor
malcur
vev
ert
ical
l
yatt
hiscent
ralv
alue,t
het
wohal
veswi
l
lbemi
rr
or
i
mages.
3.Thenor
malcur
vef
all
sofsmoot
hlyi
nei
therdi
rect
ionf
rom t
hecent
ralv
alue.I
t
i
sasy
mpt
oti
c,meani
ngt
hatt
hecur
veget
scl
oserandcl
osert
otheX–axi
s
butnev
eract
ual
l
ytouches i
t.I
nrealwor
ld pr
obl
ems,howev
er,t
hisi
s
somewhatunr
eal
i
sti
c.The
f
(x)

54
 X
TheNor
malCur
ve
Thenor
malpr
obabi
l
itydi
str
ibut
ioni
simpor
tanti
nst
ati
sti
cali
nfer
encef
ort
hree
di
sti
nctr
easons:
1.Themeasur
ement
spr
oducedi
nmanyr
andom pr
ocessesar
eknownt
ofol
l
ow
t
hisdi
str
ibut
ion.
2.Nor
malpr
obabi
l
ity can of
ten be used t
o appr
oxi
mat
e ot
herpr
obabi
l
ity
di
str
ibut
ion,
suchast
hebi
nomi
alandPoi
ssondi
str
ibut
ions.
3.Di
str
ibut
ionofsuchst
ati
sti
csast
hesampl
emeanandsampl
epr
opor
ti
on
of
ten f
oll
ow t
he nor
maldi
str
ibut
ion r
egar
dless oft
he di
str
ibut
ion oft
he
popul
ati
on.

Const
ruct
ingt
hePr
obabi
li
tyCur
ve
Ther
eisnotj
ustonenor
malpr
obabi
l
itydi
str
ibut
ion.Ther
eisaf
ami
l
yoft
hem we
ni
ghthav
eoneoft
hef
oll
owi
ng:
a.Equalmeansanddi
ff
erentst
andar
ddev
iat
ionseg.Av
erageageofst
udent
sin
t
hreesect
ionsS1,S2,S3i
sequal24y
ear
s.Butt
hest
andar
ddev
iat
ionf
orS1
=2.
5,S2=3.
1andS3=4.

55
 Theshapeoft
hecur
vesi
sdet
ermi
nedbyt
hest
andar
ddev
iat
ion.Thesmal
l
er
t
hest
andar
ddev
iat
iont
hemor
epackedt
hecur
vewi
l
lbeandt
hel
argert
he
st
andar
ddev
iat
iont
hemor
efl
atandwi
dert
hecur
vewi
l
lbe
b.di
ff
erentmeansbutequalst
andar
ddev
iat
ion.Bot
hsect
ionshav
eequal
st
andar
ddev
iat
ion3.
1butdi
ff
erentmeansS1=23 S2=26S3=28

c.Di
ff
erentmeansanddi
ff
erentst
andar
ddev
iat
ions
ForS1=22and=2.
8
S2=24and=2.
1
S3=27and=3.
1

Thenumberofnor
maldi
str
ibut
ionsi
sunl
i
mit
ed.I
twoul
dbepr
act
ical
l
yimpossi
blet
o
pr
ovi
deat
abl
eofpr
obabi
l
iti
es(
ast
hebi
nomi
alandPoi
sson)f
oreachcombi
nat
ionof
andorusi
ngaf
ormul
a.

Onememberoft
hef
ami
l
iesofnor
maldi
str
ibut
ionscanbeusedf
oral
lpr
obl
ems
wher
ethenor
mal
dist
ri
but
ioni
sappl
i
cabl
e.

56
I
thasameanof0andast
andar
ddev
iat
ionof1andi
scal
l
edSt
andar
dNor
mal
Di
str
ibut
ion.
Fi
rsti
tisnecessar
ytoconv
ertorst
andar
dizet
heact
ualdi
str
ibut
iont
oast
andar
d
nor
mal
dist
ri
but
ionusi
ngZv
alue.Zi
scal
l
edt
henor
mal
dev
iat
e.

Zv
aluei
sthedi
stancebet
weenasel
ect
edv
alueandt
hepopul
ati
onmeani
nuni
tsof
t
hest
andar
ddeci
ati
on.

Tr
ansf
ormat
ionoft
heNor
mal
Random Var
iabl
e
Si
ncet
her
ear
einf
ini
tel
ymanypossi
blenor
malr
andom v
ari
abl
esoneoft
hem i
s
sel
ect
edt
oser
veasourst
andar
d.

Wewantt
otr
ansf
orm Xi
ntot
hest
andar
dnor
mal
random v
ari
abl
eZ.

Exampl
e.Wehav
eanor
malr
andom v
ari
abl
eXwi
th=50and=10wewantt
o
conv
ertt
hisr
andom v
ari
abl
ewi
th=0and=1.

Wemov
ethedi
str
ibut
ionf
rom i
tscent
erof50t
oacent
erof0.t
hisi
sdoneby
subt
ract
ing50f
rom al
lthev
aluesofX.Thusweshi
ftt
hedi
str
ibut
ion50uni
tsback
sot
hati
tsnew cent
eri
s0.I
fwesubt
ractt
hemeanf
rom al
lval
uesofX,t
henew
di
str
ibut
ion(
X-)wi
l
lhav
eameanofzer
o.

Thesecondt
hingweneedt
odoi
stomaket
hewi
dthoft
hedi
str
ibut
ion,st
andar
d
dev
iat
ionequalt
o1.Thi
sisdonebysqueezi
ngt
hewi
dthoft
hedi
str
ibut
iondown
f
rom 10t
o1.Becauset
het
otalpr
obabi
l
ityundert
hecur
vemustr
emai
n1.t
he
di
str
ibut
ionmustgr
owupwar
dtomai
ntai
nthesamear
ea.

Mat
hemat
ical
l
y,squeezi
ngt
hecur
vet
omaket
hewi
dth1i
sequi
val
entt
odi
vi
dingt
he
r
andom v
ari
abl
ebyi
tsst
andar
ddev
iat
ion.Thear
eaundert
hecur
veadj
ust
edsot
hat
t
het
otal
remai
nst
hesame.
Themat
hemat
icalt
ransf
ormat
ionf
rom Xt
oZi
sthusachi
evedbyf
ir
stsubt
ract
ing
f
rom Xandt
hendi
vi
dingt
her
esul
tby.

Z=X–


57
Exampl
e–Theweekl
yincomesofal
argegr
oupofmi
ddl
emanager
sar
enor
mal
l
y
di
str
ibut
edwi
thameanof1000Br
.andst
andar
ddev
iat
ionofBr
.100.Whati
stheZ
v
aluef
orani
ncomeof
a)Br
.1100? Z=X- =1000
 =100
Z=1100–1000=1
100

Thi
smeansani
ncomeof1100i
sonest
andar
ddev
iat
ionabov
ethemean.
b)Br900?
Z=900–1000=-1
100
Thi
simpl
iest
hatani
ncomeofBr
.900i
sonest
andar
ddev
iat
ion(
Br.100)bel
owt
he
mean.
c)Br
.1250?
Z=1250–1000=2.
5
100
Thi
simpl
i
est
hatani
ncomeofBr
.1250i
s2.
5st
andar
ddev
iat
ionsabov
ethemean

d)Br
.850?
Z=850–1000=-
1.5
100
Thi
smeansani
ncomeofBr
.850i
s1.
5st
andar
ddev
iat
ionsbel
owt
hemean
Fi
ndi
ngpr
obabi
li
ti
esusi
ngt
henor
malpr
obabi
li
tyt
abl
e

Foranyv
alueofZcal
cul
atedt
hecor
respondi
ngpr
obabi
l
itycanbeeasi
l
yfoundf
rom
t
heZt
abl
e.

Exampl
e1:Thel
i
fet
imeofanel
ect
ri
calcomponenti
sknownt
ofol
l
ow nor
mal

58
di
str
ibut
ionwi
thmean2000hrandst
andar
ddev
iat
ion200hr
(
a)Whati
sthepr
obabi
l
ityt
hatar
andoml
ysel
ect
edcomponentwi
l
llastbet
ween
2000and2400hr
?

Xhr
s
1400 1600 1800 2200 2400 2600

Z(Standar
d
-
3 -
2 -
1 +1 +2 +3 Normal
Thel
owerboundar
yoft
hei
nter
vali
satt
hemeanoft
hedi
str
ibut
ionandt
her
efor
eat
Z=0.Theupperboundar
yoft
hei
nter
val
int
ermsofZi
s

Z=

Byr
efer
encet
othepr
obabi
l
ityt
abl
e
p(
0Z+2)=0.
4772
p(
2000x2400)=0.
4772
Thi
smeansar
andoml
ysel
ect
edcomponentwi
l
lhav
eapr
obabi
l
ityof0.
4772t
olast
bet
ween2000t
o2400hr
.Orwecansay47.
72%ofal
lcomponent
swi
l
llastbet
ween
2000t
o2400hr
.
(
b)Whati
sthepr
obabi
l
ityt
hatar
andoml
ysel
ect
edcomponentwi
l
llastmor
ethan
2200hr
s?

Not
ethatt
het
otalar
eat
other
ightoft
hemean2000i
s0.
5.Ther
efor
eifwe
det
ermi
net
hepr
opor
ti
onbet
weent
hemeanand2200,wecansubt
ractt
hisv
alue
f
rom 0.
50t
oobt
aint
hepr
obabi
l
ityoft
hehr
sxbei
nggr
eat
ert
han2200.
Z=2200–2000=1
200

59
 p(
0Z+1.
0)=0.
3413
p(
Z>+1)=0.
5000–0.
3413
=0.
1587
Thi
smeans15.
87%oft
hecomponent
swi
l
llastmor
ethan2200hr
s.

P=0.
90

45 X Xmi
n

Exampl
e2:Theamountoft
imer
equi
redf
oracer
tai
nty
peofcarr
epai
rataser
vice
guar
agei
snor
mal
l
ydi
str
ibut
edwi
tht
he=45mi
n.Andt
hest
andar
ddev
iat
ion=8
mi
n.Theser
vicemanagepl
anst
ohav
ewor
kbegi
nonacust
omer
scar10mi
naf
ter
t
hecari
sdr
oppedof
fandhet
ell
sthecust
omert
hatt
hecarwi
l
lber
eadywi
thi
n1hr
s
t
otal
time.

a)Whati
sthepr
obabi
l
ityt
hathewi
l
lbewr
ong?
P(
err
or)=p(x>50mi
n),si
nceact
ual
l
ywor
kist
obegi
nin10mi
n,t
heact
ual
r
epai
rmust becompl
etedi
nther
emai
ning50mi
n.Andt
hemanagerwi
l
lbe
wr
ongi
fther
epai
rtakesmor
ethan50mi
nut
es.
Z=X–=50-
40=+0.
62p(
Z=0.
62)=0.
2324t
hen,
 8

P(x>50)=P(
Z>+0.
62)
=0.
5000–0.
2324=0.
2676
b)Whati
sther
equi
redwor
kingt
imeal
l
otmentsucht
hatt
her
eisa90%chancet
hat
t
her
epai
nwi
l
lbecompl
etedwi
thi
nthatt
ime?

I
fthepr
opor
ti
onoft
hear
eai
s0.
90,
thenbecauseapr
opor
ti
onof0.
5ist
othel
eftof
t
hemean,i
tfol
l
owst
hatapr
opor
ti
onof0.
4isbet
weent
hemeanandt
heunknown
v
alueofX.
Byl
ooki
ngt
het
abl
ethecl
osestwecancomet
oapr
opor
ti
onof0.
40i
s0.
3997and

60
t
heZv
alueassoci
atedwi
tht
hispr
opor
ti
oni
sZ=+1.
28
Nowconv
ertZv
aluet
oav
alueofX
Z=X–, Z(
)=x-,
x=+Z

X=45+(
+1.
28)(
8.00)
=45+10.
24=55.
24mi
n

20002200 X
0 1 Z

Thi
smeansi
ftheser
vicemanageral
l
ots55.
24mi
nut
esf
ort
her
epai
rhewi
l
lhav
ea
90%chancet
ocompl
etet
her
epai
rwi
thi
n55.
24mi
nut
es.
C)Whati
sthewor
kingt
imeal
l
otmentsucht
hatt
her
eisapr
obabi
l
ityofj
ust30%t
hat
t
her
epai
rcanbecompl
etedwi
thi
nthatt
ime?

Si
nceapr
opor
ti
onofar
eaof0.
3ist
othel
eftoft
heunknownv
alueofXi
tfol
l
ows
t
hatapor
ti
onof0.
20i
sbet
weent
heunknownv
alueandt
hemean.Byr
efer
encet
o
t
he t
abl
ethe pr
opor
ti
on ofar
ea cl
osestt
othi
sis 0.
1985 and t
he Z v
alue
cor
respondi
ng t
othi
spr
obabi
l
ityi
s0.
52.The Z v
alue i
snegat
ive because t
he
unknownv
aluei
stot
hel
eftoft
hemean.
X=+2
X=45+(
-0.
52)
(8)=40.
84mi
n.Theser
vicemanagerwi
l
lhav
ea30% chancet
o
compl
etet
her
epai
rwi
thi
n40.
84mi
n.

Exampl
e3.Ret
urni
ngagai
ntot
heweekl
yincomesi
l
lust
rat
ion,
=1000and=100
(
a)Whatper
centoft
heexecut
iveear
nweekl
yincomesof1245ormor
e?

61
 X1245
Z=1245–1000=2.
45
100
Thear
eaassoci
atedwi
thZ=2.
4is0.
4929.Thi
sist
hepr
obabi
l
itybet
ween1000and
1245.Thepr
obabi
l
ityf
or1245andbey
ondi
sfoundbysubt
ract
ing0.
4929f
rom 0.
5.
Thi
sisequalt
o=0.
0075.Thatonl
y0.
71%oft
heexecut
ivesear
nweekl
yincomesof
1245ormor
e.

(
b)Whati
sthepr
obabi
l
ityofsel
ect
ingani
ncomebet
ween840and1200
Thi
spr
obl
em i
sdi
vi
dedi
ntot
wopar
ts
1)f
ort
hepr
obabi
l
itybet
ween840andt
hemean
Z=840–1000=-
1.60
100

2)f
ort
hepr
obabi
l
itybet
weent
hemean1000and1200
Z=1200–1000=2
100

Thepr
obabi
l
ityofZ=-
1.60i
s0.
4452
Thepr
obabi
l
ityofZ=2i
s0.
4772
0.
4452+0.
4772=0.
9224or92.
24%i
.e.
,
92.
24%oft
hemanager
shav
eweekl
yincomesbet
ween840and1200.

0.
4452 0.
4772

840 1000 1200 XBi

rr
0.
9224

c)Whati
sthepr
obabi
l
ityt
hatar
andoml
ysel
ect
edmi
ddl
emanagerwi
l
lhav
ean
i
ncomebet
ween1150and1250

62
Thi
spr
obl
em i
ssepar
atedi
ntwopar
ts.Fi
rstf
indt
heZv
alueassoci
atedwi
th1250
Z= 1250–100=2.
5
100

Nextf
indt
heZv
aluef
or1150
Z=1150–1000=1.
5
100

p(
Z=2.
5)=0.
4935
Si
mil
arl
yp(
Z=1.
5)=0.
4332
Sot
hepr
obabi
l
itybet
ween1150and1250equal
s
0.
4938–0.
4332=0.
0606

0.
0606

1000 1500 1250

CheckYourPr
ogr
ess–6

Ser
vicel
i
feoft
ruckt
ir
esf
orheav
y-dut
ytr
ucksf
oll
owst
henor
maldi
str
ibut
ionwi
th
mean50000km andst
andar
ddev
iat
ion5000km.
a)Whati
sthepr
obabi
l
ityt
hatat
yrewi
l
llastbet
ween47,
000km and60000km?
b)Whatper
cent
ageoft
het
yreswi
l
llastbel
ow48500km?
c)I
fthesuppl
i
eroft
het
yresi
spl
anni
ngt
orepl
aceonl
y1%oft
hoset
yreswi
th
t
hemi
nimum per
for
mancewhatshoul
dbet
heser
vicel
i
fef
orwar
rant
y?

Comput
ingunknownMeanandunknownSt
andar
ddev
iat
ion

Somet
imest
hemeanandt
hest
andar
ddev
iat
ionofnor
malpr
obabi
l
itydi
str
ibut
ion
maynotbegi
venorknown.I
nsuchsi
tuat
ionst
hepr
obabi
l
ityoft
wounknown

63
v
ari
abl
es(
x1andx2)i
susedt
ocomput
ethemeanandst
andar
ddev
iat
ion.

Exampl
e1:Theconst
ruct
iont
imef
oracer
tai
nbui
l
dingi
snor
mal
l
ydi
str
ibut
edwi
th
anunknownmeanandunknownv
ari
ance.Wedoknow,
howev
er,
that75%oft
het
ime
const
ruct
iont
akesl
esst
han12mont
hsand45%oft
het
imeconst
ruct
iont
akesl
ess
t
han12mont
hsand45% oft
het
imeconst
ruct
iont
akesl
esst
handev
iat
ionoft
he
const
ruct
iont
ime.
Wehav
ep(
x<12)=0.
75and
p(
x<10)=0.
45,
thi
sfol
l
owst
hat

p =0.
75and

p =0.
45

0.
75
0.
45

10 12 X
Z1 Z2 Z

Fr
om t
het
abl
ewef
indt
hatZ1=-
0.12andZ2=0.
67subst
it
uti
ngt
heset
wov
aluesf
or

andweget
: =-
0.12and

=0.
67

bycr
ossmul
ti
pli
cat
ion,
-
0.12=10-
0.
67=12-

64
 =10+0.
1
=12–0.
67
Wehav
etwoequat
ionwi
tht
wounknownandi
tfol
l
owst
hat
10+0.
12=12–0.
67
0.
79=2
=279=2.
53
=10+0.
12(
2.53)
=10.
30

CheckYourPr
ogr
ess–7

Amachi
nei
stobedesi
gnedsot
hatonl
y2.
5%oft
hel
engt
hofbol
tsmadear
emor
e
t
han0.
01mm abov
ethemeanandonl
y2.
5%ar
emor
ethan0.
01bel
ow t
hemean.
Whatst
andar
ddev
iat
ionmustt
hemachi
nehav
etomeett
heseobj
ect
ives?

Nor
mal
Appr
oxi
mat
ion
Oneoft
her
easonswhyweappl
ythenor
malpr
obabi
l
itydi
str
ibut
ioni
sthati
tismor
e
ef
fi
cientt
hant
hebi
nomi
alorpoi
ssonwhent
hesedi
str
ibut
ionsi
nvol
vel
argernor
v
aluesr
espect
ivel
y.

3.
4.1TheNor
malappr
oxi
mat
iont
otheBi
nomi
al
Thet
abl
eoft
hebi
nomi
alpr
obabi
l
iti
esgoessuccessi
vel
yfr
om annof1t
onof25or
30.Supposeapr
obl
em i
nvol
ved t
aki
ng asampl
eof60.Gener
ati
ng abi
nomi
al
di
str
ibut
ionf
ort
hatl
argeanumberusi
ngt
hef
ormul
awoul
dbev
eryt
imeconsumi
ng.
A mor
e ef
fi
cientappr
oach i
sto appl
ythe nor
malappr
oxi
mat
ion.Thi
s seems
r
easonabl
ebecauseasni
ncr
eases,abi
nomi
aldi
str
ibut
ionget
scl
oserandcl
osert
o
anor
mal
dist
ri
but
ion.

Thenor
malpr
obabi
l
itydi
str
ibut
ioni
sgener
all
ydeemedagoodappr
oxi
mat
iont
othe
bi
nomi
alpr
obabi
l
itydi
str
ibut
ionwhennpandnqar
ebot
hgr
eat
ert
han5.

Si
ncet
her
eisnoar
eaundert
henor
malcur
veatasi
ngl
epoi
nt,
weassi
gni
nter
valon
t
her
eall
i
net
othedi
scr
etev
alueofXbymaki lacont
ngwhatwecal inui
tycor
rect
ion
f
act
or.Cont
inui
tycor
rect
ion f
act
ori
s subt
ract
ing oraddi
ng,dependi
ng on t
he

65
pr
obl
em,t
hev
alue0.
5toasel
ect
edv
aluewhenabi
nomi
alpr
obabi
l
itydi
str
ibut
ioni
s
bei
ngappr
oxi
mat
edbyanor
maldi
str
ibut
ion.Weadd0.
5toxwhenxandx>a
cer
tai
nval
uewesubt
ract0.
5fr
om xwhenx<andacer
tai
nval
ue.

Exampl
e1:supposest
hatt
hemanagementofar
est
aur
antf
oundt
hat70% oft
hei
r
new cust
omer
sret
urnf
oranot
hermeal
.Foraweeki
nwhi
ch80new (
fi
rstt
ime)
cust
omer
sdi
nedatt
her
est
aur
ant
,whati
sthepr
obabi
l
ityt
hat60ormor
ewi
l
lret
urn
f
oranot
hermeal
?
Not
icet
hatt
hebi
nomi
alcondi
ti
onsar
emet
.

To cal
cul
atet
his pr
obabi
l
ityusi
ng t
he bi
nomi
alf
ormul
a means comput
ing t
he
pr
obabi
l
iti
esof60,61,62….
.80andaddi
ngt
hem t
oar
ri
veatpr
obabi
l
ityof60or
mor
e.Thi
sisqui
ckwar
dthepr
act
ical
l
yimpossi
ble.Sot
hemostappr
opr
iat
esol
uti
on
i
sthenor
mal
appr
oxi
mat
ion.
St
ep1:comput
ethear
it
hmet
icmeanandt
hest
andar
ddev
iat
ionoft
hebi
nomi
al
di
str
ibut
ion
=np=80(
0.70)=56

= =4.
0988

St
ep2.Appl
ycont
inui
tycor
rect
ionf
act
orf
orx.x=60f
ort
hedi
scr
eter
andom
v
ari
abl
e
60ormor
emeans60i
ncl
usi
ve.Si
ncet
hel
owerl
i
mitf
or60i
s59.
5,Si
xtyst
art
sfr
om
59.
5.Thi
sissi
mil
art
oroundi
ngnumberbet
ween59.
5and60.
5to60.60i
sav
alue
b/
n59.
5and60.
5

St
ep3:
Det
ermi
net
hest
andar
dnor
mal
val
ue,
Z,

Z= = =0.
85

St
ep4:cal
cul
atet
hepr
obabi
l
ityofaZv
aluegr
eat
ert
hen0.
85
Thepr
obabi
l
ityofZv
aluebet
weenOand0.
85i
s0.
3023
Todet
ermi
net
hepr
obabi
l
ityofaZv
aluegr
eat
ert
han0.
85subt
ract0.
3023f
rom 0.
50
0.
5000–0.
3023=0.
1977.Sot
hepr
obabi
l
ityt
hat60ormor
ecust
omer
swi
l
lcome
agai
nis19.
77%

66
Exampl
e2:Foral
argegr
oupofsal
espr
ospect
siti
sknownt
hat20% oft
hose
cont
act
edper
sonal
l
ybyasal
esr
epr
esent
ati
vewi
l
lmakeapur
chase.I
fasal
es
r
epr
esent
ati
vecont
act
s30pr
ospect
s,whati
sthepr
obabi
l
ityt
hat10ormor
ewi
l
l
makeapur
chase?
=np=(
30)(
0.2)=6.
00
= =2.
19

10ormor
eisassumedt
obegi
nat9.
5.i
.e.
,x=9.
5
Z=9.
5–6.
00=3.5=+1.
60
2.
19 2.
19

Thepr
obabi
l
ityf
orZ=1.
60=0.
4452
p(
1.
6)=0.
5000–0.
4452=0.
0548

3.
4.2Nor
malAppr
oxi
mat
ionofPoi
ssonDi
str
ibut
ion

Whent
hemeanofaPoi
ssondi
str
ibut
ioni
srel
ati
vel
ylar
ge,t
henor
malpr
obabi
l
ity
di
str
ibut
ioncanbeusedt
oappr
oxi
mat
ethePoi
ssondi
str
ibut
ion.Foragoodnor
mal
appr
oxi
mat
iont
othepoi
ssonmustbegr
eat
ert
hanorequal
to10.

Exampl
e:Theav
eragenumberofcal
l
sforaser
vicer
ecei
vedbyamachi
ner
epai
r
shopper8hrshi
fti
s10.
00.Whati
sthepr
obabi
l
ityt
hatmor
ethan15cal
l
swi
l
lbe
r
ecei
veddur
ingar
andoml
ysel
ect
ed8hrshi
ft
=10
= =3.
16
Z=15.
5–10=5.
5=1.
71
3.
166 3.
16
Thepr
obabi
l
ityf
orZ=1.
74=0.
4591
p(
Z>1.
74)=0.
5000–0.
4591=0.
0409

CheckYourPr
ogr
ess–8
Pat
ient
sar
ri
veatahospi
talatanav
erager
ateof25peraday
.Whati
sthepr
obabi
l
ity
t
hatmor
ethan22pat
ient
swi
l
lar
ri
vei
naday
?Assumi
ngar
ri
valofpat
ient
sfol
l
owt
he

67
poi
ssondi
str
ibut
ion

3.
5ANSWERSTOCHECKYOURPROGRESS

1.P(
E)=0.
5
P(
B)=0.
5
X P(
x)
0 0.
0625
1 0.
250
2 0.
375
3 0.
250
4 0.
0625
Sum 1
2.2=0.
27
=0.
5196
3.p=0.
60 q=0.
4 n=6
a) X p(
x)
0 0.
0041
1 0.
03684
2 0.
13824
3 0.
27648
4 0.
31104
5 0.
1866
6 0.
04666
1

b)E(
x)=np=3.
6
St
andar
ddev
iat
ion=

= =1.
2

4.1)N=50
S=40

68
 n=5
x=4 P(
x=4)=0.
4313
5.a)Thecompanywi
l
lmeeti
tsgoali
fli
nef
ail
uresdonotexceedt
hreesot
he
pr
obabi
l
ityt
hatt
hecompanywi
l
lmeeti
tsgoal
is
P6+1+2+3l
i
nef
ail
ures
=0.
4335
b)p(
wil
lnotmeeti
tsgoal
)
=1–p(
wil
lmeeti
tsgoal
)
=1–0.
4335
=0.
5665
6.a)0.
7029
b)0.
3821
c)38350l
m
7.=0.
005mm
8.P(
x>22)=0.
6915

3.
6MODELEXAMI
NATI
ONQUESTI
ONS

Answert
hef
oll
owi
ngquest
ions(
clear
lyshowy
ourst
eps)
1.Li
stt
hechar
act
eri
sti
csoft
henor
mal
orcont
inuouspr
obabi
l
itydi
str
ibut
ionand
i
tsaccompany
ingnor
mal
cur
ve.
2.Whyweappl
ythenor
mal
probabi
l
itydi
str
ibut
ion.
3.Whatdet
ermi
nest
heshapeoft
henor
mal
cur
vewhy
?
4.Ser
vicel
i
feoft
ruckt
yresf
orheav
y-dut
ytr
ucksf
oll
owst
henor
maldi
str
ibut
ion
wi
thmean50,
000km andst
andar
ddev
iat
ion5000km.
a)Cal
cul
ateZv
aluef
or60,
000km,
48,
000km,
63,
000km,
58,
000km,
39,
000km,
62,
750km.
b)Whati
sthepr
obabi
l
ityt
hatat
yrewi
l
llast
i
)bet
ween47,
000km and50,
000km?
i
i
)bet
ween50,
000and60,
000km
i
i
i)bet
ween45,
000and57,
500km?

69
 i
v)l
esst
han48,
000km?
v
)gr
eat
ert
han45,
000km?
v
i)l
esst
han63000km?
v
ii
)bet
ween53,
000and62,
000km?
v
ii
i)bet
ween55,
000and63,
000km?
c)Thesuppl
i
eroft
het
yresi
spl
anni
ngt
orepl
aceonl
y1%oft
hoset
yreswi
th
t
hel
eastper
for
mance.Whatshoul
dbet
heser
vicel
i
fef
orwar
rant
y?
d)Ty
res wi
thl
ess t
han 38500km per
for
mance ar
e consi
der
ed bel
ow
st
andar
dsordef
ect
ive.How manyt
yreswi
l
lbebel
ow st
andar
ds,i
f2500
t
yresar
emade?
5.Sal
esatadepar
tmentst
oref
oll
ow t
henor
maldi
str
ibut
ionwi
thanunknown
meanandunknownst
andar
ddev
iat
ion.Ther
etai
l
ingmanagerdoesknow,
howev
ert
hat
,16%oft
het
imehesel
l
smor
ethan2200assor
tment
sand34%
oft
het
imehesel
l
slesst
han1800assor
tment
s.Fi
ndt
hemeanandst
andar
d
dev
iat
ionf
ort
henumberofi
temssol
d.
6.ForanAi
rl
ine80%oft
het
imeseat
sinal
lfl
i
ght
sar
eoccupi
ed.I
fapar
ti
cul
ar
Ai
rpl
anehas180seal
s
a)Whati
stheexpect
ednumberofoccupi
edseat
s?
b)Whati
sthepr
obabi
l
ity(
appl
yi
ngnor
malappr
oxi
mat
iont
othebi
nomi
al)
t
hat
i
. Mor
ethan150seat
swi
l
lbeoccupi
ed
i
i
.Lesst
han175seat
swi
l
lbeoccupi
ed
i
i
i.190ormor
eseat
swi
l
lbeoccupi
ed
7.Cust
omer
sar
ri
val
satabankf
oll
ow t
hepoi
ssondi
str
ibut
ionwi
thanav
erage
r
ateof45i
nanhour
.Whati
sthepr
obabi
l
ityt
hati
napar
ti
cul
aronehourt
ime
a)mor
ethan50wi
l
lar
ri
ve
b)55ormor
ewi
l
lar
ri
ve
c)35t
o55wi
l
lar
ri
ve

70
 UNI
T5:
SAMPLI
NGANDSAMPLI
NGDI
STRI
BUTI
ON

Cont
ent
s
4.
1. Ai
msandObj
ect
ives
4.
2. I
ntr
oduct
ion
4.
3. WhySampl
i
ng
4.
4. Er
ror
s
4.
5. Pr
obabi
l
itySampl
i
ng
4.
6. Met
hodofPr
obabi
l
itySampl
i
ng
4.
7. Sampl
i
ngDi
str
ibut
ion
4.
8. Cent
ral
Limi
tsTheor
em
4.
9. Di
str
ibut
ionoft
heSt
andar
dizedSt
ati
sti
cs
4.
10.Est
imat
es
4.
10.
1. Poi
ntEst
imat
esandt
hei
rPr
oper
ti
es
4.
10.
2. I
nter
val
Est
imat
es
4.
10.
2.1. Const
ruct
ingConf
idenceI
nter
val
4.
10.
2.2. Fi
nit
ePopul
ati
onCor
rect
ionFact
or
4.
11. Sel
ect
ingASampl
eSi
ze
4.
11.
1.Sampl
eSi
zef
ort
heMean
4.
11.
2.Sampl
eSi
zef
orPr
opor
ti
on
4.
11Answer
stoCheckYourPr
ogr
ess
4.
12Model
Exami
nat
ionQuest
ion

4.
0AI
MSANDOBJECTI
VES

Usual
l
ythepopul
ati
onunderst
udyi
sver
ylar
geori
nfi
nit
ewhi
chmakesst
uddi
ngi
t
v
erydi
ff
icul
tori
mpossi
ble.Undersuchci
rcumst
anceswet
akeasampl
eorasubset
oft
hepopul
ati
ont
ost
udyt
hepopul
ati
on.Af
tercompl
eti
ngt
hisuni
t,y
ouwi
l
lbeabl
e
t
o
under
standwhywesampl
e
i
dent
if
yty
pesofpr
obabi
l
itysampl
i
ngt
echni
ques
def
inesampl
i
ngdi
str
ibut
ionandt
hecent
ral
li
mitt
heor
em

71
 est
imat
ethepopul
ati
onmeanandpopul
ati
onpr
opor
ti
on
i
dent
if
ythet
ypesofest
imat
esandconst
ructconf
idencei
nter
valf
ort
hemean
andpr
opor
ti
on
det
ermi
net
hesampl
esi
zef
ort
hemeanandt
hepr
opor
ti
on

4.
1INTRODUCTI
ON

St
ati
sti
csi
sasci
enceofi
nfer
ence.I
tist
hesci
enceofmaki
nggener
alconcl
usi
on
aboutt
heent
ir
egr
oup(
thepopul
ati
on)basedoni
nfor
mat
ionobt
ainedf
rom asmal
l
gr
ouporsampl
e.

4.
2WHYSAMPLI
NG

I
tisof
tennotf
easi
blet
ost
udyt
heent
ir
epopul
ati
on.Thef
oll
owi
ngar
esomeoft
he
maj
orr
easonswhysampl
i
ngi
snecessar
y.

4.
2.1TheDest
ruct
iveNat
ureofCer
tai
nTest
es

Manyex
per
iment
sespeci
all
yinqual
i
tycont
roldemanddest
ruct
ingout
put
s.Consi
der
t
hef
oll
owi
ngt
est
s:
- Test
ingwi
neorcof
fee
- Bl
oodt
estf
orapat
ient
- Test
ingst
rengt
hofl
i
ghtbul
bs
- Seedt
estf
orger
minat
ionet
c.

Unl
esssampl
eist
akenf
rom t
heent
ir
epopul
ati
ont
hewi
net
est
ershoul
ddr
inkal
lthe
wi
ne,
allt
hebl
oodf
rom t
hepat
ientshoul
dbepour
ed-
out
,al
lthel
i
ghtbul
bspr
oduced
shoul
dbedest
roy
edandnot
hingwoul
dremai
nforsal
e.Her
esampl
eisamust
.

4.
2.2ThePhy
sicalI
mpossi
bil
i
tyofChecki
ngal
lIt
emsi
nthePopul
ati
on

Thepopul
ati
onsoff
ish,
bir
dsandot
herwi
l
dli
vesar
elar
geandar
econst
ant
lymov
ing
bei
ngbor
nanddy
ing.Ther
eisnomechani
sm t
ocont
actal
lit
emsori
ndi
vi
dual
member
soft
hepopul
ati
on.

72
4.
2.3TheCostofSt
udy
ingal
ltheI
temsi
naPopul
ati
oni
sOf
tenPr
ohi
bit
ive

Publ
i
c opi
nion pol
l
s and consumert
est
ing or
gani
zat
ions usual
l
ycont
actf
ewer
f
ami
l
ies outofmi
l
li
ons.Consi
dera mul
tinat
ionalcor
por
ati
on wi
th 50 mi
l
li
on
cust
omer
swor
ldwi
de.I
fthi
scompanypl
anst
ounder
takemar
ketsur
veyoutoft
he
50mi
l
li
oni
twi
l
ltake2000sampl
es,
ifi
ttakes20br
.tomai
lsampl
esandt
abul
atet
he
r
esponsesof2000sampl
es,t
otalsur
veywi
l
lcostBr
.40000.Whi
l
ethesamesur
vey
i
nvol
vi
ng50mi
l
li
onpopul
ati
onwoul
dcostaboutonebi
l
li
onbr
.

4.
2.4TheAdequacyofSampl
eResul
ts

Ev
eni
ffundswer
eav
ail
abl
e,i
tisdoubt
fulwhet
hert
headdi
ti
onalaccur
acyof100%
sampl
ei.
e.,st
udy
ing t
he ent
ir
e popul
ati
on i
s essent
iali
n mostpr
obl
ems. To
det
ermi
nemont
hlyi
ndexoff
oodpr
ices,br
ead,beans,mi
l
ket
c,i
tisunl
i
klyt
hatt
he
i
ncl
usi
onofal
lgr
ocer
yst
oresandshopswoul
dsi
gni
fi
cant
lyaf
fectt
hei
ndex,Si
nce,
t
hepr
icesofsuchcommodi
ti
esusual
l
ydonotv
arybymor
ethanaf
ewcent
sfor
m
onest
oret
oanot
her
.100%accur
acycannotbeal
lway
sguar
ant
eedbyst
udy
ingt
he
ent
ir
epopul
ati
on.Thechanceofer
rori
ncol
l
ect
ingandanal
yzi
ngbul
kdat
ahasi
ts
owndi
sadv
ant
age.

4.
2.5ToCont
actt
heWhol
ePopul
ati
onWoul
dOf
tenbeTi
meConsumi
ng

Amar
ketsur
veymayt
aket
woort
hreeday
sforf
iel
dint
erv
iewsbyt
aki
ngasampl
eof
2000cust
omer
s.Byusi
ngt
hesamest
affandi
nter
viewer
sandwor
kingsev
enday
sa
weeki
twoul
dtakenear
ly200y
ear
stocont
act50mi
l
li
oncust
omer
s.

4.
3ERRORS

Av
eryi
mpor
tantconsi
der
ati
oni
nsampl
i
ngi
stosel
ectt
hesampl
einsuchawayt
hat
i
tisv
eryl
i
kel
ytohav
echar
act
eri
sti
cssi
mil
art
othepopul
ati
onasawhol
e.Ot
herwi
se,
t
hesampl
ecoul
dhav
echar
act
eri
sti
csqui
tedi
ff
erentf
ormt
hepopul
ati
on.I
nthat
casey
oucoul
ddr
aw er
roneousconcl
usi
onsaboutt
hepopul
ati
onont
hebasi
sof
i
mpr
oper
lychosensampl
e.Er
rorcanbesampl
i
ngornon-
sampl
i
nger
ror
.

73
Sampl
i
nger
rori
srel
atedwi
tht
hesampl
i
ngt
echni
queandappr
oacheswhi
l
enon-
sampl
i
nger
rori
srel
atedwi
thadmi
nist
eri
ngt
hesur
vey
.Sampl
i
nger
ror
scanbe
i
dent
if
iedandr
ect
if
iedusi
ngsomemat
hemat
ical
techni
ques.Whi
l
ethenon-
sampl
i
ng
er
ror
sar
ever
ydi
ff
icul
ttoi
dent
if
yandr
ect
if
ybef
oremaki
ngconcl
usi
ons.

4.
4PROBABI
LITYSAMPLE

Pr
obabi
l
itysampl
eisasampl
esel
ect
edi
nsuchawayt
hateachi
tem orper
soni
nthe
popul
ati
onbei
ngst
udi
edhasaknown(
nonzer
o)l
i
kel
i
hoodofbei
ngi
ncl
udedi
nthe
sampl
e.Non-
probabi
l
itysampl
eisasampl
esel
ect
edbasedoncont
ingencyand
j
udgment
.

I
fnon-
probabi
l
itymet
hodsar
eused,notal
lit
emsorpeopl
ehav
eachanceofbei
ng
i
ncl
udedi
nthesampl
e.I
nsuchi
nst
ancest
her
esul
tmaybebi
ased,
thesampl
eresul
t
maynotber
epr
esent
ati
veoft
hepopul
ati
on.

Panelsampl
i
ngandconv
eni
encesampl
i
ngar
enon-
probabi
l
itysampl
i
ng.Theyar
e
basedonconv
eni
encet
othest
ati
sti
cian.St
ati
sti
calpr
ocedur
esusedt
oev
aluat
e
sampl
eresul
tsbasedonpr
obabi
l
itysampl
i
ng.

4.
5METHODSOFPROBABI
LITYSAMPLI
NG

Al
lpr
obabi
l
itysampl
i
ngmet
hodshav
eonegoal
,toal
l
ow chancet
odet
ermi
net
he
i
temsorper
sonst
obei
ncl
udedi
nthesampl
e.Ther
ear
edi
ff
erentt
ypesofsampl
i
ng
t
echni
ques.Howev
ert
her
eisnoonebestmet
hodofsel
ect
ingapr
obabi
l
itysampl
e.A
t
echni
quebestf
oragi
venci
rcumst
anceorsi
tuat
ionmayf
ail
inanot
hersi
tuat
ions.

Commonl
yusedpr
obabi
l
itysampl
i
ngt
echni
quesar
ethef
oll
owi
ng:

4.
5.1Si
mpl
eRandom Sampl
i
ng

Asampl
efor
mul
atedi
nsuchamannert
hateachi
tem orper
soni
nthepopul
ati
onhas
t
hesamechanceofbei
ngi
ncl
udedi
nthesampl
e.Wecaneasi
l
yli
stt
henameor
i
dent
if
icat
ionofal
li
temsi
.e.t
hepopul
ati
ononapi
eceofpaperandpr
oper
lyf
oldand
mi
xi
ngandr
uingt
hel
otunt
ilwehav
ether
equi
redsampl
esi
ze.Thi
smet
hodi
sti
me

74
consumi
ngandawkwar
d.

Mor
econv
eni
entmet
hodofsel
ect
ingar
andom sampl
eist
ouseat
abl
eofr
andom
number
s.I
tisnecessar
yfi
rstt
ogi
vei
dent
if
icat
ionf
oral
lel
ement
sint
hepopul
ati
on.
Wewi
l
lsel
ectt
hest
art
ingpoi
ntar
ri
bit
rar
il
yandcont
inuet
otaket
hesampl
eunt
ilwe
hav
ether
equi
redsampl
esi
ze.

Thi
smet
hodmaybet
ousei
ncer
tai
nresear
chsi
tuat
ions.Most
lydi
ff
icul
twhent
he
popul
ati
oni
sver
ylar
ger
.

4.
5.2Sy
stemat
icRandom Sampl
ing
Thei
temsori
ndi
vi
dual
soft
hepopul
ati
onar
ear
rangedi
nsomeway(
alphabet
ical
)or
someot
hermet
hod.Ar
andom st
art
ingpoi
nti
ssel
ect
edandt
henev
eryKthmember
oft
hepopul
ati
oni
ssel
ect
edf
ort
hesampl
e.

Asy
stemat
icr
andom sampl
eshoul
dnotbeused,
ift
her
eisapr
edet
ermi
nedpat
ter
n
t
othepopul
ati
on.Li
kei
nvent
orycont
rol
,ori
fval
uesar
eli
stedi
nascendi
ngor
descendi
ngor
der
s.

4.
5.3St
rat
if
iedRandom Sampl
e
Apopul
ati
oni
sfi
rstdi
vi
dedi
ntosubgr
oupscal
l
edst
rat
a,andasampl
eissel
ect
ed
f
orm eachst
rat
um.St
rat
um canbe
-Pr
opor
ti
onal
sampl
e/t
othepopul
ati
onor
-Non-
propor
ti
onal

Exampl
e.St
udy
ing adv
ert
isi
ng expendi
tur
e of352 l
arge compani
es.Pr
ofi
tabi
l
ity
per
cent
agei
susedt
ost
rat
if
ythi
spopul
ati
on.Weneedt
osel
ect50sampl
es.

St
ratum Pr
ofi
tabi
li
ty Numberof %oftot
al Number
(
0) (
1) (
2) (
3) (4)
(50x(
3))
1 30%andover 8 2 1
2 20-
30% 35 10 5
3 10-
20% 189 54 27
4 0upto10% 115 33 16
5 def
ici
t 5 1 1
352 150 50

St
rat
if
iedsampl
i
nghast
headv
ant
age,i
nsomecases,ofmor
eaccur
acyr
efl
ect
ing

75
t
hechar
act
eri
sti
csoft
hepopul
ati
ont
handosesi
mpl
erandom orsy
stemat
icr
andom
sampl
i
ng.

4.
5.4Cl
ust
erSampl
ing
I
tisdi
vi
dingt
hepopul
ati
oni
ntosmal
luni
ts.Theseuni
tsar
ecal
l
edpr
imar
yuni
ts.
Ther
esel
ectatr
andom cer
tai
ngr
oupsorcl
ust
ers.Thi
stechni
quei
s

Of
tenempl
oyedt
oreducecostofsampl
i
ngapopul
ati
onscat
ter
edov
eral
arge
geogr
aphi
car
ea.

4.
6SAMPLI
NGDI
STRI
BUTI
ON

Twoi
mpor
tantt
ermsi
nsampl
i
ngdi
str
ibut
ive:
a)Popul
ati
onpar
amet
er–Anumer
ical
measur
eofapopul
ati
on,
popul
ati
on
mean,
popul
ati
onv
ari 2,
ance, popul
ati
onst
andar
ddev
iat
ion,
,popul
ati
on
pr
opor
ti
on,
pet
c.
b)Sampl
est
ati
sti
cs/St
ati
sti
c/-Anumer
ical
measur
eoft
hesampl
e

Sampl
emean, ,
sampl
evar
ianceS2sampl
est
andar
ddev
iat
ionS,
sampl
epr
opor
ti
on
,
etc.

Sampl
ingDi
str
ibut
ionoft
hemeans( )
Sampl
i
ng di
str
ibut
ion oft
he sampl
e means, ,i
sthe pr
obabi
l
ity di
str
ibut
ion
consi
sti
ngofal
i
stofal
lpossi
blesampl
emeansofagi
vensampl
esi
zesel
ect
ed
f
rom apopul
ati
on,andt
hepr
obabi
l
ityofoccur
renceassoci
atedwi
theachsampl
e
mean.

Exampl
e.Thef
oll
owi
ngdi
str
ibut
ioni
sthehour
lywageofsev
enempl
oyees

Empl
oyee Hour
lywage
A 7

76
 B 7
C 8
D 8
E 7
F 8
G 9

54
Thi
spopul
ati
onhasameanof7.
71hoar
ywagei
.e. /
7

I
fwear
epl
anni
ngt
otakesampl
eoft
woempl
oyees,wewi
l
lhav
e21(
7C2)possi
ble
sampl
esandcor
respondi
ngsampl
emeans.The21possi
blesampl
eswi
tht
hei
r
meanar
ethef
oll
owi
ng:
-

Possi
ble
Sample Samplemean( )
AB 7.
0
AC 7.
5
AD 7.
5
AE 7.
0
AF 7.
5
AG 8.
0
BC 7.
5
BD 7.
5
BE 7.
0
BF 7.
5
BG 8.
0
CD 8.
0
CE 7.
5
CF 8.
0
CG 8.
5
DE 7.
5
DF 8.
0
DG 8.
5

77
 EF 7.
5
EG 8.
0
FG 8.
5
 =162

Summar
yofsampl
i
ngdi
str
ibut
ionoft
hemeansf
orn=2wi
l
lbe

Sampl
e Noofmeans Pr
obabi
li
ty
Mean
7 3 0.
1429
7.
5 9 0.
4285
8.
00 6 0.
2857
8.
50 3 0.
1429
Tot
al 21 1
Themeanoft
hedi
str
ibut
ionofsampl
emeansi
sobt
ainedbysummi
ngt
hev
ari
ous
sampl
emeansanddi
vi
dingt
hesum byt
henumberofsampl
es.Themeanofal
lthe
sampl
emeansi
susual
l
ywr
it
ten r
emi
ndsust
hati
tisapopul
ati
onv
alue

becausewehav
econsi
der
edal
lpossi
blesampl
es.Thesubscr
ipt i
ndi
cat
est
hati
t
i
sasampl
i
ngdi
str
ibut
ionofmeans.

Thef
oll
owi
nggr
aphsr
epr
esentt
hepopul
ati
ondi
str
ibut
ionandt
hedi
str
ibut
ionoft
he
sampl
emeans.
Popul
ati
onDi
str
ibut
ion Pr
obabi
li
ty Sampl
ing
Di
str
ibut
ion
0.
4 0.
4

0.
3 0.
3

0.
2 0.
2

78
0.
1 0.
1
7 8 9 Hour
lyWage 7 7.
5 8 8.
5 XHour
ly
r
ate

Fr
om t
heabov
egr
aphs/di
str
ibut
ionswecanunder
standt
hat
:
a)Themeanoft
hesampl
emeans(
7.71)i
sequalt
othemeanoft
hepopul
ati
on.
Thi
sisal
way
str
uei
fal
lpossi
blesampl
esofagi
vensi
zear
esel
ect
edf
rom t
he
popul
ati
onofi
nter
est
b)Ther
angeofsampl
emeansi
slesst
hant
her
angei
nthepopul
ati
on.The
sampl
emeansr
angef
orm 7t
o8.
5wher
east
hepopul
ati
onv
aryf
orm 7t
o9.
00.
c)Thegr
aphr
epr
esent
ingt
hedi
str
ibut
ionoft
hepopul
ati
onandt
hatoft
he
sampl
emeansshowst
hechangei
nshapef
rom t
hepopul
ati
ont
othesampl
e.
Thegr
aphr
epr
esent
ingt
hedi
str
ibut
ionoft
hesampl
emeansl
ooksl
i
kea
nor
mal
cur
ve.

4.
7THECENTRALLI
MITTHEOREM

Forapopul
ati
onwi
thmeanandVar
iance2,
thesampl
i
ngdi
str
ibut
ionoft
hemeans
ofal
lpossi
blesampl
esofsi
zengener
atedf
rom t
hepopul
ati
onwi
l
lbeappr
oxi
mat
ely
nor
mal
l
ydi
str
ibut
edwi
tht
hemeanoft
hesampl
i
ngdi
str
ibut
ionequalt
oandt
he
v
ari
anceequal
to ,
assumi
ngt
hatt
hesampl
esi
zei
ssuf
fi
cient
lyl
arge.

Thei
mpor
tantf
acet
soft
hecent
ral
li
mitt
heor
em bearr
epeat
ing.
1.i
fthesampl
esi
zeni
ssuf
fi
cient
lyl
arge,t
hesampl
i
ngdi
str
ibut
ionoft
he
meanswi
l
lbeappr
oxi
mat
elynor
malr
egar
dlessoft
hedi
str
ibut
ionoft
he
popul
ati
onf
orm whi
cht
her
andom sampl
eisdr
awn
2.i
fapopul
ati
oni
slar
geandal
argenumberofsampl
esar
esel
ect
edf
rom t
he
popul
ati
on t
hen t
he means oft
he sampl
e means wi
l
lbe cl
ose t
othe
popul
ati
onmean.
3.t
hev
ari
anceoft
hedi
str
ibut
ionofsampl
emeansi
sdet
er nedby2/
mi n.Thi
s

i
mpl
i
est
hatast
hesampl
esi
zei
ncr
easest
hev
ari
ati
onof abouti
tsmean

79
 decr
ease.Not
ethata sampl
e of30 ormor
e el
ement
sis consi
der
ed
suf
fi
cient
lyl
argef
ort
hecent
ral
li
mitt
heor
em t
otakeef
fect
.

Al
argermi
nimum sampl
esi
zemayber
equi
redf
oragoodnor
malappr
oxi
mat
ion
whent
hepopul
ati
ondi
str
ibut
ioni
sver
ydi
ff
erentf
rom anor
maldi
str
ibut
ion.Whi
l
ea
smal
l
ermi
nimum sampl
esi
zemaysuf
fi
cef
oragoodnor
malappr
oxi
mat
ionwhen
t
hepopul
ati
ondi
str
ibut
ioni
scl
oset
oanor
mal
dist
ri
but
ion.

4.
8DI
STRI
BUTI
ONOFTHESTANDARDI
ZEDSTATI
STI
CSFORTHESAMPLEMEAN

I
nor
dert
ouset
hecent
rall
i
mitt
heor
em,weneedt
oknow t
hepopul
ati
onst
andar
d
dev
iat
ionwheni
tisnotknowt
hest
andar
ddev
iat
ionoft
hesampl
e,desi
gnat
edbyS
i
susedt
oappr
oxi
mat
eit
.Thest
andar
dizeddi
str
ibut
ionoft
hesampl
emeansi
sZ
and

Z= ,i
fthepopul
ati
onst
andar
ddev
iat
ioni
sknownor ,i
fthepopul
ati
on

st
andar
ddev
iat
ioni
sunknown.

Exampl
e1:
Theannualwagesofal
lempl
oyeesofacompanyhasameanof20,
400pery
earwi
th
st
andar
ddev
iat
ionof3200.Theper
sonnelmanageri
sgoi
ngt
otakear
andom
sampl
e of36 empl
oyees and cal
cul
atet
he sampl
e mean wage.Whati
sthe
pr
obabi
l
ityt
hatt
hesampl
emeanwi
l
lexceed21.
000?
n=36=20,
400and=3200

P[ >21,
000]= = =1.
125

P(
Z>1.
13)=0.
1292

80
 Exampl
e.2
Acompanymakesengi
neusedi
nspeedboat
s.Thecompany
’sengi
neer
sbel
i
evet
hat
t
heengi
nedel
i
ver
sanav
eragepowerof220hor
sepower/HP/andt
hatt
hest
andar
d
dev
iat
ionofpowerdel
i
ver
edi
s15HP.A pot
ent
ialbuy
eri
ntendst
osampl
e100
engi
nes(
eachengi
net
ober
unasi
ngl
eti
me).Whati
sthepr
obabi
l
ityt
hatt
he
sampl
emean, ,
wil
lbel
esst
han217HP.

P( <2/
7)=P =-
2

P(
Z<-
2)=0.
0228

Thusi
fthepopul
ati
onmeani
sindeed=220HPandt
hest
andar
ddev
iat
ioni
s=
15HP,
ther
eisar
athersmal
lpr
obabi
l
ityt
hatt
hepot
ent
ialbuy
er’
stest
swi
l
lresul
tina
sampl
emeanl
owert
han217HP.

CheckYourPr
ogr
ess–1

Theav
erageGPA ofal
lgr
aduat
ingst
udent
sinacol
l
egei
s2.
85wi
thast
andar
d
dev
iat
ionof0.
96.Thepl
acementuni
trandoml
ysel
ect
s64gr
aduat
ingst
udent
s.What
i
sthepr
obabi
l
ityt
hatt
hesampl
emeanwi
l
lbegr
eat
ert
han3.
00?

Onei
mpor
tantappl
i
cat
ionoft
hecent
ral
li
mitt
heor
em i
sint
hear
eaofqual
i
tycont
rol
.
The manuf
act
uri
ng pr
ocess i
svar
iabl
e and be moni
tor
ed t
o be sur
ethatt
he
v
ari
abi
l
itydoesnotgetbey
ondaccept
abl
elev
els.

A cont
rolchar
tisusedt
oassi
sti
nmoni
tor
ingt
hev
ari
abi
l
ity char
tisusedt
o
cont
rol
var
iat
ioni
nthesampl
emeans.
TheChar
thast
wol
i
mit
saboutt
hemean
c)Uppercont
rol
li
mit(
UCL)
d)Lowercont
rol
li
mit(
LCL)
Thecent
erl
i
nei
sthedesi
redmean,
.
UCL(
UpperCont
rolLi
mit
)
ngMean

81
i
Sampl
 LCL(
LowerCont
rolLi
mit
)

1 2 3 4 5 6……………………….
.50……………………
Sampl
enumber
I
fapoi
nti
sobser
vedabov
eUCLorbel
owLCLt
hepr
ocessi
sst
oppedandf
indt
he
pr
obl
em.
Theupperandl
owercont
roll
i
mit
sar
egener
all
ylocat
edone,t
wo,ort
hreet
imes

abov
eandbel
owdependi
ngont
henat
ureoft
hepr
oductandt
hepr
ocess.

4.
9ESTI
MATES

I
nfer
ent
ial
stat
ist
icsi
sconcer
nedwi
thest
imat
ion.
I
nmanycasesv
aluesf
orapopul
ati
onpar
amet
erar
eunknown.I
fpar
amet
ersar
e
unknowni
tisgener
all
ynotsuf
fi
cientt
omakesomeconv
eni
entassumpt
ionabout
t
hei
rval
ues,
rat
hert
hoseunknownpar
amet
ersshoul
dbeest
imat
ed.

I
nbusi
nessmanydeci
sionar
emadewi
thoutcompl
etei
nfor
mat
ion.

Af
ir
m doesnotknowexact
lywhatwi
l
lbei
tssal
esv
olumenexty
earornextmont
h.A
col
l
egedoesnotknow exact
lyhow manyst
udent
swi
l
lenr
ollnexty
ear
.Bot
hmust
est
imat
etomakedeci
sionaboutt
hef
utur
e.

Ty
pesofEst
imat
es

4.
9.1Poi
ntest
imat
e
Anumberorasi
mpl
enumberi
susedt
oest
imat
eapopul
ati
onpar
amet
er.
Ar
andom sampl
eofobser
vat
ionsi
stakenf
rom t
hepopul
ati
onofi
nter
estandt
he
obser
vedv
aluesar
eusedt
oobt
ainapoi
ntest
imat
eoft
her
elev
antpar
amet
er.

82
a.Theampl
emean, ,
ist
hebestest
imat
oroft
hepopul
ati
onmean.
Di
ff
erentsampl
esf
rom apopul
ati
ony
iel
ddi
ff
erentpoi
ntest
imat
esof,

b.Sampl
epr
opor
ti
on i
sagoodest
imat
orofpopul
ati
onpr
opor
ti
on,
p.
-Popul
ati
onpr
opor
ti
onPi
sequalt
othenumberofel
ement
sint
hepopul
ati
on
bel
ongi
ngt
othecat
egor
yofi
nter
estdi
vi
dedbyt
het
otalnumberofel
ement
sin

t
hepopul
ati
onp=

Wher
e:Xi
sthenumberofsuccessi
nthepopul
ati
onand
Npopul
ati
onsi
ze

Sampl
epr
opor
ti
on, = wher
e;

xi
sthenumberofel
ement
sint
hesampl
efoundt
obel
ongt
othecat
egor
yofi
nter
est
andni
sthesampl
esi
ze.

or =Numberofsuccessi
nasampl
e
numbersampled

Exampl
e of 2000 per
sons sampl
ed 1600 f
avor
ed mor
e st
ri
ctenv
ironment
al
pr
otect
ionmeasur
es,
whati
stheest
imat
edpopul
ati
onpr
opor
ti
on.

=16000=0.
80
2000

80% i
s an est
imat
e oft
he pr
opor
ti
on i
nthe popul
ati
on t
hatf
avormor
e st
ri
ct
measur
es

I
ngener
al:
Thest
ati
sti
c est
imat
es
Sest
imat
es
S2est
i es2
mat
est
imat
esp

83
Est
imat
orsandt
hei
rpr
oper
ti
es/Goodnessofanest
imat
or/
Thepr
oper
ti
esofgoodest
imat
orsar
e
a)Unbi
asedness
b)Ef
fi
ciency
c)Consi
stencyand
d)Suf
fi
ciency

a)Anest
imat
ori
ssai
dtobeunbi
asedi
fit
sexpect
edv
aluei
sequalt
othepopul
ati
on
par
amet
eri
test
imat
es.

E( )=Thesampl
emean, ,
ist
her
efor
e,anunbi
asedest
imat
oroft
hepopul
ati
on
mean.Anysy
stemat
icdev
iat
ionoft
heest
imat
orawayf
rom t
hepar
amet
erofi
nter
est
i
scal
l
edBi
as.

b)Anest
imat
ori
sef
fi
cienti
fithasar
elat
ivel
ysmal
lvar
iance(
asst
andar
ddev
iat
ion)
.
Thesampl
emeanshav
eav
aranceof/
i nval
uei
slesst
han.Sot
hesampl
e
meani
sanef
fi
cientest
imat
oroft
hepopul
ati
onmean.
c)Anest
imat
ori
ssai
dtobeconsi
stenti
fit
spr
obabi
l
ityofbei
ngcl
oset
othe
par
amet
eri
test
imat
esi
ncr
easesast
hesampl
esi
zei
ncr
eases.

Thesampl
emeani
saconsi
stentest
imat
orof.Thi
sissobecauset
hest
andar
d

dev
iat
ionof i
s .Ast
hesampl
esi
zeni
ncr
eases,
thest
andar
ddev
iat
ionof

decr
easesandhencet
hepr
obabi
l
ityt
hat wi
l
lbecl
osest
oit
sexpect
edv
alue,,
i
ncr
eases.

d)Anest
imat
ori
ssai
dtobesuf
fi
cienti
fitcont
ainsal
lthei
nfor
mat
ioni
nthedat
a
aboutt
hepar
amet
eri
test
imat
es.Thesampl
emeani
ssuf
fi
cientest
imat
orof.
Ot
herest
imat
orsl
i
ket
hemedi
anandmodedonotconsi
deral
lval
ues.Butt
he
meanconsi
der
sal
lval
ues(
addedanddi
vi
dedbyt
hesampl
esi
ze)
.

4.
9.2I
nter
valEst
imat
es
I
nter
valest
imat
est
atest
her
angewi
thi
nwhi
chapopul
ati
onpar
amet
erpr
obabl
yli
es.
Thei
nter
valwi
thi
nwhi
chapopul
ati
onpar
amet
eri
sexpect
edt
oli
eisusual
l
yref
err
ed

84
t heconf
oast idencei
nter
val
.

Theconf
idencei
nter
valf
ort
hepopul
ati
onmeani
sthei
nter
valt
hathasahi
gh
pr
obabi
l
ityofcont
aini
ngt
hepopul
ati
onmeans,


Twoconf
idencei
nter
val
sar
eusedext
ensi
vel
y.
1.95%conf
idencei
nter
val
and
2.99%conf
idencei
nter
val
A 95% conf
idence i
nter
valmeans t
hatabout95% oft
he si
mil
arl
yconst
ruct
ed
i
nter
val
swi
l
lcont
aint
hepar
amet
erbei
ngest
imat
ed.I
fweuset
he99%conf
idence
i
nter
valwe expectabout99% oft
he i
nter
val
sto cont
aint
he par
amet
erbei
ng
est
imat
ed.

Anot
heri
nter
pret
ati
onoft
he95% conf
idencei
nter
vali
sthat95% oft
hesampl
e
meansf
oraspeci
fi
edsampl
esi
zewi
l
lli
ewi
thi
n1.
96st
andr
eddev
iat
ionsoft
he
hy
pot
hesi
zedpopul
ati
onmean.For99% t
hesampl
emeanswi
l
lli
e,wi
thi
n2.
58
st
andar
ddev
iat
ionsoft
hehy
pot
hesi
zedpopul
ati
onmean.

Wher
edot
hev
alues1.
96and2.
58comef
orm?

Themi
ddl
e95% oft
hesampl
emeanl
i
eequal
l
yonei
thersi
deoft
hemean.And
l
ogi
cal
l
y0.
95/
2=0.
4750or47.
5%oft
hear
eai
stot
her
ightoft
hemeanandt
hear
ea
t
othel
eftoft
hemeani
s0.
4750.

TheZv
aluef
ort
hispr
obabi
l
ityi
s1.
96.
TheZt
other
ightoft
hemeani
s+1.
96andZt
othel
efti
s–1.
96.

4.
9.2.
1Const
ruct
ingConf
idenceI
nter
val
a)Comput
ethest
andar
der
roroft
hemean
St
andar
der
roroft
hemeani
sthest
andar
ddev
iat
ionoft
hesampl
emeans.
=populati
on
standard
deviat
ion
n=sampl esize
I
fthepopul
ati
onst
andar
ddev
iat
ioni
snotknown,t
hest
andar
ddev
iat
ionoft
he

85
sampl
es,
isusedt
oappr
oxi
mat
ethepopul
ati
onst
andar
ddev
iat
ion.

Thi
sindi
cat
est
hatt
heer
rori
nest
imat
ingt
hepopul
ati
onmeansdecr
easesast
he
sampl
esi
zei
ncr
eases.
b)The95%and99%conf
idencei
nter
val
sar
econst
ruct
edasf
oll
owswhenn>30.

95%conf
idencei
nter
val 1.
96

99%conf
idencei
nter
val 2.
58

1.
96and2.
58i
ndi
cat
etheZv
aluescor
respondi
ngt
othemi
ddl
e95%or99%oft
he
obser
vat
ionr
espect
ivel
y.

I
ngener
alaconf
idencei
nter
valf
ort
hemeani
scomput
edby ,Zr
efl
ect
sthe

sel
ect
edl
evel
ofconf
idence.

Exampl
e.An exper
imenti
nvol
ves sel
ect
ing a r
andom sampl
e of256 mi
ddl
e
manager
sforst
udy
ingt
hei
rannuali
ncome.Thesampl
emeani
scomput
edt
obeBr
.
35,
420andt
hesampl
est
andar
ddev
iat
ioni
sBr
.2,
050.
a.Whati
stheest
imat
edmeani
ncomeofal
lmi
ddl
emanager
s(t
hepopul
ati
on)?
b.Whati
sthe95%conf
idencei
nter
val
c(r
oundedt
othenear
est10)
c.Whatar
ethe95%conf
idencel
i
mit
s?
d.I
nter
prett
hef
indi
ng.

Sol
uti
on
a.Sampl
emeani
s35420sot
hiswi
l
lappr
oxi
mat
ethepopul
ati
onmeanso=
35420.I
tisest
imat
edf
rom t
hesampl
emean.
b.Theconf
idencei
nter
val
isbet
ween35170and35670f
oundby

=354201.
96 =35168.
87and35671.
13

c.Theendpoi
ntsoft
heconf
idencei
nter
valar
ecal
l
edt
heconf
idencel
i
mit
s.I
n
t
hiscaset
heyar
eroundedt
o35170and35670.35170i
sthel
owerl
i
mitand
35070i
stheupperl
i
mit
.

86
 d.I
nter
pret
ati
on
I
fwesel
ect100sampl
esofsi
ze256f
ormt
hepopul
ati
onofal
lmi
ddl
emanager
sand
comput
ethesampl
emeansandconf
idencei
nter
val
s,t
hepopul
ati
onmeanannual
i
ncomewoul
dbef
oundi
nabout95outoft
he100conf
idencei
nter
val
s.About5out
oft
he100 conf
idencei
nter
val
swoul
d notcont
aint
hepopul
ati
on mean annual
i
ncome.

CheckYourPr
ogr
ess–2

Ar
esear
chf
ir
m conduct
edasur
veyt
odet
ermi
net
hemeanamountsmoker
sspend
onci
gar
ett
edur
ingaweek.Asampl
eof49smoker
srev
eal
edt
hatt
hesampl
emean
i
sBr
.20wi
thst
andar
ddev
iat
ionofBr
.5.Const
ruct95%conf
idencei
nter
valf
ort
he
meanamountspent
.

Conf
idencei
nter
valf
orapopul
ati
onpr
opor
ti
on
Theconf
idencei
nter
val
forapopul
ati
onpr
opor
ti
oni
sest
imat
ed
Zp

Wher
epi
sthest
andar
der
roroft
hepr
opor
ti
onand

Ther
efor
etheconf
idencei
nter
val
forpopul
ati
onpr
opor
ti
oni
sconst
ruct
edby

Z

Exampl
e.Suppose1600of2000uni
onmember
ssampl
edsai
dtheypl
ant
ovot
efor
t
hepr
oposalt
omer
gewi
thanat
ionaluni
on.Uni
onbyl
awsst
atet
hatatl
east75%of
al
lmember
smustappr
ovef
ort
hemer
gert
obeenact
ed.Usi
ngt
he0.
95degr
eeof
conf
idence,
whati
sthei
nter
valest
imat
efort
hepopul
ati
onpr
opor
ti
on?Basedont
he

conf
idencei
nter
val
,whatconcl
usi
oncanbedr
awn? = =0.
8.Thesampl
e

pr
opor
ti
oni
s80%

87
Thei
nter
vali
scomput
edasf
oll
ows. Z =0.
801.
96 =

0.
081.
96
=0.
78247and0– 81753r
oundedt
o0.
782and
0.
818.
Basedont
hesampl
eresul
tswhenal
luni
onmember
svot
e,t
hepr
oposalwi
l
lpr
obabl
y
passbecause0.
75l
i
ebel
owt
hei
nter
val
bet
ween0.
782and0.
818.

CheckYourPr
ogr
ess–3

A sampl
eof200 peopl
ewer
eassumedt
oident
if
ythei
rmaj
orsour
ceofnews
i
nfor
mat
ion;110 st
ated t
hatt
hei
rmaj
orsour
ce was t
elev
isi
on news cov
erage.
Const
ructa90% conf
idencei
nter
valf
ort
hepr
opor
ti
onofpeopl
eint
hepopul
ati
on
whoconsi
dert
elev
isi
ont
hei
rmaj
orsour
ceofnewsi
nfor
mat
ion.

4.
9.2.
2Fi
nit
ePopul
ati
onCor
rect
ionFact
or
Thepopul
ati
onwehav
esampl
edsof
arhasbeenv
eryl
arge,
orassumedt
obei
nfi
nit
e.

I
fthesampl
ed popul
ati
on i
snoti
nfi
nit
eornotl
argerweneed t
o makesome
adj
ust
ment
sint
he st
andar
d er
roroft
he mean and t
he st
andar
d er
roroft
he
pr
opor
ti
on.Thi
sisdonet
oreducet
heer
rorwecommi
tt
eei
nest
imat
ingapar
amet
er.

Apopul
ati
ont
hathasaf
ixedupperbondi
ssai
dtobef
ini
te.Af
ini
tepopul
ati
oncan
besmal
lorcanbev
eryl
arge.

Foraf
ini
tepopul
ati
on,wher
ethet
otalnumberofobj
ect
sisN,andt
hesi
zeoft
he
sampl
eisnt
hef
oll
owi
ngadj
ust
menti
smadet
othest
andar
der
ror
soft
hemeanand
t
hepr
opor
ti
on.
St
andar
der
roroft
hemean

88
St
andar
der
roroft
hepr
opor
ti
on

Thi
sadj
ust
menti
scal
l
edf
ini
tepopul
ati
oncor
rect
ionf
act
or.
Whyi
sitnecessar
ytoappl
yaf
act
orandwhati
sit
sef
fect
?

Logi
cal
l
y,i
fasampl
eisasubst
ant
ialper
cent
ageoft
hepopul
ati
on,t
henwewoul
d
expectanyest
imat
etobemor
epr
eci
set
hant
hosef
orasmal
l
ersampl
e.

Supposet
hepopul
ati
oni
s1000andt
hesampl
eis100.Thent
hisr
ati
ois

or .Taki
ngt
hesquar
erootgi
vest
hecor
rect
ionf
act
or0.
9492.Mul
ti
ply
ingt
he

st
andar
der
rorr
educest
heer
rorbyabout5%or(
1-0.
9492)
=0.
5.Thi
sreduct
ionoft
he
si
ze oft
he st
andar
d er
rory
iel
ds a smal
l
err
ange ofv
alues i
n est
imat
ing t
he
popul
ati
onmean.I
fthesampl
esi
zei
s200t
hecor
rect
ionf
act
ori
s0.
8949.Meani
ng
t
hatt
hest
andar
der
rorhasbeenr
educedbymor
ethan10%.
n
Theusual
rul
eist
hatI
fther
ati
ooft
hesampl
etot
hepopul
ati
on,/N,i
slesst
han0.
05,
t
hef
ini
tepopul
ati
oncor
rect
ionf
act
ori
signor
ed.

Exampl
e.Ther
ear
e250f
ami
l
iesi
nasmal
ltownApol
lof40f
ami
l
iesr
eveal
edt
hat
t
hemeanannualcommuni
tycont
ri
but
ioni
s450wi
thast
andar
ddev
iat
ionof75.
Const
ructa95%conf
idencei
nter
val
fort
hemeanannual
cont
ri
but
ion.

Sol
uti
on:-
Fi
rstnot
ethatt
hepopul
ati
oni
sfi
nit
e.
Secondt
hesampl
econst
it
utemor
ethan5%oft
hepopul
ati
onn/
N=40/
250=0.
16
Hencet
hef
ini
tepopul
ati
oncor
rect
ionf
act
ori
sappl
i
ed.

=4501.
96

=45023.
24
=45021.
34
=428.
66and471.
34

89
Conf
idencei
nter
valf
orsmal
lsampl
e(St
udent
’sDi
str
ibut
ion)

Whent
hepopul
ati
oni
slar
geandnor
malandt
hest
andar
ddev
iat
ioni
sknownt
he
st
andar
dnor
maldi
str
ibut
ioni
sempl
oyedt
oconst
ructt
heconf
idencei
nter
valf
ort
he
meanandpr
opor
ti
on.I
fthesampl
esi
zei
satl
east30,
thesampl
est
andar
ddev
iat
ion
can subst
it
utet
he popul
ati
on st
andar
d dev
iat
ion and t
he r
esul
ts ar
e deemed
sat
isf
act
ory
.

I
fthesampl
esi
zei
slesst
han30andpopul
ati
onst
andar
ddev
iat
ioni
sunknown,t
he
st
andar
dnor
maldi
str
ibut
ion,
Z,i
snotappr
opr
iat
e.Thest
udent
’stort
hetdi
str
ibut
ion
i
sused.

Char
act
eri
sti
csoft
heSt
udent
’stDi
str
ibut
ion
Assumi
ngt
hatt
hepopul
ati
onofi
nter
esti
snor
malorappr
oxi
mat
elynor
mal
,the
f
oll
owi
ngar
ethechar
act
eri
sti
csoft
hetdi
str
ibut
ion
1.I
tisacont
inuousdi
str
ibut
ion
2.I
tisbel
l
-shapedandsy
mmet
ri
cal
3.Ther
eisnotonetdi
str
ibut
ion,
butr
athera‘
fami
l
y’oftdi
str
ibut
ion.Al
lhav
ethe
samemeanofzer
obutt
hei
rst
andar
ddev
iat
iondi
ff
eraccor
dingt
othesampl
e
si
ze,
n.Thetdi
str
ibut
iondi
ff
ersf
ordi
ff
erentsampl
esi
ze.
4.I
tismor
espr
eadoutandf
lat
teratt
hecent
ert
hani
stheZ.Howev
erast
he
sampl
esi
zei
ncr
easest
hecur
ver
epr
esent
ingtdi
str
ibut
ionappr
oachest
heZ
di
str
ibut
ion.

tdi
str
ibut
ionf
orsampl
esi
zeof28

90
 tdi
str
ibut
ionf
orsampl
esi
zeof20
tdi
str
ibut
ionf
orsampl
esi
zeof
10

Ast
hesampl
esi
zedecr
easest
hecur
ver
epr
esent
ingt
hetdi
str
ibut
ionwi
l
lhav
ewi
der
t
ail
sandwi
l
lbemor
efl
atatt
hecent
er.

ZDi
str
ibut
ion

tDi
str
ibut
ion

Foragi
venconf
idencel
evel
,say95%,t
hetv
aluei
sgr
eat
ert
hant
heZv
alue.Thi
sis
so because t
her
eis mor
evar
iabi
l
ityi
n sampl
e meanscomput
ed f
rom smal
l
er
sampl
es.Thusourconf
idencei
nther
esul
ti
ngest
imat
eisnotst
rong.tv
aluesar
e
f
oundr
efer
ri
ngt
otheappr
opr
iat
edegr
eesoff
reedom i
nthett
abl
e.Degr
eesof
f
reedom meanst
hef
reedom t
ofr
eel
ymov
edat
apoi
ntsort
hef
reedom t
ofr
eel
y
assi
gnv
aluesar
bit
rar
il
y.
Degr
eesoff
reedom (
df)=n–1wher
eni
sthesampl
esi
ze.

Thi
simpl
i
est
hatwecanf
reel
ymov
eorassi
gnv
aluesf
oral
ldat
apoi
ntsexceptt
he
astnthv
l alue.I
fthemeanoft
hedi
str
ibut
ioni
sspeci
fi
edt
her
eisaf
reedom t
oassi
gn
anyv
aluef
oral
ldat
apoi
ntsexceptt
hel
ostpoi
nt.

Exampl
e-t
hemeanoff
ivedat
apoi
ntsi
s12.Theni
tfol
l
owst
hatt
hesum ofal
lthe
f
ivepoi
ntsi
s60=(
5x12)
.Thusi
ffi
vepoi
ntsar
econst
rai
nedt
ohav
easum of60or

91
ameanof12,
wehav
e5–1=4degr
eesoff
reedom.

I
fal
lthef
ivedat
apoi
ntsar
emi
ssi
ngwear
efr
eet
oassi
gnanyv
alueasl
ongast
hei
r
sum i
s60say14,
12,
10,
9,15.

I
f4ar
emi
ssi
ngwear
efr
eet
oassi
gnanyv
aluesi
nce60mi
nust
heknownv
alueofa
dat
apoi
nti
sknown.

I
ftwoar
eunknow,
14,
16,
10,
x3,
x4si
nce14+16+10+x3+x4=60
Thenx3+x4=60–40=20
x3 +x4 =20.Wecanassi
gnanyv
alueasl
ongast
hei
rsum i
s20.10,10or9.
11or
15.
5et
c…
Buti
fthef
ourdat
apoi
ntsar
eknown,(
10,14,16,12)
,the5th dat
apoi
ntwi
l
lhav
ea
pr
edet
ermi
nedv
aluei
.e.60–52=8.Nowwear
enotf
reet
oassi
gnar
bit
rar
yval
uef
or
t
hisdat
apoi
nt.Degr
eesoff
reedom canbeobt
ainedf
rom t
hedev
iat
ionbasedont
he
assumpt
iont
hatsum oft
hedi
ff
erences(
d)bet
weent
hemeanandal
lval
uesoft
he
r
andom v
ari
abl
e(x)i
szer
o.I
.e.
,i
fwesubt
ractt
hemeanf
rom al
lval
uesofxt
hesum
oft
hedi
ff
erencewi
l
lbezer
oconsi
dert
heabov
efi
vedat
apoi
nts.Thei
rmeani
s12
andt
hei
rsum 60.Thus(
x1–12)+(
x2+12)+(
x3–12)+(
x4–12)+(
x5–12)=0=d1
+d2+d3+d4+d5=0
Nowwear
efr
eet
oassi
gnanyv
aluef
oronl
yfourmi
ssi
ngdi
ff
erencesasl
ongast
his
sum i
szer
o.Sowehav
est
il
ln–1degr
eesoff
reedom.

Comput
ingtv
alue

Thetv
ari
abl
erepr
esent
ingt
hest
udent
’stdi
str
ibut
ioni
sdef
inedas

t= wher
e: i
sthesampl
emeanofnmeasur
ement
s,i
sthepopul
ati
on

meanandsi
sthesampl
est
andar
ddev
iat
ion

Not
ethatti
sjustl
i
keZ= exceptt
hatwer
epl
acewi
ths.unl
i
keourmet
hods

ofl
argesampl
es,cannotbeappr
oxi
mat
edbyswhent
hesampl
esi
zei
slesst
han
30andwecannotuset
henor
maldi
str
ibut
ion.Thet
abl
efort
hetdi
str
ibut
ioni
s
const
ruct
edf
orsel
ect
edl
evel
sofconf
idencef
ordegr
eeoff
reedom upt
o30.Touse

92
t
het
abl
eweneedt
oknow t
wonumber
s,t
het
ailar
ea,(
1mi
nusconf
idencel
evel
sel
ect
ed)
,andt
hedegr
eeoff
reedom.

(
1– conf
idencel
evelsel
ect
ed)i
s,t
heGr
eekl
ett
eral
pha.Thi
sist
heer
rorwe
commi
tt
eei
nest
imat
ing.

Theconf
idencei
nter
val
fort
hesampl
emeani
s  (
n–1)

Exampl
e.A t
raf
fi
cdepar
tmenti
ntowni
spl
anni
ngt
odet
ermi
nemeannumberof
acci
dent
s at a hi
gh-
ri
sk i
nter
sect
ion. Onl
ya r
andom sampl
e of 10 day
s
measur
ement
swer
eobt
ained.
Numberofacci
dent
sperdaywer
e
8, 7 10 15 11 6 8 5 13 12
Const
ructa95%conf
idencei
nter
val
fort
hemeannumberofacci
dentperday
.
a)Comput
e ands

= =9.
5perday

=3.
24perday

Theconf
idencel
evel
is95%so
=1–0.
95=0.
05

=0.
025

Thedegr
eeoff
reedom,
df=n–1=10–1=9f
rom t
hett
abl
et 025,
0. df9=2.
76
Theconf
idencei
nter
val
is

t
.0025df
(9)

9.
5(
2.26)

9.
52.
3
7.
2to11.
80
Wi
th95%conf
idencet
hemeannumberofacci
dentatt
hispar
ti
cul
ari
nter
sect
ioni
s

93
bet
ween7.
2and11.
8.
CheckYourPr
ogr
ess–4

Aqual
i
tycont
rol
l
erofacompanypl
anst
oinspectt
heav
eragedi
amet
erofsmal
l
bol
tsmade.Ar
andom sampl
eof6bol
tswassel
ect
ed.Thesampl
eiscomput
edt
o
be2.
0016mm andt
hesampl
est
andar
ddev
iat
ion0.
0012mm.Const
ructt
he99%
conf
idencei
nter
val
foral
lbol
tsmade.

4.
10SELECTI
NGASAMPLESI
ZE

Si
zeofasampl
emustbedet
ermi
nedsci
ent
if
ical
l
y.Car
emustbet
akennott
osel
ect
asampl
etool
argeort
oosmal
l
.Ther
ear
etwomi
sconcept
ionsabouthowmanyt
o
sampl
e
a)Sampl
econsi
sti
ng5% (
orsi
mil
arconst
antper
cent
age)i
sadequat
eforal
l
pr
obl
ems.
5%canbet
oomuchf
orapar
ti
cul
arpopul
ati
onsay10mi
l
li
onorcanbet
oo
smal
lforanot
hersay200.
b)Asampl
e,f
orexampl
e,mustbesel
ect
edf
orm aheav
il
ypopul
atedar
ea.
Theav
oidsuchpr
obl
emst
hesampl
esi
zeshoul
dbemat
hemat
ical
l
ydet
ermi
ned.

4.
10.
1Sampl
eSi
zef
ort
heMean

Ther
ear
ethr
eef
act
orst
hatdet
ermi
net
hesi
zeoft
hesampl
e.Noneofwhi
chhasany
di
rectr
elat
ionshi
ptot
hesi
zeoft
hepopul
ati
on.
a.Thedegr
eeofconf
idencesel
ect
ed.
b.Themaxi
mum al
l
owabl
eer
ror
c.Thev
ari
ati
oni
nthepopul
ati
on
a.Thedegr
eeofconf
idence,
Thi
sisusual
l
y95%or99%.Buti
tmaybeanyl
evel
.Iti
s
speci
fi
edbyt
hest
ati
sti
cian.Thehi
ghert
hedegr
eeofconf
idence,t
hel
argert
he
sampl
erequi
red.I
fwewantt
obesur
ethet
ruemeanwi
l
lli
ebet
weenani
nter
val
,
wewoul
dhv
etosur
veyt
heent
ir
epopul
ati
on.Exampl
e.Supposet
hepar
amet
ert
o
beest
imat
edi
sthear
it
hmet
icmean,andt
hedegr
eeofconf
idencesel
ect
edi
s
90%.Basedonasampl
e,i
twasest
imat
edt
hatt
hepopul
ati
onmeani
sint
he
i
nter
valbet
ween 850 and 1050.Logi
cal
l
y,i
fthedegr
ee ofconf
idence wer
e

94
 i
ncr
easedt
o95%or99%t
hesampl
esi
zewoul
dhav
etoi
ncr
ease.
b.Maxi
mum er
roral
l
owed.I
tist
hemaxi
mum er
rort
hatwi
l
lbet
oler
abl
eat a
speci
fi
edl
evelofconf
idence.Supposeast
ati
sti
ciani
sint
erest
edt
oest
imat
ethe
meani
ncomeofr
esi
dent
sofanar
ea.Ther
ear
eindi
cat
ionst
hatt
hef
ami
l
y
i
ncomesr
angef
rom apr
obabl
elow of19000t
oahi
ghofabout39000.Ont
he
assumpt
iont
hatt
hesear
ereasonabl
eest
imat
es,doesi
tseem l
i
kel
ythatt
he
st
ati
sti
cianwoul
dbesat
isf
iedwi
tht
hisst
atementr
esul
ti
ngf
rom asampl
eofar
ea
r
esi
dent
s.“Thepopul
ati
onmeani
sbet
ween23,
000and35,
000”Pr
obabi
l
itynot
.
Becauseconf
idencel
i
mit
sthatwi
dei
ndi
cat
eli
tt
leornot
hingaboutt
hepopul
ati
on
mean.I
nst
ead,t
hest
ati
sti
cianst
ated“
usi
ngt
he0.
95conf
idencel
evel
,thet
otal
er
rori
spr
edi
cti
ngt
hepopul
ati
onmeanshoul
dnotexceedby200”
.Themaxi
mum
al
l
owabl
eer
rori
sdenot
ed‘
E’=E=| -|
.Thi
smeansbasedonasampl
esi
zen,
if
t
heest
imat
eofpopul
ati
onmeani
scomput
edt
obe35,
000,t
henwewi
l
lassur
e
t
hatt
hepopul
ati
onmeani
sint
hei
nter
valbet
ween34800and35200.Foundby
35,
000+200and35000-
200.Fort
he0.
95degr
eeofconf
idencesel
ect
edt
he
maxi
mum er
rorof+200i
nter
msofZi
s1.
96.Todet
ermi
net
hev
alueofone
st
andar
der
roroft
hemean si
mpl
ydi
vi
det
het
otaler
rorof200by1.
96=

102.
04

= =102.
04

Er
rorcannotexceed
200 200

97.
96 102.
04 102.
04 97.
96
-
1.96 -
1 0 +1 1.
96
Popul
ati
onmeanmustbei
nthe Z
i
nter
val
+200f
rom t
hesampl
e
mean

95
 Thesi
zeoft
hesampl
eiscomput
edbysol
vi
ngf
orni
nthef
ormul
a

,
not
ethatsi
ncewear
eusi
ngasampl
est
andar
ddev
iat
ion.

i
.e.
, i
ssubst
it
utedf
or andSf
or

Tot
alal
l
owabl
eer
rorl
etber
epr
esent
edby‘
E’t
heni
tfol
l
owst
hat
,

=102.
04

Si
ncet
her
ear
etwounknownsf
oroneequat
ionwecannotsol
vef
orbot
h.

c.Var
iat
ioni
nthepopul
ati
on.Ther
ear
est
il
ltwounknowns.Tosol
vef
ort
henumber
t
obesampl
edweneedt
oest
imat
ethev
ari
ati
oni
nthepopul
ati
on.Thest
andar
d
dev
iat
ioni
sameasur
eofv
ari
ati
on.Thust
hest
andar
ddev
iat
ionoft
hepopul
ati
on
mustbeest
imat
ed.

Thi
scanbedoneei
ther
:
a-Byt
aki
ngasmal
lpi
l
otsur
veyandusi
ngt
hest
andar
ddev
iat
ionoft
hepi
l
otsampl
e
asanest
imat
eoft
hepopul
ati
onst
andar
ddev
iat
ionor
b-Byest
imat
ingt
hest
andar
ddev
iat
ionbasedonknowl
edgeoft
hepopul
ati
on.

Supposeapi
l
otsur
veyi
sconduct
edandsampl
est
andar
ddev
iat
ioni
scomput
edt
o
be3000.Thenumbert
obesampl
edcannowbeest
imat
ed.

n=864.
36

96
 i
sst
andar
der
roroft
hemean,
theer
rorwecommi
tinest
imat
ing.Fr
om t
heabov
e

comput
ati
onwecanl
ear
nthatast
hev
ari
ati
oni
nthepopul
ati
oni
ncr
easet
hesampl
e
si
zewi
l
lincr
ease.
Amor
econv
eni
entcomput
ati
onal
for
mul
afordet
ermi
ningni
s.

n=

wher
eE=al
l
owabl
eer
ror
Z=Zv
aluef
ort
hedegr
eeofconf
idencesel
ect
ed
S=Sampl
edev
iat
ion

Fort
hisexampl
en= =864.
36

Exampl
e1.Amar
ket
ingr
esear
chf
ir
m want
stoconductasur
veyt
oest
imat
ethe
av
erageamountspentonent
ert
ainmentbyeachper
sonv
isi
ti
ngapopul
arpub.The
peopl
ewhopl
ant
hesur
veywoul
dli
ket
obeabl
etodet
ermi
net
heav
erageamount
spentbyal
lpeopl
evi
sit
ingt
hepubt
owi
thi
nbr
.120,
wit
h95%conf
idence.Fr
om past
oper
ati
onsoft
hepub,
anest
imat
eoft
hepopul
ati
onst
andar
ddev
iat
ioni
s=br
.400
whati
sthemi
nimum r
equi
redsampl
esi
zes?
Z=1.
96
E=120
=400
Requi
red,
n?

n= =42.
6843

CheckYourPr
ogr
ess–5

Apr
ocessorofcar
rot
scut
sthegr
eent
opofeachcar
rotwashest
hecar
rot
s,and
i
nser
tssi
xtoapackage.Twent
ypackagesar
einser
tedi
naboxf
orshi
pment
.Tot
est
t
heWi
ghtoft
heboxes,af
ew wer
echecked.Themeanwei
ghtwas10kgandt
he
st
andar
ddev
iat
ion0.
25kg.Howmanyboxesmustt
hepr
ocessorsampl
etobe95%
conf
identt
hatt
hesampl
emeandoesnotdi
ff
erf
rom t
hepopul
ati
onmeanbymor
e

97
t
han0.
1kg?

4.
10.
2Sampl
esi
zef
orpr
opor
ti
on
Thepr
ocedur
eusedt
odet
ermi
net
hesampl
esi
zef
ort
hemeani
sappl
i
cabl
eto
det
ermi
newhenpr
opor
ti
onsar
einv
olv
ed.
Thr
eet
hingsmustbespeci
fi
ed.
-Deci
deont
hel
evel
ofconf
idence
-I
ndi
cat
ehowpr
eci
set
heest
imat
eoft
hepopul
ati
onpr
opor
ti
onmustbe
-Appr
oxi
mat
ethepopul
ati
onpr
opor
ti
on,
P,ei
therf
rom pastexper
ienceorf
rom a
smal
lpi
l
otsur
vey
Thef
ormul
afordet
ermi
ningt
hesampl
esi
zenf
orapr
opor
ti
on
n= (
1- )

wher
e: -est
imat
edpr
opor
ti
on
Z=Zv
aluef
ort
hesel
ect
edconf
idencel
evel
E=t
hemaxi
mum t
oler
abl
eer
ror

Exampl
e1.Amemberofpar
li
amentwant
stodet
ermi
neherpopul
ari
tyi
nherar
egi
on.
Shei
ndi
cat
est
hatt
hepr
opor
ti
onofv
oter
swhowi
l
lvot
eforhermustbeest
imat
ed
wi
thi
n + 2 per
centoft
he popul
ati
on pr
opor
ti
on.Fur
ther
,the 95% degr
ee of
conf
idencei
stobeused.I
npastel
ect
ionssher
ecei
ved40%oft
hepopul
arv
otei
n
t
hatar
ea.Shedoubt
swhet
heri
thaschangedmuch.How manyr
egi
ster
edv
oter
s
shoul
dbesampl
ed?
Z=1.
96
=0.
40
E=0.
02
n= (
1- )

=0.
40(
1–0.
4) =2,
304.
962305

Thi
ssampl
esi
zemi
ghtbet
ool
arge,
or
t
oosmal
lorexact
lycor
rectdependi
ngont
heaccur
acyof .

98
Not
e:i
fther
eisnol
ogi
calest
imat
eof ,
thesampl
esi
zecanbeest
imat
edbyl
ett
ing

=0.
5

Exampl
e2.Supposet
hepr
esi
dentwant
san est
imat
eoft
hepr
opor
ti
on oft
he
popul
ati
ont
hatsuppor
tthi
scur
rentpol
i
cyonunempl
oyment
.Thepr
esi
dentwant
s
t
heest
imat
eto bewi
thi
n0.
04oft
het
ruepr
opor
ti
on.Assumea95% l
evelof
conf
idenceandt
hepr
opor
ti
onsuppor
ti
ngcur
rentpol
i
cyt
obe0.
60.
a) Howl
argeasampl
eisr
equi
red
b)How l
argewoul
dthesampl
ehav
eto bei
ftheest
imat
ewer
enot
av
ail
abl
e?
Sol
uti
on:
a)E=0.
04
n=0.
6(1–0.
6)
Z=1.
96
=577
=0.
60
b)E=0.
4
Z=1.
96
=0.
50(
sincet
her
eisnoest
imat
e)

n=0.
5(1–0.
5)

=600

CheckYourPr
ogr
ess–6

Themar
ket
ingdepar
tmentofacompanywi
shest
ost
udyt
hel
oyal
typat
ter
nof
consumer
s.Loy
alt
ypat
ter
nsr
angef
rom ext
remel
yloy
alt
obr
andsni
tcher
.Ift
he
depar
tmentwi
shest
oest
imat
ethepr
opor
ti
onofconsumer
swhoar
eext
remel
yloy
al
t
othi
sbr
and,whatsampl
esi
zewoul
dbenecessar
ytoest
imat
ethi
spr
opor
ti
onwi
th
0.
05wi
th95%conf
idence?

4.
11ANSWERSTOCHECKYOURPROGRESS

99
 1.0.
1056
2.18.
60and21.
40
3.49.
21%and60.
79%
4.1.
9996and2.
0036
5.24
6.384

4.
12MODELEXAMI
NATI
ONQUESTI
ONS

Answert
hef
oll
owi
ngquest
ions
1.Expl
aint
hecent
ral
li
mitt
heor
em andi
tsi
mpor
tantf
acet
s.
2.An i
nvest
mentconsul
tantr
epor
tst
hatt
heav
erage12-
mont
hret
urnon a
r
andom sampl
eof50pr
oject
swas20.
74%.I
fthest
andar
ddev
iat
ionwas5%
f
ort
heent
ir
elar
gegr
oupofst
ocksf
rom whi
cht
hesampl
eofpr
oject
swas
chosen,const
ructa95%conf
idencei
nter
valf
ort
heav
erage12-
mont
hret
urn
f
oral
lpr
oject
sint
hisgr
oup.
3.Anadv
ert
isi
ngexecut
ivet
hinkst
hatt
hepr
opor
ti
onofconsumer
’swhohav
e
seen hi
s company
’s adv
ert
isementi
n newspaper
sis ar
ound 0.
65.The
execut
ivewant
stoest
imat
ethecust
omerpopul
ati
onpr
opor
ti
ont
owi
thi
n
0.
05andhav
ea98%conf
idencei
ntheest
imat
e.Howl
argeasampl
eshoul
d
bet
aken.
4.A companywant
sto est
imat
ethepr
opor
ti
on ofi
tsempl
oyees,who ar
e
sat
isf
iedwi
thanewi
ncent
ivescheme.Outofat
otalof1,
242empl
oyees,
160
wer
erandoml
ysel
ect
edandi
nter
viewed.Oft
heonei
nter
viewed,85i
ndi
cat
ed
t
hatt
heywer
esat
isf
iedwi
tht
henew scheme.Const
ructa90% conf
idence
i
nter
valf
ort
hepr
opor
ti
onofal
lempl
oyeeswhoar
esat
isf
iedwi
tht
henew
deci
sion.
5.A sur
veyi
sbei
ngpl
annedt
odet
ermi
net
hemeanamountoft
imeseni
or
execut
iveswat
chTV.Api
l
otsur
veyi
ndi
cat
edt
hatt
hemeant
imeperweeki
s
12hr
swi
thast
andar
ddev
iat
ionof3hr
s.I
tisdesi
redt
oest
imat
ethemean
v
iewi
ngt
imewi
thi
n0.
25hr
s.The95%degr
eeofconf
idencei
stobeused.How
manyexecut
ivesshoul
dbesur
vey
ed?

100
6.Whysampl
i
ng?
7.Whatar
ethepr
oper
ti
esofgoodest
imat
ors?Expl
ain
8.Asampl
eof200peopl
ewer
easkedt
oident
if
ythei
rmaj
orsour
ceofnews
i
nfor
mat
ion.110sai
dthei
rmaj
orsour
cewasr
adi
o.
a)Const
ructa95%conf
idencei
nter
valf
ort
hepr
opor
ti
onofpeopl
eint
he
popul
ati
ont
hatconsi
derr
adi
othei
rmaj
orsour
ceofnewsi
nfor
mat
ion
b)How l
argeasampl
ewoul
dbenecessar
ytoest
imat
ethepopul
ati
on
pr
opor
ti
onwi
thasampl
i
nger
rorof0.
05at95%conf
idence.
9.Whatar
ethef
act
orst
hatdet
ermi
net
hesi
zeoft
hesampl
e?
10.
Underwhatci
rcumst
ancest
hef
ini
tepopul
ati
oncor
rect
ionf
act
orshoul
dbe
appl
i
ed?
11.
Ther
egi
str
arofacol
l
egewant
stoest
imat
ethear
it
hmet
icmeanf
inalGPAof
al
lgr
aduat
ingseni
orst
udent
s.GPAsr
angebet
ween2.
0and4.
0.Themean
GPAi
stobeest
imat
edwi
thpl
usandmi
nus0.
05oft
hepopul
ati
onmean.The
99%conf
idencei
stobeused.Thest
andar
ddev
iat
ionofasmal
lpi
l
otsur
veyi
s
0.
279.
Howmanygr
ader
epor
ts(
transcr
ipt
s)shoul
dbesampl
ed?
12.
Inasmal
ltownt
her
ear
e250f
ami
l
ies.Fr
om 50f
ami
l
iessampl
e15r
egul
arl
y
at
tend communi
tymeet
ings.Const
ructa95% conf
idencei
nter
valf
ort
he
pr
opor
ti
onoff
ami
l
iesat
tendi
ngt
hemeet
ingr
egul
arl
y.
13.
Awi
nei
mpor
terneedst
orepor
ttheav
erageper
cent
ageofal
coholi
nbot
tl
es
ofnewwi
ne.
Fr
om exper
ience wi
thv
ari
ous ki
nds ofwi
nes,t
he i
mpor
terbel
i
eves t
he
popul
ati
onst
andar
ddev
iat
ioni
s1.
2%.Thei
mpor
terr
andoml
ysampl
ed60
bot
tl
esoft
henew wi
neandobt
ainasampl
emeanof9.
3%.Gi
vea90%
conf
idencei
nter
valf
ort
heav
erageper
cent
ageofal
coholi
nal
lbot
tl
esoft
he
newwi
ne.
14.
Themanuf
act
urer
sofaspor
tscarwantt
oest
imat
ethepr
opor
ti
onofpeopl
e
i
nagi
veni
ncomebr
acket
,whoar
eint
erest
edi
namodel
.Thecompanywant
s
t
oknowt
hepopul
ati
onpr
opor
ti
ont
owi
thi
n0.
10wi
th99%conf
idence.Cur
rent
companyr
ecor
dsi
ndi
cat
ethatt
hepr
opor
ti
onmaybear
ound0.
25.whati
sthe

101
 mi
nimum r
equi
redsampl
esi
zef
ort
hissur
vey
.
15.
Asur
veyofar
andom sampl
eof1000manager
sfoundt
hat81%oft
hem hada
hi
ghneedf
orpower
.Thi
sledt
oaconcl
usi
ont
hatpoweri
samot
ivat
orf
or
manager
s.Const
ructa 90% conf
idence i
nter
valf
ort
he pr
opor
ti
on ofal
l
manager
sint
hepopul
ati
onunderst
udywhoar
emot
ivat
edbypower
.
16.
Theav
eragescor
eoft
rai
neeswhopar
ti
ci
pat
edi
naspeci
alt
rai
ningpr
ogr
am i
s
120wi
thast
andar
ddev
iat
ionof15.A companywhosenti
tsempl
oyees
sampl
ed 36 empl
oyees and cal
cul
ates t
hei
rmean scor
es.Whati
sthe
pr
obabi
l
ityt
hatt
hesampl
emeanwi
l
lbel
esst
han115?
17.
Abusi
nessf
acul
tyi
nauni
ver
sit
yispl
anni
ngt
oint
roduceanewper
for
mance
ev
aluat
ion t
echni
que.I
nst
ruct
orsar
erequi
red t
o ev
aluat
ethei
rrespect
ive
depar
tmentheads.A r
andom sampl
eof7i
nst
ruct
orsf
rom t
hemar
ket
ing
depar
tmentwassel
ect
edandt
hei
rev
aluat
ionr
ecor
ded.Ther
esul
tswer
e
72,
81,
69,
78,
80,
75,
79
Const
ructa90% conf
idencei
nter
valf
ort
heav
erageper
for
manceev
aluat
ion
ofal
lthei
nst
ruct
orsi
nthedepar
tment
.

UNI
T6:
TESTSOFHYPOTHESES

Cont
ent
s
6.
1.Ai
msandObj
ect
ives
6.
2.I
ntr
oduct
ion
6.
3.Hy
pot
hesi
sandHy
pot
hesi
sTest
ingDef
ined
6.
3.1Hy
pot
hesi
s
6.
3.2Hy
pot
hesi
sTest
ing
6.
4.St
epsf
orTest
ingaHy
pot
hesi
s
6.
5.Hy
pot
hesi
sTest
ingI
nvol
vi
ngLar
gesampl
es
6.
5.1Test
ingf
ort
hePopul
ati
onMean/
Lar
geSampl
e/
6.
5.1.
1Popul
ati
onSt
andar
dDev
iat
ionKnown
6.
5.1.
2Popul
ati
onSt
andar
dDev
iat
ionUnknown

102
 6.
5.2Test
ingf
orTwoPopul
ati
onmeans
5.
4.3Test
ingf
oraPopul
ati
onPr
opor
ti
on
5.
4.4Test
ingf
ort
heDi
ff
erencebet
weenTwoPopul
ati
onPr
opor
ti
ons
5.
5Hy
pot
hesi
sTest
ingI
nvol
vi
ngSmal
lSampl
es
5.
5.1Char
act
eri
sti
csoft
hest
udent
’stDi
str
ibut
ion
5.
5.2Testf
ort
hePopul
ati
onMean
5.
5.3Testf
orCompar
isonofTwoPopul
ati
onMeans
5.
5.4Hy
pot
hesi
sTest
ingI
nvol
vi
ngPai
redObser
vat
ions
5.
6Test
ingf
orDi
ff
erenceofVar
ianceCompar
ingTwoPopul
ati
onVar
iances
5.
7Answer
stoCheckYourPr
ogr
ess
5.
8Model
Exami
nat
ionQuest
ions

5.
0AI
MSANDOBJECTI
VES

Whenweest
imat
ethev
alueofapar
amet
erwear
eusi
ngmet
hodsofest
imat
ion.The
unknownv
alueofapopul
ati
onpar
amet
eri
sest
imat
edf
rom sampl
einf
ormat
ionby
const
ruct
ingconf
idencei
nter
val
est
imat
e.

Deci
sionconcer
ningt
hev
alueofapopul
ati
onpar
amet
erar
eobt
ainedbyhy
pot
hesi
s
t
est
ing,
whi
chi
sthet
opi
coft
hischapt
er.
Af
tercompl
eti
ngt
hisuni
t,y
ouwi
l
lbeabl
eto:
 def
inehy
pot
hesi
sandt
est
inghy
pot
hesi
s
 t
esthy
pot
hesi
sinv
olv
ingl
argesampl
e
 t
esthy
pot
hesi
sinv
olv
ingsmal
lsampl
e
 under
standt
hep-
val
uei
nhy
pot
hesi
stest
ing
 t
est
ingf
ordi
ff
erencesofv
ari
ance

5.
1INTRODUCTI
ON

Mostst
ati
sti
cali
nfer
ence cent
ers ar
ound t
he par
amet
ers ofa popul
ati
on.I
n
hy
pot
hesi
stest
ingwest
artwi
thanassumedv
alueofapopul
ati
onpar
amet
er.Thena
sampl
eev
idencei
susedt
odeci
dewhet
hert
heassumedv
aluei
sunr
easonabl
eand
shoul
dber
eject
ed,
orwhet
heri
tshoul
dbeaccept
ed;
Hencet
hest
ati
sti
cali
nfer
ences

103
madear
eref
err
edt
oashy
pot
hesi
stest
ing.

5.
2HYPOTHESI
SANDHYPOTHESI
STESTI
NGDEFI
NED

5.
2.1Hy
pot
hesi
sisast
atementoranassumpt
ionaboutt
hev
alueofapopul
ati
on
par
amet
erorpar
amet
ers.
Exampl
es
- Themeanmont
hlyi
ncomeofal
lempl
oyeesofacompanyi
sbr
.2000.
- Theav
erageageofst
udent
sinacol
l
egei
s22y
ear
s
- 5%oft
hepr
oduct
sofaf
ir
m ar
edef
ect
ive

Al
lthesehy
pot
hesi
shav
eonet
hingi
ncommon:
Thepopul
ati
onofi
nter
estar
esol
arget
hatf
orv
ari
ousr
easonsi
twoul
dnotbe
f
easi
blet
ost
udyal
lthei
tems,
orper
sons,
int
hepopul
ati
on

5.
2.2Hy
pot
hesi
sTest
ingDef
ined
Hy
pot
hesi
stest
ing i
s a pr
ocedur
e based on sampl
e ev
idence and pr
obabi
l
ity
di
str
ibut
ionusedt
odet
ermi
newhet
hert
hehy
pot
hesi
sisar
easonabl
est
atementand
shoul
dnotber
eject
ed,
ori
sunr
easonabl
eandshoul
dber
eject
ed.

I
tissi
mpl
ysel
ect
ingasampl
efr
om t
hepopul
ati
ons,cal
cul
atesampl
est
ati
sti
cand
basedoncer
tai
ndeci
sionr
ulesacceptorr
ejectt
hehy
pot
hesi
s.

Testst
ati
sti
cisasampl
est
ati
sti
ccomput
edf
rom t
hesampl
edat
a.Thev
alueoft
he
t
estst
ati
sti
cisusedi
ndet
ermi
ningwhet
herornotwemayr
ejectt
hehy
pot
hesi
s.

Deci
sionr
uleofast
ati
sti
calhy
pot
hesi
sisr
ulet
hatspeci
fi
est
hecondi
ti
onsunder
whi
cht
hehy
pot
hesi
smayber
eject
ed.Wedeci
dewhet
herornott
orej
ectt
he
hy
pot
hesi
sbyf
oll
owi
ngt
hedeci
sionr
ule.

5.
3STEPSFORTESTI
NGHYPOTHESI
S

Ther
eisaf
ive-
steppr
ocedur
ethatsy
stemat
izehy
pot
hesi
stest
ing.
Hy
pot
hesi
stest
ing as used by t
he st
ati
sti
cians does notpr
ovi
de pr
ooft
hat
somet
hingi
str
ue,i
nthemanneri
nwhi
chamat
hemat
ici
an“
prov
es”ast
atement
.It

104
doespr
ovi
deaki
ndof“
proofbey
ondar
easonabl
edoubt
”int
hemannerofan
at
tor
ney
.

St
epI
.Ident
it
ythenul
lhy
pot
hesi
sandt
heal
ter
nat
ehy
pot
hesi
s
Thef
ir
stst
epi
stost
atet
hehy
pot
hesi
stobet
est
ed.I
tiscal
l heNul
edt lHy
pot
hesi
s,
desi
gnat
edbyHo andr
ead“
Hsub-
zer
o”.Thecapi
tall
ett
erHst
andsf
orhy
pot
hesi
s
andt
hesubscr
iptzer
oimpl
i
es“
nodi
ff
erenceornochange.Ther
eisusual
l
ya‘
not
’or
a‘
no’t
ermi
nthenul
lhy
pot
hesi
smeani
ngnochange”
.Thenul
lhy
pot
hesi
sissetup
f
ort
hepur
poseofei
thert
orej
ect
ingornott
orej
ect
ingi
t.Thenul
lhy
pot
hesi
sisa
st
atementt
hatwi
l
lber
eject
edi
toursampl
einf
ormat
ionpr
ovi
deuswi
thconv
inci
ng
ev
idencet
hati
tfal
se.Andi
twi
l
lnotber
eject
edi
foursampl
edat
afai
ltopr
ovi
de
ampl
eev
idencet
hati
tisf
alse.

I
fthenul
lhy
pot
hesi
sisnotr
eject
edbasedonsampl
edat
a,i
nef
fectwear
esay
ing
t
hatt
heev
idencedoesnotal
l
ow ust
orej
ecti
t.Wecannotst
ate,howev
er,t
hatt
he
nul
lhy
pot
hesi
sist
rue.Thi
sist
hesameast
hesi
tuat
ioni
nthecour
ts.

I
ncour
tswehear
djudgessay
ing,
“Foundnotgui
l
ty”whent
heyr
eleaseasuspectf
ree.
Theynev
ersay“
hei
sinnocent
”.Thesuspecti
srel
eased maybebecauset
he
pr
osecut
orort
hepol
i
cef
ailt
opr
ovi
det
hecour
twi
thconv
inci
ngev
idencebey
ond
r
easonabl
edoubtt
hatt
hesuspecthascommi
tt
edt
hecr
ime.Thenul
lhy
pot
hesi
sisa
t
ent
ati
veassumpt
ionmadeaboutt
hev
alueofapopul
ati
onpar
amet
er.Usual
l
yiti
sa
st
atementt
hatt
hepopul
ati
onpar
amet
erhasaspeci
fi
cval
ue.

Fai
l
uret
orej
ectt
henul
lhy
pot
hesi
sdoesnotpr
ovet
hatHoi
str
ue.Topr
ovewi
thout
anydoubtt
hatt
henul
lhy
pot
hesi
sist
rue,
thepopul
ati
onpar
amet
erwoul
dhav
etobe
known.Thi
sisusual
l
ynotf
easi
ble.

Thesampl
est
ati
sti
cisusual
l
ydi
ff
erentf
rom t
hehy
pot
hesi
zedpopul
ati
onpar
amet
er.
Fort
hisr
easonwehav
etomakeaj
udgmentaboutt
hedi
ff
erence.

I
fahy
pot
hesi
zedmeani
s70andt
hesampl
emeani
s69.
5wemust
smakea
j
udgmentaboutt
hedi
ff
erence0.
5.I
sitat
ruedi
ff
erence,i
.easi
gni
fi
cantdi
ff
erence,
ori
sitduet
ochance/sampl
i
ng.Toanswert
hisquest
ionweconductat
estof

105
si
gni
fi
cance,
commonl
yref
err
edt
oasat
estofhy
pot
hesi
s.

I
dent
if
ythe Al
ter
nat
ive hy
pot
hesi
s(H1)
:Al
l
iter
ate hy
pot
hesi
sis a st
atement
descr
ibeswhatwewi
l
lbel
i
evei
fwer
ejectt
henul
lhy
pot
hesi
s.I
tisdesi
gnat
edH1(
H
sub–one)t
heal
ter
nat
ehy
pot
hesi
swi
l
lbeaccept
edi
fthesampl
edat
apr
ovi
deus
wi
thev
idencet
hatt
henul
lhy
pot
hesi
sisf
alse.

I
tisast
atementt
hatwi
l
lbeaccept
edi
foursampl
edat
apr
ovi
deuswi
thampl
e
ev
idencet
hatt
henul
lhy
pot
hesi
sisf
alse.

St
epI
I:Det
ermi
net
hel
evelofsi
gni
fi
cance
Af
terset
ti
ngupt
henul
lhy
pot
hesi
sandal
ter
nat
ehy
pot
hesi
s,t
henextst
epi
stost
ate
t
hel
evelofsi
gni
fi
cance.I
tist
hepr
obabi
l
ityofr
eject
ingt
henul
lhy
pot
hesi
swheni
tis
act
ual
l
ytr
ue.

Lev
elofsi
gni
fi
cancei
sther
iskweassumeofr
eject
ingt
henul
lhy
pot
hesi
swheni
tis
aact
ual
l
ytr
ue.

Thel
evelofsi
gni
fi
cancei
sdesi
gnat
edbyt
heGr
eekl
ett
eral
pha,,i
tisal
sor
efer
red
t
oast
hel
evel
ofr
isk.

Tr
adi
ti
onal
l
ythr
eel
evel
sofsi
gni
fi
cancear
eknown
0.
05.l
evel
issel
ect
edf
orconsumerr
esear
ch
0.
01.f
orqual
i
tyassur
ance
0.
10.f
orpol
i
tical
pol
l
ing
The l
evelofsi
gni
fi
cance r
efl
ect
sthe r
isk we wantt
o assume A0.
01 l
evelof
si
gni
fi
cancewi
l
lyi
eldsmal
l
err
iskt
han0.
05or0.
1.

Ther
esear
chermustdeci
deont
hel
evel
ofsi
gni
fi
cancebef
oref
ormul
ati
ngadeci
sion
r
uleandcol
l
ect
ingsampl
edat
a.Thi
sisv
eryi
mpor
tantt
oreducebi
as.Thel
evelof
si
gni
fi
cancecanbeanyl
evel
bet
ween0and1.

Toi
l
lust
rat
ehow i
tispossi
blet
orej
ectat
ruehy
pot
hesi
s,supposet
hatacomput
e
manuf
act
urerpur
chaseacomponentf
orm asuppl
i
er.Supposet
hecont
ractspeci
fi
es
t
hatt
he manuf
act
ure’
s qual
i
tyassur
ance depar
tmentwi
l
lsampl
e al
lincomi
ng
shi
pmentofcomponent
.Ifmor
ethan 6% oft
he component
s sampl
ed ar
e

106
subst
andar
dtheshi
pmentwi
l
lber
eject
ed.

Thenul
lhy
pot
hesi
sis:
Ho= t
he i
ncomi
ng shi
pmentofcomponent
s cont
ains 6% orl
ess subst
andar
d
component
s.

Theal
ter
nat
ivehy
pot
hesi
sis:
H1:Mor
ethan6%oft
hecomponent
sar
edef
ect
ive.
Asampl
eof50component
sjustr
ecei
vedr
eveal
edt
hat4component
sor8% wer
e
subst
andar
d.

Theshi
pmentwasr
eject
edbecausei
texceededmaxi
mum of6%.I
ftheshi
pment
wasact
ual
l
ysubst
andar
dthent
hedeci
siont
oret
urnt
hecomponentt
othesuppl
i
er
wascor
rect
.

Howev
ersuppose t
he 4 component
s sel
ect
ed i
nthe sampl
e wer
ethe onl
y
subst
andar
d component
sint
he shi
pmentof4000 component
s.Onl
y1% wer
e
def
ect
ive.I
nthatcasel
esst
han6% oft
heent
ir
eshi
pmentwassubst
andar
dand
r
eject
ingt
heshi
pmentwasaner
ror
.

I
nter
msofhy
pot
hesi
stest
ingwer
eject
edt
henul
lhy
pot
hesi
sthatt
heshi
pmentwas
notsubi
tandar
dwhenweshoul
dnothav
erej
ect
edi
t.

Byr
eject
ingat
ruehy
pot
hesi
swecommi
tt
edat
ypeIer
ror
.
At
ypeIer
rori
sdesi
gnat
edby(
alpha)
.

Ty
peIer
rori
srej
ect
ingt
henul
lhy
pot
hesi
s,Ho,
wheni
tisact
ual
l
ytr
ue.

Thepr
obabi
l
ityofcommi
tt
inganot
hert
ypeofer
ror
,Ty
peI
Ier
ror
,isdesi
gnat
ed,
bet
a,
f
ail
uret
orej
ectHowheni
tisact
ual
l
yfal
se.

Theabov
efi
rm woul
dcommi
tat
ypeI
Ier
rori
f,unknownt
oit
,ani
ncomi
ngshi
pment
cont
ained600subst
andar
dcomponent
syett
heshi
pmentwasaccept
ed.Suppose2
oft
he50componenti
nthesampl
e(4%)t
est
edwer
esubst
andar
dand48wer
egood.
Becauset
hesampl
econt
ainsl
esst
han6%subst
andar
dcomponent
s,t
heshi
pment
wasaccept
ed.Butofal
ltaskt
heent
ir
eshi
pment15% oft
hecomponent
swe

107
def
ect
ive.

Weof
tenr
efert
othoset
wopossi
bleer
ror
sast
heal
phaer
ror,
andt
hebet
aer
ror,
er
ror–t
hepr
obabi
l
ityofmaki
ngat
ypeIer
ror
er
ror–t
hepr
obabi
l
ityofmaki
ngt
ypeI
Ier
ror
Thef
oll
owi
ngt
abl
eshowst
hedeci
siont
her
esear
chercoul
dmakeandt
hepossi
ble
consequences.
Nul
lHy
pot
hesi
s The r
esear
cher TheResear
cher
doesnotr
ejectHo r
eject
sHo
I
fHoi
str
ue Cor
rectdeci
sion Ty
peIer
ror
I
fHoi
sfal
se Ty
peI
Ier
ror Cor
rectdeci
sion

St
epI
II
:Fi
ndt
heTestst
ati
sti
c

Testst
ati
sti
c–Av
alue,
det
ermi
nedf
rom sampl
einf
ormat
ion,
usedt
orej
ectornott
o
r
ejectt
henul
lhy
pot
hesi
s.

Ther
ear
emanyt
estst
ati
sti
cs,
Z(t
henor
maldi
str
ibut
ion)
,thest
udenttt
est
, andX2
F,
ort
hechi
–squar
e.

Thest
andar
dnor
maldev
iat
e,Zdi
str
ibut
ioni
susedast
estst
ati
sti
cwhent
hesampl
e
si
zei
slar
ge,n30.Basedont
hesampl
esi
zeandt
hepar
amet
ert
obet
est
edt
he
st
ati
sti
cianwi
l
lsel
ectt
heappr
opr
iat
etestst
ati
sti
c.

St
epI
V:Det
ermi
net
hedeci
sionr
ule
Adeci
sionr
ulei
sast
atementoft
hecondi
ti
onsunderwhi
cht
henul
lhy
pot
hesi
sis
r
eject
edandt
hecondi
ti
onsunderwhi
chi
tisnotr
eject
ed.

Ther
egi
onorar
eaofr
eject
iondef
inest
hel
ocat
ionofal
lthosev
aluest
hatar
eso
l
argeorsosmal
lthatt
hepr
obabi
l
ityoft
hei
roccur
renceunderat
ruenul
lhy
pot
hesi
s
i
srat
herr
emot
e.

Sampl
i
ngdi
str
ibut
ionf
ort
hest
ati
sti
cZ,
0.05l
evel
ofsi
gni
fi
cance.

108
 Non-
rej
ect
ion
Regi
onordonotr
ejectH0 Rej
ect
ionr
egi
on

Scal
eofZ
0 1.
645
0.
95Pr
obabi
l
ity 0.
05Pr
obabi
l
ity

I
nit
ial
Val
ue

Theabov
echar
tpor
tray
sther
eject
ionr
egi
onf
orat
estofsi
gni
fi
cance.Thel
evelof
si
gni
fi
cancesel
ect
edi
s0.
05.
1.Thear
eawher
ethenul
lhy
pot
hesi
sisnotr
eject
edi
ncl
udest
hear
eat
othel
eft
of1.
645
2.Thear
eaofr
eject
ioni
stot
her
ightof1.
645
3.Aone–t
ail
edt
esti
sbei
ngappl
i
ed/
wil
lbedi
scussedl
att
eron/
4.The0.
05l
evel
ofsi
gni
fi
cantwaschosen
5.Thesampl
i
ngdi
str
ibut
ioni
sfort
het
estst
ati
sti
cZ ,t
hest
andar
dnor
mal
dev
iat
e.
6.Thev
alue1.
645separ
atest
her
egi
onswher
ethenul
lhy
pot
hesi
sisr
eject
ed
andwher
eiti
snotr
eject
ed
7.Thev
alue1.
645i
scal
l
edt
hecr
it
icalv
alue.I
tist
hecor
respondi
ngv
alueoft
he
t
estst
ati
sti
cfort
hesel
ect
edl
evelofsi
gni
fi
cancei
.e.Zv
alueatt
he0.
05l
evel
ofsi
gni
fi
cancei
s1.
645.

Cr
it
icalv
alue:Thedi
vi
dingpoi
ntbet
weent
her
egi
onwher
ethenul
lhy
pot
hesi
sis
r
eject
edandt
her
egi
onwher
eiti
snotr
eject
ed.

St
epsV:Takeasampl
eandmadeadeci
sion
Att
hisst
epadeci
sioni
smadet
orej
ectornott
orej
ectt
henul
lhy
pot
hesi
s.Fort
he

109
abov
echar
t,i
fbasedonsampl
edat
aori
nfor
mat
ion,Zi
scomput
edbe2.
34t
henul
l
hy
pot
hesi
sisr
eject
edatt
he0.
05l
evel
ofsi
gni
fi
cance.

Thedeci
siont
orej
ectHoi
smadebecause2.
34l
i
esi
nther
egi
onofr
eject
iont
hati
s
bey
ond 1.
645.We woul
drej
ectt
he nul
lhy
pot
hesi
sreasoni
ng t
hati
tis hi
ghl
y
i
mpr
obabl
ethatacomput
edZv
aluet
hisl
argei
sduet
osampl
i
ngv
ari
ati
onorchance.
Hadt
hecomput
edv
aluebeen1.
645orl
esssay0.
71t
henHowoul
dnotber
eject
ed.
I
twoul
dber
easonedt
hatsuchasmal
lcomput
edv
aluecoul
dbeat
tri
but
edt
ochance
t
hati
ssampl
i
ngv
ari
ati
on.

One–Tai
ledandTwo–Tai
ledt
est
sofsi
gni
fi
cance

OneTai
ledTest
Ther
egi
onofr
eject
ioni
sonl
yinonet
ailoft
hecur
ve.Theabov
eexampl
eindi
cat
es
t
hatt
her
egi
onofr
eject
ioni
sint
her
ight(
upper
)tai
loft
hecur
ve.

Non-
rej
ect
ion
Rej
ect
ionr
egi
on Regi
onordonotr
ejectH0

0.
95Pr
obabi
l
ity
Z
-
1.645 0
0.
05Pr
obabi
l
ity 0.
95Pr
obabi
l
ity

I
nit
ial
Val
ue

Consi
dercompani
espur
chasel
argerquant
it
iesoft
yre.Supposet
heywantt
het
ir
es
t
oanav
eragemi
l
eageof40,
000Km ofwearundernor
malusage.Theywi
l
lther
efor
e
r
ejectashi
pmentoft
ir
esi
faccel
erat
ed-l
i
fet
estr
evealt
hatt
hel
i
feoft
het
ir
esi
s
si
gni
fi
cant
lybel
ow40000Km ont
heav
erage.

Thepur
chaser
sgl
adl
yacceptashi
pmenti
fthemeanl
i
fei
sgr
eat
ert
han40000Kms,

110
t
heyar
enotconcer
nedwi
tht
hispossi
bil
i
ty.

Theyar
eonl
yconcer
nedi
ftheyhav
esampl
eev
idencet
oconcl
udet
hatt
het
ir
eswi
l
l
av
eragel
esst
han40000Kmsofusef
ull
i
fe.

Thust
het
esti
ssetupt
osat
isf
ytheconcer
noft
hecompani
est
hatt
hemeanl
i
feof
t
het
ir
esi
slesst
han40000Km.

Thenul
landal
ter
nat
ehy
pot
hesesar
ewr
it
ten:
-
Ho:
=40,
000km and
H1:
<40000km

Onewayt
odet
ermi
net
hel
ocat
ionoft
her
eject
ionr
egi
oni
stol
ookatt
hedi
rect
ioni
n
whi
cht
hei
nequal
i
tysi
gni
ntheal
ter
nat
ehy
pot
hesi
sispoi
nti
ng.

Testi
sone–t
ail
ed,
ifH1st
ates>or<i
f1,
stat
esadi
rect
ion,
testi
sone-t
ail
ed.

Two-
tai
ledt
est
At
esti
stwo-t
ail
edi
fH1doesnotst
ateadi
rect
ion.
Consi
dert
hef
oll
owi
ngexampl
e:
Ho:t
her
eisnodi
ff
erencebet
weent
hemeani
ncomeofmal
esandt
hemeani
ncome
off
emal
es.
H1:t
her
eisadi
ff
erencei
nthemeani
ncomeofmal
esandt
hemeani
ncomeof
f
emal
es.
I
fHoi
srej
ect
edandH1 accept
edt
hemeani
ncomeofmal
escoul
dbegr
eat
ert
han
t
hatoff
emal
esorv
isv
ersa.Toaccommodat
etheset
wopossi
bil
i
ties,t
he5l
evelof
si
gni
fi
cancer
epr
esent
ingt
hear
eaofr
eject
ioni
sdi
vi
dedequal
l
yint
otwot
ail
soft
he
sampl
i
ngdi
str
ibut
ion.I
fthel
evelofsi
gni
fi
canti
s0.
05eachr
eject
ionr
egi
onwi
l
lhav
e
0.
025pr
obabi
l
ity
.

Not
ethatt
het
otal
areaundert
henor
mal
cur
vei
sonef
oundby0.
95+0.
025+0.
025.

Non-
rej
ect
ion
Rej
ect
ionr
egi
on Regi
onordonotr
ejectH0 Rej
ect
ionr
egi
on

111
 0.
95Pr
obabi
l
ity
Z
-
1.96 0 +1.96
0.
025Pr
obabi
l
ity 0.
025Pr
obabi
l
ity

I
nit
ial
Val
ue I
nit
ial
Val
ue

5.
4HYPOTHESI
STESTI
NGI
NVOLVI
NGLARGESAMPLE

Not
ethatasampl
eof30ormor
eisconsi
der
edl
arge.

5.
4.1Testf
ort
hePopul
ati
onMean

5.
4.1.
1Popul
ati
onSt
andar
dDev
iat
ionKnown
Exampl
e.Theef
fi
ciencyr
ati
ngsofacompanyhav
ebeennor
mal
l
ydi
str
ibut
edov
era
per
iodofmanyy
ear
s.Thear
it
hmet
icmean(
)oft
hedi
str
ibut
ioni
s200andt
he
st
andar
ddev
iat
ioni
s19.Recent
ly,howev
er,y
oungempl
oyeeshav
ebeenhi
redand
newt
rai
ningandpr
oduct
ionmet
hodsi
ntr
oduced.Usi
ngt
he0.
01l
evelofsi
gni
fi
cance,
wewantt
otestt
hehy
pot
hesi
sthatt
hemeani
sst
il
l200.

Sol
uti
on:
St
ep1.Thenul
lhy
pot
hesi
sis"Thepopul
ati
onmeani
sst
il
l200"t
heal
ter
nat
ive
hy
pot
hesi
sis“
Themeani
sdi
ff
erentf
rom 200"or"
Themeani
snot200"
t
het
wohy
pot
hesesar
ewr
it
tenas:
Ho:
=200
H1:
200

Thi
sisat
wo-t
ail
edt
estbecauset
heal
ter
nat
ehy
pot
hesi
sdoesnotst
atet
he
di
rect
ionoft
hedi
ff
erence.

Thati
s,i
tdoesnotst
atewhet
hert
hemeani
sgr
eat
ert
hanorl
esst
han200.

St
ep2:-Asnot
edt
he0.
01l
evelofsi
gni
fi
cancei
stobeused.Thi
sist
hepr
obabi
l
ity

112
ofcommi
tt
ingat
ypeIer
ror
.Thati
sthepr
obabi
l
ityofr
eject
ingat
ruehy
pot
hesi
s.

St
ep3:-Thet
estst
ati
sti
cfort
hist
ypeofpr
obl
em i
sZ,t
hest
andar
dnor
maldev
iat
e
/
youwi
l
lseel
ateront
hatt
hesampl
esi
zei
slar
ge/

Z=

St
ep4:Thedeci
sionr
ulli
sfor
mul
atedbyf
indi
ngt
hecr
it
icalv
aluesofZf
rom t
he
t
abl
eofnor
mal
dist
ri
but
ion.

Si
ncet
hisi
sat
wo-t
ail
edt
est
,hal
fof0.
01or0.
005i
sineacht
ail
.Eachr
eject
ion
r
egi
onwi
l
lhav
eapr
obabi
l
ityof0.
005.

Thear
eawher
eHoi
snotr
eject
edl
ocat
edbet
weent
het
wot
ail
s,i
sther
efor
e,0.
99.
0.
5000-
0.005=0.
4950so0.
4950i
sthear
eabet
ween0andt
hecr
it
icalv
alue.The
v
aluenear
estt
o0.
4950i
s0.
495.Thev
aluef
ort
hispr
obabi
l
ityi
s2.
58.

Non-
rej
ect
ion
Rej
ect
ionr
egi
onwi
th Regi
onordonotr
ejectH0 Rej
ect
ionr
egi
on
pr
obabi
l
ity 0.
99Pr
obabi
l
ity wi
thpr
obabi
l
ity0.
01÷2=0.
005
0.
01÷2=0.
005 0.
4950=0.
5-0.
0050.
4950=0.
5-0.
005
Z
I
tisnotr
eject
ed

Thedeci
sionr
ulei
sther
efor
e:Rej
ectt
henul
lhy
pot
hesi
sandacceptt
heal
ter
nat
e
hy
pot
hesi
sift
hecomput
edv
alueofZdoesnotf
alli
nther
egi
onbet
ween+2.
58and-
2.
58.Ot
her
wisedonotr
ejectt
henul
lhy
pot
hesi
s.

St
ep5:Takeasampl
eandmakeadeci
sion
Takeasampl
efr
om t
hepopul
ati
on(
eff
ici
ent
lyr
ati
ngs)comput
eZandbasedont
he

113
deci
sionr
ule,
arr
iveatadeci
siont
orej
ectHoornotr
ejectHo.

Theef
fi
cent
yrat
ingsof100empl
oyeeswer
eanal
yzed.Themeanoft
hesampl
ewas
comput
edt
obe203.
5.
Comput
eZ

Z= = 203.
5-200=2.
19

Si
nce2.
19doesnotf
alli
nther
eject
ionr
egi
on,Hoi
snotr
eject
ed.Soweconcl
ude
t
hatt
hedi
ff
erencebet
ween203.
5,t
hesampl
emean,and200canbeat
tri
but
edt
o
chancev
ari
ati
on.

Not
e:Sel
ect
ingt
hel
evelofsi
gni
fi
cancebef
oreset
ti
ngupt
hedeci
sionr
uleand
sampl
i
ngt
hepopul
ati
oni
simpor
tantnott
obebi
ased.

Hoi
snotr
eject
edatt
he1% l
evel
.Wewoul
dhav
ebi
asedt
hel
aterdeci
sionbynot
i
nit
ial
l
ysel
ect
ingt
he0.
01l
evel
.Inst
eadwecoul
dhav
ewai
tedunt
ilaf
tert
hesampl
i
ng
andsel
ect
edal
evelofsi
gni
fi
cancet
hatwoul
dcauset
henul
lhy
pot
hesi
stobe
r
eject
ed.Wecoul
dhav
echosen,f
orexampl
e,t
he0.
05l
evel
.Thecr
it
icalv
aluef
or
t
hatl
evel
are+1.
96.

Si
ncet
hecomput
edv
alueofZ(
2.19)l
i
esbey
ond1.
96t
henul
lhy
pot
hesi
swoul
dbe
r
eject
edandwecoul
dconcl
udedt
hatt
hemeanef
fi
ciencyr
ati
ngi
snot200.

Exampl
e2:Themeanannualt
urnov
err
ateofabr
andofchemi
cali
s6.
0(t
his
i
ndi
cat
est
hatt
hest
ockoft
hechemi
calt
urnsov
eranav
erageofsi
xti
mesay
ear
s).
Thest
andar
ddev
iat
ioni
s0.
5.I
tissuspect
edt
hatt
heav
eraget
urnov
eri
snot6.
0.The
0.
05l
evel
ofsi
gni
fi
cancei
stobeusedt
otestt
hishy
pot
hesi
s.
1.St
ateHo,
adH1
2.Whati
sthev
alueof?
3.Gi
vet
hef
ormul
afort
het
estst
ati
sti
c
4.St
atet
hedeci
sionr
ule
5.Ar
andom sampl
eof64bot
tl
esofabr
andwassel
ect
ed.Themeant
urn
ov
err
atecomput
edt
obe5.
84.Shal
lwer
ejectt
henul
lhy
pot
hesi
satt
he

114
 0.
05l
evel
s?I
nter
pret
.
Sol
uti
on:
1.Ho:
=6.
00
H1:
6.
00
2.0.
05

3.Z=

4.Donotr
ejectt
henul
lhy
pot
hesi
sift
hecomput
edZv
aluef
alesbet
ween–
1.
96and+1.
96

5.Z= =2.
56

6.r
ejectHoatt
he0.
05l
evel
.AcceptH1t
hemeant
urnov
eri
snotequalt
o
6.
00.

AoneTai
ledTest

I
ftheal
ter
nat
ehy
pot
hesi
sst
atesadi
rect
ion(
eit
hergr
eat
ert
han“or“l
esst
han”
)the
t
esti
sonet
ail
ed.Thehy
pot
hesi
s–t
est
ingpr
ocedur
eisgener
all
ythesameasf
ora
t
wo–t
ail
edt
est
,exceptt
hatt
hecr
it
ical
val
uei
sdi
ff
erent
.

Letuschanget
heal
ter
nat
ehy
pot
hesi
sint
hepr
evi
ouspr
obl
em,i
nvol
vi
ngef
fi
cing
r
act
ingofwor
ker

H1:
200(
tow–t
ail
edt
est
)to
H1:
>200(aone–t
ail
edt
est)

Thecr
it
icalv
aluesf
ort
het
wo– t
ail
edt
estwer
e-2.
58and+2.
58.Ther
egi
onof
r
eject
ionf
oraone–t
ail
edt
esti
sint
her
ightt
ail
oft
hecur
ve
Foraone-
tai
l
edt
estt
hecr
it
ical
val
uei
sfoundby
a.0.
5000–0.
01=0.
4900
b.TheZv
aluef
or0.
4900=pr
obabi
l
ityi
s2.
33

115
CheckYourPr
ogr
ess–1

Themanagementofchai
nofr
est
aur
ant
scl
aimst
hatt
hemeanwai
ti
ngt
imeof
cust
omer
sforser
vicei
snor
mal
l
ydi
str
ibut
ed wi
thameanof3 mi
nut
esand a
st
andar
ddev
iat
ionofonemi
nut
e.Thequal
i
tyassur
ancedepar
tmentf
oundasampl
e
of50cust
omer
satar
est
aur
antandt
hatt
hemeanwai
ti
ngt
imewas2.
75mi
nut
es.At
t
he0.
05si
gni
fi
cancel
eveli
sthemeanwai
ti
ngt
imel
esst
han3mi
nut
es?(
Not
ethat
t
hist
esti
sonet
ail
ed)

P–v
aluesi
sHy
pot
hesi
sTest
ing
Addi
ti
onalv
aluei
sof
tenr
epor
tedont
hest
rengt
hoft
her
eject
ion,orhow conf
ident
wear
einr
eject
ingt
henul
lhy
pot
hesi
s.Thi
smet
hodr
epor
tst
hepr
obabi
l
ity(
assumi
ng
t
hatt
henul
lhy
pot
hesi
sist
rue)ofget
ti
ngav
alueoft
het
estst
ati
sti
catl
eastas
ext
erm ast
hatobt
ained.

Thi
spr
ocedur
ecompar
est
hepr
obabi
l
ity
,cal
l
edP–Val
ue,
wit
hthesi
gni
fi
cancel
evel
.
I
ftheP-v
aluei
ssmal
l
ert
hant
hesi
gni
fi
cancel
evel
,Hoi
srej
ect
ed.I
fiti
slar
gert
han
t
hesi
gni
fi
cantl
evelHoi
snotr
eject
ed.Thi
spr
ocedur
enotonl
yresul
tsi
ndeci
sion
r
egar
dingHobuti
tgi
vesusi
nsi
ghti
ntot
hest
rengt
hoft
hedeci
sion.

Av
erysmal
lP-v
aluessay0.
001,
meanst
hatt
her
eisav
eryl
i
ttl
eli
kel
i
hoodt
hatHoi
s
t
rue.Ont
heot
herhand,ap-v
alueof0.
4meanst
hatHoi
snotr
eject
ed,andwedi
d
notcomev
erycl
oset
orej
ect
ingi
t.

Recal
lthatf
ort
heef
fi
ciencyr
ati
ngst
hecomput
edv
alueofZwas2.
19.Thedeci
sion
wasnott
orej
ectHobecauset
heZof2.
19f
alli
nthenon-
rej
ect
ionar
eabet
ween2.
58

116
and+2.
58.Thepr
obabi
l
ityofobt
aini
ngaZv
aluesof2.
19ormor
eis0.
0143f
oundby
0.
5000–0.
4857.Tocomput
etheP–v
alue,weneedt
obeconcer
nedwi
thv
alues
l
esst
han-
2.19andv
aluesgr
eat
ert
han+2.
19.Thep-v
aluei
s0.
0286f
oundby
2(
0.0143)
.TheP – v
alueof0.
0286i
sgr
eat
ert
hant
hesi
gni
fi
cancel
evel(
0.01)
deci
deduponi
nit
ial
l
y,soHoi
snotr
eject
ed.

5.
4.1.
2Test
ingf
ort
hepopul
ati
onmean:(
standar
ddev
iat
ionunknown)
I
nthepr
ecedi
ngpr
obl
ems,
weknewpopul
ati
onst
andar
ddev
iat
ion,
.I
nmostcases,
howev
er,i
tisunl
i
kel
ythatwoul
dbeknown.Thusi
tmustbeest
imat
edusi
ngt
he

sampl
est
andar
ddev
iat
ion,
S.Thent
het
estst
ati
sti
cZ=

Exampl
e:
Adepar
tmentst
orei
ssuesi
towncr
edi
tcar
d.Thecr
edi
tmangerwant
stof
indouti
f
t
hemeanmont
hlyunpai
dbal
ancei
smor
ethanBr
.400.Thel
evelofsi
gni
fi
cancei
s
setat0.
05.Ar
andom checkof172unpai
dbal
ancesr
eveal
edt
hesampl
emeant
obe
407 and t
he st
andar
d dev
iat
ion oft
he sampl
e 38.Shoul
dthe cr
edi
tmanager
concl
udet
hatt
hepopul
ati
onmeani
sgr
eat
ert
han400,
ori
sitr
easonabl
etoassume
t
hatt
hedi
ff
erenceof407-400=7i
sduet
ochance:

Sol
uti
on
Ho:
=400
Hi
:>400
BecauseHlst
atesadi
rect
ion,aonet
ail
edt
esti
sappl
i
ed.Thecr
it
icalv
alueofZi
s
1.
645f
or0.
05l
evel

Z= = =2.
42

Av
alueoft
hisl
arge(
2.42)wi
l
loccurl
esst
han5%oft
het
ime.Sot
hecr
edi
tmanager
woul
drej
ectt
henul
lhy
pot
hesi
s,Ho.t
hatt
hemeanunpai
dbal
ancei
sgr
eat
ert
han
400,
inf
avorofH1,
whi
chst
atest
hatt
hemeani
sgr
eat
ert
han400.

TheP–v
alue,i
nthi
sone–t
ail
edt
esti
sthepr
obabi
l
ityt
hatZi
sgr
eat
ert
han2.
42.

117
Foundby0.
5000-
0.4922.0.
4922i
sthepr
obabi
l
ityt
hatZcanassumeav
alueof2.
420.

CheckYourPr
ogr
ess–2

Att
het
imeaser
verwashei
redatar
est
aur
antwast
oldbyt
hemanagert
hatshecan
av
eragemor
ethan20bradayi
nti
ps.Ov
ert
hef
ir
st35day
sshewasempl
oyedatt
he
r
est
aur
ant
,themeandai
l
yamountofhert
ipswas24.
85brwi
thast
andar
ddev
iat
ion
of3.
24br
.Att
he0.
01si
gni
fi
cancel
evel
,cant
hemanagerconcl
udet
hatshei
s
ear
ningmor
ethan20br
.perdayi
nti
ps?

5.
4.2Hy
pot
hesi
stest
ing;
Two-
popul
ati
onmeans;
Independentpopul
ati
on

Assumpt
ionf
ort
wo-
sampl
etest
1.Thepopul
ati
onshoul
dbenor
mal
l
ydi
str
ibut
ed
2.Thepopul
ati
onst
andar
ddev
iat
ionsf
orbot
hpopul
ati
onshoul
dbeknown.I
f
t
hey ar
e not known,t
hen bot
h sampl
es shoul
d cont
ain at l
east 30
obser
vat
ions so t
hat t
he sampl
e st
andar
d dev
iat
ion can be used t
o
appr
oxi
mat
ethepopul
ati
onst
andar
ddev
iat
ion
3.Thesampl
esshoul
dbedr
awnf
rom i
ndependentpopul
ati
on.

I
fwesel
ectr
andom sampl
esf
rom t
wonor
malpopul
ati
ont
hedi
str
ibut
ionoft
he
di
ff
erences bet
ween t
he t
wo means i
s al
so nor
malori
fa l
arge numberof
i
ndependentr
andom sampl
es ar
e sel
ect
ed f
rom t
wo popul
ati
on,t
he di
ff
erence
bet
weent
het
womeanswi
l
lbenor
mal
l
ydi
str
ibut
ed.I
fthesedi
ff
erencesar
edi
vi
ded
byt
hest
andar
der
roroft
hedi
ff
erence,
ther
esul
tist
hest
andar
dnor
mal
dist
ri
but
ion.
Thef
ormul
afort
het
estst
ati
sti
cZi
s
Thedi
ff
erencebet
weent
wo
Z= sampl
emeans
St
andarderr
orofthe
di
ff
erencebetweent
wo
Exampl
e:Eachpat
ientatahospi
tali
saskedt
oev
aluat
etheser
viceatt
het
imeof
di
schar
ge.Recent
lyt
her
ehav
ebeensev
eralcompl
aint
sthatr
esi
dentphy
sici
ansand
nur
sesont
hesur
gicalwi
ngr
espondt
oosl
owl
ytot
heemer
gencycal
l
sofseni
or
ci
ti
zens.Theadmi
nist
rat
oroft
hehospi
talaskedt
hequal
i
tyassur
ancedepar
tmentt
o

118
i
nvest
igat
e.Af
terst
udy
ingt
hepr
obl
em,t
hequal
i
tyassur
ancedepar
tmentcol
l
ect
ed
t
hef
oll
owi
ngsampl
einf
ormat
ion.Att
he0.
01si
gni
fi
cancel
evel
,i
sther
esponset
ime
l
ongerf
ort
heseni
orci
ti
zens,
emer
genci
es?
Pat
ientt
ype Smapl
emean Sampl
est
andar
d Sampl
eSi
ze
dev
iat
ion
SenorCi
ti
zens 5.
5Mi
nut
es 0.
40mi
nuet
s 50
Ot
her 5.
3Mi
nut
es 0.
30mi
nut
es 100

Sol
uti
on:
-
Thet
est
ingpr
ocedur
eist
hesameasf
oronesampl
etestexceptt
hef
ormul
afort
he
t
estst
ati
sti
c,Z:

St
ep1:Ho:t
her
eisnodi
ff
erencei
nthemeanr
esponset
imebet
weent
het
wogr
oups
ofpat
ient
s.
i
:eThedi
ff
erenceof0.
2mi
nut
e,i
nthear
it
hmet
icmeanr
esponset
imei
sduet
o
chances.

H1:
themeanr
esponset
imei
sgr
eat
erf
ort
heseni
orci
ti
zens
Becauset
hequal
i
tyassur
ancedepar
tmenti
sconcer
nedt
hatt
her
esponset
imei
s
gr
eat
erf
orseni
orci
ti
zens,
hewant
stoconductaone–t
ail
edt
est
.Ther
efor
ethenul
l
andal
ter
nat
ehy
pot
hesesar
est
atedasf
oll
ows.
Ho:
1=2
H1:
1>2
St
ep2:
The0.
01si
gni
fi
cancel
evel
issel
ect
ed.

St
ep3:
thet
estst
ati
sti
csi
sZ,
thest
andar
dnor
mal
dist
ri
but
ion,
Z=

St
ep4:
Thedeci
sionr
ulei
s:
Rej
ectt
henul
lhy
pot
hesi
sift
hecomput
edv
alueofZi
sgr
eat
ert
hen2.
33.
Thecr
it
ical
val
uef
or0.
01cr
uel
,one-
tai
l
edt
esti
s2.
33

St
ep5:
Cal
cul
atet
het
estst
ati
sti
candmakeadeci
sion.

119
Thet
estst
ati
sti
cisZ=

Z= =3.
13

Thecomput
edv
alueof3.
13i
sbey
ondt
hecr
it
icalv
alueof2:
33.Ther
efor
e,t
henul
l
hy
pot
hesi
sisr
eject
edandt
heal
ter
nat
ehy
pot
hesi
sisaccept
edatt
he0.
01si
gni
fi
cant
l
evel
.

Thequal
i
tyassur
ancedepar
tmentwi
l
lrepor
ttot
headmi
nist
rat
ort
hatt
hemean
r
esponset
imeoft
henur
sesandr
esi
dentphy
sici
ansi
slongerf
orseni
orci
ti
zenst
han
f
orot
herpat
ient
s.

Whati
stheP-
val
uei
nthi
spr
obl
em?
P-Val
uei
sthepr
obabi
l
ityofcomput
ingaZv
aluet
hisl
argeorl
argerwhenHoi
str
ue.
Whati
sthel
i
kel
i
hoodofaZv
aluegr
eat
ert
han3.
13
P(
Z=3.
13)
=0.
4991
So,
P(Z)
>31.
13)=0.
5000-
0.44991=0.
0009
Hoi
sver
yli
kel
yfal
seandt
her
eisl
i
ttl
eli
kel
i
hoodofat
ypeIer
ror
.

CheckYourPr
ogr
ess–3

ApealEst
ateAssoci
ati
oni
spr
epar
ingapamphl
ett
hatt
heyf
eelmi
ghtbeofi
nter
est
t
opr
ospect
ivehomebuy
ersi
ntheeast
ernandwest
ernar
easoft
heci
ty.Onei
tem of
i
nter
esti
sthel
engt
hoft
imet
hesel
l
eroccupi
edt
hehome.Asampl
eof40homesol
d
r
ecent
lyi
ntheeast
ernar
easr
eveal
edt
hatt
hemeanl
engt
hofowner
shi
pwas7.
6
y
ear
swi
thst
andar
ddev
iat
ionof2.
3year
s.

A sampl
eof55homesi
nthewest
ernar
easr
eaeal
l
edt
hatt
hemeanl
engt
hof
owner
shi
p was 8.
1year
s wi
th a st
andar
d dev
iat
ion of2.
9year
s.Att
he 0.
05
si
gni
fi
cancel
evelcanweconcl
udet
hatt
heEast
ernr
esi
dent
sownedt
hehomesf
ora
shor
terper
iodoft
ime?

120
5.
4.3Test
ingf
orPopul
ati
onPr
opor
ti
on
I
ntest
inghy
pot
hesi
sfort
hepopul
ati
onpr
opor
ti
ont
heassumpt
ionsoft
hebi
nomi
al
di
str
ibut
ionshoul
dbemet
.Tot
estf
ort
hepr
opor
ti
on

a)npandn(
1-p)bot
hshoul
dbegr
eat
ert
han5.
b)nshoul
dbeatl
east50

Exampl
e:supposepr
iorel
ect
ionsi
nar
egi
oni
ndi
cat
edt
hati
tisnecessar
yfora
candi
dat
eforgov
ernort
orecei
veatl
east80%oft
hemaj
ori
tyv
ote.Thei
ncumbent
gov
ernori
sint
erest
edi
nassessi
nghi
schanceofr
etur
ningt
oof
fi
ceandpl
anst
o
hav
easur
veyconduct
edconsi
sti
ngof2000r
egi
ster
edv
oter
s

Usi
ngt
hef
ive–st
ephy
pot
hesi
stest
ingpr
ocedur
e,assest
hegov
ernor
’schancesof
r
efl
ect
ion
np=2000(
0.8)=1600whi
chi
sgr
eat
ert
han5
nq=n(
1-p)=2000(
1-0.
8)=400whi
chi
sgr
eat
ert
han5
bot
h1600and400ar
egr
eat
ert
han5

St
ep1:
Thenul
lhy
pot
hesi
sHoi
sthatt
hepopul
ati
onpr
opor
ti
onsi
s0.
80
Theal
ter
nat
ehy
pot
hesi
s,H1i
sthatt
hepr
opor
ti
oni
slesst
han0.
80.
Thei
ncumbentgov
ernori
sconcer
nedonl
ywhent
hesampl
epr
opor
ti
oni
slesst
han
0.
8.I
fiti
sequalt
oorgr
eat
ert
han0.
8hewi
l
lhav
enopr
obl
em;t
hati
sthesampl
e
dat
awoul
dindi
cat
ehewi
l
lbepr
obabl
yber
eel
ect
ed.

Ho:
P=0.
80
H1:
P<0.
80
St
ep2:
Thel
evel
ofsi
gni
fi
cancei
s0.
05
St
ep3:
Zist
heappr
opr
iat
est
ati
sti
c

Z= wher
eP–i
sthepopul
ati
onpr
opor
ti
onand

i
sthe sampl
e pr
opor
ti
on,p i
sthe st
andar
d er
roroft
he
pr
opor
ti
on

121
 = sot
hef
ormul
aforZbecomes:

Z=

St
ep4:
Thear
eabet
ween0andt
hecr
it
icalv
aluei
s,1.
645obt
ainedf
ort
heZt
abl
e0.
45000=
0.
5000–0.
05Zv
aluef
orpr
obabi
l
ity0.
450i
s1.
645.

Thedeci
sionr
ulei
sther
efor
erej
ectt
henul
lhy
pot
hesi
sandacceptt
heal
ter
nat
e
hy
pot
hesi
sift
hecomput
edv
alueofZf
all
stot
hel
eftof-
1.645ot
her
wisedonot
r
ejectHo.

St
ep5.TakeSampl
eandmakeadeci
sionwi
thr
espectt
oHo.
Thesampl
esur
veyof2000pot
ent
ialv
oter
srev
eal
edt
hat1550pl
annedt
ovot
efor
t
hei
ncumbentgov
ernor
.Ist
hepr
opor
ti
onof0.
775(
foundby1550/
2000)cl
ose
enought
o0.
80t
oconcl
udet
hatt
hedi
ff
erencei
fduet
ochance?
n=2000

=0.
775

p=0.
80,
thehy
pot
hesi
zedpopul
ati
onpr
opor
ti
on

Z= =-
2.80

Thecomput
edv
alueofZ(
-2.
80)i
sint
her
eject
ionr
egi
on.Sot
henul
lhy
pot
hesi
sis
r
eject
edatt
he0.
05l
evelofsi
gni
fi
cance.Thedi
ff
erenceof2.
5per
cent
agepoi
nts
bet
weent
hesampl
e(77.
5)andt
hehy
pot
hesi
zedpopul
ati
onper
cent
age(
80.
0)i
s
st
ati
sti
cal
l
ysi
gni
fi
cance.I
tispr
obabl
ynotduet
osampl
i
ngv
ari
ati
on.

Toputi
tanot
herwayt
heev
idenceatt
hispoi
ntdoesnotsuppor
tthecl
aimt
hatt
he
i
ncumbentgov
ernorwi
l
lret
urnt
otheof
fi
ce.

Thep-Val
uei
s0.
0026f
oundby0.
5000-
0.4974.0.
4974i
sthepr
obabi
l
ityofZt
o

122
assume
–2.
80v
alue.I
tisl
esst
hant
hesi
gni
fi
cancel
evelof0.
05.SoHoshoul
dber
eject
ed.
Thi
sfur
theri
ndi
cat
est
hatt
hel
i
kel
i
hoodt
hatHoi
stur
eissmal
l
.

CheckYourPr
ogr
ess–4

Thi
sCl
aimi
stobei
nvest
igat
edatt
he0.
02l
evel“
For
typer
centoft
hoseper
sonswho
r
eti
redf
rom ani
ndust
ri
alj
obbef
oret
heageof60woul
dret
urnt
owor
kifasui
tabl
e
j
obwer
eav
ail
abl
e”74per
sonsoutoft
he200sampl
edsai
dtheywoul
dret
urnt
owor
k.

Canweconcl
udet
hatt
hef
ract
ionr
etur
ningt
owor
kisdi
ff
erentf
rom 0.
40?
1)Cant
heZt
estbeused?Whyorwhynot
?
2)St
atet
henul
lhy
pot
hesi
sandt
heal
ter
nat
ehy
pot
hesi
s
3)Comput
eZ,
andar
ri
veatadeci
sion

5.
4.4Test
ingf
ort
heDi
ff
erencebet
weent
woPopul
ati
onPr
opor
ti
ons

Exampl
e:-acompanyhasdev
elopedanewper
fume
Oneoft
hequest
ionsi
swhet
hert
heper
fumei
spr
efer
redbyal
argerpr
opor
ti
onof
y
oungerwomenoral
argerpr
opor
ti
onsofol
derwomen.Ast
andar
dsmel
ltesti
s
used.
Womensel
ect
edatr
andom ar
easkedt
o sni
ffsev
eralper
fumesi
nsuccessi
on,
i
ncl
udi
ngt
henew.Eachwomansel
ect
stheper
fumeshel
i
kesbest
.

St
ep1
Ho“Ther
eisnodi
ff
erencebet
weent
hepr
opor
ti
onofy
oungerwomenwhopr
efert
he
per
fumeandt
hepr
opor
ti
onofol
derwomenwho pr
eferi
t”I
fthepr
opor
ti
onof
y
oungerwomeni
nthepopul
ati
oni
sdesi
gnat
edasP1 andt
hepr
opor
ti
onofol
der
womeni
sP2t
hen;
Ho:
P1=P2
Theal
ter
nat
ehy
pot
hesi
sist
hatt
het
wopr
opor
ti
onsar
enotequal
or:
Hi
:P1P2

St
ep2:I
twasdeci
dedt
ouset
he0.
05l
evel
.

123
St
ep3:Thet
estst
ati
sti
cisZandt
hef
ormul
ais:
-
wher
e:n1 ,i
sthenumberofy
oungwomen
Z=
sel
ect
edi
nthesampl
en2 i
sthenumberof
ol
derwomensel
ect
edi
nthesampl
e, =i
s
t
he wei
ght
ed mean of t
he t
wo sampl
e
pr
opor
ti
oncomput
edby

= =

wher
ex1 i
sthenumberofy
oungerwomen
(
sampl
e1)whopr
efert
heper
fume,x2 i
sthe
numberofol
derwomen (
sampl
e 2)who
pr
efert
heper
fume.

i
sgener
all
yref
err
edt
oast
hepool
edest
imat
eoft
hepopul
ati
onpr
opor
ti
onori
tis
acombi
nedest
imat
e,combi
nedpr
opor
ti
on.

St
ep4:TheFor
mul
ateDeci
sionRul
e:
Thecr
it
icalv
aluesf
ort
he0.
05l
evelt
wo-
tai
l
edt
est
sar
e-1.
96and+1.
96.I
fthe
comput
edZv
aluei
sint
her
egi
onbet
ween+1.
96and-
1.96,t
henul
lhy
pot
hesi
swi
l
l
notber
eject
ed.I
fitdoesoccuri
tisassumedt
hatanydi
ff
erencebet
weent
het
wo
pr
opor
ti
onsi
sduet
ochancev
ari
ati
on.
Two–t
ail
edt
est
,Ar
easofr
eject
ionandNon-
rej
ect
ion0.
05l
evel
ofsi
gni
fi
cance.

St
ep5:Thedeci
sion
At
otalof100y
oungwomensel
ect
edatr
andom,andeachwasgi
vent
hest
andar
d
smel
ltest
.For
tyoft
he100y
oungwomenchoset
heper
fume,
ast
heyl
i
kedbest
x1=40
n1=100and

200ol
derwomenwer
esel
ect
edatr
andom andeachwasgi
vent
hesamest
andar
d
smel
ltestoft
he200women100pr
efer
redt
heper
fume.
x2=100
n2=200

124
Thepool
edorwei
ght
edpr
opor
ti
on i
s

= = =140/300=0.
4667

Z=

Thecomput
edv
alueofZ (
-1.
64)f
all
sint
henon-
rej
ect
ionr
egi
on.Ther
efor
ewe
concl
udedt
hatt
her
eisnodi
ff
erencei
nthepr
opor
ti
onofy
oungerandol
derwomen
whopr
efert
heper
fume.I
nthi
scaseweexpectt
heP-v
aluet
obegr
eat
ert
hant
he
si
gni
fi
cancel
evel
of0.
05,
andi
tis.

f
orZ=-
1.64pr
obabi
l
ityi
s0.
4495
Pv
alue=0.
5000–0.
4495=0.
0505f
oronet
ail
onl
y

Howev
ert
het
estwast
wot
ail
ed,sowemustaccountf
ort
hear
eabey
ond1.
64as
wel
last
hear
eal
esst
han-
1.64.Then
TheP–v
aluei
s2(
0.0505)=0.
1010

CheckYourPr
ogr
ess–5

Of150gi
rl
swhot
ri
edanew candy87r
atedi
texcel
l
entof200boy
ssampl
ed123
r
atedi
texcel
l
entusi
ngt
he0.
10l
evelofsi
gni
fi
cance,
canweconcl
udet
hatt
her
eisa
di
ff
erencei
nthepr
opor
ti
onofgi
rl
sver
susboy
swhor
atet
hecandyexcel
l
ent
?
1.St
atet
henul
landal
ter
nat
ehy
pot
heses
2.Whati
sthedeci
sionr
ule
3.Comput
ethev
alueoft
het
estst
ati
sti
cs
4.St
atey
ourdeci
siongr
ant
ingHo
5.Comput
etheP–v
alue

5. StTEST/SMALLSAMPLE/
5STUDENT’

Whent
hepopul
ati
oni
snor
malandt
hest
andar
ddev
iat
ioni
sknownt
heZdi
str
ibut
ion

125
i
sempl
oyedasat
estst
ati
sti
cforat
est
.Ift
hepopul
ati
onst
andar
ddev
iat
ioni
snot
knowt
hesampl
est
andar
ddev
iat
ioni
ssubst
it
utedf
or.I
fthesampl
esi
zei
satl
east
30,
ther
esul
tsar
edeemedsat
isf
act
ory
.

I
fthesampl
esi
zei
slesst
han30obser
vat
ionsandi
sunknownt
heZdi
str
ibut
ioni
s
notappr
opr
iat
e.Thest
udent
’stort
hetdi
str
ibut
ioni
susedast
het
estst
ati
sti
c.

5.
5.1Char
act
eri
sti
csofSt
udent
’stDi
str
ibut
ion

Not
e:The Char
act
eri
sti
cs ofst
udent
’s di
str
ibut
ion ar
e di
scussed i
n uni
t4.To
ment
ionsome
1.I
tisacont
inuousdi
str
ibut
ion.
2.I
tisbel
l
-shapedandsy
mmet
ri
cal
,
3.Ther
eisnotonedi
str
ibut
ion,
butr
athera“
fami
l
y”oftdi
str
ibut
ion.Al
lhav
ethe
smal
lmeanofzer
o butt
hei
rst
andar
d dev
iat
ionsdi
ff
eraccor
ding t
othe
sampl
esi
zen.Thetdi
str
ibut
ionf
orasampl
esi
zeof20,
22,
25ar
edi
ff
erent
.
4.I
tismor
espr
eadoutandf
latatt
hecent
ert
hani
stheZ.Howev
erast
he
sampl
esi
zei
ncr
eases,t
hecur
ver
epr
esent
ingt
hetdi
str
ibut
ionappr
oaches
t
heZdi
str
ibut
ion.I
fthesampl
esi
zei
s30wewi
l
lhav
eappr
oxi
mat
elyt
hesame
tdi
str
ibut
ionast
heZ.

Si
ncet
hetdi
str
ibut
ionhasagr
eat
erspr
eadort
het
ail
sar
ewi
de,
thecr
it
icalv
aluesof
tf
oragi
venl
evelofsi
gni
fi
cancear
elar
geri
nmagni
tudet
hant
hecor
respondi
ngZ
cr
it
ical
val
ues.

Regi
onofr
eject
ionf
ort
heZandtdi
str
ibut
ion0.
05l
evel
,onet
ail
edt
est
Whyt
hecr
it
icalv
aluef
oragi
venl
evelofsi
gni
fi
cancei
sgr
eat
erf
orsmal
lsampl
es
t
hanf
orl
argesampl
es?
a.Theconf
idencei
nter
valwi
l
lbewi
dert
hanf
orl
argesampl
esusi
ngt
heZ
di
str
ibut
ion
b.Ther
egi
onwher
eHoi
snotr
eject
edi
swi
dert
hanf
orl
argesampl
esusi
ngZ
di
str
ibut
ion
c.A l
argertv
aluewi
l
lbeneededt
orej
ectt
henul
lhy
pot
hesi
sthanf
orl
arge

126
 sampl
esusi
ngZ.I
not
herwor
dsbecauset
her
eismor
evar
iabi
l
ityi
nsampl
e
meanscomput
edf
rom smal
l
ersampl
eswear
elessaptt
orej
ectt
henul
l
hy
pot
hesi
s.

5.
5.2ATestf
ort
hePopul
ati
onMean

Exampl
e:Exper
iencei
ninv
est
igat
ing acci
dentcl
aimsbyan i
nsur
ancecompany
r
eveal
edt
hati
tcost60ont
heav
eraget
ohandl
ethepaperwor
k,payt
hei
nvest
igat
or,
andmakeadeci
sion.Thecostcompar
edwi
tht
hatofot
heri
nsur
ancef
ir
mswas
deemedexor
bit
ant
,andcostcut
ti
ngmeasur
eswer
einst
it
uted.I
nor
dert
oev
aluat
e
t
hei
mpactoft
hesenew measur
es,asampl
eof26r
ecentcl
aimswassel
ect
edat
r
andom andcostst
udi
eswer
emade.I
twasf
oundt
hatt
hesampl
emean, ,
andt
he
sampl
est
andar
ddev
iat
ions,
s,wer
e57and10r
espect
ivel
y.

Att
he0.
01l
eveli
sther
ear
educt
ioni
ntheav
eragecost
,orcant
hedi
ff
erenceof3=
(
60-
57)beat
tri
but
edt
ochance?

Theusual
fiv
e-st
ephy
pot
hesi
stest
ingpr
ocedur
eisused
St
ep1:-t
henul
lhy
pot
hesi
s,Ho:
thepopul
ati
onmeani
s60
Theal
ter
nat
ehy
pot
hesi
s,H1t
hepopul
ati
onmeani
slesst
han60.i
.e.
Ho:
=60
H1:
-<60
St
ep2:The0.
01l
evel
ist
obeused
St
ep:3t
het
estst
ati
sti
cisst
udent
’stdi
str
ibut
ion.Becauset
hepopul
ati
onst
andar
d
dev
iat
ioni
sunknownandt
hesampl
esi
zei
ssmal
l(26under30)

t=

St
ep4:Thecr
it
ical
val
ueoftar
egi
veni
ntabl
e4
Ther
ear
en-
1degr
eesoff
reedom f
ort
het
estdf(
26-
1=25)
Thecr
it
ical
val
uef
ordf=25,
aonet
ail
edt
estand0.
01l
evel
is2.
485
Thedeci
sionr
ulef
ort
hisonet
ail
edt
esti
srej
ectHoi
fthecomput
edv
alueoftf
all
sin

127
anypar
toft
het
ail
stot
hel
eftof–2.
485ot
her
wisedonotr
ejectHo.
Ho:
N=60

Ho;
=60
H1:
<60

St
ep5:Comput
et,
andar
ri
veatadeci
sion df=26–1=25

t=

=57
=67
S=10 t= =-
1.530
n=26

Because-
1.530l
i
esi
nther
egi
ont
other
ightoft
hecr
it
icalv
alue–2.
485Hoi
snot
r
eject
edatt
he0.
01l
evel
.

Thi
sindi
cat
est
hatt
hecostcut
ti
ngmeasur
eshav
enotr
educedt
hemeancostper
cl
aimt
olesst
han60basedonsampl
eresul
ts.

CheckYourPr
ogr
ess–6

Fr
om pastr
ecor
dsi
tisknownt
hatt
hear
it
hmet
icmeanl
i
feofabat
ter
yusedi
na
di
git
alcl
ocki
s305day
s.Thel
i
vesoft
hebat
ter
iesi
snor
mal
l
ydi
str
ibut
ed.Thebat
ter
y
wasr
ecent
lymodi
fi
edt
olastl
onger
.Asampl
eof20modi
fi
edbat
ter
ieswer
etest
ed.
I
twasdi
scov
eredt
hatt
hemanl
i
fewas311day
sandt
hesampl
est
andar
ddev
iat
ion
was12day
s.Att
he0.
05l
evelofsi
gni
fi
cance,di
dthemodi
fi
cat
ioni
ncr
easest
he
meanl
i
feoft
hebat
ter
y?

128
 1.St
atet
henul
landal
ter
nat
ehy
pot
heses
2.St
atet
hedeci
sion
3.Comput
etandmakeadeci
sion

5.
5.3Compar
ingt
woPopul
ati
onMean
At
estusi
ngt
hetdi
str
ibut
ioncanal
sobeappl
i
edt
ocompar
etwosampl
emeanst
o
det
ermi
nei
fthesampl
eswer
eobt
ainedf
rom nor
malpopul
ati
onswi
tht
hesame
mean.

Thr
eeassumpt
ionar
erequi
redt
otestf
ort
wopopul
ati
onmeans.
1.The popul
ati
onsmustbenor
mal
l
ydi
str
ibut
ed (
orappr
oxi
mat
elynor
mal
l
y
di
str
ibut
ed)
2.Thepopul
ati
onsmustbei
ndependent
3.Thepopul
ati
onv
ari
ancemustbeequal

Thest
ati
sti
cfort
het
wosampl
eissi
mil
art
othatempl
oyedf
ort
heZst
ati
sti
cexcept
t
hatanaddi
ti
onal
cal
cul
ati
oni
srequi
red.

Thet
wo-
sampl
evar
iancemustbepol
l
edt
ofor
m asi
ngl
eest
imat
eoft
heunknown
popul
ati
on v
ari
ance.Si
nce t
he sampl
es hav
efewert
han 30 obser
vat
ions t
he
popul
ati
onst
andar
ddev
iat
ions,ar
enotknown.So,wesubst
it
uteS2 f
or2,because
weassumet
hatt
het
wopopul
ati
onshav
eequalv
ari
ances,
thebestest
imat
ewecan
makeoft
hatv
aluei
stocombi
neorpoolal
lthei
nfor
mat
ionwehav
ewi
thr
espectt
o
t
hepopul
ati
onv
ari
ance.

Thef
oll
owi
ngf
ormul
aisusedt
opoolt
hesampl
evar
iances.Not
icet
hatt
wof
act
ors
makeupt
hewei
ght
s:-t
henumberofobser
vat
ionsi
neachsampl
eandt
hesampl
e
2
v
ari
ancest
hemsel
ves.Thepool
edv
ari
ance,
Sp is

2
Sp =

eS12–v
wher ari
anceofsampl
eone
S22–v
ari
anceofsampl
etwoand
n1+n2–2i
stot
aldf
.

129
Thev
alueofti
sthendet
ermi
nedbyt
hef
ormul
a

t=

wher
e: i
ssampl
emeanone
i
ssampl
emeant
wo
n1i
ssampl
esi
zef
orf
ir
stsampl
e
n2i
ssampl
esi
zef
orsecondsampl
e

Thenumberofdegr
eesoff
reedom i
nthet
esti
sequalt
othet
otalnumberofi
tems
sampl
edmi
nust
henumberofsampl
e.Si
ncet
her
ear
etwosampl
es,
ther
ear
e
n1+n2–2degr
eesoff
reedom.

Exampl
e:Twodi
ff
erentpr
ocedur
esar
epr
oposedf
ormount
ingengi
neonaf
rame.
Thequest
ioni
s:‘
i
sther
eadi
ff
erencei
nthemeant
imet
omountt
heengi
neont
he
f
rame?
’Toev
aluat
ethet
wopr
oposedmet
hods,
itwasdeci
dedt
oconductat
imeand
mot
ionst
udy
.Asampl
eoff
iveempl
oyeeswer
eti
medusi
ngpr
ocedur
e1and6wer
e
t
imedusi
ngpr
ocedur
es2.

Ther
esul
tsi
nmi
nut
es,
are:

Pr
ocedure1 Pr
ocedure2
(Mi
nutes) (Minutes)
3
2 7
4 5
9 8
3 4
2 3

I
sther
eadi
ff
erencei
sthemeanmount
ingt
imes?Uset
he0.
10si
gni
fi
cancel
evel
.

Sol
uti
on:
The nul
lhy
pot
hesi
s st
ates t
hatt
her
eis no di
ff
erence i
n mean mount
ing t
ime

130
bet
weent
het
wopr
ocedur
esandt
heal
ter
nat
ehy
pot
hesi
sst
atest
hatt
her
eina
di
ff
erencei
sthemeanmount
ingt
imebet
weent
het
wopr
ocedur
es.
St
epI
.Ho:
1=2 H1:
12
Ther
equi
redassumpt
ionsar
emet
.
Thedegr
eesoff
reedom ar
edet
ermi
nedbyn1+n2–2t
her
ear
e9degr
eesoff
reedom
(
5+6-
2).

St
epI
I.The0.
01l
evel
ist
obeused

St
epI
II
.Thet
estst
ati
sti
cist=

St
epI
V.Thecr
it
icalv
alueoftf
ordf=9,at
wot
ail
edt
est
,att
he0.
10l
evelof
si
gni
fi
cance,
are+1.
833and-
1.833

Wedonotr
ejectt
henul
lhy
pot
hesi
sift
hecomput
edtv
aluef
all
sbet
ween-
1.853and
+1.
833ot
her
wiseHoi
srej
ect
ed.

Cal
cul
atetandmaket
hedeci
sion
(
a)Cal
cul
atet
hesampl
evar
iance

Pr
ocedur
e1 Pr
ocedur
e2
X1 X12 X2 X22
2 4 3 9
4 16 7 49
9 81 5 25
3 9 8 64
2 4 4 16
x1=20 x12114 3 9
x1=30 x22=172

S12= S21=

131
 = =8.
5 = =4.
44

(
b)Pool
thev
ari
ances

Sp2=

(
c)Det
ermi
net

=4and =5

t= =-
0.6626

Thedeci
sioni
snott
orej
ectHobecause-
0.6620f
all
sint
her
egi
onbet
ween-
1.833
and+1.
833.
Weconcl
udet
hatt
her
eisnodi
ff
erencei
nthemeant
imet
omountt
he
engi
neont
hef
rame.

CheckYourPr
ogr
ess–7

Thenetwei
ghtofsampl
eofbot
tl
esf
il
ledbyt
wodi
ff
erentmachi
nespr
oducedbyt
wo
di
ff
erentmanuf
act
ures,
are(i
ngr
ams)
Machi
ne1-
5,8,
7,
6,
9,
7
Machni
es2-
8,10,
11,
9,
12,
14,
9
Att
he0.
05l
eveli
sthemeanmi
ghtoft
hebot
tl
edf
il
edbymachi
ne2ar
egr
eat
ert
han
t
hemeanwei
ghtoft
hebot
tl
esf
il
ledbymachi
ne1?(
Not
ethatt
het
esti
sonet
ail
ed)

5.
5.4Hy
pot
hesi
sTest
ingI
nvol
vi
ngPai
redObser
vat
ions
Ther
ear
esi
tuat
ionswher
ethesampl
esar
enoti
ndependent
.Apar
ti
cul
argr
oupwi
l
l
beexposedt
otwodi
ff
erentexper
iment
s.I
nasenset
hesampl
eisone.

Exampl
e: Thepr
oduct
ionmanagerwant
stof
indoutwhet
herauni
quet
rai
ning
pr
ogr
am wi
l
lincr
easeempl
oyeeef
fi
ciency
.

132
Hepl
anst
otakear
andom sampl
eof10empl
oyeesandr
ecor
dthei
ref
fi
ciencybef
ore
t
het
rai
ningst
art
s.Af
tercompl
eti
onoft
hepr
ogr
am,t
heef
fi
ciencyoft
hesame
sampl
eofempl
oyeeswi
l
lber
ecor
ded.

Thust
her
ewi
l
lbeapai
rofef
fi
ciencyr
ati
ngsf
oreachmemberoft
hesampl
e.At
est
ofhy
pot
hesi
sisconduct
edt
ofi
ndouti
fther
eisadi
ff
erencebet
weent
her
ati
ngs
bef
oreandaf
tert
het
rai
ningpr
ogr
am.I
tiscal
l
edapai
reddi
ff
erencet
est

Thesampl
edat
esar
e
Sampl
e Ef
fi
ciencyRat
ings Di
ff
erence(
d) di
ffer
ence/ /
/
2
member squar
edd
Bef
ore Af
ter
1 128 135 7 49
2 105 110 5 25
3 119 131 12 144
4 140 142 2 4
5 98 105 7 49
6 123 130 7 49
7 127 131 4 16
8 115 110 -
5 25
9 122 125 3 9
10 145 149 4 16
d=46 d2=386

Fort
het
estofhy
pot
hesi
stobeconduct
ed,t
her
eisessent
ial
l
yonl
yonesampl
e,not
t
wo.Wear
etest
ingt
hehy
pot
hesi
sthatt
hedi
str
ibut
ionoft
hedi
ff
erenceshasamean
of0.

Thesampl
eismadeupoft
hedi
ff
erencesb/
ntheef
fi
ciencyr
ati
ngsbef
oret
he
t
rai
ningpr
ogr
am andt
her
ati
ngsaf
tert
hepr
ogr
am.

133
I
fpr
oduct
ionmet
hodsbef
oreandaf
tert
het
rai
ningpr
ogr
am r
emai
nthesame,one
coul
dlogi
cal
l
yexpectsomeempl
oyeest
obenef
itf
rom t
het
rai
ningpr
ogr
am andt
o
becomemor
eef
fi
cient
.Ot
herempl
oyeeswoul
dpr
efert
hemet
hodusedbef
oret
he
t
rai
ningpr
ogr
am,
.Andt
hei
ref
fi
ciencywoul
dremai
nthesameorev
endecr
ease.
Thust
hemeanoft
hedi
ff
erencei
nef
fi
ciencyr
ati
ngsdesi
gnat
edd woul
dbal
ance
outandequal
zer
o.

Thepr
oduct
ionmanagerwant
stoknowwhet
herornott
henewpr
oduct
iont
echni
que
af
fectef
fi
ciency
.Ifi
tdoesonewoul
dreasonabl
yassumet
hatmostoft
hedi
ff
erence
woul
dbeposi
ti
vei
.e.i
ncr
easedef
fi
ciency
.

Thenul
lhy
pot
hesi
stobet
est
edi
sther
efor
e;t
hemeandi
ff
erencei
szer
oort
her
eis
nodi
ff
erencei
ntheef
fi
ciencyr
ati
ngsbef
oreandaf
tert
het
rai
ning.

Ho:
d=0.
Theal
ter
nat
ehy
pot
hesi
sist
hatt
hemeanoft
hedi
ff
erencei
sgr
eat
ert
hanO
H1:
d>0,
signi
fyi
ngt
hatt
hedi
ff
erencesar
eposi
ti
ve.
Thet
estst
ati
sti
cti
s

t=

wher
e =t
hemeandi
ff
erencei
.e.
,

Sd=st
andar
ddev
iat
ionoft
hedi
ff
erencesbet
weent
hepai
redobser
vat
ions
Thest
andar
ddev
iat
ionoft
hedi
ff
erencesi
scomput
edas

Sd=

Thecr
it
icalv
alueoftf
ort
hisonet
ail
edt
estofpai
reddi
ff
erencef
or9degr
eeof

134
f
reedom att
he0.
05l
evel
is1.
833

= = =4.
60

Sd= = =4.
40

t= = =3.
33

Becauset
hev
alueoft(
3.30)l
i
esi
nther
eject
ionr
ejoi
n,t
hati
sbey
ondt
hecr
it
ical
v
alueof1.
833,
thenul
lhy
pot
hesi
sisr
eject
ed.

Thepr
oduct
ionmangerhasconv
inci
ngev
idencet
hatt
hisspeci
alt
rai
ningpr
ogr
am
wi
l
lbeef
fect
ivei
nincr
easi
ngef
fi
ciency
.

CheckYourPr
ogr
ess–8

135
AnAgr
icul
tur
alExper
iment
alSt
ati
onpl
anst
otestt
heef
fect
ivenessoft
wosol
uti
ons
f
orcor
nseedst
oincr
easesr
esi
stancef
orapar
ti
cul
art
ypeofpestandi
ncr
ease
ger
minat
ionandgr
owt
hti
mes. Thepur
poseoft
heexper
imenti
stodet
ermi
nei
f
t
her
eisadi
ff
erencei
nef
fect
ivenessoft
wosol
uti
ons,
sol
uti
onAandsol
uti
onB.

Var
iouscor
nseedsar
etobeusedi
ntheexper
iment
.Apai
rofseedsi
ssel
ect
edone
i
ssoakedi
nsol
uti
onA,t
heot
heri
nsol
uti
onB. Thent
heyar
epl
ant
edandt
he
ger
minat
ionandgr
owt
hti
mesi
nday
sar
erecor
ded.

Pai
r
Sol
uti
on 1 2 3 4 5 6 7 8 9
A 16 9 21 14 26 27 18 14 30
B 18 7 26 11 26 27 19 20 28

1.St
atet
henul
landal
ter
nat
ivehy
pot
hesi
s.
2.Usi
ngt
he0.
05l
evel
whati
sthecr
it
ical
val
ue?
3.Usi
ngt
heabov
eni
nepai
rsofsampl
ecomput
etandar
ri
val
atadeci
sion.

5.
6 TESTI
NG FOR DI
FFERENCES OF VARI
ANCES /THE ‘
F’DI
STRI
BUTI
ON FOR
COMPARI
NGTWOPOPULATI
ONVARI
ANCES

Det
ermi
ningwhet
herornotonenor
malpopul
ati
onhasmor
evar
iat
iont
hant
heot
her
i
simpor
tantf
ormanydeci
sion-
maki
ngpur
posesi
nbusi
ness.

Supposet
womachi
nesar
esett
opr
oducest
eelbar
soft
hesamel
engt
h.Thebar
s,
t
her
efor
e,shoul
dhav
ethesamemeanl
engt
h.Wewantt
oensur
ethat
,inaddi
ti
ont
o
hav
ingt
hesamemeanl
engt
h,t
heyhav
esi
mil
arv
ari
ati
on.or

Themeanr
ateofr
etur
noni
nvest
mentoft
wot
ypesofpr
oject
smaybet
hesame.But
t
her
emaybemor
evar
iat
ioni
nther
etur
nofonet
hant
heot
her
.Deci
sion,
ast
owhi
ch
pr
ojecti
smor
efeasi
ble,
isbasedont
hel
evel
ofv
ari
ati
on.

TheFdi
str
ibut
ioni
susedt
otestt
hehy
pot
hesi
sthatt
hev
ari
ati
onofonenor
mal
l
y
di
str
ibut
edpopul
ati
onequal
sthev
ari
anceofanot
hernor
mal
l
ydi
str
ibut
edpopul
ati
on.

136
Themaj
orchar
act
eri
sti
csoft
heFdi
str
ibut
ion:

a.Ther
eisA “
Fami
l
y”ofFdi
str
ibut
ion.A par
ti
cul
armemberoft
hef
ami
l
yis
det
ermi
nedbyt
wopar
amet
ers,t
hedegr
eeoff
reedom i
nthenumer
ator
,and
t
hedegr
eeoff
reedom i
nthedenomi
nat
or.Ther
eisonl
yoneFdi
str
ibut
ionf
or
t
hecombi
nat
ionof29degr
eeoff
reedom i
nthenumer
atorand28degr
eesof
f
reedom i
nthedenomi
nat
or.Theshapeoft
hecur
veschangesast
hedegr
ees
off
reedom change.
b.Fcannotbenegat
ive;
andi
tisacont
inuousdi
str
ibut
ion.
c.Thecur
ver
epr
esent
inganFdi
str
ibut
ioni
sposi
ti
vel
yskewed.Fcannotbe
negat
ive.
d.I
tsv
aluer
angef
rom 0t
oposi
ti
vei
nfi
nit
e(.Ast
hev
alueofFi
ncr
easest
he
cur
veappr
oachest
hex-
axi
s,buti
tnev
ert
ouchesi
t.

Foral
linv
est
igat
ions t
he nul
lhy
pot
hesi
sist
hat‘
the v
ari
ance ofone nor
mal
popul
aton12,equal
i sthev
ari
anceoft
heot
hernor
malpopul
aton22.
i ’Toconduct
t
het
est
,ar
andom sampl
eofn,obser
vat
ionsi
sobt
ainedf
rom onepopul
ati
onanda
sampl
eofn2obser
vat
ionsi
sobt
ainedf
rom t
hesecondpopul
ati
on.Thet
estst
ati
sti
cs
i
s

, eS12andS22ar
wher ether
espect
ivesampl
evar
iances.

I
fthenul
lhy
pot
hesi
sist
r 12=22.
ueHo:

137
Thet
estst
ati
sti
cfol
l
owst
heFdi
str
ibut
ionwi
thn1 – 1andn2 – n1 degr
eesof
f
reedom

Thel
argersampl
evar
iancei
spl
acedi
nthenumer
ator
;hence,t
heFr
ati
oisal
way
s
posi
ti
veandgr
eat
ert
hanone. Thus,t
heupper
-t
ailcr
it
icalv
aluei
stheonl
yone
r
equi
red.Thecr
it
icalv
alueofFi
sfoundbydi
vi
dingt
hesi
gni
fi
cancel
eveli
nhal
f
andt
henr
efer
ri
ngt
otheappr
opr
iat
enumberofdegr
eesoff
reedom i
ntheFt
abl
e.

Exampl
e:Acarr
ent
alof
fer
sli
mousi
neser
vicef
rom ci
tycent
ert
otheai
rpor
t.The
manageroft
hecompanyi
sconsi
der
ingt
wor
out
es.Hewant
stoconductast
udyof
bot
hrout
sandt
hencompar
ether
esul
ts.Her
ecor
dedt
hef
oll
owi
ngdat
a.Usi
ngt
he
0.
10si
gni
fi
cancel
evel
,i
sther
eadi
ff
erencei
nthev
ari
ati
oni
nthet
wor
out
es?
Rout
e Mean Ti
me St
andar
d Sampl
e
(
minut
es) dev
iat
ion si
ze
(
Minut
es)
1 56 12 7
2 59 5 8

Themanagernot
edt
hatt
hemeant
imesseem v
erysi
mil
arbutt
her
eismor
evar
iat
ion,
asmeasur
edbyt
hest
andar
ddev
iat
ion,
inr
out
e1,

Ther
easoncanber
out
e1cont
ainsmor
est
opl
i
ght
s,whi
l
ethedi
stancei
sshor
terbut
f
orr
out2t
hedi
stancei
slongerbuti
tisal
i
mit
edaccesshi
ghway
.Sohedeci
dest
o
conductast
ati
sti
calt
estt
odet
ermi
nei
fther
eisr
eal
l
yadi
ff
erencei
nthev
ari
ati
onof
t
het
wor
out
es.

Theusual
fiv
e-st
ephy
pot
hesi
stest
ingpr
ocedur
ewi
l
lbeempl
oyed.

St
ep1:t
het
esti
stwo-
tai
l
edbecausewear
elooki
ngf
oradi
ff
erencei
nthev
ari
ati
on
oft
het
wor
out
es.Wear
enott
ryi
ngt
oshowt
hatoner
out
ehasmor
evar
iat
iont
han
t
heot
her
.

12=22
Ho:
1222
H1:

138
St
ep2:Asi
gni
fi
cantl
evel
of0.
10i
ssel
ect
ed.

St
ep3:t
heappr
opr
iat
etestst
ati
sti
cisFdi
str
ibut
ion F=

St
ep4:Thedeci
sionr
ulei
sobt
ainedf
rom t
heFt
abl
ebecausewear
eusi
ngat
wo

t
ail
edt
estt
hesi
gni
fi
cancel
eveli
s0.
05f
oundby t
her
ear
en1–1=7-
1=6

degr
eesoff
reedom i
nthenumer
atorandn2–1=8–1=7degr
eesoff
reedom i
nhe
denomi
nat
or.Thecr
it
icalv
aluef
ora0.
05l
evelanddf
(7,
6)i
s3.
87.I
fther
ati
ooft
he

sampl
evar
iances exceed3.
87t
henul
lhy
pot
hesi
sisr
eject
ed.

St
ep5:t
hecomput
edv
alueoft
het
est
sst
ati
sti
cis5.
70=

Thenul
lhy
pot
hesi
sisr
eject
edandt
heal
ter
nat
ehy
pot
hesi
saccept
ed.Thev
ari
ati
on
i
snott
hesamei
nthet
wopout
s.

Theusualpr
ocedur
eist
odet
ermi
net
heFr
ati
obyput
ti
ngt
hel
argerv
ari
ancei
nthe
numer
ator
.Thi
swi
l
lfor
cet
heFr
ati
otobel
argert
han1.
0.Whyi
sthi
snecessar
y?

I
tal
l
owsust
oal
way
suset
heuppert
ailoft
heFst
ati
sti
cthusav
oidi
ngt
heneedf
or
mor
eext
ensi
veFt
abl
es.

Howaone-
fai
l
edt
est
ist
obehandl
ed:Agai
nwewi
l
lar
ranget
heFr
ati
osot
hati
tis
al
way
sgr
eat
ert
hat1.
00.Undert
hesecondi
ti
onsi
tisnotnecessar
ytodi
vi
det
hel
evel
ofsi
gni
fi
cancei
nhal
f.Wear
ether
efor
erest
ri
ctedt
othe0.
05of0.
1 l
eveland
si
gni
fi
cancef
orone-
tai
l
edt
est
sint
heFt
abl
e.

CheckYourPr
ogr
ess–9

A companyassembl
esel
ect
ri
calcomponent
s.Fort
hel
ast10day
sempl
oyee‘
A’
av
eraged9r
eject
sperdaywi
thast
andar
ddev
iat
ionof2r
eject
s.Empl
oyee‘
B’
av
eraged8.
5rej
ect
sperdaywi
thast
andar
ddev
iat
ionof1.
5rej
ect
sov
ert
hatsame

139
per
iod.Att
he0.
05l
evel
,canweconcl
udet
hatt
her
eismor
evar
iat
ioni
nthenumber
ofr
eject
sperdayat
tri
but
edt
oempl
oyedA?(
Not
ethatt
hegi
vensar
est
andar
d
dev
iat
ionsnotv
ari
ances.Thet
esti
sone-
tai
l
ed)

5.
7ANSWERSTOCHECKYOURPROGRESS

1.Rej
ectHo Z=1.
767>1.
645
2.Rej
ectHo; Z=8.
86>2.
33
3.Donotr
ejectHo; Z=0.
936>1.
645
4.1)Yes,
becauseNpandn(
1–p)ornqexceeds
2)Ho:
p=0.
40
p0.
40
3)Donotr
ejectHo Z=-
0.866>-
2.58
5.1)Ho:
P1=P2 H:
P1P2
2)Rej
ectHoi
fZ<-
1.645or>1.
645

3) =0.
6

Z=

4)Donotr
ejectHo
5)P-
val
ue=2(
0.5000–0.
2454)=0.
5092
6.1)Ho:
=305 H1:
>305
2)Rej
ectHoi
ft>1.
729
3)t=2.
236
r
ejectHo,
themeani
sgr
eat
ert
han305age
7.1)Ho:
1=2 H1 1<2
Rej
ectHoi
ft<-
1.782
t=-
2.827
r
ejectHo
8.Ho:
d=0 H1 d0
cr
it
ical
val
uesar
e–2.
306and+2.
306

140
 t= =0.
180

Donotr
ejectHo.Ther
eisnodi
ff
erencebet
weent
het
wosol
uti
ons

8.Cr
it
ical
val
uei
s3.
18
I
fF>3.
18r
ejectHo

F= =1.
78

Donotr
ejectHo

5.
8MODELEXAMI
NATI
ONQUESTI
ONS

1.Testf
ort
hepopul
ati
onmean
Aneducat
orcl
aimst
hatt
heav
erageI
Qofci
tycol
l
agest
udent
sisnomor
e
t
han110.Tot
estt
hiscl
aim,ar
andom sampl
eof150wast
akenandgi
ven
r
elev
antt
est
s.Thei
rav
erageI
Qscor
ecamet
o111.
2wi
thast
andar
ddev
iat
ion
of7.
2.Atl
evelofsi
gni
fi
canceof0.
01,t
esti
fthecl
aim oft
heeducat
ori
s
j
ust
if
ied.
2.Testf
ort
wopopul
ati
onmeans
A pot
ent
ialbuy
erofel
ect
ri
cbul
bsbought100bul
bseachoft
wof
amous
br
ands,AandB.Upont
est
ingbot
hthesesampl
es,hef
oundt
hatbr
andAhad
ameanl
i
feof1500hour
swi
thst
andar
ddev
iat
ionof50hour
swher
easbr
and
Bhadanav
eragel
i
feof1530hour
swi
thast
andar
ddev
iat
ionof60hour
s.Can
i
tbe concl
uded at5% l
evelofsi
gni
fi
cance t
hatt
he t
wo br
ands di
ff
er
si
gni
fi
cant
lyi
nqual
i
ty?
3.Testf
ort
hepopul
ati
onpr
opor
ti
on
Asoci
ologi
stt
akenasur
veyoft
hepr
evi
ousl
ott
erywi
nner
sofonemi
l
li
onbr
.
hast
akenandf
oundt
hat80%oft
hesewi
nner
scont
inuet
owor
kont
hei
rjob.
Apsy
chol
ogi
stf
eltot
her
wise.Tot
estt
her
epor
toft
hest
ate,
het
ookasampl
e
of100suchwi
nner
satr
andom andf
oundt
hatonl
y25wi
nner
soft
hissampl
e
hadqui
tthei
rjobs.At95% conf
idencel
evel
,canweconcl
udet
hatt
hest
ate
r
epor
tiscor
rect
?

141
4.Testf
ort
hedi
ff
erencebet
weent
wopopul
ati
onpr
opor
ti
ons
Random sampl
esof2000peopl
eint
ownAand3000i
ntownBwer
easkedi
f
t
heyt
houghtt
her
ewast
oomuchv
iol
enceonTVt
heseday
s.1400peopl
ein
t
ownAand1800peopl
eint
ownBr
epl
i
edi
ntheaf
fi
rmat
ive.Canweconcl
ude
at99%conf
idencel
evel
thatpr
opor
ti
onsar
esi
gni
fi
cant
lydi
ff
erent
?

5.Testf
ort
hepopul
ati
onmean
AHomeOwner
s’Associ
ati
onhasdet
ermi
nedt
hatt
heav
eragenumberofday
s
ahousewasi
nthemar
ketf
orsal
ewas90day
s,bef
orei
twassol
d.Ar
eal
est
ateagencybel
i
evest
hati
ncer
tai
nsect
ionofLongI
sland,t
heav
erage
numberofday
sthehousesr
emai
nedi
nthemar
ketbef
oresal
eswasl
esst
han
90.I
tsel
ect
edar
andom sampl
eof10homest
hatwer
esol
dint
hissect
ioni
n
or
dert
ojust
if
ywhati
tbel
i
eves.Thef
oll
owi
ngdat
arepr
esent
sthenumberof
day
sthateachoft
hese10homesst
ayedi
nthemar
ketbef
oresal
e?
87,
95,
78,
83,
110,
75,
82,
92,
90,
80
At0.
01l
evelofconf
idenceandassumi
ngt
hatpopul
ati
oni
sappr
oxi
mat
ely
nor
mal
,i
sther
eal
est
ateagencyj
ust
if
iedi
nit
sbel
i
ef?
6.Testf
ort
het
wopopul
ati
onmeans
Two dr
ug manuf
act
uri
ng compani
es pr
oduce headache r
emedi
es.Each
companycl
aimst
hati
tsdr
ugbr
ingf
ast
er-
act
ingr
eli
ef.Aconsumerpr
otect
ion
agencywant
stot
esti
fonedr
ug br
ingsr
eli
eff
ast
ert
han t
heot
her
.An
exper
imentwasper
for
medt
ocompar
ethemeanl
engt
hsoft
imer
equi
redf
or
bodi
l
yabsor
pti
onofbot
hdr
ugs.12peopl
esel
ect
edatr
andom wer
egi
ven
dosageofonedr
ugandanot
her12peopl
erandoml
ysel
ect
edweegi
ven
dosageoft
heseconddr
ug.Thel
engt
hoft
imei
nmi
nut
esf
ort
hedr
ugst
o
r
eachaspeci
fi
edl
eveli
nthebl
oodwasr
ecor
dedf
orbot
hdr
ugs.Themeans
andst
andar
ddev
iat
ionsoft
het
wosampl
esar
erecor
dedasf
oll
ows:
Dr
ug(
1) Dr
ug(
2)
X=10.
1 X=8.
9
s=4.
2 s=3.
8

142
 Usea5%l
evelofsi
gni
fi
cancet
otestt
hehy
pot
hesi
sthatt
her
eisnodi
ff
erence
i
nthemeant
imer
equi
redf
orbodi
l
yabsor
pti
onoft
heset
wodr
ugs.
7.Compar
ingt
wopopul
ati
onmeans
Ani
ndust
ri
alengi
neerconsul
tanthasconduct
edat
imeandmot
ionst
udyona
par
ti
cul
armanuf
act
uri
ngassembl
yoper
ati
onwhi
chhecl
aimswoul
dsav
eti
me.
Thepr
oduct
ionmanagerdeci
dest
otestnew pr
ocedur
etoseei
fitact
ual
l
y
r
educest
heav
erageassembl
yti
me.Ar
andom sampl
eoft
enassembl
ersi
s
sel
ect
edandeachassembl
eri
sti
medusi
ngt
heol
dpr
ocedur
e.Thent
hesame
assembl
ersar
egi
vent
rai
ningi
nthenew pr
ocedur
esandar
eti
medagai
nas
t
heyper
for
m t
hesameoper
ati
on.Thef
oll
owi
ngt
abl
eshowst
het
imei
n
mi
nut
es t
aken f
ort
he oper
ati
on underpr
evi
ous pr
ocedur
e and t
he new
pr
ocedur
e:

Assembl
er Ol
dPr
ocedur
e NewPr
ocedur
e
1 10.
6 10.
0
2 6.
7 7.
4
3 8.
0 6.
1
4 9.
5 6.
0
5 7.
1 7.
1
6 7.
0 6.
0
7 6.
4 5.
5
8 6.
9 7.
0
9 9.
0 8.
6
10 10.
0 9.
6
Assumi
ngt
hatt
het
imesundert
heol
dpr
ocedur
e,t
imesundert
henew pr
ocedur
es
and hence t
he dat
a pfpai
red di
ff
erences ar
e al
lnor
mal
l
ydi
str
ibut
ed,can we
concl
udeat99%conf
idencel
evelt
hatt
henewpr
ocedur
ereducest
heav
eraget
ime
r
equi
redf
ort
heoper
ati
on?

143