The Range Rule of Thumb is based on the insight that the range is often approximately 4 times
as large as the standard deviation. This insight enables you to quickly estimate the standard
deviation of a data set by finding the maximum and minimum data values, using them to
compute the range, and then dividing this value by 4.
Each of the following 5 data sets has a mean close to 100, and a standard deviation in the
20s. Assume that each of these are sample data sets.
For each of the 5 data sets given below,
use the Excel function “=stdev.s” (or technology) to find the actual sample standard deviation
(10 points), compute the estimate given by the Range Rule of Thumb (RROT) Estimate (10
points), and compute the percentage error of the estimate (10 points). The formula for the
RROT estimate is RROT estimate = Range/4 (where the range = maximum value – minimum
value), on the assumption that the Standard Deviation
The formula used
to find the percentage error of the estimate is: