Sampling and Sampling distribution

Arun Kumar, Ravindra Gokhale, and Nagarajan

Krishnamurthy
Quantitative Techniques-I, Term I, 2012
Indian Institute of Management Indore
Acceptance Sampling of Pins
Production manager knows the length of pins are
normally distributed with mean 1.008 inches and standard
deviation of 0.045 inches.
Customer takes a random sample of 50 pins from the
batch and compute the sample mean. If the sample mean
is within the interval 1.00 0.01 inch, then customer will
buy the whole batch.
Why examine only 50 pins; why not examine the
whole batch?
Checking each pin in the whole batch will be time
consuming (may be impossible).
Checking each pin in the whole batch costs money.
Why examine only 50 pins; why not examine the
whole batch?
Checking each pin in the whole batch will be time
consuming (may be impossible).
Checking each pin in the whole batch costs money.
Why examine only 50 pins; why not examine the
whole batch?
Checking each pin in the whole batch will be time
consuming (may be impossible).
Checking each pin in the whole batch costs money.
More reasons for sampling
Process of collecting the data may be destructive.
Smaller number of items can be checked in more detail
than a larger number of items.
More reasons for sampling
Process of collecting the data may be destructive.
Smaller number of items can be checked in more detail
than a larger number of items.
Population
Population
A group all of whose members are of interest to the researcher.
Population is generally very large
e.g. all pins in the batch.
Population
Population
A group all of whose members are of interest to the researcher.
Population is generally very large e.g. all pins in the batch.
Parameter
Parameter
A descriptive measure (number) pertaining to the population.
Parameter is the question we are trying to answer
e.g. mean
length of the pins.
Parameter
Parameter
A descriptive measure (number) pertaining to the population.
Parameter is the question we are trying to answer e.g. mean
length of the pins.
Sample
Sample
A subset of individuals drawn from the population.
e.g. 50 pins drawn in the sample.
Sample
Sample
A subset of individuals drawn from the population.
e.g. 50 pins drawn in the sample.
Statistic
Statistic
A descriptive measure (number) of the sample.
Used to make inferences about the parameter
e.g. mean
length of 50 pins.
Statistic
Statistic
A descriptive measure (number) of the sample.
Used to make inferences about the parameter e.g. mean
length of 50 pins.
Inferential Statistics
In inferential statistics, we learn how to make inference about
population parameter using sample statistic.
How the pins should be chosen?
We want to avoid a sample that has smaller and larger pins in
a dierent proportion than they are in the population.
How the pins should be chosen?
We want to avoid a sample that has smaller and larger pins in
a dierent proportion than they are in the population.
How to choose a sample?
Sample should be representative of the population.
How to choose a sample?
Sample should be representative of the population.
Why random sampling?
Random sampling ensures unbiased information
Random sampling gives the most representative sample of
the population. A representative sample gives unbiased
information about the population.
Simple random sample (SRS)
A sample selected in such a way that every possible sample
with the same number of individuals is equally likely to be
chosen is known as simple random sample.
Why random sampling?
Random sampling ensures unbiased information
Random sampling gives the most representative sample of
the population. A representative sample gives unbiased
information about the population.
Simple random sample (SRS)
A sample selected in such a way that every possible sample
with the same number of individuals is equally likely to be
chosen is known as simple random sample.
Other sampling method
Random sampling methods
Stratied Sampling
Cluster Sampling
Non-random sampling methods
Voluntary Sampling
Convenience Sampling
Other sampling method
Random sampling methods
Stratied Sampling
Cluster Sampling
Non-random sampling methods
Voluntary Sampling
Convenience Sampling
Important questions to ask
What is the sample size?
What is the response rate?
Why 50 pins were selected, why not 30 or 100....?
Sample size is chosen depending on the error in the
estimate that customer is willing to tolerate.
Smaller sample has larger margin of error and larger
sample has smaller margin of error.
More data means more investment of time and money.
Therefore error threshold should be chosen judiciously so
that the cost of collecting the data and the margin of
error in the estimate both are reasonable.
Why 50 pins were selected, why not 30 or 100....?
Sample size is chosen depending on the error in the
estimate that customer is willing to tolerate.
Smaller sample has larger margin of error and larger
sample has smaller margin of error.
More data means more investment of time and money.
Therefore error threshold should be chosen judiciously so
that the cost of collecting the data and the margin of
error in the estimate both are reasonable.
Why 50 pins were selected, why not 30 or 100....?
Sample size is chosen depending on the error in the
estimate that customer is willing to tolerate.
Smaller sample has larger margin of error and larger
sample has smaller margin of error.
More data means more investment of time and money.
Therefore error threshold should be chosen judiciously so
that the cost of collecting the data and the margin of
error in the estimate both are reasonable.
Why 50 pins were selected, why not 30 or 100....?
Sample size is chosen depending on the error in the
estimate that customer is willing to tolerate.
Smaller sample has larger margin of error and larger
sample has smaller margin of error.
More data means more investment of time and money.
Therefore error threshold should be chosen judiciously so
that the cost of collecting the data and the margin of
error in the estimate both are reasonable.
Acceptance Sampling of Pins
Production manager knows the length of pins are
normally distributed with mean 1.008 inches and standard
deviation of 0.045 inches.
Customer takes a random sample of 50 pins from the
batch and compute the sample mean. If the sample mean
is within the interval 1.00 0.01 inch, then customer will
buy the whole batch.
Question?
What is the probability that a batch will be acceptable to the
consumer? Is the probability large enough to be an acceptable
level of performance?
Why the above question is important from business point of
view?
Ans: Rejection of a batch of pins will cost money to the
company.
Question?
What is the probability that a batch will be acceptable to the
consumer? Is the probability large enough to be an acceptable
level of performance?
Why the above question is important from business point of
view?
Ans: Rejection of a batch of pins will cost money to the
company.
Question?
What is the probability that a batch will be acceptable to the
consumer? Is the probability large enough to be an acceptable
level of performance?
Why the above question is important from business point of
view?
Ans: Rejection of a batch of pins will cost money to the
company.
What is the probability that batch will be accepted
in the pin problem?
P(1 0.01

X
50
1 + 0.01)=P(0.99

X
50
1.01)
What is the probability that batch will be accepted
in the pin problem?
P(1 0.01

X
50
1 + 0.01)=P(0.99

X
50
1.01)
Is

X
50
a random variable?
Yes because of sampling variation. Everytime you choose a
new set of 50 pins, you will get a new sample mean.
Distribution of a sample statistics due to sampling variation is
also known as sampling distribution.
Is

X
50
a random variable?
Yes because of sampling variation. Everytime you choose a
new set of 50 pins, you will get a new sample mean.
Distribution of a sample statistics due to sampling variation is
also known as sampling distribution.
How to nd the sampling distribution of

X
50
Two dierent situations
Population is normal
Population is not normal
Sampling distribution of sample mean when
population is normal
Distribution of

X
n
is exactly normal with mean and standard
deviation /

n, where is the population mean, is the

population standard deviation, and n is the sample size.
Sampling distribution of Sample mean when
population is not normal?
When sample size is large, distribution of

X
n
is approximately
normal with mean and standard deviation /

n, where is
the population mean, is the population standard deviation,
and n is the sample size. This is the Central Limit Theorem.
Distribution is approximate but that does not aect how we
do the calculation.
Outline of the Proof of the Central Limit Theorem
Moment Generating Function (MGF)
MGF of a random variable X denoted by m
X
(t) is E(e
tx
).

d
k
dt
(m
X
(t))

(t=0)
= E(X
k
).
Proof of the Central Limit Theorem
What is the sampling distribution of

X
50
in the pin
example?

X
50
N(1.008, (0.045/

50)
2
) (1)
What is P(0.99 <

X
50
< 1.01)?
Conclusion
Lathe should be adjusted so that acceptance rate increases.
Conclusion
Lathe should be adjusted so that acceptance rate increases.
What changes can be made in the process?
We can change the mean.
We can change the standard deviation.
What changes can be made in the process?
We can change the mean.
We can change the standard deviation.
What changes can be made in the process?
We can change the mean.
We can change the standard deviation.
If lathe could be adjusted to have mean of lengths
at any desired level, what should be the lathe
adjusted to?
It should be adjusted to 1.000.
If lathe could be adjusted to have mean of lengths
at any desired level, what should be the lathe
adjusted to?
It should be adjusted to 1.000.
What is P(0.99 <

X
50
< 1.01) when is adjusted
to 1.00 inches?
What should be the standard deviation if at least
90% of the parts should be acceptable?
Standard deviation should be 0.011.
What should be the standard deviation if at least
90% of the parts should be acceptable?
Standard deviation should be 0.011.
Which one is easier to adjustmean or standard
deviation?
????
Which one is easier to adjustmean or standard
deviation?
????