Business Statistics Chapter 7

expected value

X bar, is the same as the expected value of the individual observation X. or: E(Xbar) = E(X) = mean.

control chart

a tool used to monitor the behavior of a production process

chance variation

aka common variation. caused by a number of randomly occurring events that are part of the production process.

sample statistic

aka statistic -used to make inferences about the unknown population parameter.

cluster sampling

another method for forming a representative sample. formed buy dividing the population into groups (clusters) and then selecting a sample of the groups for the analysis.

statistical quality control

involves statistical techniques used to develop and maintain a firm's ability to produce high-quality goods and services.

simple random sample

is a sample of n observations which has the same probability of being selected from the population as any other sample of n observations. most statistical methods persume simple random samples.

population

consists of all items of interest in a statistical problem

parameter

constant, although its value may be unknown.

detection approach

preferred approach to quality control. inspects the production process and determines at which point the production process does not conform to specifications

non-response bias

refers to a systematic difference in preferences between respondents and non-respondents to a survey or poll

selection bias

refers to the systematic exclusion of certain groups from consideration for the sample.

bias

refers to the tendency of a sample statistic to systematically over or under estimate a population parameter

stratified random sampling

the population is divided up into groups called "strata". this sampling includes randomly selected observations from each stratum, which are proportional to the stratum's size.

variance

var(Xbar)= st.dev^2/(n). var(X)= st. dev. ^2 the average has less variance than the individual observation.

estimator

when a statistic is used to estimate a parameter

estimate

a particular value of the estimator

sample

a subset of the population.

sampling distribution

probability distribution of the sample mean.

acceptance sampling

quality control. inspecting a proportion of the products a firm makes. if a product does not conform the specifications then it is discarded or repaired.

assignable variation

specially caused variation. caused by specific events or factors that can usually be identified and eliminated

central limit theorem

states that the sum or mean of a large number of independent observations from the same underlying distribution has an approximate normal distribution.

statistic

such as the sample mean of sample proportion, is a random variable whose value depends on the chosen random sample