Statistics-I

Probability Distributions
Discrete Probability Distributions

Chapter 6

McGraw-Hill/Irwin ©The McGraw-Hill Companies, Inc. 2008

GOALS
 Define the terms probability distribution and random variable.
 Distinguish between discrete and continuous probability
distributions.
 Calculate the mean, variance, and standard deviation of a
discrete probability distribution.
 Describe the characteristics of and compute probabilities using
the binomial probability distribution.
 Describe the characteristics of and compute probabilities using
the hypergeometric probability distribution.
 Describe the characteristics of and compute probabilities using
the Poisson
What is a Probability Distribution?

Experiment: Toss a
coin three times.
Observe the number
of heads. The possible
results are: zero
heads, one head, two
heads, and three
heads.
What is the probability
distribution for the
number of heads?
Probability Distribution of Number of
Heads Observed in 3 Tosses of a Coin
Characteristics of a Probability
Distribution
Random Variables

Random variable - a quantity resulting from an

experiment that, by chance, can assume different
values.
Types of Random Variables

 Discrete Random Variable can assume only

certain clearly separated values. It is usually
the result of counting something

 Continuous Random Variable can assume an

infinite number of values within a given
range. It is usually the result of some type of
measurement
Discrete Random Variables - Examples

 The number of students in a class.

 The number of children in a family.
 The number of cars entering a carwash in a hour.
 Number of home mortgages approved by Coastal
Federal Bank last week.
Continuous Random Variables -
Examples

 The distance students travel to class.

 The time it takes an executive to drive to
work.
 The length of an afternoon nap.
 The length of time of a particular phone call.
 Discrete Random Variables

 Can only assume a countable number of values

Examples:

– Roll a die twice

Let X be the number of times 4 occurs
(then X could be 0, 1, or 2 times)

– Toss a coin 5 times.

Let X be the number of heads
(then X = 0, 1, 2, 3, 4, or 5)
Discrete Probability Distribution

 A list of all possible [ xi , P(xi) ] pairs

xi = Value of Random Variable (Outcome)
P(xi) = Probability Associated with Value
 x ’s are mutually exclusive
i
(no overlap)
 x ’s are collectively exhaustive
i
(nothing left out)
 0 £ P(x ) £ 1 for each x
i i

S P(xi) = 1
Features of a Discrete Distribution

The main features of a discrete probability

distribution are:
 The sum of the probabilities of the various
outcomes is 1.00.
 The probability of a particular outcome is
between 0 and 1.00.
 The outcomes are mutually exclusive.
 Example of a Discrete Random
Variable Probability Distribution

Experiment: Toss 2 Coins. Let X = # heads.

4 possible outcomes
Probability Distribution
T T X Value Probability
0 1/4 = 0.25

T H 1 2/4 = 0.50
2 1/4 = 0.25

H T
Probability

0.50

0.25
H H
0 1 2 X
Probability Distribution For A
Discrete Random Variable
 A probability distribution for a discrete random
variable is a mutually exclusive listing of all
possible numerical outcomes for that variable and
a probability of occurrence associated with each
outcome.
Number of Classes Taken Probability
2 0.2
3 0.4
4 0.24
5 0.16
The Mean of a Probability Distribution

MEAN
•The mean is a typical value used to represent the
central location of a probability distribution.
•The mean of a probability distribution is also
referred to as its expected value.
 Discrete Random Variables;
Mean
 Expected Value (or mean) of a discrete
random variable (Weighted
N
Average)

 E(X)  Xi P( Xi )
i1

– Example: Toss 2 coins, X P(X)

X = # of heads, 0 0.25
compute expected value of X: 1 0.50
E(X) = ((0)(0.25) + (1)(0.50) + (2)(0.25)) 2 0.25
= 1.0

Cha Business Statistics: A First Course, 5e © 2009

p 5- Prentice-Hall, Inc.
16
The Variance, and Standard
Deviation of a Probability Distribution

Variance and Standard Deviation

• Measures the amount of spread in a distribution
• The computational steps are:
1. Subtract the mean from each value, and square this difference.
2. Multiply each squared difference by its probability.
3. Sum the resulting products to arrive at the variance.
The standard deviation is found by taking the positive square root
of the variance.
Mean, Variance, and Standard
Deviation of a Probability Distribution - Example

John Ragsdale sells new cars for Pelican Ford.

John usually sells the largest number of cars
on Saturday. He has developed the following
probability distribution for the number of cars
he expects to sell on a particular Saturday.
Mean of a Probability Distribution - Example
Variance and Standard
Deviation of a Probability Distribution - Example
Example

Consumers were surveyed on the relative number

of visits to a Sears store (often, occasional, and
never) and if the store was located in an enclosed
mall (yes and no). When variables are measured
nominally, such as these data, the results are
usually summarized in a contingency table.
 What is the probability of selecting a shopper who:
(a) Visited a Sears store often?
(b) Visited a Sears store in an enclosed mall?
(c) Visited a Sears store in an enclosed mall or
visited a Sears store often?
(d) Visited a Sears store often, given that the
shopper went to a Sears store in an enclosed mall?
(e) Are the number of visits and the enclosed mall
variables independent?
(f) What is the probability of selecting a shopper who
visited a Sears store often and it was in an enclosed
mall?
a) P(visited often) = 80/195 = .41
c) The two events are not mutually exclusive,
P(visited often or visited a Sears in an enclosed
mall)
= P(often) + P(enclosed mall) - P(often and
enclosed mall)
= 80/195 + 90/195 – 60/195 = .56
d) P(visited often | went to a Sears in an enclosed
mall)=
60/90 = .67
e) No, the two variables are not independent. As;
P(A | B) ≠ P(A)
 Probability Distributions
Probability
Distributions

Discrete Continuous
Ch. 6 Probability Probability Ch. 7
Distributions Distributions

Binomial Normal

Poisson Uniform
 The Binomial Distribution
Probability
Distributions

Discrete
Probability
Distributions

Binomial

Poisson
Binomial Probability Distribution

Characteristics of a Binomial Probability

Distribution
 There are only two possible outcomes on a
particular trial of an experiment.
 The outcomes are mutually exclusive,
 The random variable is the result of counts.
 Each trial is independent of any other trial
 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
 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
Binomial Probability Formula
Binomial Probability - Example

There are five flights

daily from Pittsburgh
via US Airways into
the Bradford,
Pennsylvania,
Regional Airport.
Suppose the
probability that any
flight arrives late
is .20.
What is the probability
that none of the
flights are late today?
Binomial Probability - Excel
Binomial Dist. – Mean and Variance
Binomial Dist. – Mean and Variance:
Example

For the example

regarding the number
of late flights, recall
that  =.20 and n = 5.
What is the average
number of late flights?
What is the variance of
the number of late
flights?
Binomial Dist. – Mean and Variance:
Another Solution
Binomial Distribution - Table

Five percent of the worm gears produced by an automatic, high-

speed Carter-Bell milling machine are defective. What is the
probability that out of six gears selected at random none will be
defective? Exactly one? Exactly two? Exactly three? Exactly
four? Exactly five? Exactly six out of six?
Binomial – Shapes for Varying n
( constant)
Cumulative Binomial Probability
Distributions

A study in June 2003 by the Illinois Department of

Transportation concluded that 76.2 percent of front
seat occupants used seat belts. A sample of 12
vehicles is selected. What is the probability the front
seat occupants in at least 7 of the 12 vehicles are
wearing seat belts?
Exercise
A factory produces mobile phone chargers, and the
quality control team inspects a random sample of 10
chargers from each batch. Based on past data, it is
known that 20% of chargers typically have defects. The
company wants to calculate the probabilities related to
the number of defective chargers in a sample.
1. What is the probability that exactly 2 chargers will be
defective?
2. What is the probability that at most 1 charger will be
defective?
3. What is the probability that more than 3 chargers will
be defective?
a. Probability of Exactly 2 Defective Chargers
P(X=2)= 10C 2​(0.2) 2 (0.8) 10-2
=0.302

b. Probability of at most 1 Defective Chargers

P(X≤1)= P(X=0)+ P(X=1) = 0.375

c. Probability of more than 3 Defective

Chargers? P(X>3)=1−0.879=0.121
 Activity
 A company launches a new email marketing campaign
targeting 20 potential customers. Based on past data, the
marketing department estimates that 30% of recipients will
respond positively to the campaign (i.e., either by opening
the email or engaging with the content). The company
wants to analyze the outcomes of this campaign by
determining the likelihood of different response rates.
1. What is the probability that exactly 6 customers will respond
positively to the campaign?
2. What is the probability that at most 4 customers will
respond positively to the campaign?
3. What is the probability that more than 7 customers will
respond positively?
a. The probability that exactly 6 customers

𝑃(𝑋=6)= ?
respond positively;

P(X=6)= 20C 6​(0.3) 6 (0.7) 20-6

=0.200
b. Probability of At Most 4 Customers
Responding
P(X≤4)≈0.368
c. Probability of More than 7 Customers

𝑃(𝑋>7)=1−𝑃(𝑋≤7)P(X>7)=1−P(X≤7) = 0.128
Responding.

d. Probability of At least 4 Customers

Responding ?
Cumulative Binomial Probability
Distributions - Excel
Poisson Probability Distribution

The Poisson probability distribution

describes the number of times some event
occurs during a specified interval. The
interval may be time, distance, area, or
volume.
Poisson Probability Distribution

The Poisson distribution can be

described mathematically using the
formula:
Poisson Probability Distribution

The mean number of successes

can be determined in binomial
situations by n, where n is the
number of trials and  the
probability of a success.

The variance of the Poisson

distribution is also equal to n .
Poisson Probability Distribution -
Example

Assume baggage is rarely lost by Northwest Airlines.

Suppose a random sample of 1,000 flights shows a
total of 300 bags were lost. Thus, the arithmetic
mean number of lost bags per flight is 0.3
(300/1,000). If the number of lost bags per flight
follows a Poisson distribution with u = 0.3, find the
probability of not losing any bags.
Exp: Washington Insurance Company determined
the likelihood that a man age 25 will die within the
next year is .0002. If Washington Insurance sells
4,000 policies to 25-year-old men this year, what
is the probability they will pay on exactly one
policy?
Exp: Ninety-five percent of the employees at the J. M. Smucker
Company plant on Laskey Road have their bimonthly wages
sent directly to their bank by electronic funds transfer. This is
also called direct deposit. Suppose we select a random sample
of seven employees.

(a) Does this situation fit the assumptions of the binomial

distribution?
(b) What is the probability that all seven employees use direct
deposit?
(c) Determine the exact probability that four of the seven
sampled employees use direct deposit.
a) Yes, each employee either uses direct deposit or
does not (Two possible outcoes on each trial)
 employees are independent (independent trials)
 the probability of using direct deposit is 0.95 for
all (probability of a success does not change
from trial to trial)
 the number using the service out of 7, n=7

b. P(x=7) = 7 C 7 (.95)7 (.05)7-7 = .6983

c. P(x=4) = 7 C 4 (.95) 4 (.05) 7-3 = .0036

EXP: Let us consider the purchase decisions of the
next three customers who enter the Martin
Clothing Store. On the basis of past experience,
the store manager estimates the probability that
any one customer will make a purchase is .30.
what is the probability that two of the next three
customers will make a purchase?
1. The experiment can be described as a sequence of three
identical trials, one trial for each of the three customers who
will enter the store.
2. Two outcomes—the customer makes a purchase
(success) or the customer does not make a purchase (failure)
—are possible for each trial.
3. The probability that the customer will make a purchase
(.30) or will not make a purchase (.70) is assumed to be the
same for all customers.
4. The purchase decision of each customer is independent
of the decisions of the other customers.
 P(X=2) = 3! (.30) 2 (.70) 1 = .189
2!1!
Probability Distribution for the Number of Customers Making
a Purchase
Exp: for its Music 360 survey, Nielsen Co. asked teenagers
and adults how each group has listened to music in the past
12 months. Nearly two-thirds of U.S. teenagers under the age
of 18 say they use google Inc.’s video-sharing site to listen to
music and 35% of the teenagers said they use Pandora
Media Inc.’s custom online radio service (the wall street
Journal, August 14, 2012). Suppose 10 teenagers are
selected randomly to be interviewed about how they listen to
music.
a. Is randomly selecting 10 teenagers and asking whether or
not they use Pandora Media Inc.’s online service a binomial
experiment? b. what is the probability that none of the 10
teenagers use Pandora Media Inc.’s online radio service?
c. what is the probability that 4 of the 10 teenagers
use Pandora Media Inc.’s online radio service?

d. what is the probability that at least 2 of the 10

teenagers use Pandora Media Inc.’s online radio
service?
Exercise: A service organization in a large town
organizes a raffle each month. One thousand raffle
tickets are sold for $1 each. Each has an equal
chance of winning. First prize is $300, second prize
is $200, and third prize is $100. Let X denote the net
gain from the purchase of one ticket.
a) Construct the probability distribution of X.
b) Find the probability of winning any money in the
purchase of one ticket.
c) Find the expected value of X, and interpret its
meaning.
 If
a ticket is selected as the first prize winner, the
net gain to the purchaser is:

$300 prize less the $1 (that was paid for the

ticket), hence

X = 300 − 1 = 299

There is one such ticket, so P(299) = 0.001.

Applying the same “income minus outgo” principle
to the second and third prize winners and to the 997
losing tickets yields the probability distribution:

a) Probability distribution of X ( net gain)

b) Let W denote the event that a ticket is selected to win one
of the prizes. Using the table, probability of wining is:

c) The expected value of X is:

The negative value means that one loses money on the average. In
particular, if someone were to buy tickets repeatedly, then although
he would win now and then, on average he would lose 40 cents per
ticket purchased.