LECTURE 7

PROBABILITY DISTRIBUTION

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Discrete Probability Distribution
Binomial Distribution
Poisson Distribution
Introduction to Probability Distributions
Random Variable
Represents a possible numerical value from a
random event
Takes on different values based on chance

Random
Variables
Discrete
Random Variable
Continuous
Random Variable
today
Next
week
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A discrete random variable is a variable that is
determined by counting ie can assume only a
countable number of values
Many possible outcomes:
number of complaints per day
number of TVs in a household
number of rings before the phone is answered
Only two possible outcomes:
gender: male or female
defective: yes or no
spreads peanut butter first vs. spreads jelly first
Discrete Random Variable
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I. The sum of the probabilities of all the
outcomes is 1. P(X) = 1
II. The probability of a particular
outcome is between 0 and 1.
0 P(X) 1

III. The outcomes are mutually
exclusive.
Main features of
Discrete Probability Distributions
Mean of a probability distribution


Variance of a probability distribution




Standard Deviation of a probability distribution


| |
| |
2
2
2
2 2
) ( ) (
) ( ) ( ) (

=
= =
x xP x P x
X E X E X Var o
The Mean, Variance and Standard
Deviation of a Discrete Probability
Distributions

= = ) ( ) ( x xP X E
) ( ) ( X Var X SD = =o
EXAMPLE

Clifton Windows and Glass Company makes and distributes
window products for new home constructions. Each week the
companys quality manager examines a randomly selected window to
check for defects
No of
Defects, X Frequency
0 150
1 110
2 50
3 90
E 400
1) Find probability for each defect.
2) Calculate the Mean: Expected value, E(x)
3) Calculate the Standard Deviation, o
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E(x) = E xP(x) = ??
1) The Mean: Expected value, E(x)
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No of
defects,
x
Frequency
P(x) xP(x) xP(x)
0
1
2
3
150
110
50
90
400
2) Standard Deviation, o
2 2
[E(x)] - ) E(x =
8
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LAWS OF EXPECTED VALUE AND VARIANCE
EXPECTED VALUE ; E(X)

1. E(c) = c
2. E(cX) = c x E(X)

VARIANCE, VAR(X)

1. Var(c) = 0
2. Var (c X) = c Var(X)
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EXAMPLE:

Discrete random variable X is given by P(X = x) = cX
For x = 1, 2, 3, 4.
Construct probability distribution table and compute the
Mean value.
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Probability Distributions
Continuous
Probability
Distributions
Binomial
Poisson
Probability
Distributions
Discrete
Probability
Distributions
Normal
Today Next
Week
Continuous
Probability
Distributions
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The Binomial Distribution
Characteristics of the Binomial Distribution:

A trial has only two possible outcomes success or
failure
There is a fixed number, n, of identical trials
The trials of the experiment are independent of each
other
The probability of a success, p, remains constant
from trial to trial
If p represents the probability of a success, then
(1-p) = q is the probability of a failure
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Binomial Distribution Settings
A manufacturing plant labels items as
either defective or acceptable
A firm bidding for a contract will either get
the contract or not
A marketing research firm receives survey
responses of yes I will buy or no I will
not
New job applicants either accept the offer
or reject it
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Counting Rule for Combinations
A combination is an outcome of an experiment
where x objects are selected from a group of n
objects
)! x n ( ! x
! n
C
n
x

=
where:
C
x
= number of combinations of x objects selected from n objects
n! =n(n - 1)(n - 2) . . . (2)(1)
x! = x(x - 1)(x - 2) . . . (2)(1)
0! = 1 (by definition)
n
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P(x) = nCx p^x q^x (using calculator)
P(x) = probability of x successes in n trials,
with probability of success p on each trial

x = number of successes in sample,
(x = 0, 1, 2, ..., n)
p = probability of success per trial
q = probability of failure = (1 p)
n = number of trials (sample size)
P(x)
p
q
x n
x
=

Example: Flip a coin four
times, let x = # heads:
n = 4
p = 0.5
q = (1 - .5) = .5
x = 0, 1, 2, 3, 4
Binomial Distribution Formula
n
x
C
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Binomial Distribution Characteristics
Mean

Variance and Standard Deviation
np E(x) = =
npq
2
=
npq =
Where n = sample size
p = probability of success
q = (1 p) = probability of failure
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Binomial Distribution Example
Example: 35% of all voters support
Proposition A. If a random sample of 10
voters is polled, what is the probability that
exactly three of them support the
proposition?

i.e., find P(x = 3) if n = 10 and p =0.35

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A survey shows that 30% of students major in
Business Administration. Consider a random
sample of 10 students, find the probability that
the number of students major in Business
Administration would be:
a) Three
b) None
c) Less than two
d) At least one

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Example of a Binomial Distribution
19 19
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If X ~ P ( ), then

where
is the mean number of successes in
a particular interval
e is the constant 2.71828
x is the number of successes
P(x) is the probability for a specified value
of x
mean = E(X) = variance = V(X) =
x!
e
x) P(X
x
= =
Poisson Distributions Formula
21
In a Poisson distribution mean, = 0.3. Find:
(a) P(x= 0)




(b) P(x 1)
P(X 1) = P(X=1) + P(X=2) + (until infinity)
= 1 [P(X=0)]

EXAMPLE
22
The marketing manager of a company has noted that she
usually receives 10 complaint calls from customers during
a working week (A working week is a 5 day week) and
these calls occur at random.
Find the probability of her receiving more than one call in
a single day.
Solution:
X = the number of calls per week
X ~ P (10)
Y = the number of calls per day
Y ~ Poisson (10/5 = 2)
P( Y > 1 ) = P (Y=2) + P(Y=3) +
= 1 [P(Y=0) + P(Y=1)]

594 . 0
2 2
=
(

+ =

1!
2 e
0!
2 e
- 1
1 0
EXAMPLE
QUESTION
Each day a quality control inspector selects 10 items
from a continuous production line. From
experience, he knows that 30% of the items
produced on this line will have to be modified.
(a) What is the probability that out of 10 samples
taken, none of them need any modification ?
(b) What is the probability that out of 10 samples,
there will be at least 3 that need modification
(c) On average, how many need modification out of
15 samples?