Underlying Theory of Statistical Inference

The process improvement frameworks use statistical inference, a general methodology that includes several individual tools (such as confidence intervals and hypothesis tests). The theory of statistical inference is used to determine the appropriate formulas for confidence intervals or the hypothesis tests, such as t-tests or F-tests, and it includes the mathematical basis for these formulas. This chapter explains some of the key theoretical concepts that underlie statistical inference and explain the concepts of the normal and other probability distributions, sampling distributions, linear combinations, and transformations.