Expected Value E(x)

If a random variable x can have values x1,

x2, x3 . . .. with probabilities p1, p2 and p3,. . .
he expected value E(x) is given by
E(x) = x1p1+ x2p2 + x3p3+ . . .

 If you toss a coin 10 times what is the expected

number of heads
n

np

0.001

0.000

0.010

0.010

0.044

0.088

0.117

0.352

0.205

0.820

0.246

1.230

0.205

1.230

0.117

0.820

0.044

0.352

0.010

0.088

10

0.001

0.010

SUM

5.000

Standard deviation
A random variable X has values x1, x2, x,3 ,
xn. Variance V is defined
as
n

(x x)
i 1

n
2

xi
2
V
x
n
Standard deviation() is square root of variance

Example
A random variable has values of 1,2,3,4,5.
What is the variance?

x (1 2 3 4 5) / 5 3
1
V [(1 3) 2 (2 3) 2 (3 3) 2 (4 3) 2 (5 3) 2 ]
5
1
*10 2
5

Example (continued)
1 2 3 4 5
2
V
3
5
V 55 / 5 9 11 9 2
2

Population and Sample Parameters

In research it is usually required to
estimate the population parameters from
experimentation. Experimental results, at
best can be considered to be a sample
from the large population
1000 balls
Some red
and
some green

Sample of 20
4 red
16 green

1000 balls
Some red
and
some green

Sample of 20
4 red
16 green

Estimate
parameters

1
2
3
4
5
Av =3

1
1
1
1
1
1
2
2
2
3

2
2
2
3
3
4
3
3
4
4

3
4
5
4
5
5
4
5
5
5
AVR

2.000
2.333
2.667
2.667
3.000
3.333
3.000
3.333
3.667
4.000
3.000

 The average may be 2,2.33,2.67,3,3.33,3.67 or

4.00
But the expected value of the sample average
is 3. It is same as the population average.
When the expected value of a sample
parameter is same as the population parameter,
it is known as an unbiased estimate of the
population parameter.
The sample average is an unbiased estimate
of the population average

The sample variance is not

An unbiased estimate
of population variance

It has a downward bias

V is an unbiased estimate of
population
n

V '

(x x)
i 1

n
x
n 1

n
n

V '

(x x)
i 1

n 1

( x1 x ) ( x2 x ) ( x3 x ) .....

n
2

( x1 x ) ( x2 x ) ( x3 x ) .....
'
n 1
2

Some books refer

Population sd as
And sample sd as s

Some work sheet functions

STDEV ()
STDEVP()
VAR()
VARP()

Estimated sd
sample SD
Estimated Variance
Sample Variance

The following were 11 readings of a critical parameter recorded

once after every hour. What is the estimated process average
and what is the estimated standard deviation
119.266
118.381
112.654
113.388
118.090
113.280
116.511
117.108
114.964
113.219
110.808

A
1

119.27

118.38

112.65

113.39

118.09

113.28

116.51

117.11

114.96

10

113.22

11

110.81

= AVERAGE(A1:A11) 115.24
= STDEV(A1:A11)
2.776

Statistical Estimation
Point Estimation
In Point estimation a single point estimate is
made of the population parameter

Interval Estimation
In Interval estimation a range of value is
identified in which the population parameter
lies with certain level of confidence

Statistical Estimation
Point Estimation
Interval Estimation
In Point Estimation the population parameter is
estimated from the sample observation
Population Mean assumed to be equal to sample
mean
Population SD is assumed to be equal to
. n
Times the sample standard deviation
n 1

Statistic of sample means

Let x be a random variable with the following
parameters:
Mean =
Standard deviation =
Take a number of samples of size n and evaluate
Sample mean for each sample.
Let sample mean of sample i =
i
Sample averages will have a distribution with
Mean =

Standard deviation =
n

125

117

121

116 119.75

125

117

112

127 120.25

130

127

108

119

124

130

118

123 123.75

125

125

119

122 122.75

123

115

122

132

123

114

120

121

119

118.5

114

126

122

120

120.5

122

117

123

124

121.5

117

118

120

117

118

117

110

121

115 115.75

117

113

116

120

121

119

122

125 121.75

122

121

124

111

119.5

123

116

118

125

120.5

121

118

126

121

121.5

120

121

127

120

122

117

119

118

122

119

121

116.5

0.166667

0.166667

0.166667

0.166667

0.166667

0.166667

0.028

1.5

0.056

0.083

2.5

0.111

0.139

3.5

0.139

0.139

4.5

0.111

0.083

5.5

0.056

0.028

Properties of sample means

Expected value of sample mean is equal to
population mean
The distribution of sample means have a
standard deviation given by

Sd=
What ever be the parent distribution, the
distribution of sample means will have a
tendency to be distributed normally. Distribution
will be more close to normal if sample size is
larger

Example
The diameter of a pin is normally
distributed with a mean of 33.05 mm with
a standard deviation of 0.01mm. What is
the probability that
The diameter of a pin will exceed 33.065mm
The average diameter of a sample of 4 pins
will exceed 33.065 mm

P(dia exceeds 33.065)

Z=(33.065-33.05)/0.01
Z=1.5
P(Dia < 33.065)
= (1.5)
( CDF)
= normsdist(1.5)
=0.933
P(Dia >33.065)
=1-0.933=0.067

P(Sample average exceeds

33.065)

SD of distribution of sample averages

=0.01/sqrt(4)=0.005
Z=(33.065-33.05)/0.005=3
P( Sample average <33.065)
= (3)
=normsdist(3)
=0.9987
P( Sample average >33.065)
=1-0.9987=0.00135

 The average diameter of a pin is set to

33.05mm. The machine can produce pins
with a sd of 0.01 mm. What is the
probability that the average diameter of a
sample of 4 pins will lie out side the range
of 33.035 and 33.065mm
P( xbar>33.065) =0.00135
P( xbar<33.035) =0.00135
P( xbar<33.065 or xbar>33.065)=0.0027
=1/370
One out of 370 samples may go outside
the specified range

 Suppose the process mean shifts to 33.06 mm.

What is the probability that the average of a
sample of 4 will lie lie out side the range of
33.035 and 33.065mm
Process mean = 33.06
Z= (33.065-33.060)/0.005=1
Probability of sample average < 33.065
= (1)
=0.841
Probability of sample average < 33.035 =0
P(33.035< xbar <33.065)= 0.841
P( xbar<33.035 or xbar>33.065)=0.16
Around one out of six points will go beyond the
specified limits

Assignment 1
The diameter of a pin is normally
distributed with a mean of 25.05 mm and
sd of 0.01mm. However some times the
mean shifts from the target of 25.05
producing defective units. The firm uses
an Xbar chart with sample size of 4 to
control quality. What is the probability of a
false alarm. Draw an ARL curve for the
chart

Operation of a control chart

25.065
25.05
25.035