BUSINESS ANALYTICS

Dr. Ramaraju Poosapati

July 2024
DISCLAIMER

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claim any of the represent any
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presented is his own. is working or worked in
The references are the past. The views
used for Educational expressed are personal
purpose only views.

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AGENDA
01 RECAP

02 SAMPLING DISTRIBUTION

03 SAMPLING METHODS

04 ESTIMATING POPULATION PARAMETERS

05 SAMPLING ERROR

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SAMPLING DISTRIBUTION

A sampling distribution is a concept used in statistics. It is a probability distribution of a statistic obtained

from a larger number of samples drawn from a specific population. The sampling distribution of a given
population is the distribution of frequencies of a range of different outcomes that could possibly occur for a
statistic of a population.

• A sampling distribution is a probability distribution of a statistic that is obtained through repeated

sampling of a specific population.
• It describes a range of possible outcomes for a statistic, such as the mean or mode of some variable, of
a population.

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STATISTICAL SAMPLING: METHODS

Sampling
Methods

The population is
Subjective Probabilistic divided into
Sampling Sampling clusters, and a
Methods Methods random sample of
clusters is selected

Simple Systematic Continuous

Judgment Convenience Stratified Cluster
Random (Periodic) Process
Sampling Sampling Sampling Sampling
Sampling Sampling Sampling

Expert judgment is Samples are selected Each item in the Selects every The population is
used to select the based on ease of population has nth item from divided into natural
sample access an equal chance the population subsets (strata) Random
Random
based on Time
Time Points
characteristics Selection
(Gender, Age group
etc.) Choose a random Choose n random
time and then select times and select the
the next n items next item

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ESTIMATING POPULATION PARAMETERS

Point Estimate:
A point estimate is a single value derived from sample data that is used to estimate an unknown population
parameter. It is most used method in statistics.
Provides a specific numerical value as an approximation of the population parameter.
Advantages: Easy to calculate. Limitations: Lack of Precision
Interval Estimates:
An interval estimate provides a range of values within which a population parameter is expected to lie, based
on sample data. It offers more information than a point estimate by accounting for the variability and
uncertainty inherent in the estimation process.
• Confidence Intervals: A range of values believed to contain the population parameter with a specified
level of confidence.
• Prediction Intervals: An interval estimate used to predict the value of a new observation from the same
population.
• Tolerance Intervals: An interval which uses collected data set population to obtain an interval, within
tolerance limits,

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SAMPLING ERROR

Sampling error is the difference between a sample statistic (e.g., sample mean) and the corresponding
population parameter (e.g., population mean) due to the fact that the sample is only a subset of the
population.
Causes of Sampling Error:
• Random Variation: Natural differences between samples due to randomness.
• Sample Size: Smaller samples tend to have larger sampling errors due to less data representing the
population.
• Sampling Method: Non-random sampling methods can introduce bias, increasing sampling error.

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RECAP

1. What is a sampling distribution? 6. Which sampling method involves dividing the population into strata
A) A distribution of frequencies of a single sample based on shared characteristics?
B) A probability distribution of a statistic obtained from multiple A) Simple Random Sampling
samples B) Systematic Sampling
C) A distribution of the entire population C) Stratified Sampling
D) A single value representing the population mean D) Cluster Sampling

2. Which of the following is true about a sampling distribution?

A) It is based on a single sample from the population. 7. In cluster sampling, what is typically done within each sampled cluster?
B) It is obtained through repeated sampling of a specific population. A) A random sample is taken
C) It represents the distribution of individual data points. B) A complete census is conducted
D) It is always normally distributed regardless of the sample size. C) Expert judgment is used to select samples
D) Convenience sampling is used
3. What is the main characteristic of subjective sampling methods?
A) Random selection of samples 8. What is a challenge associated with cluster sampling?
B) Selection based on expert judgment or convenience A) It is difficult to implement
C) Division of the population into strata B) Clusters should be heterogeneous to represent the entire population
D) Use of systematic procedures accurately
C) It requires expert judgment
4. Which of the following is an example of judgment sampling? D) It does not ensure each stratum is represented proportionately
A) Selecting every 10th customer from a list
B) Using expert judgment to choose the "best" customers 9. Which method involves choosing a random time and then selecting the
C) Randomly selecting names from a database next n items produced after that time?
D) Dividing the population into natural subsets A) Simple Random Sampling
B) Systematic Sampling
5. What is a key feature of probabilistic sampling methods? C) Random Time Selection
A) Samples are selected based on ease of access D) Random Time Points
B) Samples are chosen using random procedures
C) Samples are selected based on expert judgment
D) Samples are selected based on specific criteria known to the expert
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 THANK YOU
Disclaimer: Views expressed are personal and I don’t represent the company that I’m
working or the ones that I worked in the past.

Dr. Ramaraju Poosapati

https://www.linkedin.com/in/rampoosapati