Central limit theorem

Presented by:
MOHAMMAD FAROOQ
ACADEMIC COORDINATOR
MATHEMATICS
LEARNING OBJECTIVES
 The importance of the central limit theorem.
 Sampling from a Normal Distribution
 Examples (Normal Distribution)
 Assignment 1 due on 3/6/17
The Central Limit Theorem
 If all samples of a particular size are
selected from any population, the sampling
distribution of the sample mean is
approximately a normal distribution. This
approximation improves with larger
samples.
 The mean of the sampling distribution

equal to μ and the variance equal to σ2/n.

Graphical presentation of CLT
 Application of CLT
 For any population X with expected value m and
standard deviation s, the sampling distribution of
X will be approximately normal if the sample size
n is sufficiently large.
 If the shape is known to be non-normal, but the
sample contains at least 30 (n > 30)
observations, the central limit theorem
guarantees the sampling distribution of the mean
follows a normal distribution
 As before, if X is approximately
X 
normal, then we can transform it to Z 
 n
 Sampling from a
Normal Distribution
 For any sample size n, the sampling
distribution of X is normal if the
population X from which the sample is
drawn is normally distributed.
 If X is normal, then we can transform it
into the standard normal random variable
as: For a distribution of
For a sampling
distribution. the values of x.

Z
   X 
X E X
Z
x E X

x
SD  X   n SD  X  
Example 1
 Given that m = 16 inches and s = 0.8
inches, determine the following:
 What is the expected value and the

standard deviation of the sample mean

derived from a random sample of
 0.8
 2 pizzas E  X     16 SD X     0.57
n 2
 0.8
 4 pizzas E  X     16 SD X    0.40
n 2
Example 2
 Given that m = 16 inches and s = 0.8
inches, determine the following:
 What is the probability that a randomly selected
pizza is less than 15.5 inches?
 x   15.5  16 P ( X  15.5)  P ( Z  0.63)
Z   0.63
 0.8  0.2643 or 26.43%

 What is the probability that 2 randomly selected

pizzas average less than 15.5 inches?
 x  15.5  16 P ( X  15.5)  P (Z  0.88)
Z   0.88
 n 0.8 2  0.1894 or 18.94%
Example 3
 From the introductory case, Anne wants to
determine if the marketing campaign has
had a lingering effect on the amount of
money customers spend on iced coffee.
 Before the campaign, m = $4.18 and s = $0.84.
Based on 50 customers sampled after the
campaign, m = $4.26.
 Let’s find P  X  4.26  . Since n > 30, the central limit
theorem states that X is approximately normal. So,
 X   4.26  4.18 
 
P X  4.26  P  Z 
 n
  P  Z 
0.84 50

   
 P  Z  0.67   1  0.7486  0.2514
Example 4
The foreman of a bottling plant has observed
that the amount of soda in each “32-ounce”
bottle is actually a normally distributed random
variable, with a mean of 32.2 ounces and a
standard deviation of .3 ounce.
If a customer buys one bottle, what is the
probability that the bottle will contain more
than 32 ounces?
Solution 4
We want to find P(X > 32), where X is normally
distributed and µ = 32.2 and σ =.3
 X   32  32.2 
P(X  32)  P    P( Z   .67)  1  .2514  .7486
  .3 
“there is about a 75% chance that a single bottle
of soda contains more than 32oz.”
Example 5
The foreman of a bottling plant has observed
that the amount of soda in each “32-ounce”
bottle is actually a normally distributed random
variable, with a mean of 32.2 ounces and a
standard deviation of .3 ounce.

If a customer buys a carton of four bottles, what

is the probability that the mean amount of the
four bottles will be greater than 32 ounces?
Solution 5
We want to find P( X > 32), where X is normally
distributed
With µ = 32.2 and σ =.3

Things we know:
X
1) X is normally distributed, therefore so will .

2) = 32.2 oz.

3)
Solution 4
If a customer buys a carton of four bottles, what
is the probability that the mean amount of the
four bottles will be greater than 32 ounces?

“There is about a 91% chance the mean of the

four bottles will exceed 32oz.”
Assignment 1 due on 3/6/17

College of Computer Science & Information System

Program: MBA Semester: Summer 2017
Course Title: Statistical Inference Code: STA 404
Faculty: Muhammad Farooq

Assignment #01
Object: To understand and verify the relationship between mean of the sample means and
population mean and the standard deviation of the sample means and population standard
deviation for with and without replacement techniques.

1. Consider the following data related to the number of units that 8 sales representatives
have sold during the last month.
50, 52, 57, 59, 60, 63, 65

a. Calculate mean (  ) and standard deviation ( ) .

b. Draw all possible samples of size 3 without replacement and compute  x &  x .

  N  n 
c. For the answers to part (b), verify that  x   &  x 
n  N  1 