The length of observation represents the magnitude, duration, or size of each observation period. Use the length of observation to convert the rate of occurrence into a form that best suits your situation.
For example, if each sample observation counts the number of events in a year, a length of 1 would represent a yearly rate of occurrence while a length of 12 would represent a monthly rate of occurrence.
Minitab uses total occurrences, N, and the length of observation to calculate the rate of occurrence. For example, inspectors inspect the number of defects in a box of towels. A towel can have more than one defect, such as 1 tear and 2 pulls (3 defects). Each box contains 10 towels, they sample 50 total boxes, and they find a total of 122 defects.
- The total occurrences is 122, because they found 122 defects.
- The sample size (N) is 50 because they sampled 50 boxes.
- To determine the number of defects per towel, inspectors use a length of observation of 10 because there are 10 towels per box. If they wanted the number of defects per box, the length of observation would be 1.
- The rate of occurrence is (Total occurrences / N) / (length of observation) = (122/50) / 10 = 0.244. So on average, each towel has 0.244 defects.