Graduate (S) Business Administration 502

STATISTICS FOR MANAGERS

Spring 2017
 
| HOME | SYLLABUS | CALENDAR | ASSIGNMENTS | ABOUT PROF. GIN |
 

C. The Normal Distribution

1. Basic concepts

a. Continuous random variables - results from a measuring process

  • Can take on a range of values
  • Not possible to calculate probability at a single point
  • Need to calculate the probability of being in a range

.

b. Continuous probability density functions

Function such that the area under the function between two values is the probability of the random variable taking on that value

.

.

.

.

.

.

.

.

.

.

2. Normal distribution

a. Properties

(1) Bell-shaped and symmetric

.

.

.

.

.

.

.

.

.

.

(2) Measures of central tendency are identical

(3) Interquartile range is 1.33 standard deviations

(4) Random variable has infinite range

.

b. Standardizing the normal distribution

Convert a normal distribution with mean and standard deviation into a normal distribution with a mean of 0 and a standard deviation of 1

X ~ N (μ, σ)

Z ~ N ( 0 , 1 )

  X - μ
Z = --------
  σ

Ex. -

.

.

.

.

.

.

.

.

.

c. Standard normal table

(1) Finding probability, given values

(a) P(Z < +)

.

.

.

.

.

.

.

(b) P(Z < -)

.

.

.

.

.

.

.

(c) P(Z > +)

.

.

.

.

.

.

.

.

(d) P(Z > -)

.

.

.

.

.

.

.

.

(e) P(+ < Z < +)

.

.

.

.

.

.

.

.

(f) P(- < Z < -)

.

.

.

.

.

.

.

.

(g) P(- < Z < +)

.

.

.

.

.

.

.

.

(2) Finding values, given probability

  X - μ
Z = --------
  σ

=> X = μ + Z σ

Ex. -

.

.

.

.

.

.

.

.

.

.

d. Excel

  • =STANDARDIZE(X, mean, standard deviation)

Gives Z value

.

.

  • =NORMDIST(X, mean, standard deviation, True)

P(X < X0)

.

.

  • =NORMSINV(prob)

Gives Z0, where P(Z < Z0) = prob

.

.

  • =NORMINV(prob, mean, standard deviation)

Gives X0, where P(X < X0) = prob

.

.

Six Sigma Quality