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n! = n x (n-1) x (n-2) x ...

x 2
x 1
)! (
!
r n
n
P
n
r

= ( )
)! ( !
!
r n r
n
C
n
r
n
r

= =
Are the events mutually exclusive?
P(A) & P(B) = P(A) x P(B)

P(A) or P(B) = P(A) + P(B) [P(A) x P(B)]
P(A) & P(B) = 0
P(A) or P(B) = P(A) + P(B)
Are the events Independent?
Example: does P(A/B) = P(A)
Sampling WITH Replacement Sampling WITHOUT Replacement
1) BINOMIAL
2) When n is large & p is small use
Poisson Formula or Tables.
HYPERGEOMETRIC
Are the events Conditional?
(Is one event dependent on the other)
P(A) & P(B) = P(B/A) x P(A)
P(A) & P(B) = P(A/B) x P(B)
and = (Multiply)
or = (Sum)
) (
) (
) / (
F P
F E P
F E P

=
with P(F)<>0
P(A or B or C) =
P(A) + P(B) + P(C)
-P(A X B) -P(A X C) -P(B X C)
+ P(A X B X C)
D) min(n, 0,1,2,... x ) ( =
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\
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=

N
n
D N
x n
D
x
x p
N
nD
=
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.
|

\
|

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|

\
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=
1
1
2
N
n N
N
D
N
nD
o
HYPERGEOMETRIC
DISTRIBUTION
N = Population Size
n = Size of Sample
D = Class of Interest
x = # of samples fall into
class of interest
n 0,1,..., x ) 1 ( ) ( =
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\
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=
x n x
n
x
p p x p
BINOMIAL DISTRIBUTION
np =
) 1 (
2
p np = o
0,1,... x
!
) ( = =

x
e
x p
x

POISSON
DISTRIBUTION
=
o =
2
n
s
x x
Z
i ) (
=
N
N
n
x x
s
i
) 1 (
1
) (
) ' ( Variance
2
2 2

-

= = =

o
Estimate Variance of a finite population
s
x x
Z
i
) (
=
Standard Deviation for a Distribution of averages, Ns= # samples, n= samples size
n
s
N
x x
s
i
x
or
) (
Error Standard
2

= =o
1 . 0 <
N
n
9 . 0 1 . 0
10
s s
>
p
np
better) larger the (the 15 >
1 . 0 < p
(The smaller
p and larger
n the better)
9 . 0 > p
Let p=1-p,
the smaller p
and larger n
the better
B
N
P
H
0 ) ( > =

x e x f
x

1
=
2
2
1

o =
EXPONENTIAL DISTRIBUTION
0 ) (
) (
) (
1
>
I
=

x e x
r
x f
x r

r
=
2
2

o
r
=
GAMMA DISTRIBUTION
0 exp ) (
1
>
(
(

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=

x
x x
x f
| |
u u u
|
WEIBULL DISTRIBUTION
|
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+ I =
|
u
1
1
(
(

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+ I
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|

\
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+ I =
2
2 2
1
1
2
1
| |
u o
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u
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\
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+
u ~ =
) 1 (
2
1
) 1 (
2
1
) (
p np
np a
p np
np a
a x P
{ }
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.
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\
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u
|
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.
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\
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+
u ~ s s
) 1 (
2
1
) 1 (
2
1
p np
np a
p np
np b
b x a P
n x p / =
{ }
|
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\
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u
|
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.
|

\
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u ~ s s
n p p
p u
n p p
p v
v p u P
/ ) 1 ( / ) 1 (

2
|
.
|

\
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=
E
Zs
n
n
s
Z
n
s
Z E = |
.
|

\
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+ =
Sample Size Variable Data:
2
|
.
|

\
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=
E
Z
pq n
2
|
.
|

\
|
=
E
Z
p n
Sample Size Discrete Data Binomial:
Sample Size Discrete Data Poisson:
( )
2
2
2
2
2 / ) 2 (
2
2
2
) 1 (
where
!
2
2
2
) (
2
o
_
u
_
_
u
u
_
s n e
f

=
|
.
|

\
|
=

N =
N 2 ) (
2 2
= _ o
n
s
X
t

=

2
2
2
1
s
s
F =
N
x
i

= =
2
2
) (
Variance

o
Variance of the population
( )
n
x x
i

= = =
2
2
Square Sigma Variance o
Variance of a set of data
1
) (
) ' ( Variance
2
2 2

= = =

n
x x
s
i
o
Estimate Variance of a infinite population
{ } { }
{ } { }
{ } { } a x P a x P
a x P a x P
a x P a x P
s = >
> = s
s = > 1
ModMed-X bar Xbar-Med-Mod

Null Hypothesis
TRUE FALSE
Decision Made: Null Hypothesis (Ho) true Null hypothesis (Ho) false
Do not reject Ho No error (1- o) Type II error (|)
Reject Ho Type error (o) No error (1-|)
n
X
n
X
o

o
96 . 1 96 . 1 + < <
95 % Confidence Interval with known Sigma
n
s
t X
n
s
t X
2 2 o o
+ < <
Confidence Interval with UN-known Sigma
Clasificacion Nivel Confianza Z
Maradona 90% 1.645
Michel Jordan 95% 1.96
Yao Li 99% 2.58

Sigma Percentage In PPM Defective
1 68.26 317,300.0
2 95.44 45,500.0
3 99.73 2,700.0
4 99.9937 63.0
5 99.999943 0.57
6 99.999660 0.002
{ } { }
{ } { } false is reject to fail error II type
true is reject error I type
0 0
0 0
H H P P
H H P P
= =
= =
|
o
VARIANCE KNOWN

Ho:

Hi:
0
=
0
>
Reject Ho if
:
o
Z Z >
0

Ho:

Hi:
0
=
Reject Ho if
:
o
Z Z <
0
0
<
Reject Ho if
:
2 / 0 o
Z Z >
0 1
0 0
:
:

=
=
H
H
n
x
Z
o

0
0

=
| |

< = u
> = u
= = u
=
0 1 0 0 0
0 1 0 0 0
0 1 0 0 0
: : : test tailed - lower a for ) (
: : : test tailed - upper an for ) ( 1
: : : test tailed - two a for 1 2

H H Z
H H Z
H H Z
P
1 , 0 0 0 1 1
1 , 0 0 0 1 1
if H reject , : If
if H reject , : If

< <
> >
n
n
t t H
t t H
o
o

VARIANCE UNKNOWN
UNKNOWN
0 1
0 0
:
:

=
=
H
H
Reject Ho if
:
n S
x
t
0
0

=
2
1 , 2 / 1
2
2
2
1 , 2 /
2
) 1 ( ) 1 (

s s

n n
S n S n
o o
_
o
_
Confidence Interval on the Variance Normal Dist.
2
1 , 1
2
2
) 1 (

s
n
S n
o
_
o
2
2
1 ,
2
) 1 (
o
_
o
s

n
S n
One sided Confidence Interval on the Variance
( )
2
0
2
2
0
1
o
_
S n
=
2
0
2
1
2
0
2
0
:
:
o o
o o
=
=
H
H
df. 1 - n on with distributi square - Chi the of
points percentage /2) ( - 1 lower and /2 upper the to ing correspond
if or
2
1 , 2 / 1
2
0
2
1 , 2 /
2
0
o o
_ _ _ _
o o
< >
n n
The null hypothesis is rejected if:
2
0
2
1
: o o < H
The null hypothesis is rejected if:
2
1 , 1
2
0
<
n o
_ _
2
0
2
1
: o o > H
The null hypothesis is rejected if:
2
1 ,
2
0
>
n o
_ _
n
p p
Z p p
n
p p
Z p
) 1 (

) 1 (

2 / 2 /

+ s s

o o
INFERENCE ON A POPULATION PROPORTION
0 1
0 0
:
:
p p H
p p H
=
=

>

<

+
=
0
0 0
0
0
0 0
0
0
np x if
) 1 (
) 5 . 0 (
np x if
) 1 (
) 5 . 0 (
p np
np x
p np
np x
Z
2 / 0 o
Z Z >
Reject if:
Confidence Interval on a Population Proportion
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u
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\
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u =
o
o
o
o
|
o o
n
Z
n
Z
2 / 2 /
o + =
0 1
0 > o
2 / o
Z
o o / n 0 2 / o
Z
Under H0 Under H1
|
The Probability of Type II error
n
x
Z
/
0
0
o

=
0 2 1 0
: A = H
2
2
2
1
2
1
0 2 1
0
n n
x x
Z
o o
+
A
=
0 2 1 1
0 2 1 1
0 2 1 1
:
:
:
A <
A >
A =

H
H
H
o
o
o o
Z Z
Z Z
Z orZ Z Z
<
>
< >
0
0
2 / 0 2 / 0
Alternative Hypothesis Rejection Criterion
2
2
2
1
2
1
2 / 2 1 2 1
2
2
2
1
2
1
2 / 2 1
n n
Z x x
n n
Z x x
o o

o o
o o
+ + s s +
Confidence Interval on a Difference in Means, Variances Known
Inference for a Difference in Means, Variance Known 2 2
2
2
1
o o o = =
Inference for a Difference in Means, Variance Unknown
Case 1:
0 2 1 0
: A = H
2 1
0
2 1
0
1 1
n n
S
x x
t
p
+
A
=
2
2
2 1
2 2
1
2 1
1 2
2
1
2
1
S
n n
n
S
n n
n
S
p
+

+
+

=
0 2 1 1
0 2 1 1
0 2 1 1
:
:
:
A <
A >
A =

H
H
H
2 , 0
2 , 0
2 , 2 / 0
2 , 2 / 0
2 1
2 1
2 1
2 1

+
+
+
+
<
>
<
>
n n
n n
n n
n n
t t
t t
t t
or t t
o
o
o
o
Alternative Hypothesis Rejection Criterion
Case 2:
2
2
2
1
o o =
2
2
2
1
2
1
0
2 1 *
0
n
S
n
S
x x
t
+
A
=
2
1
) / (
1
) / (
2
2
2
2
2
1
2
1
2
1
2
2
2
2
1
2
1

+
|
|
.
|

\
|
+
=
n
n S
n
n S
n
S
n
S
u
2 2
2
2
1
o o o = =
Confidence Interval on a Difference in Means, Variances Unknown
2
2
2
1
o o =
2
2
2
1
2
1
, 2 /
2 1
2 1
2
2
2
1
2
1
, 2 /
2 1
n
S
n
S
t x x
n
S
n
S
t x x + + s s +
v o v o

2 1
2 , 2 /
2 1
2 1
2 1
2 , 2 /
2 1
1 1 1 1
2 1 2 1
n n
S t x x
n n
S t x x
p n n p n n
+ + s s +
+ + o o

Inference for paired data
n S
d
t
d
/
0
=
0 :
0
=
d
H
1 , 2 / 0
>
n
t t
o
Reject if:
Average difference between data.
Sd is the STD of differences

Inference on the Variances of Two Normal
Distributions
2
2
2
1 1
: o o <
2
2
2
1 1
: o o > H
H
2
2
2
1
0
2
1
2
2
0
S
S
F
S
S
F
=
=
2
2
2
1
0
S
S
F =
or
1 , 1 ), 2 / ( 1 0
2 1

<
n n
F F
o
>
2 , 1 , 2 / 0
2 1
n n
F F
o
Alternative Hypothesis / Test Statistic / Rejection Criterion
2
2
2
1 1
: o o = H
1 , 1 , 0
2 1

>
n n
F F
o
1 , 1 , 0
1 2

>
n n
F F
o
Confidence Interval on the Ratio of the Variances of Two Normal Distributions
1 , 1 , 2 /
2
2
2
1
2
2
2
1
1 , 1 , 2 / 1
2
2
2
1
1 2 1 2

s s
n n n n
F
S
S
F
S
S
o o
o
o
1 , 1 , 2
2
2
1
2
2
2
1
1 2

s
n n
F
S
S
o
o
o
2
2
2
1
1 , 1 , 1 2
2
2
1
1 2
o
o
o
s
n n
F
S
S
Inference on Two Population Proportions
2 1 0
: p p H =
|
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.
|

\
|
+

=
2 1
2 1
0
1 1
) 1 (

n n
p p
p p
Z
2 1 1
2 1 1
2 1 1
:
:
:
p p H
p p H
p p H
<
>
=
o
o
o o
Z Z
Z Z
Z Z Z Z
<
>
< >
0
0
2 / 0 2 / 0
or
Alternate Hypothesis Rejection criteria
Confidence Interval on the Difference in Two Population Proportions
2
2 2
1
1 1
2 / 2 1 1
2
2 2
1
1 1
2 / 2 1
) 1 ( ) 1 (

) 1 ( ) 1 (

2
n
p p
n
p p
Z p p p p
n
p p
n
p p
Z p p

+

+ s s

o o
GOODNESS OF FIT

=
k
i i
i i
E
E O
1
2
0
) (
_
Where k = class intervals, p = number of parameters
2
1 ,
2
0
>
p k o
_ _
Reject Ho if:
H
0
: The shape of the distribution is the proposed
distribution

If n different in between cells, then the Error degree of freedom is:
a*b*(n-1)*(n-1)*(n-1)