Normalized Sample mean graph

To apply what we’ve learnt from the previous excel file, we have to simulate a situation in
which this information are directly applicable. The most apparent graph to use in order to manage
our business is the normalized sample mean graph .Using the empirical rule, we can find out how
much of the data lies within one, two and three standard deviations from the mean.

Normalized Sample Mean Graph

35
30
25
Frequency

20
15
10
5
0
-8 -6 -4 -2 0 2 4 6 8
Z-Value

Mean: 3.249

Standard Deviation: 0.08239

68 percent of the data which are within ONE standard deviation from the mean are between:

( 3.249−0.0829 ) ¿ ( 3.249+0.0829 )
3.1661 ¿3.331 USD

95 percent of the data which are within TWO standard deviations from the mean are between:

( 3.249−2∗0.0829 ) ¿ ( 3.249+2∗0.0829 )
3.0832 ¿3.4148 USD
99.7 percent of the data which are within THREE standard deviations from the mean are between:

( 3.249−3∗0.0829 ) ¿ ( 3.249+3∗0.0829 )
3.0003 ¿ 3.4977 USD

How can we use the empirical rule to get useful information on the price of meat?

Let’s say we want to find the probability that the meat price is above 3.331 dollars. From the
empirical rule, we calculated that 68 percent of the distribution lies between one standard deviation
which in this case is from 3.1661 ¿3.331 USD. Therefore 32 percent of the distribution lies outside
of this range and 16 percent lies above this range. Hence, the probability that the meat price is
above 3.331 dollars is 16 percent.
 The empirical rule is used often in statistics for forecasting final outcomes. After
calculating the standard deviation and before collecting exact data, this rule can be used as
a rough estimate of the outcome of the impending data to be collected and analysed since
collecting data can be time consuming.