Statistics for Management II

Chapter 1
Sampling and Sampling
Distributions

2023
 CONTENTS

I. Basic definitions
II. The need for sampling
III. Types of sampling techniques
IV. Sampling distributions
 Basic Concepts
• A population is the set of all the elements of interest
in a study
• A sample is a subset of a population
• Census: Gathering information from a population
• Sampling: Gathering of information from a sample
 The need for Samples
• Although, decision makers need information about
the whole population (census information), but it is,
• Expensive or costly
• Time consuming
• Not practical
• Therefore, sampling is used extensively to
provide information needed by decision
makers.
• With proper sampling methods, the sample
result will provide good estimates of the
population characteristics.
 The need for Samples
• The purpose of statistical inference is to obtain
information about a population from information
contained in a sample.
• Sampling and sample results can be used to
develop estimates of population characteristics.
• Sampling results provide only estimates of the
value of the population characteristics.
 Methods of Sampling
I. Random Sampling or Probability Sampling
– Simple random sampling: each item/person in a
population has the same chance of being included or
selected
– Systematic random sampling: the item of a
population is arranged in some way (kth = N/n)
– Stratified random sampling: A population is
subdivided into subgroups, called strata, a sample is
selected from each stratum. This requires presence
of non-homogeneities in a population. It guarantees
representation of each subgroup
– Cluster sampling : Area sampling method
 Methods of Sampling
II. Non Random or Non Probability Sampling
– Convenience sampling: Elements are
selected for the sample for the convenience
of the researcher
– Judgmental/Purposive sampling: Judgment
of the researcher
– Quota sampling:
• Reading Assignment: Sampling and Non
sampling errors
Parameters and Statistics
• A parameter is a numerical characteristic of a
population. They have a single value,
• example:
– µ = population mean
– ∂ = population standard deviation
– Р = population proportion
• A statistic is a numerical characteristic of a
sample. Their value depends on the sample
drawn
• example:
– xˉ = sample mean
– s = sample standard deviation
– p ˉ = sample proportion
Parameters and Statistics
Example:
Let us take a population has five items with the following
values
0, 6, 8, 9, 12
Required
a. Find population mean
b. Find sample mean with a sample size of 3.

• xˉ = is a point estimator of a population mean, µ

• s = is a point estimator of a population standard
deviation, ∂
• p ˉ = is a point estimator of a population
proportion, Р
 Introduction to Sampling
Distribution
I. The sampling distribution of the mean (xˉ)
Is the sampling distribution of all possible values
of the sample means for all possible simple
random samples of a given size that can be
drawn from a population.
Example: The population given below is a sales
data (in thousand of units) achieved by a
company for its first five months of the
operation from July to November
 Introduction to Sampling Distribution

I. The sampling distribution of the mean (xˉ)

July J August A September S October O November N
0 3 6 3 18
Required
A. How many samples of size n = 3 can be drawn from the
population?
B. Compute and tabulate the sampling distribution of the mean for
sample size n = 3
Solution:
N = 5; n = 3; Number of samples computed by NCn
C. 5C3 = 5!/3!(5-3)! = 10, thus 10 samples of size n = 3 can be drawn
from the population size N = 5.
 Introduction to Sampling Distribution

I. The sampling distribution of the mean (xˉ)

B. The 10 possible samples and their mean are shown below:
Population values Samples Sample values Sample mean xˉ
J=0 JAS 0, 3, 6 3
A=3 JAO 0, 3, 3 2
S=6 JAN 0, 3, 18 7
O=3 JSO 0, 6, 3 3
N = 18 JSN 0, 6, 18 8
JON 0, 3, 18 7
ASO 3, 6, 3 4
ASN 3, 6, 18 9
AON 3, 3, 18 8
SON 6, 3, 18 6
∑ xˉ 60
Introduction to Sampling Distribution

I. The sampling distribution of the mean (xˉ)

B. The 10 possible samples and their mean are shown below:
Therefore, the sampling distribution of the mean is also called the
probability distribution of the sample mean is summarized
below:
Sample means Frequency Relative Freq.
2 1 0.10
3 2 0.20
4 1 0.10
7 2 0.20
8 2 0.20
9 2 0.20
Summation 10 1
Introduction to Sampling Distribution

I. The sampling distribution of the mean (xˉ)

The relationship between population and the sampling distribution mean:
– µxˉ = µ ……. Proof it using the previous eg.
– ∂xˉ = ∂ ∕(√n)
Example:
Employees annual salary has a s.d. of $4000 what
is the standard error of the mean ∂xˉ for a
samples of size 30 employees.

∂xˉ = ∂ ∕(√n) = 4000/√30 = 730.30

Normal distribution of the mean (xˉ)

• For a normal population, the sample means

are normally distributed.
• If the population is not known of its normality,
but if the sample is greater than 30, the
sample mean distribution can be assumed as
normal.
• The formula for the standard normal variable
for the distribution of xˉ is
Z = (xˉ - µxˉ)/ ∂xˉ
 Normal distribution of the mean (xˉ)
Example
Hourly wage of workers is an industry have a mean wage rate of $5 per hour and a s.d. of $0.6.
a) What is the probability that the mean wage of a random sample of 50 workers will be between
5.10 and 5.20?
b) What is the probability that the mean wage of a random sample of 36 workers will be between
5.10 and 5.20? (Answer 0.1359)
Solution
a) Given: µ = 5, Thus, µxˉ = 5 ; ∂ = 0.6; n = 50
∂xˉ = ∂ ∕(√n) = 0.6/√50 = 0.0849
at xˉ = 5.10 at xˉ = 5.20
Z = (xˉ - µxˉ)/ ∂xˉ Z = (xˉ - µxˉ)/ ∂xˉ
= (5.10 – 5.0)/0.849 = (5.20 – 5.0)/0.849
= 1.18 = 2.36
P(0 to 1.18) = 0.3810 P(0 to 2.36) = 0.4909
P(1.18 ≤Z≤2.36) = P(0 to 2.36) - P(0 to 1.18)
= 0.1099 is the prob that the sample mean wage of
50 employees is between $5.10 and $5.20.
 Normal distribution of the mean (xˉ)
Example 2
The average age of vehicles registered in USA is 8 years.
Assume the s.d. is 16 months. If a random sample of 36
vehicles is selected, find the probability that the mean of
their age is between 90 and 100 months.
Solution:
Z1 = -2.25; Z2 = 1.50
P(90≤Xˉ≤ 100) or P(-2.25≤Z≤1.50) = 92.1%
Exercise: The ESA reported that children between the ages of 2
and 5 watch an average of 25 hours of television per
week. Assume the variable is normally distributed and the
s.d. is 3hrs. If 20 children between the age of 2 and 5 are
randomly selected, find the probability that the mean of
the number of hrs they watch television will be greater
than 26.3 hrs per week. (Answer: 2.62%)
Sampling distribution of the proportion
(Pˉ)

• The probability distribution for all possible values of the

sample proportion pˉ is called the sampling distribution of
the sample proportion pˉ.
• P is the population proportion of success
• pˉ is the sample statistic proportion of success
• Note that,
µ pˉ = P
∂ pˉ = √(p*q)/n
• The general formula of the standard normal variable Z of pˉ
is
Z = (pˉ - µ pˉ)/ ∂ pˉ
 Sampling distribution of the proportion (Pˉ)
Example: Suppose that 55% of the TV audience of a large population watched a
particular program on Saturday evening. What is the probability that in a
random sample of 100 viewers, less than 50% of the sample watched the
program?
Solution:
Given: P = 0.55 since µ pˉ = P thus µ pˉ = 0.55 i.e. q = 0.45
n = 100; pˉ = 0.50
∂ pˉ = √(p*q)/n = 0.0497
At pˉ = 0.5, Z = (pˉ - µ pˉ)/ ∂ pˉ
= -1.01
P(-1.01to 0) = 0.3438
P(z≤-1.01) = 0.5-0.3438
= 0.1562 is the probability that less than 50% of the sample
saw the program.
 Sampling distribution of the proportion (Pˉ)
Example2: Of the 2500 employees of a company 1500 employees are
completed the management training program. If a sample of 30
employees is taken, what is the probability of obtaining a value of pˉ
within 0.05 of the population proportion of employees who have
completed the management training program.
Solution:
Given: P = 1500/2500 = 0.60 since µ pˉ = P thus µ pˉ = 0.60 i.e. q = 0.40
n = 30; pˉ = 0.60 ± 0.05
∂ pˉ = √(p*q)/n = 0.0894
At pˉ = 0.55, Z = (pˉ - µ pˉ)/ ∂ pˉ; At pˉ = 0.55, Z = (pˉ - µ pˉ)/ ∂ pˉ
= -0.56 ; = 0.56
P(-0.56≤Z≤0.56) = 0.2123 + 0.2123
= 0.4246 is the probability of obtaining a
sample size of n = 30 within the given condition.
End of the chapter!
thank you!