Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc.

Chap 6-1
Chapter 6

The Normal Distribution and
Other Continuous Distributions
Statistics for Managers
Using Microsoft

Excel
4
th
Edition
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-2
Chapter Goals
After completing this chapter, you should be
able to:
Describe the characteristics of the normal distribution
Translate normal distribution problems into standardized
normal distribution problems
Find probabilities using a normal distribution table
Evaluate the normality assumption
Recognize when to apply the uniform and exponential
distributions

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-3
Chapter Goals
After completing this chapter, you should be
able to:
Define the concept of a sampling distribution
Determine the mean and standard deviation for the
sampling distribution of the sample mean, X
Determine the mean and standard deviation for the
sampling distribution of the sample proportion, p
s
Describe the Central Limit Theorem and its importance
Apply sampling distributions for both X and p
s
_
_
(continued)
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-4
Probability Distributions
Continuous
Probability
Distributions
Binomial
Hypergeometric
Poisson
Probability
Distributions
Discrete
Probability
Distributions
Normal
Uniform
Exponential
Ch. 5 Ch. 6
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-5
Continuous Probability Distributions
A continuous random variable is a variable that
can assume any value on a continuum (can
assume an uncountable number of values)
thickness of an item
time required to complete a task
temperature of a solution
height, in inches

These can potentially take on any value,
depending only on the ability to measure
accurately.
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-6
The Normal Distribution
Probability
Distributions
Normal
Uniform
Exponential
Continuous
Probability
Distributions
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-7
The Normal Distribution
Bell Shaped
Symmetrical
Mean, Median and Mode
are Equal
Location is determined by the
mean,
Spread is determined by the
standard deviation,

The random variable has an
infinite theoretical range:
+ to
Mean
= Median
= Mode
X
f(X)


Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-8
By varying the parameters and , we obtain
different normal distributions
Many Normal Distributions
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-9
The Normal Distribution
Shape
X
f(X)


Changing shifts the
distribution left or right.
Changing increases
or decreases the
spread.
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-10
The Normal Probability
Density Function
The formula for the normal probability density
function is
Where e = the mathematical constant approximated by 2.71828
= the mathematical constant approximated by 3.14159
= the population mean
= the population standard deviation
X = any value of the continuous variable
2
)/] (1/2)[(X
e
2
1
f(X)

o
=
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-11
The Standardized Normal
Any normal distribution (with any mean and
standard deviation combination) can be
transformed into the standardized normal
distribution (Z)

Need to transform X units into Z units
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-12
Translation to the Standardized
Normal Distribution
Translate from X to the standardized normal
(the Z distribution) by subtracting the mean
of X and dividing by its standard deviation:

X
Z

=
Z always has mean = 0 and standard deviation = 1
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-13
The Standardized Normal
Probability Density Function
The formula for the standardized normal
probability density function is
Where e = the mathematical constant approximated by 2.71828
= the mathematical constant approximated by 3.14159
Z = any value of the standardized normal distribution
2
(1/2)Z
e
2
1
f(Z)

=
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-14
The Standardized
Normal Distribution
Also known as the Z distribution
Mean is 0
Standard Deviation is 1
Z
f(Z)
0
1
Values above the mean have positive Z-values,
values below the mean have negative Z-values
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-15
Example
If X is distributed normally with mean of 100
and standard deviation of 50, the Z value for
X = 200 is



This says that X = 200 is two standard
deviations (2 increments of 50 units) above
the mean of 100.
2.0
50
100 200

X
Z =

=
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-16
Comparing X and Z units
Z
100
2.0 0
200 X
Note that the distribution is the same, only the
scale has changed. We can express the problem in
original units (X) or in standardized units (Z)
( = 100, = 50)
( = 0, = 1)
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-17
Finding Normal Probabilities
Probability is the
area under the
curve!
a b
X
f(X)
P a X b (
)

Probability is measured by the area
under the curve

P a X b (
)
< < =
(Note that the
probability of any
individual value is zero)
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-18
f(X)
X

Probability as
Area Under the Curve
0.5 0.5
The total area under the curve is 1.0, and the curve is
symmetric, so half is above the mean, half is below
1.0 ) X P( = < <
0.5 ) X P( = < <
0.5 ) X P( = < <
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-19
Empirical Rules
1 encloses about
68% of Xs
f(X)
X
+1 -1
What can we say about the distribution of values
around the mean? There are some general rules:

68.26%
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-20
The Empirical Rule
2 covers about 95% of Xs
3 covers about 99.7% of Xs
x
2 2
x
3 3
95.44% 99.72%
(continued)
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-21
The Standardized Normal Table
The Standardized Normal table in the
textbook (Appendix table E.2) gives the
probability less than a desired value for Z
(i.e., from negative infinity to Z)

Z
0 2.00
.9772
Example:
P(Z < 2.00) = .9772
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-22
The Standardized Normal Table
The value within the
table gives the
probability from Z =
up to the desired Z
value
.9772
2.0
P(Z < 2.00) = .9772
The row shows
the value of Z
to the first
decimal point
The column gives the value of
Z to the second decimal point
2.0
.
.
.
(continued)
Z 0.00 0.01 0.02

0.0
0.1
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-23
General Procedure for
Finding Probabilities
Draw the normal curve for the problem in
terms of X

Translate X-values to Z-values

Use the Standardized Normal Table
To find P(a < X < b) when X is
distributed normally:
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-24
Finding Normal Probabilities
Suppose X is normal with mean 8.0 and
standard deviation 5.0
Find P(X < 8.6)
X
8.6
8.0
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-25
Suppose X is normal with mean 8.0 and
standard deviation 5.0. Find P(X < 8.6)

Z
0.12 0
X
8.6 8
= 8
= 10
= 0
= 1
(continued)
Finding Normal Probabilities
0.12
5.0
8.0 8.6

X
Z =

=
P(X < 8.6) P(Z < 0.12)
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-26
Z
0.12
Z .00 .01
0.0 .5000 .5040 .5080
.5398
.5438
0.2 .5793 .5832 .5871
0.3 .6179 .6217 .6255
Solution: Finding P(Z < 0.12)
.5478
.02
0.1
.5478
Standardized Normal Probability
Table (Portion)
0.00
= P(Z < 0.12)
P(X < 8.6)
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-27

Upper Tail Probabilities
Suppose X is normal with mean 8.0 and
standard deviation 5.0.
Now Find P(X > 8.6)
X
8.6
8.0
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-28
Now Find P(X > 8.6)
(continued)
Z
0.12
0
Z
0.12
.5478
0
1.000
1.0 - .5478
= .4522
P(X > 8.6) = P(Z > 0.12) = 1.0 - P(Z 0.12)
= 1.0 - .5478 = .4522

Upper Tail Probabilities
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-29
Probability Between
Two Values
Suppose X is normal with mean 8.0 and
standard deviation 5.0. Find P(8 < X < 8.6)
P(8 < X < 8.6)
= P(0 < Z < 0.12)
Z 0.12 0
X 8.6 8
0
5
8 8

X
Z =

=
0.12
5
8 8.6

X
Z =

=
Calculate Z-values:
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-30
Z
0.12
Solution: Finding P(0 < Z < 0.12)
.0478
0.00
= P(0 < Z < 0.12)
P(8 < X < 8.6)
= P(Z < 0.12) P(Z 0)
= .5478 - .5000 = .0478
.5000
Z .00 .01
0.0 .5000 .5040 .5080
.5398
.5438
0.2 .5793 .5832 .5871
0.3 .6179 .6217 .6255
.02
0.1
.5478
Standardized Normal Probability
Table (Portion)
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-31
Suppose X is normal with mean 8.0 and
standard deviation 5.0.
Now Find P(7.4 < X < 8)
X
7.4
8.0
Probabilities in the Lower Tail
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-32
Probabilities in the Lower Tail
Now Find P(7.4 < X < 8)
X
7.4 8.0
P(7.4 < X < 8)
= P(-0.12 < Z < 0)
= P(Z < 0) P(Z -0.12)
= .5000 - .4522 = .0478
(continued)
.0478
.4522
Z
-0.12 0
The Normal distribution is
symmetric, so this probability
is the same as P(0 < Z < 0.12)
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-33
Steps to find the X value for a known
probability:
1. Find the Z value for the known probability
2. Convert to X units using the formula:
Finding the X value for a
Known Probability
Z X + =
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-34
Finding the X value for a
Known Probability
Example:
Suppose X is normal with mean 8.0 and
standard deviation 5.0.
Now find the X value so that only 20% of all
values are below this X
X
? 8.0
.2000
Z
? 0
(continued)
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-35
Find the Z value for
20% in the Lower Tail
20% area in the lower
tail is consistent with a
Z value of -0.84
Z .03
-0.9 .1762 .1736
.2033
-0.7 .2327 .2296
.04
-0.8
.2005
Standardized Normal Probability
Table (Portion)
.05
.1711
.1977
.2266




X
? 8.0
.2000
Z
-0.84 0
1. Find the Z value for the known probability
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-36
2. Convert to X units using the formula:
Finding the X value
80 . 3
0 . 5 ) 84 . 0 ( 0 . 8
Z X
=
+ =
+ =
So 20% of the values from a distribution
with mean 8.0 and standard deviation
5.0 are less than 3.80
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-37
Assessing Normality
Not all continuous random variables are
normally distributed
It is important to evaluate how well the data set
is approximated by a normal distribution
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-38
Assessing Normality
Construct charts or graphs
For small- or moderate-sized data sets, do stem-and-
leaf display and box-and-whisker plot look
symmetric?
For large data sets, does the histogram or polygon
appear bell-shaped?
Compute descriptive summary measures
Do the mean, median and mode have similar values?
Is the interquartile range approximately 1.33 ?
Is the range approximately 6 ?
(continued)
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-39
Assessing Normality
Observe the distribution of the data set
Do approximately 2/3 of the observations lie within
mean 1 standard deviation?
Do approximately 80% of the observations lie within
mean 1.28 standard deviations?
Do approximately 95% of the observations lie within
mean 2 standard deviations?
Evaluate normal probability plot
Is the normal probability plot approximately linear
with positive slope?
(continued)

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-40
The Normal Probability Plot
Normal probability plot
Arrange data into ordered array
Find corresponding standardized normal quantile
values
Plot the pairs of points with observed data values on
the vertical axis and the standardized normal quantile
values on the horizontal axis
Evaluate the plot for evidence of linearity
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-41
A normal probability plot for data
from a normal distribution will be
approximately linear:
30
60
90
-2 -1 0 1 2
Z
X
The Normal Probability Plot
(continued)
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-42
Normal Probability Plot
Left-Skewed Right-Skewed
Rectangular
30
60
90
-2 -1 0 1 2
Z
X
(continued)
30
60
90
-2 -1 0 1 2
Z
X
30
60
90
-2 -1 0 1 2
Z
X
Nonlinear plots
indicate a deviation
from normality
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-43
The Uniform Distribution
Continuous
Probability
Distributions
Probability
Distributions
Normal
Uniform
Exponential
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-44
The Uniform Distribution
The uniform distribution is a
probability distribution that has equal
probabilities for all possible
outcomes of the random variable

Also called a rectangular distribution
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-45
The Continuous Uniform Distribution:
otherwise 0
b X a if
a b
1
s s

where
f(X) = value of the density function at any X value
a = minimum value of X
b = maximum value of X
The Uniform Distribution
(continued)
f(X) =
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-46
Properties of the
Uniform Distribution
The mean of a uniform distribution is



The standard deviation is
2
b a

+
=
12
a) - (b

2
=
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-47
Uniform Distribution Example
Example: Uniform probability distribution
over the range 2 X 6:
2 6
.25
f(X) = = .25 for 2 X 6
6 - 2
1
X
f(X)
4
2
6 2
2
b a
=
+
=
+
=
1547 . 1
12
2) - (6
12
a) - (b

2 2
= = =
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-48
The Exponential Distribution
Continuous
Probability
Distributions
Probability
Distributions
Normal
Uniform
Exponential
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-49
The Exponential Distribution
Used to model the length of time between two
occurrences of an event (the time between
arrivals)

Examples:
Time between trucks arriving at an unloading dock
Time between transactions at an ATM Machine
Time between phone calls to the main operator
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-50
The Exponential Distribution
X
e 1 X) time P(arrival

= <
Defined by a single parameter, its mean
(lambda)
The probability that an arrival time is less than
some specified time X is
where e = mathematical constant approximated by 2.71828
= the population mean number of arrivals per unit
X = any value of the continuous variable where 0 < X <
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-51
Exponential Distribution
Example
Example: Customers arrive at the service counter at
the rate of 15 per hour. What is the probability that the
arrival time between consecutive customers is less
than three minutes?
The mean number of arrivals per hour is 15, so = 15
Three minutes is .05 hours
P(arrival time < .05) = 1 e
-X
= 1 e
-(15)(.05)
= .5276
So there is a 52.76% probability that the arrival time
between successive customers is less than three
minutes
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-52
Sampling Distributions
Sampling
Distributions
Sampling
Distributions
of the
Mean
Sampling
Distributions
of the
Proportion
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-53
Sampling Distributions
A sampling distribution is a
distribution of all of the possible
values of a statistic for a given size
sample selected from a population
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-54
Developing a
Sampling Distribution
Assume there is a population
Population size N=4
Random variable, X,
is age of individuals
Values of X: 18, 20,
22, 24 (years)
A
B
C
D
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-55
.3
.2
.1
0
18 20 22 24
A B C D
Uniform Distribution
P(x)
x
(continued)
Summary Measures for the Population Distribution:
Developing a
Sampling Distribution
21
4
24 22 20 18
N
X

i
=
+ + +
=
=

2.236
N
) (X

2
i
=

=

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-56
1
st
2
nd
Observation
Obs 18 20 22 24
18 18,18 18,20 18,22 18,24
20 20,18 20,20 20,22 20,24
22 22,18 22,20 22,22 22,24
24 24,18 24,20 24,22 24,24

16 possible samples
(sampling with
replacement)
Now consider all possible samples of size n=2
1st 2nd Observation
Obs 18 20 22 24
18 18 19 20 21
20 19 20 21 22
22 20 21 22 23
24 21 22 23 24


(continued)
Developing a
Sampling Distribution
16 Sample
Means
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-57
1st 2nd Observation
Obs 18 20 22 24
18 18 19 20 21
20 19 20 21 22
22 20 21 22 23
24 21 22 23 24


Sampling Distribution of All Sample Means
18 19 20 21 22 23 24
0
.1
.2
.3
P(X)
X
Sample Means
Distribution
16 Sample Means
_
Developing a
Sampling Distribution
(continued)
(no longer uniform)
_
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-58
Summary Measures of this Sampling Distribution:
Developing a
Sampling Distribution
(continued)
21
16
24 21 19 18
N
X

i
X
=
+ + + +
= =

1.58
16
21) - (24 21) - (19 21) - (18
N
) X (

2 2 2
2
X
i
X
=
+ + +
=

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-59
Comparing the Population with its
Sampling Distribution
18 19 20 21 22 23 24
0
.1
.2
.3
P(X)
X
18 20 22 24
A B C D
0
.1
.2
.3
Population
N = 4
P(X)
X
_
1.58 21
X X
= =
2.236 21 = =
Sample Means Distribution
n = 2
_
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-60
Sampling Distributions
of the Mean
Sampling
Distributions
Sampling
Distributions
of the
Mean
Sampling
Distributions
of the
Proportion
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-61
Standard Error of the Mean
Different samples of the same size from the same
population will yield different sample means
A measure of the variability in the mean from sample to
sample is given by the Standard Error of the Mean:




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

X
=
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-62
If the Population is Normal
If a population is normal with mean and
standard deviation , the sampling distribution
of is also normally distributed with


and


(This assumes that sampling is with replacement or
sampling is without replacement from an infinite population)
X

X
=
n

X
=
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-63
Z-value for Sampling Distribution
of the Mean
Z-value for the sampling distribution of :
where: = sample mean
= population mean
= population standard deviation
n = sample size
X

) X (

) X (
Z
X
X

=

=
X
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-64
Finite Population Correction
Apply the Finite Population Correction if:
the sample is large relative to the population
(n is greater than 5% of N)
and
Sampling is without replacement


Then
1 N
n N
n

) X (
Z

=
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-65
Normal Population
Distribution
Normal Sampling
Distribution
(has the same mean)
Sampling Distribution Properties



(i.e. is unbiased )

x
x
x

x
=

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-66
Sampling Distribution Properties
For sampling with replacement:
As n increases,
decreases
Larger
sample size
Smaller
sample size
x
(continued)
x

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-67
If the Population is not Normal
We can apply the Central Limit Theorem:
Even if the population is not normal,
sample means from the population will be
approximately normal as long as the sample size is
large enough.

Properties of the sampling distribution:


and

x
=
n

x
=
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-68
n
Central Limit Theorem
As the
sample
size gets
large
enough
the sampling
distribution
becomes
almost normal
regardless of
shape of
population
x
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-69
Population Distribution
Sampling Distribution
(becomes normal as n increases)
Central Tendency
Variation
(Sampling with
replacement)
x
x
Larger
sample
size
Smaller
sample size
If the Population is not Normal
(continued)
Sampling distribution
properties:

x
=
n

x
=
x

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-70
How Large is Large Enough?
For most distributions, n > 30 will give a
sampling distribution that is nearly normal
For fairly symmetric distributions, n > 15
For normal population distributions, the
sampling distribution of the mean is always
normally distributed
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-71
Example
Suppose a population has mean = 8 and
standard deviation = 3. Suppose a random
sample of size n = 36 is selected.

What is the probability that the sample mean is
between 7.8 and 8.2?
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-72
Example
Solution:
Even if the population is not normally
distributed, the central limit theorem can be
used (n > 30)
so the sampling distribution of is
approximately normal
with mean = 8
and standard deviation

(continued)
x
x

0.5
36
3
n

x
= = =
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-73
Example
Solution (continued):

(continued)
0.3830 0.5) Z P(-0.5
36
3
8 - 8.2
n

-
36
3
8 - 7.8
P 8.2) P(7.8
X
X
= < < =
|
|
|
.
|

\
|
< < = < <
Z
7.8 8.2
-0.5 0.5
Sampling
Distribution
Standard Normal
Distribution
.1915
+.1915
Population
Distribution
?
?
?
?
?
?
? ?
?
?
?
?
Sample Standardize
8 =
8
X
=
0
z
=
x
X
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-74
Sampling Distributions
of the Proportion
Sampling
Distributions
Sampling
Distributions
of the
Mean
Sampling
Distributions
of the
Proportion
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-75
Population Proportions, p
p = the proportion of the population having
some characteristic
Sample proportion ( p
s
) provides an estimate
of p:


0 p
s
1
p
s
has a binomial distribution
(assuming sampling with replacement from a finite population or
without replacement from an infinite population)
size sample
interest of stic characteri the having sample the in items of number
n
X
p
s
= =
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-76
Sampling Distribution of p
Approximated by a
normal distribution if:




where
and
(where p = population proportion)
Sampling Distribution
P( p
s
)
.3
.2
.1
0
0 . 2 .4 .6 8 1 p
s
p
s
p
=
n
p) p(1

s
p

=
5 p) n(1
5 np
and
>
>
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-77
Z-Value for Proportions
If sampling is without replacement
and n is greater than 5% of the
population size, then must use
the finite population correction
factor:
1 N
n N
n
p) p(1

s
p

=
n
p) p(1
p p

p p
Z
s
p
s
s

=
Standardize p
s
to a Z value with the formula:
p

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-78
Example
If the true proportion of voters who support
Proposition A is p = .4, what is the probability
that a sample of size 200 yields a sample
proportion between .40 and .45?
i.e.: if p = .4 and n = 200, what is
P(.40 p
s
.45) ?
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-79
Example
if p = .4 and n = 200, what is
P(.40 p
s
.45) ?
(continued)
.03464
200
.4) .4(1
n
p) p(1

s
p
=

=
1.44) Z P(0
.03464
.40 .45
Z
.03464
.40 .40
P .45) p P(.40
s
s s =
|
.
|

\
|

s s

= s s
Find :
Convert to
standard
normal:
s
p

Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-80
Example
Z
.45 1.44
.4251
Standardize
Sampling Distribution
Standardized
Normal Distribution
if p = .4 and n = 200, what is
P(.40 p
s
.45) ?
(continued)
Use standard normal table: P(0 Z 1.44) = .4251
.40 0
p
s
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-81
Chapter Summary
Presented key continuous distributions
normal, uniform, exponential
Found probabilities using formulas and tables
Recognized when to apply different distributions
Applied distributions to decision problems
Statistics for Managers Using Microsoft Excel, 4e 2004 Prentice-Hall, Inc. Chap 6-82
Chapter Summary
Introduced sampling distributions
Described the sampling distribution of the mean
For normal populations
Using the Central Limit Theorem
Described the sampling distribution of a
proportion
Calculated probabilities using sampling
distributions
(continued)