Estimation

Formulae

Mean σ known
CL = x̄ ± (zα / 2 x σ x̄)
LCL = x̄ - (zα /2 x σx̄ )
UCL = x̄ + (z α/ 2 x σ x̄ )
σ x̄ = σ
√n
Where
x̄ = Sample mean
σ x̄ = Standard error of mean / Standard Deviation of the Sample Means

n
If > 0.05 use FCF
N
N−n
FCF =
√N−1
σ x̄ = σ x FCF
√n
CL = x̄ ± (zα / 2 x σ x̄)
LCL = x̄ - (zα /2 x σx̄ )
UCL = x̄ + (z α/ 2 x σ x̄ )

Mean σ not known, n < 30, population is not normally distributed

CL = x̄ ± (t α /2, df x sx̄ )
LCL = x̄ - (t α/ 2, df x s x̄ )
UCL = x̄ + (t α /2 ,df x s x̄)
s
s x̄ =
√n
df = 1 - n
Where
x̄ = Sample mean
n = Sample size
df = Degrees of freedom
s x̄ = Standard error of mean / Standard Deviation of the Sample Means

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 Estimation

Proportion
CL = p^ ± (Z α /2 x σp^ )
LCL = p^ - (Z α /2 x σp^ )
UCL = p^ + ( Zα/ 2 x σ p^ )
p^ x q^
σp^ =
Where
√ n

p^ = Sample Proportion
q^ = 1 - p^
σp^ = Standard error of proportion / Standard Deviation of the Sample Proportions
n = sample size

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 Estimation

1. A study is conducted in a company that employs 800 engineers. A random sample of 50

engineers reveals that the average sample age is 34.3 years. Historically, the population
standard deviation of the age of the company’s engineers is approximately 8 years.
Construct a 98% confidence interval to estimate the average age of all the engineers in
this company.

2. The Quality Control Manager of a tyre company has sample of 100 tyres and has found
the mean life time to be 30,214 kms. The Population Standard Deviation is 860 kms.
Construct a 95% confidence interval for the mean life time for this particular brand of
tyres.

3. Owner of a large equipment rental company wants to make a quick estimate of the
average number of days a piece of ditchdigging equipment is rented. The company has
records of all rentals, but the amount of time required to conduct an audit of all accounts
would be difficult. The owner decides to take a random sample of rental invoices. 14
different rentals of ditchdiggers are selected randomly from the files, yielding the
following data. Uses these data, construct a 99% confidence interval to estimate the
average number of days that a ditchdigger is rented.
31325121421311

4. The marketing director of a large department store wants to estimate the average
number of customers who enter the store every five minutes. She randomly selects 5
minute intervals and counts the number of arrivals at the store. She obtains the figures
58, 32, 41, 47, 56, 80, 45, 29, 32, and 78. The analyst assumes the number of arrivals is
normally distributed. Using these data, the analyst computes a 95% confidence interval
to estimate the mean value for all five-minute intervals. What interval values does she
get?

5. The marketing director of a large department store wants to estimate the average
number of customers who enter the store every five minutes. She randomly selects 5
minute intervals and counts the number of arrivals at the store. She obtains the figures
58, 32, 41, 47, 56, 80, 45, 29, 32, and 78. The analyst assumes the number of arrivals is
normally distributed. Using these data, the analyst computes a 95% confidence interval
to estimate the mean value for all five-minute intervals. What interval values does she
get?

6. In a class of 65 students at a management college, 25 students are female. Develop a

95% confidence interval estimate for the proportion of female students in the college.

7. A survey of 100 respondents was conducted to study proportion people snoring tn their
sleep. Approximately 40% people claim that they do, Using this information, construct a
95% confidence interval for the proportion of people that do sore in their sleep.

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