class04 - Statistics for Business Control and Regression...

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Unformatted text preview: Statistics for Business Control and Regression Analysis Fall 2008 1 The Normal Distribution The Normal Distribution Statistics for Business Control and Regression Analysis Fall 2008 2 The Normal Distribution The Normal Distribution The most important distribution in statistical theory Many phenomena around us and in nature have a normal distribution Stock market returns Quality characteristics of finished products (e.g., net content) Heights of males/females Convenient mathematically Statistics for Business Control and Regression Analysis Fall 2008 3 The Normal Distribution The Normal Distribution Is a bell-shaped, continuous distribution Has two parameters: = mean 2200 2 = variance (often the SD is given) + + 2 2 Statistics for Business Control and Regression Analysis Fall 2008 4 The Normal Distribution The Normal Distribution The only thing that matters: how many standard deviations away from the mean Hatched area is the same under both curves 2 4 6 10 3 8 = 3, = 1 = 8, = 2 Statistics for Business Control and Regression Analysis Fall 2008 5 Computing Probabilities Computing Probabilities Goal: to find P(a X b), P(X b), etc. (dont care about or <) We know that P(a X b) = P(X b) P(X a) To find P(X b), can use MINITAB Calc Probability Distributions Normal Choose cumulative probability Statistics for Business Control and Regression Analysis Fall 2008 6 Computing Probabilities Example Computing Probabilities Example The daily demand for coke cans in a cafeteria is approximately normally distributed with mean 150 and standard deviation 20. Let X be the demand. 1. P(X 200) = ? 2. P(X 180) = ? 3. P(150 X 180) = ? 4. How many cans should be stocked so that P(running out of cans) = 0.1? Statistics for Business Control and Regression Analysis Fall 2008 7 The Standard Normal Distribution The Standard Normal Distribution Denoted by Z...
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class04 - Statistics for Business Control and Regression...

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