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Maths- Probability

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Probability

Concepts and

Applications

Quantitative Prentice Hall,

Learning Objectives

Students will be able to:

1. Understand the basic foundations of

probability analysis.

2. Describe statistically dependent and

independent events.

3. Use Bayes theorem to establish

posterior probabilities.

4. Describe and provide examples of both

discrete and continuous random

variables.

5. Explain the difference between discrete

and continuous probability distributions.

6. Calculate expected values and variances

and use the Normal table.

Quantitative Prentice Hall,

Chapter Outline

2.1 Introduction

2.2 Fundamental Concepts

2.3 Mutually Exclusive and

Collectively Exhaustive

Events

2.4 Statistically Independent

Events

2.5 Statistically Dependent Events

2.6 Revising Probabilities with

Bayes Theorem

2.7 Further Probability Revisions

Quantitative Prentice Hall,

Chapter Outline

continued

2.8 Random Variables

2.9 Probability Distributions

2.10 The Binomial Distribution

2.11 The Normal Distribution

2.12 The Exponential

Distribution

2.13 The Poisson Distribution

Quantitative Prentice Hall,

Introduction

Life is uncertain!

We must deal with risk!

A probability is a numerical

statement about the likelihood

that an event will occur.

Quantitative Prentice Hall,

Basic Statements about

Probability

1. The probability, P, of any

event or state of nature

occurring is greater than or

equal to 0 and less than or

equal to 1.

That is: 0 P(event) 1

2. The sum of the simple

probabilities for all possible

outcomes of an activity must

equal 1.

Quantitative Prentice Hall,

Diversey Paint Example

Demand for white latex paint at Diversey

Paint and Supply has always been either 0,

1, 2, 3, or 4 gallons per day. Over the past

200 days, the frequencies of demand are

represented in the following table:

0 40

1 80

2 50

3 20

4 10

Total 200

Quantitative Prentice Hall,

Diversey Paint Example

(continued)

Probabilities of Demand

Quantity Freq. Probability

Demand (days) (Relative Freq)

0 40 (40/200) = 0.20

1 80 (80/200) = 0.40

2 50 (50/200) = 0.25

3 20 (20/200) = 0.10

4 10 (10/200) = 0.05

Total days = 200 Total Prob =1.00

Note: 0 P(event) 1

and P(event) = 1

To accompany 2-8 2006 by

Quantitative Prentice Hall,

Types of Probability

Objective probability is based on

logical observations:

Number of times event occurs

P ( event )

Total number of outcomes or occurrences

Determined by:

Relative frequency Obtained using

historical data (Diversey Paint)

Classical method Known

probability for each outcome (tossing

a coin)

Quantitative Prentice Hall,

Types of Probability

Subjective probability is based on

personal experiences.

Determined by:

Judgment of experts

Opinion polls

Delphi method

Others

Quantitative Prentice Hall,

Mutually Exclusive Events

Events are said to be mutually

exclusive if only one of the

events can occur on any one trial.

either a heads or a tails.

Quantitative Prentice Hall,

Collectively Exhaustive

Events

Events are said to be collectively

exhaustive if the list of outcomes

includes every possible outcome.

Heads and tails as possible outcomes

of coin flip.

possible outcomes for a fair coin toss

includes heads and tails.

Quantitative Prentice Hall,

Die Roll Example

Outcome Probability

of Roll

1 1/6

This is a collectively 2 1/6

exhaustive list of 3 1/6

potential outcomes

for a single die roll. 4 1/6

5 1/6

6 1/6

Total = 1

because only one event can occur (a 1, 2, 3, 4,

5, or 6) on any single roll.

Quantitative Prentice Hall,

Twin Birth Example

A woman is pregnant with non-

identical twins. Following is a list of

collectively exhaustive, mutually

exclusive possible outcomes:

Outcome Probability

of Birth

Boy/Boy

Boy/Girl

Girl/Girl

Girl/Boy

What is the probability that both

babies will be girls? / boys?

To accompany 2-14 2006 by

Quantitative Prentice Hall,

In-Class Practice

Assuming a traditional 52-card deck, can

you identify if these outcomes are mutually

exclusive and/or collectively exhaustive ??

Draw a face card and a number

card

Draw an ace and a 3

Draw a club and a nonclub

Draw a 5 and a diamond

Draw a red card and a diamond

Quantitative Prentice Hall,

Law of Addition:

Mutually Exclusive

P (event A or event B) =

P (event A) + P (event B)

or:

P (A or B) = P (A) + P (B)

Example:

P (spade or club) = P (spade) + P (club)

= 13/52 + 13/52

= 26/52 = 1/2 = 50%

Quantitative Prentice Hall,

Law of Addition:

not Mutually Exclusive

P(event A or event B) =

P(event A) + P(event B) -

P(event A and event B both

occurring)

or

P(A or B) = P(A)+P(B) - P(A and B)

Quantitative Prentice Hall,

Venn Diagram

P(A

a nd

B)

P(A) P(B)

Quantitative Prentice Hall,

Venn Diagram

P(A or B)

+ -

=

P(A or B)

Quantitative Prentice Hall,

In-Class Example:

Specialized University

Specialized University offers four different

graduate degrees: business, education,

accounting, and science. Enrollment figures

show 25% of their graduate students are in

each specialty. Although 50% of the

students are female, only 15% are female

business majors. If a student is randomly

selected from the Universitys registration

database:

business or education major?

What is the probability the student is a

female or a business major?

Quantitative Prentice Hall,

Specialized University

Solution

The probability that the student is a business

or education major is mutually exclusive

event. Thus:

P(Bus or Edu) = P(Bus) + P(Edu)

= .25 + .25

= .50 or 50%

or a business major is not mutually exclusive

because the student could be a female

business major. Thus:

P(Fem or Bus) = P(Fem) + P(Bus)

P(Fem and Bus)

= .50 + .25 - .15

= .60 or 60%

To accompany 2-21 2006 by

Quantitative Prentice Hall,

Statistical Dependence

Events are either

statistically independent (the

occurrence of one event has no

effect on the probability of

occurrence of the other), or

statistically dependent (the

occurrence of one event gives

information about the occurrence

of the other).

Quantitative Prentice Hall,

Which Are Independent?

(b) Your income level

(a) Draw a jack of hearts from a

full 52-card deck

(b) Draw a jack of clubs from a

full 52-card deck

(a) Chicago Cubs win the

National League pennant

(b) Chicago Cubs win the World

Series

Quantitative Prentice Hall,

Probabilities:

Independent Events

Marginal probability: the probability of

an event occurring: P(A)

Joint probability: the probability of

multiple, independent events, occurring

at the same time:

P(AB) = P(A)*P(B)

Conditional probability (for

independent events):

the probability of event B given that

event A has occurred:

P(B|A) = P(B)

or, the probability of event A given

that event B has occurred:

P(A|B) = P(A)

To accompany 2-24 2006 by

Quantitative Prentice Hall,

Venn Diagram: P(A|B)

P(A)

P(B)

P(B|A) P(A|B)

Quantitative Prentice Hall,

Independent Events

Example

1. P(black ball drawn

on first draw)

A bucket P(B) = 0.30

contains 3 black

balls and 7 (marginal

green balls. We probability)

draw a ball 2. P(two green balls

from the drawn)

bucket, replace P(GG) =

it, and draw a P(G)*P(G) =

second ball. 0.70*0.70 = 0.49

(joint probability

for two

independent

events)

To accompany 2-26 2006 by

Quantitative Prentice Hall,

Independent Events Example

continued

1. P(black ball drawn on second

draw, first draw was green)

P(B|G) = P(B) = 0.30

(conditional probability)

draw, first draw was green)

P(G|G) = 0.70

(conditional probability)

Quantitative Prentice Hall,

Probabilities: Dependent

Events

Marginal probability: probability of an

event occurring: P(A)

Conditional probability (for dependent

events):

The probability of event B given

that event A has occurred:

P(B|A) = P(AB)/P(A)

The probability of event A given

that event B has occurred:

P(A|B) = P(AB)/P(B)

Joint probability: The probability of

multiple events occurring at the same

time: P(AB) = P(B|A)*P(A)

Quantitative Prentice Hall,

Venn Diagram: P(B|A)

P(A

P(A) P(B)

and

B)

/

P(B) P(AB) P(A)

P(B|A) = P(AB)/P(A)

Quantitative Prentice Hall,

Venn Diagram: P(A|B)

P(A

P(A) P(B)

and

B)

/

P(A) P(AB) P(B)

P(A|B) = P(AB)/P(B)

Quantitative Prentice Hall,

Dependent Events

Example

Then:

Assume that we P(WL) = 4/10 = 0.40

have an urn P(WN) = 2/10 = 0.20

containing 10 balls

of the following P(W) = 6/10 = 0.60

descriptions: P(YL) = 3/10 = 0.3

4 are white (W)

and lettered (L) P(YN) = 1/10 = 0.1

2 are white (W)

P(Y) = 4/10 = 0.4

and numbered (N)

3 are yellow (Y)

and lettered (L)

1 is yellow (Y)

and numbered (N)

Quantitative Prentice Hall,

Dependent Events

Example (continued)

Then:

P(Y) = .4

- marginal probability

P(L|Y) = P(YL)/P(Y)

= 0.3/0.4 = 0.75

- conditional probability

P(W|L) = P(WL)/P(L)

= 0.4/0.7 = 0.57

- conditional probability

Quantitative Prentice Hall,

Dependent Events: Joint

Probability Example

Your stockbroker informs you that if

the stock market reaches the 10,500

point level by January, there is a 70%

probability that Tubeless Electronics

will go up in value. Your own

feeling is that there is only a 40%

chance of the market reaching 10,500

by January.

What is the probability that both the

stock market will reach 10,500

points, and the price of Tubeless will

go up in value?

Quantitative Prentice Hall,

Dependent Events: Joint

Probabilities Solution

Let M represent

the event of the

stock market Then:

reaching the P(MT) =P(T|M)P(M)

10,500 point = (0.70)(0.40)

level, and T

= 0.28

represent the

event that

Tubeless goes

up.

Quantitative Prentice Hall,

Revising Probabilities:

Bayes Theorem

Bayes theorem can be used to

calculate revised or posterior

probabilities.

Prior

Probabilities

Bayes Posterior

Process Probabilities

New

Information

Quantitative Prentice Hall,

General Form of

Bayes Theorem

P( AB)

P( A | B) or

P( B)

P ( B | A) P( A)

P( A | B)

P( B | A) P ( A) P ( B | A ) P ( A )

then the event A is " unfair" die.

Quantitative Prentice Hall,

Posterior Probabilities

Example

A cup contains two dice identical in

appearance. One, however, is fair

(unbiased), the other is loaded (biased).

The probability of rolling a 3 on the fair

die is 1/6 or 0.166. The probability of

tossing the same number on the loaded

die is 0.60. We have no idea which die

is which, but we select one by chance,

and toss it. The result is a 3.

rolled was fair?

To accompany 2-37 2006 by

Quantitative Prentice Hall,

Posterior Probabilities

Example (continued)

We know that:

P(fair) = 0.50 P(loaded) = 0.50

P(3|fair) = 0.166 P(3|loaded) = 0.60

- marginal probability

Then:

P(3 and fair) = P(3|fair)P(fair)

= (0.166)(0.50)

= 0.083

= (0.60)(0.50)

= 0.300

- joint probability

To accompany 2-38 2006 by

Quantitative Prentice Hall,

Posterior Probabilities

Example continued

A 3 can occur in combination with the

state fair die or in combination with

the state loaded die. The sum of their

probabilities gives the marginal

probability of a 3 on a toss:

- marginal probability

was the fair one is given by:

P(Fair and 3) 0.083

P(Fair | 3) 0.22

P(3) 0.383

- conditional probability

To accompany 2-39 2006 by

Quantitative Prentice Hall,

Further Probability

Revisions

To obtain further information as to

whether the die just rolled is fair or

loaded, lets roll it again.

Again we get a 3.

Given that we have now rolled two 3s,

what is the probability that the die

rolled is fair?

Quantitative Prentice Hall,

Further Probability

Revisions continued

We know from before that:

P(fair) = 0.50, P(loaded) = 0.50

Then:

P(3,3|fair) = P(3|fair)*P(3|fair)

= (0.166)(0.166) = 0.027

P(3,3|loaded) = P(3|loaded)*P(3|loaded)

= (0.60)(0.60) = 0.36

So:

P(3,3 and fair) = P(3,3|fair)*P(fair)

= (0.027)(0.05) = 0.013

P(3,3 and loaded) = P(3,3|loaded)P(loaded)

= (0.36)(0.5) = 0.18

Thus, the probability of getting two 3s is a marginal

probability obtained from the sum of the probability

of two joint probabilities:

P(3,3) = 0.013 + 0.18 = 0.193

To accompany Quantitative Analysis 2-41 2006 by Prentice Hall, Inc.,

for Management, 9e Upper Saddle River, NJ 07458

by Render/Stair/Hanna

Further Probability

Revisions continued

Using the probabilities from the

previous slide:

P(Fair | 3,3)

P(3,3)

0.013

0.067

0.193

P(Loaded | 3,3)

P(3,3)

0.18

0.933

0.193

To accompany 2-42 2006 by

Quantitative Prentice Hall,

Further Probability

Revisions continued

To give the final comparison:

P(fair|3) = 0.22

P(loaded|3) = 0.78

P(fair|3,3) = 0.067

P(loaded|3,3) = 0.933

Quantitative Prentice Hall,

Random Variables

Discrete random variable - can

assume only a finite or limited

set of values - i.e., the number

of automobiles sold in a year.

Continuous random variable -

can assume any one of an

infinite set of values - i.e.,

temperature, product lifetime.

Quantitative Prentice Hall,

Random Variables

(Numeric)

Experiment Outcome Random Variable Range of

Random

Variable

Stock 50 Number of X = number of 0,1,2,, 50

Xmas trees trees sold trees sold

Discrete

Inspect 600 Number Y = number 0,1,2,,

items acceptable acceptable 600

Send out Number of Z = number of 0,1,2,,

5,000 sales people people responding 5,000

letters responding

Build an % completed R = % completed 0R100

apartment after 4 after 4 months

Continuous

building months

Test the Time bulb S = time bulb 0S80,000

lifetime of a lasts - up to burns

light bulb 80,000

(minutes) minutes

Quantitative Prentice Hall,

Random

Variables (Non-numeric)

Experiment Outcome Random Range of

Variable Random

Variable

Students Strongly agree (SA) X = 5 if SA 1,2,3,4,5

respond to a Agree (A) 4 if A

questionnaire Neutral (N) 3 if N

Disagree (D) 2 if D

Strongly Disagree (SD) 1 if SD

One machine is Defective Y = 0 if defective 0,1

inspected Not defective 1 if not defective

Consumers Good Z = 3 if good 1,2,3

respond to how Average 2 if average

they like a Poor 1 if poor

product

Quantitative Prentice Hall,

Probability Distributions

possible values of a random variable

and their associated probabilities.

probability between 0 and 1 is assigned to

each discrete variable.The sum of the

probabilities sum to 1.

Quantitative Prentice Hall,

Discrete Probability

Distribution Example

Dr. Shannon asked students to respond to the

statement, The textbook was well written and

helped me acquire the necessary information.

Shown below is the discrete probability

distribution of the respondents.

SA 5 10 0.10

A 4 20 0.20

N 3 30 0.30

D 2 30 0.30

SD 1 10 0.10

Sum of P(X) = 1.0

Quantitative Prentice Hall,

Discrete Probability

Distribution Graph

A graphical display of a probability distribution

yields information about its shape, the central

tendency (expected values) and the spread of the

data (variance). Below is a graphical depiction

of Dr. Shannons student responses.

0.3

0.25

0.2

0.15

0.1

0.05

0

SA A N DA SD

Quantitative Prentice Hall,

Expected Value of a

Discrete Prob. Distribution

The expected value of a discrete

probability distribution is:

n

E( X )

X i P( X i )

i

5

E( X ) X P( X

i 1

i i)

X 1P( X 1 ) X 2 P( X 2 ) X 3 P( X 3 )

X 4 P( X 4 ) X 5 P( X 5 )

(5)(0.1) ( 4)(0.2) (3)(0.3)

( 2)(0.3) (1)(0.1)

2.9

Thus, the mean response to Dr. Shannons

question is between disagree (2) and neutral (3),

with the average being closer to neutral.

To accompany 2-50 2006 by

Quantitative Prentice Hall,

Variance of a Discrete

Probability Distribution

The variance of a discrete probability

distribution is:

n 2

2 X i EX PX i

i 1

For Dr. Shannons class:

2 5 2.9 0.1 4 2.9 0.2

2 2

2

(1 2.9) 2 (0.1)

0.44 - 0.242 0.003 0.243 0.361

1.29

Thus, the standard deviation for Dr.

Shannons question is 1.29 = 1.136

Quantitative Prentice Hall,

Variance of a Discrete

Probability Distribution

The standard deviation is a measure of

the dispersion or spread of the data that is

related to the variance. The formula for

the standard deviation of all probability

functions is:

2

For Dr. Shannons class:

1.29,

2

so,

1.358

To accompany 2-52 2006 by

Quantitative Prentice Hall,

Binomial Distribution

The binomial distribution is a

probability distribution with:

trials that follow a Bernoulli

process and have two possible

outcomes.

probabilities that stay the same

from one trial to the next.

trials that are statistically

independent.

a positive integer number of trials.

Quantitative Prentice Hall,

Binomial Formulas

The binomial formula can be

used to determine the

probability of r successes in n

trials.

n! r nr

pq

r!(n - r)!

Where,

n = number of trials

r = number of successes

p = probability of success

q = probability of failure (1-p)

Quantitative Prentice Hall,

Binomial Formulas

(continued)

For a binomial distribution, the expected

value, or mean, is:

np

The variance is:

np ( is:

The standard deviation p)

Quantitative Prentice Hall,

Soda Selection:

Binomial Example

Suppose 50% of your friends prefer

diet soda to regular soda.

You decide to practice your new

binomial skills while studying with

five friends.

You bring both diet and regular soda

to your next study session and offer

one to each of your friends.

your friends will select a diet soda?

What is the probability that three of your

friends will select the diet soda?

What is the expected value, variance, and

standard deviation of your experiment?

Quantitative Prentice Hall,

Soda Selection Solution

What is the probability that only one of your

friends will select a diet soda?

= .1563

What is the probability that three of your friends

will select the diet soda?

= .3125

These questions can be answered using the

binomial formula, where n = 5, r = 1 then 3, p = .

5

and q = .5.

P(r=3)

0.30

0.20 P(r=1)

P(r)

0.10

0.00

0 1 2 3 4 5

(r) Number of Successes

Quantitative Prentice Hall,

Soda Selection Solution

Binomial Table

Now lets answer these same

questions using the binomial table:

p= 50% success

n r 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50

1 0 0.9500 0.9000 0.8500 0.8000 0.7500 0.7000 0.6500 0.6000 0.5500 0.5000

1 0.0500 0.1000 0.1500 0.2000 0.2500 0.3000 0.3500 0.4000 0.4500 0.5000

2 0 0.9025 0.8100 0.7225 0.6400 0.5625 0.4900 0.4225 0.3600 0.3025 0.2500

1 0.0950 0.1800 0.2550 0.3200 0.3750 0.4200 0.4550 0.4800 0.4950 0.5000

2 0.0025 0.0100 0.0225 0.0400 0.0625 0.0900 0.1225 0.1600 0.2025 0.2500

3 0 0.8574 0.7290 0.6141 0.5120 0.4219 0.3430 0.2746 0.2160 0.1664 0.1250

1 0.1354 0.2430 0.3251 0.3840 0.4219 0.4410 0.4436 0.4320 0.4084 0.3750

2 0.0071 0.0270 0.0574 0.0960 0.1406 0.1890 0.2389 0.2880 0.3341 0.3750

3 0.0001 0.0010 0.0034 0.0080 0.0156 0.0270 0.0429 0.0640 0.0911 0.1250

4 0 0.8145 0.6561 0.5220 0.4096 0.3164 0.2401 0.1785 0.1296 0.0915 0.0625

1 0.1715 0.2916 0.3685 0.4096 0.4219 0.4116 0.3845 0.3456 0.2995 0.2500

n= 5 friends

2 0.0135 0.0486 0.0975 0.1536 0.2109 0.2646 0.3105 0.3456 0.3675 0.3750

3 0.0005 0.0036 0.0115 0.0256 0.0469 0.0756 0.1115 0.1536 0.2005 0.2500

4 0.0000 0.0001 0.0005 0.0016 0.0039 0.0081 0.0150 0.0256 0.0410 0.0625

5 0 0.7738 0.5905 0.4437 0.3277 0.2373 0.1681 0.1160 0.0778 0.0503 0.0313

1 0.2036 0.3281 0.3915 0.4096 0.3955 0.3602 0.3124 0.2592 0.2059 0.1563

2 0.0214 0.0729 0.1382 0.2048 0.2637 0.3087 0.3364 0.3456 0.3369 0.3125

3 0.0011 0.0081 0.0244 0.0512 0.0879 0.1323 0.1811 0.2304 0.2757 0.3125

4 0.0000 0.0005 0.0022 0.0064 0.0146 0.0284 0.0488 0.0768 0.1128 0.1563

5 0.0000 0.0000 0.0001 0.0003 0.0010 0.0024 0.0053 0.0102 0.0185 0.0313

6 0 0.7351 0.5314 0.3771 0.2621 0.1780 0.1176 0.0754 0.0467 0.0277 0.0156

1 0.2321 0.3543 0.3993 0.3932 0.3560 0.3025 0.2437 0.1866 0.1359 0.0938

2 0.0305 0.0984 0.1762 0.2458 0.2966 0.3241 0.3280 0.3110 0.2780 0.2344

3 0.0021 0.0146 0.0415 0.0819 0.1318 0.1852 0.2355 0.2765 0.3032 0.3125

To accompany

4 0.0001 0.0012 0.0055

2-58

0.0154 0.0330

2006 by

0.0595 0.0951 0.1382 0.1861 0.2344

5 0.0000 0.0001 0.0004 0.0015 0.0044 0.0102 0.0205 0.0369 0.0609 0.0938

Quantitative

6 0.0000 0.0000 0.0000 0.0001 0.0002 Prentice Hall,

0.0007 0.0018 0.0041 0.0083 0.0156

Soda Selection Solution

continued

What is the expected value, variance, and

standard deviation of your experiment?

expected value (u) = np

= 5(.5) = 2.5

variance = np(1-p)

= 5(.5)(.5) = 1.25

= 1.25 = 1.118

diet soda this is intuitive because 50% of your

friends prefer diet soda.

Quantitative Prentice Hall,

Normal Distribution

The normal distribution is the

most popular and useful

continuous probability

distribution.

and standard deviation

Symmetrical, with the midpoint

representing the mean

Values on the X axis are measured

in the number of standard

deviations away from the mean.

As the standard deviation becomes

larger the curve flattens.

Quantitative Prentice Hall,

Normal Distribution

continued

Normal Distribution

Probability density function - f(X)

1 / 2 ( X ) 2

1

f (X ) e 2

2

To accompany 2-61 2006 by

Quantitative Prentice Hall,

Normal Distribution for

Different Values of

Different values of the mean shift the curve, but

do not affect the shape of the distribution.

0

30 40 50 60 70

Quantitative Prentice Hall,

Normal Distribution for

Different Values of

Different values of the standard deviation will

flatten the curve, but do not affect the mean.

=1

=0.1

=0.3 =0.2

0 0.5 1 1.5 2

Quantitative Prentice Hall,

Three Common Areas

under the Curve

Three

commonly used

areas under the

normal curve

are +/- 1, 2 and

3 standard

deviations.

Quantitative Prentice Hall,

The Relationship Between

Z and X

=100

=15

x

Z

-3 -2 -1 0 1 2 3

Quantitative Prentice Hall,

Haynes Construction

Company Example

Haynes Construction Company builds

primarily

triplex and quadraplex apartment buildings for

investors, and it is believed that the total

construction time follows a normal distribution.

The mean time to construct a triplex is 100

days, and the standard deviation is 20 days.

Failure to complete the construction in 125

days results in penalty fees. However, early

completion of 75 days or less results in a

bonus.

penalty fee?

a bonus?

Quantitative Prentice Hall,

Haynes Construction

Company Solution

What is the probability Haynes will pay a

penalty fee?

x

Z = (125 100) / 20

= 1.25

Quantitative Prentice Hall,

The Standard Normal

Table

There is an 89.44% chance the construction will

be complete in 125 days or less, thus, there is a

1-.89435, or a 10.57% chance the construction

will take longer causing Haynes to pay a penalty!

Z 0 0.01 0.02 0.03 0.04 0.05 0.06

0.5000 0.5039 0.5079 0.5159 0.5199 0.5239

0.0 0 9 8 0.51197 5 4 2

0.5398 0.5438 0.5477 0.5517 0.5556 0.5596 0.5635

0.1 3 0 6 2 7 2 6

0.5792 0.5831 0.5870 0.5909 0.5948 0.5987 0.6025

0.2 6 7 6 5 3 1 7

0.6179 0.6217 0.6255 0.6293 0.6330 0.6368 0.6405

0.3 1 2 2 0 7 3 8

0.6554 0.6591 0.6627 0.6664 0.6700 0.6736 0.6772

0.4 2 0 6 0 3 4 4

0.6914 0.6949 0.6984 0.7019 0.7054 0.7088 0.7122

0.5 6 7 7 4 0 4 6

0.7257 0.7290 0.7323 0.7356 0.7389 0.7421 0.7453

0.6 5 7 7 5 1 5 7

0.7580 0.7642 0.7673 0.7703 0.7733 0.7763

0.7 4 0.76115 4 0 5 7 7

0.7881 0.7910 0.7938 0.7967 0.7995 0.8023

0.8 4 3 9 3 5 4 0.80511

0.8159 0.8185 0.8212 0.8238 0.8263 0.8289 0.8314

0.9 4 9 1 1 9 4 7

0.8413 0.8437 0.8461 0.8484 0.8508 0.8531 0.8554

1.0 4 5 4 9 3 4 3

To accompany

0.8643 0.8665 2-68 0.8707

0.8686 2006

0.8728 by 0.8769

0.8749

1.1 3 0 4 6

Quantitative Prentice3Hall, 8

6

Haynes Construction

Company Solution

What is the probability Haynes will pay a

penalty fee?

x

Z = (75 100) / 20

= -1.25

Quantitative Prentice Hall,

The Standard Normal

Table

The standard normal table does not have negative

value, so we must look up the positive value and

subtract from one ~ this works because of the

symmetrical property of the normal. Thus, there is a

1-.89435, or a 10.57% chance the construction will

take less than 75 days and Haynes will get a bonus!

Z 0 0.01 0.02 0.03 0.04 0.05 0.06

0.5000 0.5039 0.5079 0.5159 0.5199 0.5239

0.0 0 9 8 0.51197 5 4 2

0.5398 0.5438 0.5477 0.5517 0.5556 0.5596 0.5635

0.1 3 0 6 2 7 2 6

0.5792 0.5831 0.5870 0.5909 0.5948 0.5987 0.6025

0.2 6 7 6 5 3 1 7

0.6179 0.6217 0.6255 0.6293 0.6330 0.6368 0.6405

0.3 1 2 2 0 7 3 8

0.6554 0.6591 0.6627 0.6664 0.6700 0.6736 0.6772

0.4 2 0 6 0 3 4 4

0.6914 0.6949 0.6984 0.7019 0.7054 0.7088 0.7122

0.5 6 7 7 4 0 4 6

0.7257 0.7290 0.7323 0.7356 0.7389 0.7421 0.7453

0.6 5 7 7 5 1 5 7

0.7580 0.7642 0.7673 0.7703 0.7733 0.7763

0.7 4 0.76115 4 0 5 7 7

0.7881 0.7910 0.7938 0.7967 0.7995 0.8023

0.8 4 3 9 3 5 4 0.80511

0.8159 0.8185 0.8212 0.8238 0.8263 0.8289 0.8314

To

0.9

accompany

4 9

2-701 1

2006 by

9 4 7

0.8413 0.8437 0.8461 0.8484 0.8508 0.8531 0.8554

Quantitative

1.0 4 5 4 9 Prentice

3 4Hall, 3

Haynes Construction

Company Example

Other questions, such as the probability that the

construction will be completed between 110 and

125 days can also be answered.

Z and

= (110 100) / 20 = .5

To accompany 2-71 2006 by

Quantitative Prentice Hall,

Haynes Construction

Company Example

The area under the curve must be found for

both z values and subtracted from one another.

Z (.5) = .69146

Z (1.25) = .89435

= .20289 or 20.29%

Quantitative Prentice Hall,

The Negative

Exponential Distribution

The negative exponential distribution is

a continuous distribution that is often

used to describe the time required to

service a customer.

5 f ( X ) e x

4 =5 Expected value = 1/

3 Variance = 1/2

0

0 0.2 0.4 0.6 0.8 1 1.2

Quantitative Prentice Hall,

The Poisson Distribution

The Poisson distribution is a

discrete distribution that is often

used to describe arrival rates.

0.30

=2 x

e

0.25

P( X )

0.20

X!

Expected value =

0.15 Variance =

0.10

0.05

0.00

1 2 3 4 5 6 7 8 9

Quantitative Prentice Hall,

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