BA4101: STATISTICS FOR
MANAGEMENT
SAMPLING DISTRIBUTION
• A sampling distribution is a probability distribution
of a statistic (like the mean, proportion, or standard
deviation) that is obtained from a large number of
samples drawn from a specific population.
• It helps statisticians to understand the behavior of
sample statistics and make inferences about the
population.
Sampling distribution of the mean
• The sampling distribution of the mean is the
probability distribution of the sample means
obtained from all possible random samples of
a specific size n drawn from a population.
Sampling distribution of the mean
Mean of the Sampling Distribution :
• The mean of the sampling distribution of the
mean is equal to the population mean .
Sampling distribution of the mean
Standard Error :
• The standard deviation of the sampling
distribution of the mean is called the standard
error and is given by:
Sampling distribution of a proportion
• The sampling distribution of a proportion is
the probability distribution of sample
proportions obtained from all possible random
samples of a given size ndrawn from a
population.
Sampling distribution of a proportion
Central Limit Theorem (CLT)
• The Central Limit Theorem (CLT) is one of the
most important theorems in statistics.
• It describes the shape of the sampling
distribution of a sample statistic (such as the
sample mean or sample proportion) when
samples are taken from any population,
regardless of its original distribution.
Central Limit Theorem (CLT)
• The CLT states that if you take a large enough
sample size (n) from a population with any
shape of distribution (not necessarily normal),
the distribution of the sample mean will
approach a normal distribution as the sample
size increases, provided that the population
has a finite mean (μ) and standard deviation
(σ).
Application of Central limit theorem
Confidence Intervals
• The CLT allows for the creation of confidence intervals for
population parameters (mean or proportion) using sample data.
• Example: Estimating the average height of a population based on a
random sample.
Hypothesis Testing
• Hypothesis testing often relies on the assumption that the sampling
distribution of the test statistic (e.g., mean, proportion) is normal.
• Example: Testing whether a new drug is more effective than an
existing one.
Application of Central limit theorem
Quality Control
• In manufacturing, sample averages from production lines are
monitored. CLT ensures that the sample mean follows a
normal distribution, simplifying process control.
• Example: Ensuring the average weight of a product meets
specifications.
Application of Central limit theorem
Election Polling
• Pollsters use the CLT to approximate the sampling distribution of the
sample proportion to predict election results with a margin of error.
• Example: Predicting the percentage of voters favoring a candidate.
Market Research
• When surveying customer preferences, the CLT helps approximate the
distribution of sample means or proportions to infer population trends.
• Example: Determining the average satisfaction score for a product.
Finance and Risk Management
• The CLT is used to analyze the average returns of a portfolio or stock
prices, which is crucial for modeling and risk assessment.
• Example: Calculating the average return of an investment portfolio
over time.
Sampling techniques
• Sampling techniques are methods used in research and
data collection to select a subset of individuals or items
(a sample) from a larger population.
• The purpose of sampling is to gather information about
the population without examining every individual,
which can be time-consuming or impractical.
• The main types of sampling techniques, categorized
as probability sampling and non-probability sampling
Sampling techniques
Sampling techniques
Sampling techniques
Sampling techniques
Estimation
• Estimation is a statistical method used to infer
or predict the value of a population parameter
based on sample data.
• It plays a crucial role in hypothesis testing,
decision-making, and data analysis.
Estimation
Estimation
