Prediction Interval

We would like to construct a prediction interval around    which would contain the actual Y.

If n  ≥  30,     ± Zs_e would be the interval, where Z is the appropriate Standard Normal Value.

If n < 30,     ± ts_e would be the interval, where t is the appropriate t value (with n - 2 degrees of freedom).

Example 

In the case of the pharmaceutical firm, at X = Rs.1 crore the 90% prediction interval is 22 ± 2.132 x 3.24.

Posted Date: 9/15/2012 5:23:56 AM | Location : United States

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