OPRE504 Business Statistics

Section 1

Chapter 1 Descriptive Statistics Other: Binomial Template, Negative Binomial

• Descriptive statistics Template
• Inferential statistics
• Measurement scales Chapter 4 The Normal Distribution
• Qualitative/quantitative • Characteristics
• Percentiles • Multiple variables
• Quartiles • Finding Z probabilities
• Samples/populations • Z-transformations
• Mean/median/mode • Inverse Transformation
• Variance/standard deviation Recommended Problems: 1, 2, 3, 4, 5, 6, 22, 25,
• Skewness/kurtosis 27, 39, 40, 52, 53
• Visual analysis Other: Using the z-table, Normal Distribution
Recommended Problems: 1, 4, 5, 6, 7, 10, 11, template
13, 14, 16, 18, 19, 26, 47, 48, 49, 53
Other: Excel functions, Excel Data Analysis Add- Chapter 5 Sampling
in, Excel charts, Basic Stats Template • Sample statistics
• Population parameters
Chapter 2 Probability • Random Number Table
• Classical probability • Random Number Generators
• Expected value • Stratified sampling
• Subjective probability • Non-response bias
• Sets • Sampling distributions
• Venn diagrams • Central Limit Theorem
• Factorals • Degrees of freedom
• Permutations Recommended Problems: 2, 3, 4, 5, 12, 13, 18,
Recommended Problems: 1, 2, 4, 5, 7, 8, 27, 28, 20, 21
36, 37, 38, 52 Other: Excel RAND function, t Table, Z table, z
Other: ? Template

Chapter 3 Random Variables Chapter 6 Confidence Intervals

• Random variable • Point estimate
• Probability distribution • Interval estimate
• Cumulative distribution • CI for population proportions
• Discrete & continuous variables • CI for population variance
• Expected values E(X) • Determining sample size
• Fair game Recommended Problems: 4, 5, 6, 7, 8, 18, 19,
• Functions of variables 20, 21, 40, 41, 42
• Bernoulli random variable Other: Chi-square table, Estimating mean
• Binomial distributions template
• Negative binomial distributions
Recommended Problems: 1, 2, 3, 8, 11, 12, 13,
14, 32, 33, 34, 36, 37, 43, 44, 45
 Formulas – Section 1

Chapter 1 Descriptive Statistics

Percentiles

( n + 1) P / 100
Mean of a sample Mean of a population

n N

∑x
i =1
j ∑x
i =1
j
x= µ=
n N

Sample variance Population variance

n N

∑ x j ( xi − x ) ∑x (x −µ)
2 2
j i
s2 = i =1
σ2 = i =1

n −1 N

Sample standard deviation Population standard deviation

n N

∑ x (x − µ)
2
∑ x j ( xi − x )
2
j i

s = s2 = i =1 σ = σ2 = i =1

n −1 N

**also unbiased version page 16 (n-1)

Sample variance (shortcut)

2
 n 
n  ∑ xj 
∑x −  i =1 
2
j n
s2 = i =1

n −1

Chapter 2 Probability

Probability of an event Complement

n(A) P( A) = 1 − P( A)
P(A)=
n(S)
Intersection Mutually exclusive

n( A ∩ B ) P( A ∩ C ) = 0
P( A ∩ B) =
n( S )

Union Conditional probability

n( A ∪ B) P( A ∩ B)
P( A ∪ B) = = P( A) + P( B) − P( A ∩ B) P( A B) = , where P( B) ≠ 0
n( S ) P( B)

Permutations Combinations

n! n n!
n Pr =   = nCr =
(n − r )! r  r!(n − r)!

Chapter 3 Random Variables

Variance of a random variable Standard deviation of a random variable

2
σ = V ( X ) = E [( X − µ ) ] = 2
∑ (x − µ )
all x
2
P (x)

2 σ = SD( X ) = V ( X )
   
= E ( X ) − [ E ( X )] =  ∑ x 2 P ( x )  −  ∑ xP ( x ) 
2 2

 all x   all x 
Binomial Distribution Expected value of a random variable
 n
P ( X = x) =   p x (1 − p )( n − x ) µ = E ( X ) = ∑ xP( x)
 x all x

E ( x ) = np V(x )=np (1 − p)

Negative Binomial Distribution

 x − 1 s ( x−s)
P ( X = x) =   p (1 − p )
 s − 1 

s s(1-p)
E ( x) = µ = V(x )=
p p2

Chapter 4 Normal Distribution

Normal Probability Density Function Z-Transformation

 2

1 − 
1  x−µ  x−µ
σ  Z=
f ( x) = e 2 -∞ 〈 x 〈 ∞ σ
2πσ

Inverse Transformation

x = µ + zσ

Chapter 5 Sampling

Sample proportion Variance of the sample mean

x σ X2
pˆ = V ( X ) = σ X2 =
n
n
Expected value of the sample mean Standard deviation of the sample mean

E( X ) = µ σ
SD ( X ) = σ x =
n

When the population standard deviation is

unknown, convert to a “t” value and use Student’s
t table to find the probability

X −µ
t=
s
n

Chapter 6 Confidence Intervals

Confidence Interval (σ is known) Confidence Interval (σ is not known)

 σ   s 
CI =  x ± zα 2  CI =  x ± tα 2, n−1 
 n  n

Must use z-table Must use Student’s t table

Confidence Interval for population proportion

 ˆˆ
pq
ˆ
pˆ ± z ( )
ˆ p-1
where q=
α /2 n
Must use z-table

Minimum sample size for mean Minimum sample size for proportion