7.

SAMPLING DISTRIBUTION Terminologies Population v/s sample; finite v/s infinite population; large v/s small sample; parameter v/s statistic; point v/s interval estimation sampling distribution standard error finite population correction factor- Central limit theorem- sample size- margin of error confidence level.

SAMPLING DISTRIBUTION OF MEAN: E(X) = SD(X) = FPC * /n ( finite population) /n (infinite population)

If N is large and n<= 5% of N then fpc 1 or n/N <=0.05 use /n Form of the sampling distribution: Normally distributed Non normal distribution CLT ( as sample size becomes larger , the SD of sample mean will approximately be normal.

1. If a random sample of 25 items was selected from a normally distributed population with mean equal to 40 and standard deviation equal to 5, what is the probability that the sample mean will exceed 41.2? (0.1151) 2. The Accounts Receivable balances with a large finance company had a mean of $925 and standard deviation of $72. What is the probability that a sample of 81 Accounts Receivable would have a sample mean less than $913? What is the standard error of the sample mean? (0.0668) 3. The Accounts Receivable balances with a large finance company had a mean of $925 and standard deviation of $72. What is the probability that a sample of 81 Accounts Receivable taken from a population 500, would have a sample mean less than $913? What is the standard error of the sample mean? 0.0505 Thus, a smaller standard error, a larger Z value and thus a smaller probability (Relationship between sample size and SD(mean) : as n increases SE(mean) will decreases. Page : 278 Self test 20; 21

Sampling distribution of proportion (p) The general manager of Western Software Pty Ltd believes that 30% of the firms orders come from new or first time customers. A simple random sample of 100 orders will be used to estimate the proportion of new or first time customers. The results of the sample will be used to verify the general managers claim of p = 0. 30. (a) Assume that the general manager is correct and p = 0.30, what is the sampling distribution of p for this study. (b) What is the probability that the sample proportion p will be between 0.2 and 0.4?

(c) What is the probability that the sample proportion will be within plus or minus 0.05 of the population proportion p = 0.30? { a. 0.0458 b. 0.9708 c. 0.7242 } Last year a sample was taken for 40 of the 200 active training centres for vocational rehabilitation of handicapped veterans. It was determined from the sample that 1312 of the 1600 trainees sampled who completed the program were able to locate jobs. Each of the 200 centres had 40 trainees each. Provide an estimate of the standard error of the proportion of job placement success. { p = 1312/1600= 082; n = 1600 and N = 8000 ; 0.0086 A lecturer published 1,000 workbooks for students of Marketing I. In the past, it was found that 15% of these workbooks were defective in some way. What is the probability that a sample of 100 workbooks chosen at random would contain a sample proportion of defective workbooks greater than 22%? ( 0.0192 )

8. INTERVAL ESTIMATION Interval estimation of population mean : known Z/2 SE(X) margin of error

(a) Calculate interval estimates of the mean from large samples (n>30) of infinite population. If X = 125, = 24, and n = 36, set up a 99% confidence interval estimate of the population . A bank calculates that its individual saving accounts are normally distributed with a mean of $2000 and a standard deviation of $600. If the bank takes a random sample of 100 accounts, find the 95% confidence interval for the mean? (1882.4- 2117.6)

Nielsen Media Research reported that the household mean television viewing time during the 8 P.M. to 11 P.M. time period is 8.5 hours per week ( The World Almanac, 2003). Given a sample size of 300 households and a population standard deviation of 3.5 hours what is the 95% confidence interval estimate of the mean television viewing time per week during the 8 P.M. to 11 P.M. time period. 8.1 - 8.9 Confidence interval to estimate when is unknown US car rental firm wants to estimate the average number of miles traveled per day by each of its cars rented in California. A random sample of 110 cars rented in California reveals that the sample mean travel distance per day is 85.5 miles, with a sample standard deviation of 19.3 miles. Compute a 99% confidence interval to estimate population mean. A sample of 100 NCC students from University of Madras was taken and their average weight was found to be 60 Kgs with a standard deviation of 5 Kgs. Can you infer about the average weight of all the NCC students in the entire university with 95% confidence.

Calculate interval estimates of the mean from large samples of finite population with unknown population standard deviation.) Fit-n-Trim caters primarily to middle-aged men who wish to lose weight through a regular program of exercise. They have 194 of these men who have been members for at least one year. After sampling 40 of these men, they have found that the average weight loss was 12 pounds and the sample standard deviation was 4 pounds. What is the estimated standard error of this mean ? Find the upper and lower limits of the confidence interval of average weight loss if the desired confidence level is 90%? ( 11.07-12.93) When is not known and sample size is small ( t distribution depending on the parameter - degrees of freedom)

If X = 50, S = 15, n = 16, and assuming that the population is normally distributed, set up a 99% confidence interval estimate for the population mean.

If the mean weight loss of 16 grinding balls after a certain length of time in mill slurry is 3.42 grams with a standard deviation of 0.68 grams. Obtain a 99% confidence interval for pop. Mean. A Finance Consultant wishes to estimate the current average time it takes for him to consult with his clients (as time is money). He takes a random sample of 16 recent appointments and estimates the mean time taken to be 35 minutes with standard deviation of 5 minutes. Assuming a normal distribution for consultation times, find a 99% confidence interval for the true consultation time with clients. (between 31.32 minutes and 38.68 minutes) Suppose a researcher wants to estimate the average amount of comp time accumulated per week for managers in the aerospace industry. He randomly samples 18 managers and measures the amount of extra time they work during a specific week and obtain the results shown ( in hours) 6 21 17 20 7 0 8 16 29 3 8 12 11 9 21 25 15 16 Construct a 90% confidence interval to estimate the average amount of extra time per week worked by a manager in the aerospace industry. ( mean = 13.5556 ; standard deviation = 7.80062)

Confidence interval for population proportion : An insurance company policy sells foreign travel policy to those going abroad. The company in reputed to settle the claims within a period of 2 months. However, the new CEO of the company came to know about the delay in settling claims. He, therefore, ordered the concerned official to take a sample of 100 claims, and report the proportion of cases which were settled within 2 months. The CEO received the proportion as 0.6. What are the 95% confidence limits for such proportion? Solution p=0.4, q=0.6, n= 100 ( p 1.96pq /n, p + 1.96pq /n ) for 95% confidence interval Therefore (0.504 to 0.696) Thus, the CEO could be 95% confident that about 50 to 70% of claims are settled within 2 months. In a random sample of 11215 animals, 62 exhibited a certain genetic defect. Determine the 95% confidence interval for the proportion of the population displaying this defect. A random sample of 500 apples was taken from a large consignment and 60 were found to be bad? Obtain 98% confidence limit for the % of bad apples in consignment . P = 60/500 = 0.12 ( p+/- 2.33pq/n)

( 8.61, 15.38)

Confidence interval for population proportion ( with finite population size) Each year the director of housing at State University must attempt to determine what proportion of students applying for admission to The State University will request live-in accommodation. This year there are 12,000 applicants for admission to the full semester. The director took a random sample of 200

applicants to check the proportion of students requiring live-in accommodation. Of these 200 applicants, 80 applicants, or 40 per cent, requested live-in accommodation. Construct a 99 per cent confidence interval for the directors estimate N= 12000, n= 200 x= 80 p = 0.4 99% C.I. for p = Z .s = 0.4 2.575 (0.0346) = 0.4 0.089 = 0.311 p 0.489 ie, the true proportion of students requiring live in accommodation lies between 31% to 49%

SAMPLE SIZE
Suppose you want to estimate the population mean height for size 12 females to within +/-15 mm with 95% confidence. On the basis of a study taken the previous year, you believe that the standard deviation is 100 mm. Find the sample size needed. ( 170.74) In a past Australian census the mean income of persons in Perths northern suburbs was $36,000 with a standard deviation of $6,400. A researcher wishes to investigate the current mean income of persons resident in the same area. If she assumes that the standard deviation of incomes is unchanged how large a sample must the researcher take in order to be at least 95% certain that the sample mean is within $500 of the actual (unknown) mean income? (With at least 95% confidence n must be at least 630)

Suppose the sample standard deviation of EPS for stocks listed on the National Stock Exchange (NSE) is s = 12.7. Assume that we are interested in estimating the population mean of EPS for all stocks listed on NSE with 90% confidence. How many stocks should be included in the sample if we desire a margin of error of 4? n= 27 Confidence Level = 95%; Sampling error, e= $50; Standard Deviation, s = $400. (a) How large a sample size is needed? (b) If management wants to be correct within $25, what sample size is needed? You want to have 90% confidence of estimating the proportion of office workers who respond to email within an hour to within +/- 0.05. Because you have not previously undertaken a study, there is no information available from past data. Determine the sample size needed. ( 270.6) Confidence level = 90%, e = 0.04 ( proportion) (a) What sample size is needed? (b) What sample size is needed if the pollster wants to have 95% confidence? (c) If she wants to have 95% confidence and a sampling error of 0.03, what sample size is needed?