Quantitative Method for

Multi-dimensional
Management and Group
Decision Making
Sampling Distributions

2-1
 Learning Objectives

1. Describe the properties of estimators

2. Explain sampling distribution
3. Describe the relationship between
populations & sampling distributions
4. State the Central Limit Theorem
5. Solve a probability problem involving
sampling distributions
2-2
 Inferential Statistics

2-3
 Types of
Statistical Applications

Statistical
Methods

Descriptive Inferential
Statistics Statistics

2-4
 Inferential Statistics

1. Involves
Population?
 Estimation
 Hypothesis
testing

2. Purpose
 Make decisions
about population
characteristics

2-5
 Inference Process

Estimate Population
& test
population
parameter
Sample
statistic
(X ) Sample

2-6
 Estimators

1. Random variables used to estimate a

population parameter
 Sample mean, sample proportion, sample
median
2. Example: Sample meanx is an
estimator of population mean µ
 Ifx = 3 then 3 is the estimate of µ
3. Theoretical basis is sampling distribution
2-7
 Sampling Distributions

2-8
 Sampling Distribution

1. Theoretical probability distribution

2. Random variable is sample statistic
 Sample mean, sample proportion etc.

3. Results from drawing all possible

samples of a fixed size
4. List of all possible [x, P(x) ] pairs
 Sampling distribution of mean

2-9
 Developing
Sampling Distributions
Suppose there’s a
population ...
Population size, N = 4
Random variable, x,
is # televisions owned
Values of x: 1, 2, 3, 4
Uniform distribution
© 1984-1994 T/Maker Co.

2 - 10
 Population
Characteristics

Summary Measures Population Distribution

N
∑ Xi .3
.2
i =1
µ= = 2.5 .1
N .0
1 2 3 4
∑a
Xi − µf
N
2

i =1
σ= = 112
.
N
2 - 11
 Let’s Draw All Possible
Samples of Size n = 2
16 Samples
1st 2nd Observation
Obs 1 2 3 4
1 1,1 1,2 1,3 1,4
2 2,1 2,2 2,3 2,4
3 3,1 3,2 3,3 3,4
4 4,1 4,2 4,3 4,4
Sample with replacement
2 - 12
 Let’s Draw All Possible
Samples of Size n = 2
16 Samples 16 Sample Means
1st 2nd Observation 1st 2nd Observation
Obs 1 2 3 4 Obs 1 2 3 4
1 1,1 1,2 1,3 1,4 1 1.0 1.5 2.0 2.5
2 2,1 2,2 2,3 2,4 2 1.5 2.0 2.5 3.0
3 3,1 3,2 3,3 3,4 3 2.0 2.5 3.0 3.5
4 4,1 4,2 4,3 4,4 4 2.5 3.0 3.5 4.0
Sample with replacement
2 - 13
 Sampling Distribution
of All Sample Means
16 Sample Means Sampling
1st 2nd Observation
Distribution
Obs 1 2 3 4
1 1.0 1.5 2.0 2.5
P(X)
2 1.5 2.0 2.5 3.0 .3
.2
3 2.0 2.5 3.0 3.5 .1
.0 X
4 2.5 3.0 3.5 4.0 1.0 1.5 2.0 2.5 3.0 3.5 4.0

2 - 14
 Summary Measures of
All Sample Means
N
∑ Xi 1.0 + 15
. +  + 4.0
i =1
µx = = = 2.5
N 16

∑ cX i − µ x h
N
2

i =1
σx =
N

=
a1.0 − 2.5f + a15. − 2.5f ++ a4.0 − 2.5f = 0.79
2 2 2

16
2 - 15
 Comparison of Population
& Sampling Distribution
Population Sampling Distribution
P(X) P(X)
.3 .3
.2 .2
.1 .1
.0 .0 X
1 2 3 4 1 1.5 2 2.5 3 3.5 4

µ = 2.5 µ x = 2.5

σ = 112
. σ x = 0.79
2 - 16
 Standard Error of Mean

1. Standard deviation of all possible

sample means,x
 Measures scatter in all sample means,x
2. Less than pop. standard deviation
3. Formula (sampling with replacement)
σ
σx =
n

2 - 17
 Sampling from
Normal Populations

2 - 18
 Sampling from
Normal Populations
Central Tendency Population Distribution
µx = µ σ = 10

Dispersion
σ µ = 50 X
σx =
n Sampling Distribution
n=4 n =16
Sampling with
σ X = 5 σ  X = 2.5
replacement

µ X- = 50 X
2 - 19
 Standardizing Sampling
Distribution of Mean

Suppose you want to make

probability statements about
the sampling distribution...

2 - 20
 Standardizing Sampling
Distribution of Mean
X − µx X − µ
Z= =
σx σ
Sampling n Standardized
Distribution Normal Distribution
σ X σ =1

µ X X µ =0 Z
2 - 21
 Thinking Challenge

You’re an operations
analyst for AT&T. Long-
distance telephone calls
are normally distribution
with µ = 8 min. & σ = 2
min. If you select random
samples of 25 calls, what
percentage of the sample
means would be between
7.8 & 8.2 minutes? © 1984-1994 T/Maker Co.

2 - 22 Alone Group Class

 Sampling Distribution
Solution*
X − µ 7.8 − 8
Z= = = − .50
σ n 2 25
X − µ 8.2 − 8
Sampling Z= = = .50 Standardized
σ n 2 25
Distribution Normal Distribution
σ  X = .4 σ =1
.3830

.1915 .1915

7.8 8 8.2 X -.50 0 .50 Z

2 - 23
 Central Limit Theorem

2 - 24
 Central Limit Theorem

As
sample
size gets
large
enough
(n ≥ 30) ...

X
2 - 25
 Central Limit Theorem

σ
As σx =
sample n
sampling
size gets distribution
large becomes
enough almost
(n ≥ 30) ... normal.

X
µx = µ
2 - 26