Week 04 - Location Dispersion.pptVIP

* Empirical Rule The empirical rule tells us roughly what fraction of measurements fall within the interval Here k is the number of standard deviations an observation is away from the mean. Thus, the empirical rule highlights the spread of an observation from the mean (or location) of the data. Important: Applicable when we know that the distribution is mound shaped. k Interval Fraction Percentage 1 Contains roughly 68% of measurements 2 Contains roughly 95% of measurements 3 Contains roughly all (99.7%) of measurements STAT1060 Week 4 Lecture Notes HG pg 105 * Empirical Rule STAT1060 Week 4 Lecture Notes * Empirical Rule (. . . cont) Example Suppose a bank is interested in the time taken for a bank teller to cash a money order. They find from their study that the mean time taken is 60 seconds and a standard deviation of s = 10 seconds. Using the empirical rule, roughly 95% of money orders will be cashed within what period of time? Since we are interested in 95%, this means we are looking at observations that are 2 standard deviations away from the mean (k = 2). So Therefore, 95% of money orders will be cashed within 40 to 80 seconds. Note: this conclusion is only valid if the times have a distribution that is mound shaped. STAT1060 Week 4 Lecture Notes * * Week 2 Lecture Notes - Camp Measures of LocationMeasures of Variability STAT1060: Business Decision Making Autumn 2010 School of Mathematical Physical Sciences University of Newcastle Week 4 Lecture The 3 S’s Shape What does the data look like? Graphical summaries (last weeks lecture) Centre Spread Statistics for Business Week 4 Lecture Notes - Camp * Two very important characteristics numerical summaries this weeks lecture STAT1060 Week 4 Lecture Notes * Notation Population of measurements with population size N Sample selected from population with sample size n Set of measurements often expressed by the letter x: For example if there are n observations in a sample: x1 is the fir