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Inferential Statistics

Inferential statistics is concerned with

drawing conclusions and/or making

decisions concerning a population based

only on sample data.

Main functions of inferential

statistics:

1.estimate population

parameters

2.test statistical hypotheses

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Inferential Statistics

http://www.gohomeworkhelp.com/admin/photos/what-is-inferential-statistics.jpg

Estimation of Parameters

A parameter is a descriptive

measure that describes a

population.

A statistic is a descriptive

measure that describes a

sample.

Usually, parameters are denoted by

lower-case GREEK letters (e.g. or

), while statistics use lower-case

ROMAN letter (e.g. x and s).

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

An estimator of a population

parameter is a random variable

that depends on sample

information whose value provides

an approximation to this unknown

parameter.

A specific value of that random

variable is called an estimate.

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Properties of Good

Estimators

1.UNBIASED. The expected value or the

mean of the estimates obtained from samples

of a given size is equal to the parameter being

estimated.

2.CONSISTENT. As sample size increases, the

value of the estimator approaches the value

of the parameter being estimated.

3.RELATIVELY EFFICIENT. Of all the statistics

that can be used to estimate a parameter,

the relatively efficient estimator has the

smallest variance. CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

There are two types of

estimates:

1. Point estimate: It is a specific

numerical value used to

approximate a population

parameter.

2. Interval estimate: It is a range

of values used to approximate a

population parameter. It’s also

called a confidence interval.

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Point Estimation

Point estimation

is the process of

finding a point

estimate from a

random sample of a

population to

approximate a

parameter value.

The statistic value

that approximates aCABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Point Estimation

The point

estimate is the

BEST GUESS or

the BEST

ESTIMATE of an

unknown

(fixed or

random)

population

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Point Estimation

Sample

Population

Statistic

MEASURE Value

(POINT

(PARAMETER)

ESTIMATE)

Mean x

Standard

deviation s

Proportion p p̂

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Point Estimation

Notes:

1. Don’t expect that the point

estimate is exactly equal to the

population parameter.

2. Any point estimate used should

be as close as possible to the

true parameter.

3. Sampling should be done at

random, using a sample size that

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Point Estimation

The following are some

1 situations that use point

estimates:

a. (estimating a mean) A sample of 50

households is used to determine the

average number of children in a

household in a barangay.

b. (estimating a proportion) A sample of 50

households is used to determine the

percentage of households in a barangay

watching a particular teleserye.

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Point Estimation

The SAMPLE MEAN x is used to

2 estimate the population mean .

The following are the lengths of seedlings in a

plant box. We want to estimate the mean length

of the seedlings.

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Point Estimation

Estimate the mean length using the

2 following:

a)average of the row averages

b)average of the column averages

c)using the average of the first row

d)using the average of the last two

columns

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Point Estimation

To determine the average monthly

3 income of factory workers of a CEPZ

company, ten workers were randomly

sampled. Their monthly incomes (in

thousand pesos) are shown in the table.

Calculate the point

Monthly Income

estimate for the Income

Monthly

Worker Worker

average monthly income.

(thousand pesos) (thousand pesos)

1 11.5 6 11.5

2 10 7 12

3 9.5 8 10.5

4 9 9 11.5

5 10 10 9

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Point Estimation

Find the point estimate of the

4 proportion of private school

teachers who are LET passers in a

city given that 480 out of a sample

of 600 randomly selected teachers

passed the LET.

Estimation of Parameters

Point Estimation

Find the point estimate of the

5 proportion of the number of junior

high school students who owns at

least one cell phone given the

following sample: Number of

Number of students surveyed

Grade

students surveyed with at least one

cell phone

7 10 9

8 15 11

9 25 16

10 20 14

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Interval Estimation

An interval estimate is a range of

values used to approximate a

population parameter. This estimate

may or may not contain the actual

value of the parameter being

An interval estimate has two

estimated.

components:

1.a range or interval of values

2. an associated level of confidence

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Interval Estimation

Why use an interval

estimate instead?

• Using a point estimate, while

unbiased, poses a degree of

uncertainty. There is no way of

expressing the degree of accuracy

of a point estimate.

• An interval estimate provides

more information about a

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

confidence n. a feeling or belief

that you can do something well or

succeed at something

(http://www.merriam-webster.com/dictionary/confidence )

Estimation of Parameters

Confidence Levels

The confidence

level c of an

interval estimate

is the probability

that the

parameter is

contained in the

interval CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Levels

The value of c is given

1-

by

where represents a

level of significance,

which indicates the long-

run percentage of

confidence intervals

which would include the

parameter being

estimated.

The value of the level of

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Levels

The significance of the level of

significance

The level of significance represents

a probability of lack of confidence;

that is, the probability of NOT

capturing the value of a population

parameter in the interval estimate.

The confidence level c = 1 - ,

meanwhile represents the probability

of confidence that the population

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Levels

The significance of the level of

significance probability that

1- lies in the

interval

estimate

probability that

does NOT lie

in the interval

estimate

z

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

A confidence interval is a specific

interval estimate of a parameter

determined by using data obtained

from a sample and by using the

specific confidence level of the

estimate.

http://blog.minitab.com/blog/adventures-in-statistics/understanding-hypothesis-tests:-confidence-intervals-and-confidence-levels

Estimation of Parameters

Confidence Intervals

Notes:

1. For a parameter , if P(a < < b) = 1

- , then the interval a < < b is

called a 100(1 - )% confidence

interval of .

2. In repeated samples of the

population, the true value of the

parameter would be contained in

100(1 - )% of intervals calculated

this way.

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

REGION OF CONFIDENCE

100(1 - )% of all intervals contain the value of

2 1- 2

̂

̂ 's

Distribution of

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

Illustration:

A 95% confidence

interval of a population

mean means that 95%

of the samples from the

same population will

produce the same

confidence intervals that

Also, this means that

contain the value of .

1 - = 0.95

so = 0.05 is the

level of significance. http://www.statistica.com.au/confidence_interval.html

Estimation of Parameters

Confidence Intervals

Illustration:

population

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

Determine the confidence level for

6 the following levels of significance:

Level of

Confidence

Significanc

Level

e

= 0.10 c = 1 - = 1 - 0.10 = 0.90 = 90%

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

Determine the levels of

7 significance for the following

confidence levels:

Confidence Level of

Level Significance

87% = 1 - c = 1 - 0.87 = 0.13

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

Important parts of a confidence

interval Width of

confidence interval

Lower Upper

Confidenc Confidenc

Point e

e

Estimate Limit

Limit CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

General Formula for Confidence

Intervals

The general formula for all confidence

intervals is given by:

� Point � �

Reliability�

�Standard�

� ��� �

� �

Estimate� � Factor �

� � Error �

The value of the reliability factor

depends on the desired level of

confidence.

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

General Formula for Confidence

Intervals

https://onlinecourses.science.psu.edu/stat504/sites/onlinecourses.science.psu.edu.stat504/files/lesson01/simple_expres_CI.gif

Estimation of Parameters

Confidence Intervals

General Formula for Confidence

Intervals

Usually, the general formula for a

confidence ˆ �E

interval ̂

is written as where is the

estimate of the

In INEQUALITY FORM, the confidence

parameter and E is the margin of error.

interval of a parameter is given by

ˆ - E < < ˆ + E

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

Confidence

Intervals

Population Population

Mean Proportion

Known Unknown

Confidence Intervals for

the Population Mean

for Known and Unknown Variances

Estimation of Parameters

the Population Mean

To construct an interval

estimate for the population

mean, we use

1.a point estimate for the

mean.

2.a margin of error.

Estimation of Parameters

the Population Mean

population mean is given by

x -E< < x +E

where E is the margin of error

dependent on a given

confidence level.

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

the Population Mean

In the confidence interval

x -E<< x +E

E = margin of error

x - E = lower confidence

x + E limit

= upper confidence

limit

2E = width of the confidence

interval CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

the Population Mean

Width of Confidence

Interval

Margin of Error Margin of Error

E E

x -E x +E

Lower Population Upper

Confidence Mean Confidence

Limit Limit

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

the Population Mean

REGION OF CONFIDENCE

100(1 - )% of all intervals contain the value of the

population mean

1-

2 2

100 ( 1 - ) %

X

x -E x +E

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

the Population Mean

Suppose that a sample is taken from a

normally-distributed population. If the

1 sample mean is 10, the confidence

interval for the population mean at a

margin of error of 2 is

10 - 2 < < 10 + 2 or 8 < < 12

From the confidence interval, we have:

Lower confidence limit: 8

Upper confidence limit: 12

Width of confidence interval: 2E = 4 or

12 – 8 = 4 CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

the Population Mean

2 width of the following

confidence

Confidence

intervals:

Width of Margin of

Interval Confidence Interval Error

2

3<<5 5-3= 2 E= =1

2

1.8

2.5 < < 4.3 4.3 - 2.5 = 1.8 E= = 0.9

2

1.84

35.08 < < 36.92 36.92 - 35.08 = 1.84 E= = 0.92

2

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

the Population Mean

In constructing an interval

estimate for the population

mean, we consider two cases:

CASE 1 – the standard deviation

of the population is known

CASE 2 – the standard deviation

of the population is not known

Estimation of Parameters

the Population Mean

CASE

The standard deviation of the

1 population is known.

A confidence interval for a

population mean with a known

standard deviation is based on

the fact that the sample means

follow an approximately

normal distribution.

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

The Central Limit Theorem – A Throwback:

If random samples of size n are drawn from a

population with replacement, then as n

becomes larger, the sampling distribution

of the mean approaches the normal

distribution, regardless of the shape of

the mean

The population distribution

and standard . of the

deviation

distribution are, respectively,

X = X =

n

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

Because of the Central Limit Theorem, we can

think of the confidence level c = 1 – as the area

-z

under the standard normal curve between

2

two zCRITICAL

VALUES and .

2

2 2

1-

-z 0 z

2 2

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

To get a 100(1 – )% confidence interval for a given

level of significance , we must include the

central (1 – ) of the probability of the

normal distribution, leaving a total area of in

both tails, or /2 in each tail, of the normal

distribution.

2 1- 2

100 ( 1 - ) %

X

x -E x +E

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

Sampling Distribution of the Mean

2 1- 2

X

μx = μ

Intervals x1

extend from 100(1-)%

x -E

x2

of intervals

x3 constructed

to

contain μ;

x +E

M

xn-1 100()%

xn

do not.

Confidence

Intervals

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

Sampling Error

The difference between the point

estimate and the actual parameter

value is called the SAMPLING ERROR.

For the sampling distribution of

sample means, the sampling error is

equal to x -

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

Margin of Error

The margin of error E is the

maximum error of estimate given by

� �

E = z X or E = z � �

2 2

�n�

where is the level of significance,

is the population standard deviation,

and n is the sample size.

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

Steps in Constructing a Confidence Interval

for a Population Mean if the Standard

Deviation is Known

STEP 1 – Calculate the sample mean. This

is the point estimate for the population

mean .

STEP 2 – Find the z-score (critical value)

that corresponds to the

confidence level .

STEP x3-–ECalculate

< < x + the

E margin of

error E.the result.

Interpret

STEP 4 – Construct the

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

Common Confidence Levels and the

Corresponding

Confidence Level of z Values

Value of z-Value

Confidence Coefficient Significance

Level

c=1– z

2 2

90% 0.90 0.10 0.05 1.645

95% 0.95 0.05 0.025 1.96

98% 0.98 0.02 0.01 2.33

99% 0.99 0.01 0.005 2.575

99.8% 0.998 0.002 0.001 3.08

99.9% 0.999 0.001 0.0005 3.27

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

A normally distributed

3 population has standard

deviation 1.5. A sample of

size 36 is obtained from

the population with

sample mean 4. Find the

margin of error for a 99%

confidence interval for the

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

Solution

Value of : = 1 - c = 1 - 0.99 = 0.01

Value of z: z = z0.005 = 2.575

2

Value of E:

� � �1.5 �

E = z � �= ( 2.575 ) � ��0.64

2

�n� � 36 �

Estimation of Parameters

Mean and Variance of Sampling Distributions of Sample Means

Check your

understanding

Compute the

margin of error for

the estimation of

the population

mean for a 90%

confidence with a

sample of size 400

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

A normally distributed

4 population has standard

deviation 2. A sample of size

25 is obtained from the

population with sample mean

10. Construct a confidence

interval for the mean of the

population using

a.90% confidence

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

a. Solution

Given: x = 10, = 2, n = 25, c = 0.90

4 Value of : = 1 - c = 1 - 0.90 = 0.10

Value of z: z = z0.05 = 1.645

2

� � �2 �

Value of E: E = z 2 � �= ( 1.645 ) � �= 0.66

�n� � 25 �

Confidence limits: x - E = 10 - 0.66 = 9.34

x + E = 10 + 0.66 = 10.66

Confidence interval:9.34 < < 10.66

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

What does our answer mea

4 9.34 < < 10.66

We are 90%

confident that the

true population

mean lies

between 9.34 and

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

b. Solution

Given: x = 10, = 2, n = 25, c = 0.95

4 Value of : = 1 - 0.95 = 0.05

Value of z: z = z0.025 = 1.96

2

� � �2 �

Value of E: E = z 2 � �= ( 1.96 ) � �= 0.78

�n� � 25 �

Confidence limits: x - E = 10 - 0.78 = 9.22

x + E = 10 + 0.78 = 10.78

Confidence interval:9.22 < < 10.78

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

What does our answer mea

4 9.22 < < 10.78

We are 95%

confident that the

true population

mean lies

between 9.22 and

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

To determine the average

5 amount of purchase of its

customers, a convenience

store samples 150 of its

customers. The average

purchase of the group is P

125. If the store knew that

the standard deviation of all

purchases is P 50, what is the

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

Solution

5 Given:

x = 125, = 50, n = 150, c = 0.95

Value of : = 1 - 0.95 = 0.05

Value of z: z = z0.025 = 1.96

2

� � � 50 �

Value of E: E = z 2 � �= ( 1.96 ) � �= 8.00

�n� � 150 �

Estimation of Parameters

Confidence Intervals

CASE

Solution

Confidence limits:

5 x - E = 125 - 8 = 117

x + E = 125 + 8 = 133

Confidence interval: 117 < < 133

Conclusion:

We are 95% confident that the

actual average purchase is between

P 117 and

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

A study of 400 kindergarten

average 5,000 hours watching TV.

The standard deviation of the

population is 900.

a.Find the 95% confidence level

of the mean TV time for all

pupils.

b.If a parent claimed that his

children watched 4,000 hours of

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

a. Solution

6

Given:

x = 5000, = 900, n = 400, c = 0.95

Value of : = 1 - 0.95 = 0.05

Value of z: z = z0.025 = 1.96

2

� � �900 �

Value of E: E = z 2 � �= ( 1.96 ) � �= 88.2

�n� � 400 �

Estimation of Parameters

Confidence Intervals

CASE

a. Solution

(continued)

Confidence limits:

6 x - E = 5000 - 88.2 = 4,911.8

x + E = 5,000 + 88.2 = 5,088.2

Confidence interval: 4,911.8 < < 5,088.2

Conclusion:

We are 95% confident that the actual

average TV time is between 4,911.8

and 5,088.2 hours.

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

b.

Question: Is the claim

6 of the parent valid?

Answer: NO, the claim of the

parent is NOT valid because

the average is NOT in the

confidence interval.

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

In a nutshell:

Steps in Finding the Confidence Interval for

Given: x = _____ , = _____ , n = _____ , c = _____

Value of : = 1 - c = _____

Value of z: z = _____

2 Confidence interval:

� �

Value of E: E = z 2 � �= _____ < < _____

n

� �

Confidence limits: x - E = _____

x + E = _____

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

In a nutshell:

Steps in Finding the Confidence Interval for

Conclusion:

We are _____%

confident that the

true mean / average

_____ is between

_____ and _____. CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

Sample Size Determination

The MINIMUM sample size n needed to

estimate the population mean is

2

�z 2 �

n=� �

�E �

� �

where is the level of significance, is the

population standard deviation and E is the

margin of error.

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

Sample Size Determination

Why compute the

Since sample size?

the confidence interval widens

as the confidence level increases, the

precision of the interval estimate

decreases. One way to increase the

precision without changing c is to

increase the sample size. The larger

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

7 sample size needed to

estimate the population

mean with 95%

confidence using a

margin of error of 4. It is

known that the

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

Solution:

7 Given: c = 0.95, E = 4, = 8

Note:

Value of : = 1 - 0.95 = 0.05 ROUND UP

your answer

Value of z: z = z0.025 = 1.96

2

2

( 1.96 ) ( 8 ) �

2

Minimum z

� 2 � �

sample size:

n = � �= �

�E � � 4 �= 15.37 �16

� � �

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

If the variance of a

8 national accounting

examination is 900, how

large a sample is needed

to estimate the true

mean score within 5

points with 99%

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Confidence Intervals

CASE

Solution:

Value of : = 1 - 0.99 = 0.01

Value of z: z = z0.005 = 2.575

2

2

( 2.575 ) ( 30 ) �

2

Minimum �z 2 � �

sample size: n = � �= � �

�E � � 5 �

� �

= 240 exams

CABT Statistics & Probability – Grade 11 Lecture Presentation

Estimation of Parameters

Mean and Variance of Sampling Distributions of Sample Means

Check your

understanding

Ehljie wants to conduct

study on the average

a

11 student spends in

studying Statistics and

Probability in a school

week with 98% confidence

and a margin of error of 2

hours. What sample size

should Ehljie use for her

CABT Statistics & Probability – Grade 11 Lecture Presentation

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