Professional Documents
Culture Documents
Basic Business Statistics: 11 Edition
Basic Business Statistics: 11 Edition
11th Edition
Chapter 8
Mean, μ
when Population Standard Deviation σ is Known
when Population Standard Deviation σ is Unknown
Confidence Intervals for the Population
Proportion, π
Determining the Required Sample Size
Lower Upper
Confidence Confidence
Point Estimate
Limit Limit
Width of
confidence interval
Mean μ X
Proportion π p
Sample
Confidence Level
Confidence the interval will contain
the unknown population parameter
A percentage (less than 100%)
Confidence
Intervals
Population Population
Mean Proportion
σ Known σ Unknown
σ
X Z α/2
n
where X is the point estimate
Zα/2 is the normal distribution critical value for a probability of /2 in each tail
σ/ n is the standard error
α α
0.025 0.025
2 2
/2 1 /2
x
Intervals μx μ
extend from x1
σ x2 (1-)x100%
X Zα / 2
n of intervals
constructed
to
σ contain μ;
X Zα / 2
n ()x100% do
not.
Confidence Intervals
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 8-19
Example
A sample of 11 circuits from a large normal
population has a mean resistance of 2.20
ohms. We know from past testing that the
population standard deviation is 0.35 ohms.
Solution: σ
X Z α/2
n
2.20 1.96 (0.35/ 11 )
2.20 0.2068
1.9932 μ 2.4068
Confidence
Intervals
Population Population
Mean Proportion
σ Known σ Unknown
Probably not!
S
X tα / 2
n
(where tα/2 is the critical value of the t distribution with n -1 degrees of
freedom and an area of α/2 in each tail)
d.f. = n - 1
Standard
Normal
(t with df = ∞)
t (df = 13)
t-distributions are bell-
shaped and symmetric, but
have ‘fatter’ tails than the t (df = 5)
normal
0 t
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 8-29
Student’s t Table
Confidence t t t Z
Level (10 d.f.) (20 d.f.) (30 d.f.) (∞ d.f.)
Note: t Z as n increases
46.698 ≤ μ ≤ 53.302
Confidence
Intervals
Population Population
Mean Proportion
σ Known σ Unknown
(1 )
σp
n
We will estimate this with sample data:
p(1 p)
n
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 8-36
Confidence Interval Endpoints
Upper and lower confidence limits for the
population proportion are calculated with the
formula
p(1 p)
p Z α/2
n
where
Zα/2 is the standard normal value for the level of confidence desired
p is the sample proportion
n is the sample size
Note: must have np > 5 and n(1-p) > 5
Determining
Sample Size
Determining
Sample Size
For the
Mean Sampling error
(margin of error)
σ σ
X Zα / 2 e Zα / 2
n n
Determining
Sample Size
For the
Mean
σ 2
Zα / 2 σ 2
e Zα / 2 Now solve
n
for n to get 2
n e
Basic Business Statistics, 11e © 2009 Prentice-Hall, Inc.. Chap 8-44
Determining Sample Size
(continued)
2 2 2 2
Z σ (1.645) (45)
n 2
2
219.19
e 5
Determining
Sample Size
For the
Proportion
Solution:
For 95% confidence, use Zα/2 = 1.96
e = 0.03
p = 0.12, so use this to estimate π
S N n
N X N (t α / 2 )
n N 1
(This is sampling without replacement, so use the finite population
correction in the confidence interval formula)
S N n
N X N (t α / 2 )
n N 1
22.3 1000 80
(1000)(87.6) (1000)(1.9905)
80 1000 1
87,600 4,762.48
D i
D i1
n
where Di audited value - original value
SD N n
N D N (t α / 2 )
n N 1
where n
( Di D) 2
S D i 1
n 1
p(1 p) N n
Upper bound p Z α
n N 1
where
Zα is the standard normal value for the level of confidence desired
p is the sample proportion of items that do not conform
n is the sample size
N is the population size
in the population
One-sided confidence intervals for the proportion
nonconforming
Addressed confidence interval estimation and ethical
issues