Statistics for Business and

Economics
Chapter 4
Fourteenth Edition, Global Edition
Random
Variables and
Probability
Distributions
Samuel Amponsah, PhD
Date: September 23, 2024

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Contents (1 of 2)
1. Two Types of Random Variables
2. Probability Distributions for Discrete Random
Variables
3. The Binomial Distribution
4. Other Discrete Distributions: Poisson and
Hypergeometric Distributions
5. Probability Distributions for Continuous Random
Variables
6. The Normal Distribution
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Contents (2 of 2)

7. Descriptive Methods for Assessing Normality

8. Other Continuous Distributions: Uniform and

Exponential

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Where We’re Going

1. Develop the notion of a random variable

2. Learn that numerical data are observed values
of either discrete or continuous random
variables
3. Study two important types of random variables
and their probability models: the binomial and
normal model

4. Present some additional discrete and

continuous random variables
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Random Variable

A random variable is a variable that assumes

numerical values associated with the random
outcomes of an experiment, where one (and only
one) numerical value is assigned to each sample
point.

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Section 4.1 Two Types of Random
Variables

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Discrete Random Variable

Random variables that can assume a countable

number (finite or infinite) of values are called
discrete.

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Example: Discrete Random Variables
1. The number of sales made by a salesperson in
a given week: x = 0, 1, 2, …
2. The number of consumers in a sample of 500
who favor a particular product over all
competitors: x = 0, 1, 2, …, 500
3. The number of bids received in a bond offering:
x = 0, 1, 2, …
4. The number of errors on a page of an
accountant’s ledger: x = 0, 1, 2, …
5. The number of customers waiting to be served
in a restaurant at a particular time: x = 0, 1, 2,
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Slide - 8
Continuous Random Variable

Random variables that can assume values

corresponding to any of the points contained in
one or more intervals (i.e., values that are infinite
and uncountable) are called continuous.

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 Example: Continuous Random Variables
1. The length of time between arrivals at a hospital
clinic: 0 ≤ x < ∞
2. The amount of carbonated beverage loaded into a
12-ounce can in a can-filling operation: 0 ≤ x ≤ 12
3. The depth at which a successful oil-drilling venture
first strikes oil: 0 ≤ x ≤ c, c is the maximum depth
obtainable
4. The weight of a food item bought in a supermarket:
0 ≤ x ≤ 500
[Note: Theoretically, there is no upper limit on x,
but it is unlikely that it would exceed 500 pounds.]
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Section 4.2 Probability
Distributions for Discrete Random
Variables

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Discrete Probability Distribution

The probability distribution of a discrete

random variable is a graph, table, or formula that
specifies the probability associated with each
possible value the random variable can assume.

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Requirements for the Probability Distribution
of a Discrete Random Variable x

1.   
p ( x) ≥ 0 for all values of x

2. ∑ p( x) = 1

where the summation of p ( x) is over all possible

values of x.

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Example: Texas Droughts (1 of 2)
Droughts cause serious problems in the farming
industry. University of Arizona researchers used
historical annual data to study the severity of
droughts in Texas (Journal of Hydrologic
Engineering). The researchers showed that the
distribution of x, the number of consecutive years
that must be sampled until a dry (drought) year is
observed, can be modeled using the formula
x −1
p( x) (0.7)
= (0.3), x 1,2,3, 
Find the probability that exactly 3 years must be
sampled before a drought year occurs.
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Example: Texas Droughts (2 of 2)
We want to find the probability that x = 3. Using the
x −1
formula p ( x) = (0.7) (0.3), we have

p (3) = (0.7)3−1 (0.3)

= (0.7) 2 (0.3)
= (0.49)(0.3)
= 0.147
Thus, there is about a 15% chance that exactly
3 years must be sampled before a drought year
occurs in Texas.
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Mean of Discrete Random Variable
Probability distributions are analogous to the
relative frequency distributions so the mean and
standard deviation are useful descriptive
measures.
The mean, or expected value, of a discrete
random variable x is
µ E (=
= x) ∑ (x ⋅ p ( x))
The expected value is the mean of the probability
distribution or a measure of its central tendency.

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Example: An Insurance Application
(1 of 2)

Suppose an insurance company sells a $10,000

one-year term insurance policy at an annual
premium of $290. Actuarial tables show that the
probability of death during the next year for a
person of your customer’s age, sex, health, etc., is
0.001. What is the expected gain (amount of
money made by the company) for a policy of this
type?
The probabilities associated with the two sample
points, Live and Die, are 0.999 and 0.001,
respectively.
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Example: An Insurance Application
(2 of 2)

The random variable you are interested in is the

gain x, which is given in the table:

µ E (=
The expected gain is= x) ∑ (x ⋅ p ( x))
=µ (290)(0.999) + (290 − 10,000)(0.001)
= $280
If the company were to sell a very large number of
one-year $10,000 policies to customers, it would
(on the average) net $280 per sale in the next year.
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Variance of Discrete Random Variable

Variance of Discrete Random Variable

σ = σ 2 = E[( x − µ ) 2 ] = ∑ ( x − µ ) 2
p( x)

The standard deviation of a discrete random

variable is equal to the square root of the variance

σ = σ2

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Probability Rules for Discrete Random
Variables (1 of 2)

Let x be a discrete random variable with probability

distribution p ( x), mean µ , and standard deviation σ. Then
Then, depending on the shape of p ( x), the following
probability statements can be made:

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Probability Rules for Discrete Random
Variables (2 of 2)
Empirical Rule: Applies to
Chebyshev’s Rule:
probability distributions
Applies to any probability
that are mound-shaped
distribution.
and symmetric.

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Example: Internet Business
Venture (1 of 3)
Suppose you invest a fixed sum of money in each
of five Internet business ventures. Assume you
know that 70% of such ventures are successful,
the outcomes of the ventures are independent of
one another, and the probability distribution for the
number, x, of successful ventures out of five is
given in the table below.

x 0 1 2 3 4 5
p(x) 0.002 0.029 0.132 0.309 0.360 0.168

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Example: Internet Business
Venture (2 of 3)
a. Find µ = E ( x). Interpret the result.
Apply the formula,= µ E (= x) ∑ ( x ⋅ p ( x)).
µ = 0(0.002) + 1(0.029) + 2(0.132) + 3(0.309)
+ 4(0.36) + 5(0.168)
= 3.50
On average, the number of successful ventures out
of five will equal 3.5.
Remember that this expected value has meaning
only when the experiment is repeated a large
number of times.
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Example: Internet Business
Venture (3 of 3)
b. Find= σ E[( x − µ ) 2 ] . Interpret the result.
Calculate the variance of x:
σ 2 = E[( x − µ )2 ] = ∑ ( x − µ )2 ⋅ p ( x))
= (0 − 3.5) 2 (0.002) + (1 − 3.5) 2 (0.029)
+ (2 − 3.5) 2 (0.132) + (3 − 3.5) 2 (0.309)
+ (4 − 3.5) 2 (0.360) + (5 − 3.5) 2 (0.168)
= 1.05
So,
= σ = σ2 1.05
= 1.02
This value measures the spread of the probability
distribution of x, the number of successful ventures
out of five.
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Section 4.3 The Binomial
Distribution

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Binomial Distribution
Many experiments result in dichotomous responses,
that is, responses for which there exist two possible
alternatives, such as
• Yes-No
• Pass-Fail
• Nondefective-Defective
• Head-Tail
Random variables that possess these characteristics
are called binomial random variables.

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Binomial Probability
Characteristics of a Binomial Experiment
1. The experiment consists of n identical trials.
2. There are only two possible outcomes on each trial. We
will denote one outcome by S (for success) and the
other by F (for failure).
3. The probability of S remains the same from trial to trial.
This probability is denoted by p, and the probability of F
is denoted by q. Note that q = 1 − p.
4. The trials are independent.
5. The binomial random variable x is the number of
successes in n trials.
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Binomial Probability Distribution
 n  x n− x n! x n− x
=p ( x) =  p q p (1 − p )
x
  x ! (n − x)!
p ( x) = Probability of x successes
p = Probability of a success on a single trial
q=1−p
n = Number of trials
x = Number of successes in n trials
( x = 0, 1, 2, ..., n)
n − x = Number of failures in n trials
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Example: Manufacturing (1 of 2)

A machine is malfunctioning and producing 10%

defectives. The defective and nondefective
stampings proceed from the machine in a random
manner. If the next five stampings are tested, find
the probability that three of them are defective.
Let x equal the number of defectives in n = 5 trials.
Then x is a binomial random variable with p, the
probability that a single stamping will be defective,
equal to 0.1, and q = 1 - p = 1 - 0.1 = 0.9.

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Example: Manufacturing (2 of 2)
The probability distribution for x is given by
5!
p( x) = (0.1) x (0.9)5− x
x !(5 − x)!
To find the probability of observing x = 3 defectives in a
sample of n = 5, substitute x = 3 into the formula for p(x) to
obtain:
5! 3 5−3 120
p (3)
= .5 (1 −
= .5) (0.1)3 (0.9)5−3
3!(5 − 3)! 6(2)

10(0.001)(0.81)
= 0.0081

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Binomial Distribution
Characteristics
The mean and standard deviation provide measures of the
central tendency and variability, respectively, of a
distribution. We can use these measures to obtain a rough
visualization of the probability distribution when needed.
Mean
= µ E=
( x) np
Variance
σ = npq
2

Standard Deviation
σ = npq
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Example: Manufacturing
Characteristics (1 of 2)
A machine is malfunctioning and producing 10%
defectives. The defective and nondefective
stampings proceed from the machine in a random
manner. Calculate the mean and standard
deviation.
Let x equal the number of defectives in n = 5 trials.
Then x is a binomial random variable with p, the
probability that a single stamping will be defective,
equal to 0.1, and q = 1 - p = 1 - 0.1 = 0.9.

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Example: Manufacturing
Characteristics (2 of 2)

Substitute n = 5 and p = 0.1 into the following

formulas to calculate the values for µ and σ .

µ = np σ = npq
= (5)(0.1) = (5)(0.1)(0.9)
= 0.5
= 0.45
= 0.67

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Section 4.4 Other Discrete
Distributions: Poisson and
Hypergeometric

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Poisson Distribution

1. Number of events that occur in an interval

• events per unit
– Time, Length, Area, Space
2. Examples
• Number of industrial accidents per month
at a manufacturing plant
• Parts per million of some toxin found in
the water or air emission
• Number of errors per 100 invoices in the
accounting records of a company
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Characteristics of a Poisson Random
Variable

1. Consists of counting number of times an event occurs

during a given unit of time or in a given area or volume
(any unit of measurement).

2. The probability that an event occurs in a given unit of

time, area, or volume is the same for all units.
3. The number of events that occur in one unit of time,
area, or volume is independent of the number that occur
in any other mutually exclusive unit.

4. The mean number of events in each unit is denoted

denoted by the Greek letter lambda, λ .
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Poisson Probability Distribution Function

λ x e−λ
p( x) = ( x = 0, 1, 2, 3, . . .)
x!
µ =λ
σ2 =λ
p ( x) = Probability of x given λ .
λ = Mean (expected) number of events in unit
e   2.71828
= . . . (base of natural logarithm)
x = Number of events per unit
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Characteristics of a Hypergeometric
Random Variable

1. The experiment consists of randomly drawing n

elements without replacement from a set of N
elements, r of which are S’s (for success) and
(N − r) of which are F’s (for failure).

2. The hypergeometric random variable x is the

number of S’s in the draw of n elements.

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 Hypergeometric Probability Distribution
Function (1 of 2)

 r   N − r
=  x   n − x  [ x Maximum [0, n – ( N – r ), …,      
p (x ) =
 N     Minimum (r , n)]
 n 

nr r (N − r )n (N − n )
µ= σ = 2

N N 2 (N − 1)

where . . .

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Hypergeometric Probability Distribution
Function (2 of 2)

N = Total number of elements

r = Number of S’s in the N elements
n = Number of elements drawn
x = Number of S’s drawn in the n elements

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Section 4.5 Probability
Distributions for Continuous
Random Variables

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Continuous Probability Density Function
(1 of 2)

The graphical form of the probability distribution for

a continuous random variable x is a smooth curve

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Continuous Probability Density Function
(2 of 2)

This curve, a function of x, is denoted by the symbol f ( x)

and is variously called a probability density function
(p d f), a frequency function, or a probability
distribution.

The areas under a probability

distribution correspond to
probabilities for x. The area A
beneath the curve between two
points a and b is the probability
that x assumes a value d

between a and b.
P (c ≤ x ≤ d ) =∫ f ( x)dx
c

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Section 4.6 The Normal Distribution

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Importance of Normal Distribution

1. Describes many random processes or

continuous phenomena

2. Can be used to approximate discrete probability

distributions
Example: binomial
3. Basis for classical statistical inference

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Normal Distribution

1. ‘Bell-shaped’ and
symmetrical

2. Mean, median,
mode are equal

Mean
Median
Mode
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Effect of Different Means and
Standard Deviations

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Probability Density Function
2
 1   x− µ 
1 −   
 2   σ 

f ( x) = e
σ 2π
where
µ = Mean of the normal random variable x
σ = Standard deviation
π = 3.1415 . . .
e = 2.71828 . . .
P ( x < a ) is obtained from a table of normal
probabilities
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Standard Normal Distribution

The standard normal distribution is a normal

=
distribution with µ =0 and σ 1. A random
variable with a standard normal distribution,
denoted by the symbol z, is called a standard
normal random variable.

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Example: Using the Standard
Normal Table (1 of 3)
Find the probability that the standard normal random
variable z falls between –1.33 and 1.33.

The standard normal

distribution is shown in the
figure.
Table II provides the area
between z = 0 and any
positive value of z, so look up
z = 1.33.

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Example: Using the Standard
Normal Table (2 of 3)
Find the probability that z
0
0
0
0.01
0.004
0.02
0.008
0.03
0.012
0.04
0.016

the standard normal 0.1

0.2
0.0398
0.0793
0.0438
0.0832
0.0478
0.0871
0.0517
0.091
0.0557
0.0948
random variable z falls 0.3
0.4
0.1179
0.1554
0.1217
0.1591
0.1255
0.1628
0.1293
0.1664
0.1331
0.17
between –1.33 and 1.33. 0.5 0.1915 0.195 0.1985 0.2019 0.2054
0.6 0.2257 0.2291 0.2324 0.2357 0.2389
0.7 0.258 0.2611 0.2642 0.2673 0.2704
The area between z = 0 0.8 0.2881 0.291 0.2939 0.2967 0.2995
0.9 0.3159 0.3186 0.3212 0.3238 0.3264
and z = 1.33 is 0.4082. 1 0.3413 0.3438 0.3461 0.3485 0.3508
1.1 0.3643 0.3665 0.3686 0.3708 0.3729
(The value in the 1.3 row 1.2
1.3
0.3849
0.4032
0.3869
0.4049
0.3888
0.4066
0.3907
0.4082
0.3925
0.4099
and .03 column.) 1.4 0.4192 0.4207 0.4222 0.4236 0.4251
1.5 0.4332 0.4345 0.4357 0.437 0.4382

This is the area labeled A1

in the previous figure.
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Example: Using the Standard
Normal Table (3 of 3)
Find the probability that the standard normal
random variable z falls between –1.33 and 1.33.
The area between z = 0 and z = 1.33 is equal to
the area between z = 0 and z = 1.33, that is, areas
A1 = A2 = 0.4082 by symmetry. So,

(–1.33 < z < 1.33) = P(–1.33< z <0) + P(0< z <1.33)

= A1 + A2
= 0.4082 + 0.4082
= 0.8164
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Example: Using the Standard Normal
Table for Tails (1 of 6)
Consider a standard normal random variable, z.
a. Find the following “tail” probability for P(z > 1.64).
The area under the
standard normal distribution
to the right of 1.64 is the
shaded area labeled A1 in
the figure.
This “tail” area represents
the desired probability that
z exceeds 1.64.
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Example: Using the Standard Normal
Table for Tails (2 of 6)
Consider a standard normal random variable, z.
a. Find the following “tail” probability for P(z > 1.64).
Look up z = 1.64 in Table II and remember that the
probability given in the table corresponds to the
area between z = 0 and z = 1.64. This area labeled
A2 in the figure.
A2= 0.4495 in Table II.
To find the area of A1 to the right of 1.64, we use
two facts, given on next slide.
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Example: Using the Standard Normal
Table for Tails (3 of 6)
Consider a standard normal random variable, z.
a. Find the following “tail” probability for P(z > 1.64).
1. The standard normal distribution is
symmetric about its mean, z = 0.
2. The total area under the standard normal
probability distribution equals 1.
This means the area on either side of the mean
z = 0 equals 0.5 so A1 + A2 = 0.5.
Then P(z > 1.64) = A1
= 0.5 – A2
= 0.5 – 0.4495 = 0.0505
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Example: Using the Standard Normal
Table for Tails (4 of 6)
Consider a standard normal random variable, z.
b. Find the following “tail” probability for P(z < 0.67).
We want P(z < 0.67). This
probability is shown as the
highlighted area in the figure.
We divide the highlighted
area into two parts:
The area A1 between z = 0
and z = 0.67 and the area A2
to the left of z = 0.
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Example: Using the Standard Normal
Table for Tails (5 of 6)
Consider a standard normal random variable, z.
b. Find the following “tail” probability for P(z < 0.67).
We must always make such a division when the
desired area lies on both sides of the mean (z = 0)
because Table II contains areas between z = 0
and the point you look up.
Look up z = 0.67 in Table II and find A1 = 0.2486.

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Example: Using the Standard Normal
Table for Tails (6 of 6)
Consider a standard normal random variable, z.
b. Find the following “tail” probability for P(z < 0.67).
The symmetry of the standard
normal distribution also implies
that half the distribution lies on
each side of the mean, so the
area A2 to the left of z = 0 is 0.5.
P(z < 0.67) = A1 + A2
= 0.2486 + 0.5
= 0.7486
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A General Normal Distribution

Normal distributions differ by

mean and standard deviation.

Each distribution would f(x)

require its own table.

Convert a normal
distribution to a standard
normal distribution to use
a single standard table. x

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Converting a Normal Distribution to
a Standard Normal Distribution

If x is a normal random variable with mean μ and

standard deviation σ, then the random variable z,
defined by the formula
x− µ
z=
σ
has a standard normal distribution. The value z
describes the number of standard deviations
between x and μ.

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Example: Cell Phone Application (1 of 4)

Assume that the length of time, x, between

charges of a cellular phone is normally distributed
with a mean of 10 hours and a standard deviation
of 1.5 hours.
Find the probability that the cell phone will last
between 8 and 12 hours between charges.

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Example: Cell Phone Application (2 of 4)

The normal distribution with

mean
= µ 10 = and σ 1.5 is
shown in the figure to right.

The desired probability that the charge lasts

between 8 and 12 hours is shaded.
First convert the distribution to standard normal by
calculating the z-score:
x− µ
z=
σ
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Example: Cell Phone Application (3 of 4)

The normal distribution with

mean
= µ 10 = and σ 1.5 is
shown in the figure to right.

The corresponding z-scores are shown beneath the

x values on the horizontal axis in the figure.
Note that z = 0 corresponds to the mean of µ = 10
hours, whereas the x values 8 and 12 yield z-scores
of –1.33 and 1.33, respectively.
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Example: Cell Phone Application (4 of 4)

Thus, the event that the cell phone charge lasts

between 8 and 12 hours is equivalent to the event
that a standard normal random variable lies
between –1.33 and 1.33.

Thus,
P (8 ≤ x ≤ 12) = P (−1.33 ≤ z ≤ 1.33)
= 2(0.4082)
= 0.8164
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Finding a Probability Corresponding to a
Normal Random Variable

1. Sketch normal distribution, indicate mean, and shade

the area corresponding to the probability you want.
2. Convert the boundaries of the shaded area from x
values to standard normal random variable z
x− µ
z=
σ
Show the z values under corresponding x values.
3. Use Table II in Appendix D to find the areas
corresponding to the z values. Use symmetry when
necessary.
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Example: Advertised Gas Mileage (1 of 3)

Suppose an automobile manufacturer introduces a

new model that has an advertised mean in-city
mileage of 27 miles per gallon. The manufacturer
provides details of the tests and the standard
deviation is 3 miles per gallon. Assuming a normal
distribution, what is the probability that a newly
purchased car averages less than 20 miles per
gallon for in-city driving?
In other words, find P(x < 20).

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Example: Advertised Gas Mileage (2 of 3)

The probability model

proposed for x, the in-city
mileage, is shown in the
figure to the right.

The area A represents the fraction of cars that can

be expected to get less than 20 miles per gallon
for in-city driving.
To find A, first calculate the z-value corresponding
to x = 20.
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Example: Advertised Gas Mileage (3 of 3)
Calculate z:
x − µ 20 − 27 7
z= = =− =−2.33
σ 3 3
So, P(x < 20) = P(z < –2.33).
Table II gives areas to the right of the mean so the
look-up of 2.33 in Table II gives the area as 0.4901.
This equals the area between z = 0 and z = – 2.33.
Then P(x < 20) = A = 0.5 – 0.4901 = 0.0099 ≈ 0.01
There is about a 1% chance that a newly purchased
car has an in-city mileage under 20 mpg.
Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 68
Example: Paint Manufacturing (1 of 4)

Suppose a paint manufacturer has a daily

production, x, that is normally distributed with a
mean of 100,000 gallons and a standard deviation
of 10,000 gallons. Management wants to create an
incentive bonus for the production crew when the
daily production exceeds the 90th percentile of the
distribution, in hopes that the crew will become
more productive. At what level of production
should management pay the incentive bonus?

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 69

Example: Paint Manufacturing (2 of 4)
In this example, find a production level, x0, such that
90% of the daily levels (x values) in the distribution
fall below x0 and only 10% fall above x0, that is,
P(x ≤ x0) = 0.90.
Convert x to standard normal random variable,
where µ 100,000
= and σ 10,000.
 x0 − µ 
P ( x ≤ x0 ) = P  z ≤ 
 σ 
 x0 − 100,000 
= P z ≤  0.90
=
 10,000 
Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 70
Example: Paint Manufacturing (3 of 4)
The area to the right of z0 is 0.10, which means that
the area between z = 0 and z0 is 0.5 – 0.1 = 0.4.
Therefore, look up the area 0.4000 in Table II and
find that the corresponding z value is (to the closest
approximation) z0 = 1.28.
The production level x0 at which the incentive bonus
is paid corresponds to a z-score of 1.28:
x0 − 100,000
= 1.28
10,000

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 71

Example: Paint Manufacturing (4 of 4)

Solve for x0:

x0 100,000 + 1.28(10,000)
100,000 + 12,800
= 112,800.

Management should pay an incentive bonus when

a day’s production exceeds 112,800 gallons if its
objective is to pay only when production is in the
top 10% of the current daily production distribution.

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 72

Normal Approximation of Binomial
Distribution

1. Useful because not all Binomial distribution

for n = 20, p = 0.6
binomial tables exist
2. Requires large sample
size
3. Gives approximate
probability only

4. Need correction for

continuity Normal distribution
with µ = 12, σ = 2.2
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Discrete Correction for Continuity

1. A 1 / 2 unit adjustment to discrete variable, e.g.

use 10.5 instead of 10 or 11 for discrete x
2. Used when approximating a discrete distribution
with a continuous distribution

3. Improves accuracy

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 74

Good Approximation Rule (1 of 3)

The interval µ ± 3σ should lie within the range of

the binomial random variable x (i.e., 0 to n) in
order for the normal approximation to be
adequate.

The rule works well because almost all of the normal

distribution falls within 3 standard deviations of the
mean.

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 75

Good Approximation Rule (1 of 3)
n = 20, p = 0.6

Normal approximation is good.

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Good Approximation Rule (1 of 3)

n = 10, p = 0.1

Normal approximation is poor.

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 77
Using a Normal Distribution to
Approximate Binomial Probabilities (1 of 4)

1. Determine n and p for the binomial distribution, then

calculate the interval:
µ ± 3σ = np ± 3 npq
If interval lies in the range 0 to n, the normal distribution will
provide a reasonable approximation to the probabilities of
most binomial events.

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 78

Using a Normal Distribution to
Approximate Binomial Probabilities (2 of 4)

2. Express the binomial probability to be approximated by

the form
P (x ≤ a ) or P (x ≤ b ) − P (x ≤ a )
For example,
P ( x < 3)= P ( x ≤ 2 )
P ( x ≥ 5 ) =1 − P ( x ≤ 4 )
P ( 7 ≤ x ≤ 10=
) P ( x ≤ 10 ) − P ( x ≤ 6 )

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 79

Using a Normal Distribution to
Approximate Binomial Probabilities (3 of 4)

3. For each value of interest

a, the correction for
continuity is (a + 0.5), and
the corresponding
standard normal z-value is

z=
( a + 0.5 ) − µ
σ

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 80

Using a Normal Distribution to
Approximate Binomial Probabilities (4 of 4)

4. Sketch the approximating

normal distribution and
shade the area
corresponding to the
event of interest. Using
Table Ⅱ and the z-value
(step 3), find the shaded
area. This is the
approximate probability of
the binomial event.

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 81

Section 4.7 Descriptive Methods for
Assessing Normality

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 82

Determining Whether the Data Are from an
Approximately Normal Distribution (1 of 4)

1. Construct either a histogram or stem-and-leaf

display for the data and note the shape of the
graph. If the data are approximately normal, the
shape of the histogram or stem-and-leaf display
will be similar to the normal curve.

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 83

Determining Whether the Data Are from an
Approximately Normal Distribution (2 of 4)

2. Compute the intervals x ± s, x ± 2 s, and x ± 3s,

and determine the percentage of measurements
falling in each. If the data are approximately
normal, the percentages will be approximately
equal to 68%, 95%, and 100%, respectively;
from the Empirical Rule (68%, 95%, 99.7%).

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 84

Determining Whether the Data Are from an
Approximately Normal Distribution (3 of 4)

3. Find the interquartile range, IQR, and standard

deviation, s, for the sample, then calculate the
ratio IQR/s. If the data are approximately
normal, then IQR / s ≈ 1.3.

IQR Q3 − Q1
=
s s

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 85

Determining Whether the Data Are from an
Approximately Normal Distribution (4 of 4)

4. Examine a normal probability plot for the data. If

the data are approximately normal, the points
will fall (approximately) on a straight line.

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 86

Normal Probability Plot

A normal probability plot for a data set is a

scatterplot with the ranked data values on one axis
and their corresponding expected z-scores from a
standard normal distribution on the other axis.
[Note: Computation of the expected standard
normal z-scores are beyond the scope of this text.
Therefore, we will rely on available statistical
software packages to generate a normal
probability plot.]

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 87

Section 4.8 Other Continuous
Distributions: Uniform and
Exponential

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 88

Uniform Distribution
Continuous random variables that appear to have equally
likely outcomes over their range of possible values possess
a uniform probability distribution.
Suppose the random
variable x can assume
values only in an interval
c ≤ x ≤ d . Then the uniform
frequency function has a
rectangular shape.

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 89

Probability Distribution for a Uniform
Random Variable x
1
Probability density function: f (x) = c≤x≤d
d−c
c+d d−c
Mean: µ = Standard Deviation: σ =
2 12
P (a < x < b ) = (b − a ) (d − c ), c ≤ a < b ≤ d

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 90

Example: Steel Manufacturing (1 of 5)
Suppose the research department of a steel
manufacturer believes that one of the
company’s rolling machines is producing
sheets of steel of varying thickness. The
thickness is a uniform random variable with
values between 150 and 200 millimeters. Any
sheets less than 160 millimeters must be
scrapped because they are unacceptable to
buyers.

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 91

Example: Steel Manufacturing (2 of 5)
a. Calculate and interpret the mean and standard
deviation of x, the thickness of the sheets
produced by this machine.
Since 150 ≤ x ≤ 200, assign c = 150 and d = 200
to find mean and standard deviation:
c + d 150 + 200
=µ = = 175 mm
2 2
d − c 200 − 150 50
=σ = = = 14.43 mm
12 12 12

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 92

Example: Steel Manufacturing (3 of 5)
a. Calculate and interpret the mean and standard
deviation of x, the thickness of the sheets
produced by this machine.
The average thickness of all manufactured steel
sheets is µ = 175 mm. From Chebyshev’s Rule, at
least 75% of the thickness values, x, will fall in the
interval
µ ± 2σ = 175 ± 2(14.43)
= 175 ± 28.86
or between 146.14 and 203.86 mm.
Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 93
Example: Steel Manufacturing (4 of 5)
b. Graph the probability distribution of x, and show
the mean on the horizontal axis. Also show 1-
and 2-standard-deviation intervals around the
mean.

The uniform probability distribution is

1 1 1
f (=
x) = = , (150 ≤ x ≤ 200)
d − c 200 − 150 50

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 94

Example: Steel Manufacturing (5 of 5)
b. Graph the probability distribution of x, and show
the mean on the horizontal axis. Also show 1-
and 2-standard-deviation intervals around the
mean.
The graph of this function is in the figure below. The
mean and 1- and 2-standard deviation intervals
around the mean are shown on the horizontal axis.

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 95

Exponential Distribution (1 of 2)
The length of time between emergency arrivals at a
hospital, the length of time between breakdowns of
manufacturing equipment, and the length of time between
catastrophic events (e.g., a stock market crash), are all
continuous random phenomena that we might want to
describe probabilistically.
The length of time or the distance between occurrences of
random events like these can often be described by the
exponential probability distribution. For this reason, the
exponential distribution is sometimes called the waiting-
time distribution.

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 96

Exponential Distribution (2 of 2)
Exponential distributions with θ = 0.5, 1, and 2.

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 97

Probability Distribution for an
Exponential Random Variable x
x
1
(x > 0)
−
Probability density function: f (x) = e θ
θ
Mean: µ =θ
Standard Deviation: σ =θ

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 98

Finding the Area to the Right of a
Number a for an Exponential Distribution

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 99

Example: Hospital Emergency
Arrivals (1 of 2)
Suppose the length of time (in hours) between emergency
arrivals at a certain hospital is modeled as an exponential
distribution with θ = 2. What is the probability that more
than 5 hours pass without an emergency arrival?
x
µ =θ = 2 1
Mean:
(x > 0)
−
f (x) = e θ
θ
Standard Deviation: σ =θ = 2

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 100
Example: Hospital Emergency
Arrivals (2 of 2)

Probability is the area

A to the right of a = 5.
−a θ ( )
− 52 −2.5
A= e =e =e
Use a calculator:
−2.5
A e=
= 0.082085

The probability that more than 5 hours pass

between emergency arrivals is about 0.08.

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 101
Key Ideas (1 of 5)
Properties of Probability Distributions
Discrete Distributions
1. p( x) ≥ 0
2. ∑ p( x) = 1
all x

Continuous Distributions

1. P (= ) 0
x a=
2. P (a < x < b) =area under curve between a and b
Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 102
Key Ideas (2 of 5)
Normal Approximation to Binomial

x is binomial ( n, p )

P (x ≤ a ) ≈ P {z < (a + .5 ) − µ}

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 103
Key Ideas (3 of 5)
Methods for Assessing Normality

1. Histogram

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 104
Key Ideas (4 of 5)
Methods for Assessing Normality

2. Stem-and-leaf display

1 7

2 3389

3 245677

4 19
5 2

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 105
Key Ideas (5 of 5)
Methods for Assessing Normality
3. ( IQR ) / S ≈ 1.3
4. Normal probability plot

Copyright © 2022 Pearson Education, Ltd. All Rights Reserved Slide - 106