DISCRETE RANDOM VARIABLES

PROBABILITY DISTRIBUTIONS
RANDOM VARIABLES
 This chapter extends the concept of probability to
explain probability distributions.

 Any given statistical experiment has more than one

outcome. It is impossible to predict which of the
many possible outcomes will occur if an
experiment is performed.

 Consequently, decisions are made under uncertain

conditions. For example, a lottery player does not
know in advance whether or not he is going to win
that lottery. If he knows that he is not going to win,
he will definitely not play.
RANDOM VARIABLES
 It is the uncertainty about winning (some positive
probability of winning) that makes him play.

 This chapter shows that if the outcomes and their

probabilities for a statistical experiment are known,
we can find out what will happen, on average, if
that experiment is performed many times.

 For the lottery example, we can find out what a

lottery player can expect to win (or lose), on
average, if he continues playing this lottery again
and again.
Table 1: Frequency and Relative Frequency
Distribution of the Number of Vehicles
Owned by All 2000 Families
RANDOM VARIABLES
 Suppose one family is randomly selected from this
population. The process of randomly selecting a family is
called a random or chance experiment. Let x denote the
number of vehicles owned by the selected family.

 Then x can assume any of the five possible values (0, 1, 2, 3,

and 4) listed in the first column of Table-1. The value assumed
by x depends on which family is selected.

 Thus, this value depends on the outcome of a random

experiment. Consequently, x is called a random variable or
a chance variable. In general, a random variable is denoted
by x or y.
RANDOM VARIABLES

 A random variable is a variable whose value is

determined by the outcome of a random experiment.

 Discrete Random Variable is a random variable that

assumes countable values is called a discrete random
variable.
Examples of discrete random variables

1. The number of cars sold at a dealership during a given

month

2. The number of houses in a certain block

3. The number of fish caught on a fishing trip

4. The number of complaints received at the office of an

airline on a given day

5. The number of customers who visit a bank during any

given hour

6. The number of heads obtained in three tosses of a coin

Continuous Random Variable

 A random variable that can assume any value contained in

one or more intervals is called a continuous random
variable.
Examples of continuous random variables

1. The length of a room

2. The time taken to commute from home to work

3. The amount of milk in a gallon

4. The weight of a letter

5. The price of a house

PROBABLITY DISTRIBUTION OF A
DISCRETE RANDOM VARIABLE
 The probability distribution of a discrete random
variable lists all the possible values that the random
variable can assume and their corresponding probabilities.

Let x be a discrete random variable. The probability

distribution of x describes how the probabilities are
distributed over all the possible values of x.
Example -1
 Recall the frequency and relative frequency distributions of
the number of vehicles owned by families given in Table-1.
 That table is reproduced below as Table-2. Let x be the
number of vehicles owned by a randomly selected family.
Write the probability distribution of x.
Table-2: Frequency and Relative Frequency
Distributions of the Number of Vehicles
Owned by Families
Example-1: Solution
Two Characteristics of a Probability
Distribution
 The probability distribution of a discrete random variable
possesses the following two characteristics.

1. The probability assigned to each value of a random

variable x lies in the range 0 to 1; that is, 0 ≤ P(x) ≤ 1 for
each x.

2. The sum of the probabilities assigned to all possible

values of x is equal to 1.0; that is, ΣP(x)=1.
Figure -1: Graphical presentation of the
probability distribution of Table-2.
 Example-2
Each of the following table lists certain values of x and their
probabilities. Determine whether or not each table represents a
valid probability distribution.
Example-2: Solution

(a) No, since the sum of all probabilities is not equal to 1.0.

(b) Yes.

(c) No, since one of the probabilities is negative.

Tutorial-1
The following table lists the probability distribution of the
number of breakdowns per week for a machine based on past
data.

Find the probability that the number of breakdowns for this

machine during a given week is
i. exactly 2
ii. 0 to 2
iii. more than 1
iv. at most 1
Tutorial-l: Solution

 Let x denote the number of breakdowns for this machine

during a given week. Table-3 lists the probability
distribution of x.
Table-3: Probability Distribution of the
Number of Breakdowns
Figure -2: Graphical presentation of the
probability distribution of Table-3.
Tutorial-l: Solution
Using Table-3,

i. P(exactly 2 breakdowns) = P(x = 2) = .35

ii. P(0 to 2 breakdowns) = P(0 ≤ x ≤ 2)

= P(x = 0) + P(x = 1) + P(x = 2)
= .15 + .20 + .35 = .70

iii. P(more then 1 breakdown) = P(x > 1)

= P(x = 2) + P(x = 3)
= .35 +.30 = .65

iv. P(at most one breakdown) = P(x ≤ 1)

= P(x = 0) + P(x = 1)
= .15 + .20 = .35
Tutorial-2
 According to a survey, 60% of all students at a large
university suffer from math anxiety. Two students are
randomly selected from this university. Let x denote the
number of students in this sample who suffer from math
anxiety. Develop the probability distribution of x.
Tutorial-l: Solution

 Let us define the following two events:

 N = the student selected does not suffer from math

 anxiety

M = the student selected suffers from math anxiety
Figure -3: Tree diagram.
Tutorial-l: Solution


P(x = 0) = P(NN) = .16


P(x = 1) = P(NM or MN) = P(NM) + P(MN)
 = .24 + .24 = .48

 P(x = 2) = P(MM) = .36

Table-4: Probability Distribution of the
Number of Students with Math Anxiety in a
Sample of Two Students
 MEAN AND STANDARD DEVIATION OF A
DISCRETE RANDOM VARIABLE
 The mean of a discrete random variable, denoted by µ,
is actually the mean of its probability distribution. The mean
of a discrete random variable x is also called its expected
value and is denoted by E(x).

 The mean (or expected value) of a discrete random variable

is the value that we expect to observe per repetition, on
average, if we perform an experiment a large number of
times.

 For example, we may expect a car salesperson to sell, on

average, 2.4 cars per week. This does not mean that every
week this salesperson will sell exactly 2.4 cars. This simply
means that if we observe for many weeks, this salesperson
will sell a different number of cars during different weeks;
however, the average for all these weeks will be 2.4 cars per
week.
MEAN AMD STANDARD DEVIATION OF A
DISCRETE RANDOM VARIABLE
 The mean of a discrete random variable x is the value
that is expected to occur per repetition, on average, if an
experiment is repeated a large number of times. It is
denoted by µ and calculated as

µ = Σ x P(x)

 The mean of a discrete random variable x is also called its

expected value and is denoted by E(x); that is,

E(x) = Σ x P(x)
 Example-5
 The probability distribution from Table-4 is reproduced below.
In this table, x represents the number of breakdowns for a
machine during a given week, and P(x) is the probability of
the corresponding value of x.

 Find the mean number of breakdowns per week for this

machine.
Example-5: Solution
Table-5: Calculating the Mean for the
Probability Distribution of Breakdowns

The mean is E(x) = µ = Σx P(x) = 1.80

 MEAN AMD STANDARD DEVIATION OF A
DISCRETE RANDOM VARIABLE

 The standard deviation of a discrete random variable,

denoted by σ , measures the spread of its probability
distribution.

 A higher value for the standard deviation of a discrete

random variable indicates that x can assume values over a
larger range about the mean.

 In contrast, a smaller value for the standard deviation

indicates that most of the values that x can assume are
clustered closely about the mean.
STANDARD DEVIATION OF A DISCRETE
RANDOM VARIABLE
 The standard deviation of a discrete random variable
x measures the spread of its probability distribution and is
computed as

  x P( x)  
2 2
 Example-6
 Baier’s Electronics manufactures computer parts that are
supplied to many computer companies. Despite the fact
that two quality control inspectors at Baier’s Electronics
check every part for defects before it is shipped to another
company, a few defective parts do pass through these
inspections undetected. Let x denote the number of
defective computer parts in a shipment of 400. The
following table gives the probability distribution of x.

 Compute the standard deviation of x.

Example 6: Solution
Table-6: Computations to Find the Standard
Deviation
Example-6: Solution

  xP  x  2.50 defective computer parts in 400

x 2P ( x ) 7.70
σ  x 2
P  x    2
 7.70  (2.50)2
 1.45
1.204 defective computer parts
 1-
Interpretation of the Standard 37

Deviation: Chebyshev’s Theorem

 1 

At least 1 

 k2
of the elements of any



distribution lie within k standard
deviations of the mean
1 1 3
1 1   75%
2
2
4 4
2
1 1 8 Standard
At 1  2 1   89% Lie
3 9 9 3 deviations
least within
1 1 15 of the mean
1  2 1   94% 4
4 16 16
Interpretation of the Standard Deviation
 The standard deviation of a discrete random variable can
be interpreted or used the same way as the standard
deviation of a data set as per Chebyshev’s theorem.

 At least [1 - (1/k2)]*100% of the total area under a curve

lies within k standard deviations of the mean, where k is
any number greater than 1.

 Thus, if k = 2, then at least 75% of the area under a curve

lies between µ - 2σ and µ + 2σ.

 Hence, Using Chebyshev’s theorem, we can state that at

least 75% of the shipments (each containing 400
computer parts) are expected to contain .092 to 4.908
defective computer parts each.
Tutorial-2
 Loraine Corporation is planning to market a new makeup
product. According to the analysis made by the financial
department of the company, it will earn an annual profit of
$4.5 million if this product has high sales and an annual
profit of $ 1.2 million if the sales are mediocre, and it will
lose $2.3 million a year if the sales are low. The
probabilities of these three scenarios are .32, .51 and .17
respectively.

(a) Let x be the profits (in millions of dollars) earned per

annum from this product by the company. Write the
probability distribution of x.

(b) Calculate the mean and the standard deviation of x.

Tutorial-2: Solution
(a) The table below lists the probability distribution of x. Note
that because x denotes profits earned by the company,
the loss is written as a negative profit in the table.
Table-7: Computations to Find the Mean
and Standard Deviation
Tutorial-2: Solution
(b) Table-7 shows all the calculations needed for the
computation of the mean and standard deviations of x.

  xPx  $1.661 million

σ  x Px  
2 2
 8.1137  (1.661) 2

$2.314 million
THE BINOMIAL PROBABILITY
DISTRIBUTION
 The binomial probability distribution is one of the most
widely used discrete probability distributions.

 It is applied to find the probability that an outcome will occur

x times in n performances of an experiment.

 For example, given that the probability is .05 that a DVD

player manufactured at a firm is defective, we may be
interested in finding the probability that in a random sample
of three DVD players manufactured at this firm, exactly one
will be defective.

 As a second example, we may be interested in finding the

probability that a cricket player with a batting average of
52.50 will have no hits in 10 innings to the fence.
THE BINOMIAL PROBABILITY
DISTRIBUTION
 To apply the binomial probability distribution, the random
variable x must be a discrete dichotomous random variable.
 In other words, the variable must be a discrete random variable, and
each repetition of the experiment must result in one of two possible
outcomes.

 The binomial distribution is applied to experiments that

satisfy the four conditions of a binomial experiment. Each
repetition of a binomial experiment is called a trial or a
Bernoulli trial.

 For example, if an experiment is defined as one toss of a

coin and this experiment is repeated 10 times, then each
repetition (toss) is called a trial.

 Consequently, there are 10 total trials for this experiment.

The Binomial Experiment

Conditions of a Binomial Experiment

A binomial experiment must satisfy the following four

conditions:

1. There are n identical trials.

2. Each trial has only two possible outcomes.
3. The probabilities of the two outcomes remain constant
for each trial.
4. The trials are independent.
Example-7
 Consider the experiment consisting of 10 tosses of a coin.
Determine whether or not it is a binomial experiment.
Example-7: Solution
 1. There are a total of 10 trials (tosses), and they are all
identical. Here, n=10.

 2. Each trial (toss) has only two possible outcomes: a head

and a tail.

 3. The probability of obtaining a head (a success) is ½ and

that of a tail (a failure) is ½ for any toss. That is,
 p = P(H) = ½ and q = P(T) = ½

 4. The trials (tosses) are independent. The result of any

preceding toss has no bearing on the result of any
succeeding toss.
 Consequently, the experiment consisting of 10 tosses is a
binomial experiment.
Example-8
 Five percent of all DVD players manufactured by a large
electronics company are defective. Three DVD players are
randomly selected from the production line of this company.
The selected DVD players are inspected to determine
whether each of them is defective or good. Is this
experiment a binomial experiment?
 Example-8: Solution
 We check whether all four conditions of the binomial
probability distribution are satisfied.
 1. The example consists of three identical trials.

 2. Each trial has two outcomes: a DVD player is defective or a

DVD player is good.

 3. The probability p that a DVD player is defective is .05. The

probability q that a DVD player is good is .95.

 4. Each trial (DVD player) is independent. i.e., if one DVD

player is defective, it does not affect the outcome of another
DVD player being defective or good.
 As all four conditions of a binomial experiment are satisfied,
this is an example of a binomial experiment.
 The Binomial Probability Distribution and
Binomial Formula
 The random variable x that represents the number of
successes in n trials for a binomial experiment is called a
binomial random variable. The probability distribution of x in
such experiments is called the binomial probability
distribution or simply the binomial distribution.

 Thus, the binomial probability distribution is applied to find

the probability of x successes in n trials for a binomial
experiment.

 The number of successes x in such an experiment is a

discrete random variable. Consider Example 8, Let x be the
number of defective DVD players in a sample of three.
Because we can obtain any number of defective DVD players
from zero to three in a sample of three, x can assume any of
the values 0, 1, 2, and 3 and therefore a discrete random
variable.
 The Binomial Probability Distribution and
Binomial Formula
 For a binomial experiment, the probability of exactly x
successes in n trials is given by the binomial formula

x n x
P( x) n C x p q
 where,
 n = total number of trials
 p = probability of success
 q = 1 – p = probability of failure
 x = number of successes in n trials
 n - x = number of failures in n trials
 Example-9
 Five percent of all DVD players manufactured by a large
electronics company are defective. A quality control inspector
randomly selects three DVD player from the production line.
What is the probability that exactly one of these three DVD
players is defective?
Figure -4: Tree diagram for selecting three
DVD Players.
 Example-9: Solution
 Let

D = a selected DVD player is defective P(D) = .05
 G = a selected DVD player is good P(G) = .95
 P(DGG) = P(D) P(G) P(G)
= (.05)(.95)(.95) = .0451

P(GDG) = P(G) P(D) P(G)

= (.95)(.05)(.95) = .0451

P(GGD) = P(G) P(G) P(D)

= (.95)(.95)(.05) = .0451
Example-9: Solution
P(1 DVD player in 3 is defective)
= P(DGG or GDG or GGD)
= P(DGG) + P(GDG) + P(GGD)
= .0451 + .0451 + .0451
= .1353
 Example-9: Solution
 n = total number of trials = 3 DVD players
x = number of successes = number of defective DVD players
 =1
n – x = number of failures = number of good DVD players
 =3-1=2
p = P(success) = .05
q = P(failure) = 1 – p = .95
Example-9: Solution
The probability of selecting exactly one defective DVD player is
Tutorial-3
 At the Express House Delivery Service, providing high-
quality service to customers is the top priority of the
management. The company guarantees a refund of all
charges if a package it is delivering does not arrive at its
destination by the specified time. It is known from past data
that despite all efforts, 2% of the packages mailed through
this company do not arrive at their destinations within the
specified time. Suppose a corporation mails 10 packages
through Express House Delivery Service on a certain day.

(a) Find the probability that exactly one of these 10 packages

will not arrive at its destination within the specified time.

(b) Find the probability that at most one of these 10 packages

will not arrive at its destination within the specified time.
Tutorial-3: Solution
n = total number of packages mailed = 10
p = P(success) = .02
q = P(failure) = 1 – .02 = .98
 Tutorial-3: Solution
 x = number of successes = 1
n – x = number of failures = 10 – 1 = 9
(a)
1 9 10!
P( x 1) 10 C1 (.02) (.98)  (.02)1 (.98) 9
1!(10  1)!
(10)(.02)(.83374776) .1667

 Thus, there is a .1667 probability that exactly one of the 10

packages mailed will not arrive at its destination within the
specified time.
Tutorial-3: Solution
(b) At most one of the ten packages is given by the sum of
the probabilities of x = 0 and x = 1

P ( x 1)  P ( x 0)  P ( x 1)

10 C 0 (.02) 0 (.98)10 10 C1 (.02)1 (.98) 9
(1)(1)(.81 707281)  (10)(.02)( .83374776)
.8171  .1667 .9838

Thus, the probability that at most one of the 10 packages

mailed will not arrive at its destination within the specified
time is .9838.
 Using the Table of Binomial Probabilities
 From the table of binomial probabilities:

 List the probabilities of x for n = 1 to n = 25.

 List the probabilities of x for selected values of p.

Example-10
 In a Group survey of adults, 30% of 50-year-old or older
(let us call them 50-plus) adult Americans said that they
would be willing to pay more for healthier options at
restaurants. Suppose this result holds true for the current
population of 50-plus adult Americans. A random sample
of six 50-plus adult Americans is selected. Using the table
of binomial probabilities, answer the following:
Example-10

(a) Find the probability that exactly three persons in this

sample hold the said opinion.

(b) Find the probability that at most two persons in this

sample hold the said opinion.

(c) Find the probability that at least three persons in this

sample hold the said opinion.

(d) Find the probability that one to three persons in this

sample hold the said opinion.

(e) Let x be the number of persons in this sample who hold

the said opinion. Write the probability distribution of x, and
draw a bar graph for this probability distribution.
Table-9: Determining P(x = 3) for n = 6 and
p = .30
Table-10: Portion of Table I for n = 6 and p=
.30
Example-10: Solution
(a) P(x = 3) = .1852

(b) P(at most 2) = P(0 or 1 or 2)

= P(x = 0) + P(x = 1) + P(x = 2)
= .1176 + .3025 + .3241 = .7442

(c) P(at least 3) = P(3 or 4 or 5 or 6)

= P(x = 3) + P(x = 4) + P(x =5) + P(x = 6)
= .1852
+ .0595 + .0102 + .0007
= .2556

(d) P(1 to 3) = P(x = 1) + P(x = 2) + P(x = 3)

= .3025 + .3241 + .1852 = .8118
Table-11: Probability Distribution of x for n
= 6 and p= .30
Figure-5: Bar graph for the probability
distribution of x.
Probability of Success and the Shape of the
Binomial Distribution
1. The binomial probability distribution is symmetric if p =.50.

2. The binomial probability distribution is skewed to the right

if p is less than .50.

3. The binomial probability distribution is skewed to the left if

p is greater than .50.
Table-12: Probability Distribution of x for n
= 4 and p= .50
Figure-6: Bar graph from the probability
distribution of Table-12.
Table-13: Probability Distribution of x for n
= 4 and p= .30
Figure-7: Bar graph from the probability
distribution of Table-13.
Table-14: Probability Distribution of x for n
= 4 and p= .80
Figure-8: Bar graph from the probability
distribution of Table-14.
 Mean and Standard Deviation of the
Binomial Distribution
 The mean and standard deviation of a binomial
distribution are, respectively,

 np and   npq

 where n is the total number of trials, p is the probability of
success, and q is the probability of failure.
Example-11
 In a 2011 Time magazine poll, American adults were
asked, “When children today in the U.S. grow up, do you
think they will be better off or worse off than people are
now?” Of these adults, 52% said worse. Assume that this
result is true for the current population of U.S. adults. A
sample of 50 adults is selected. Let x be the number of
adults in this sample who hold the above-mentioned
opinion. Find the mean and standard deviation of the
probability distribution of x.
Example-11: Solution
n = 50, p = .52, and q = .48
Using the formulas for the mean and standard deviation of
the binomial distribution,

 np 50(.52) 26

  npq  (50)(.52)(.48) 3.5327
THE HYPERGEOMETRIC PROBABILITY
DISTRIBUTION

 One of the conditions required to apply the binomial

probability distribution is that the trials are independent,
so that the probabilities of the two outcomes (success and
failure) remain constant. If the trials are not independent,
we cannot apply the binomial probability distribution to
find the probability of x successes in n trials.

 In such cases we replace the binomial by the

hypergeometric probability distribution. Such a case
occurs when a sample is drawn without replacement from
a finite population.
THE HYPERGEOMETRIC PROBABILITY
DISTRIBUTION
Let
 N = total number of elements in the population
 r = number of successes in the population
 N – r = number of failures in the population
 n = number of trials (sample size)
 x = number of successes in n trials
 n – x = number of failures in n trials
 THE HYPERGEOMETRIC PROBABILITY
DISTRIBUTION
 The probability of x successes in n trials is given by

C x N  r Cn  x
r
P( x) 
N Cn
Example-12
Brown Manufacturing makes auto parts that are sold to auto
dealers. Last week the company shipped 25 auto parts to a
dealer. Later, it found out that 5 of those parts were defective.
By the time the company manager contacted the dealer, 4
auto parts from that shipment had already been sold. What is
the probability that 3 of those 4 parts were good parts and 1
was defective?
Example-12: Solution
 For example, 20% of all auto parts manufactured at a
company are defective. Four auto parts are selected at
random. What is the probability that three of these four
parts are good?

 Note that we are to find the probability that three of the four auto parts
are good and one is defective. In this case, the population is very large
and the probability of the first, second, third, and fourth auto parts
being defective remains the same at .20. Similarly, the probability of
any of the parts being good remains unchanged at .80. Consequently,
we will apply the binomial probability distribution to find the probability
of three good parts in four.
Example-12: Solution
 The company shipped 25 auto parts to a dealer. Later, it
finds out that 5 of those parts were defective. By the time
the company manager contacts the dealer, 4 auto parts
from that shipment have already been sold. What is the
probability that 3 of those 4 parts were good parts and 1
was defective?

 Here, because the 4 parts were selected without replacement from a

small population, the probability of a part being good changes from the
first selection to the second selection, to the third selection, and to the
fourth selection. In this case we cannot apply the binomial probability
distribution. In such instances, we use the hypergeometric probability
distribution to find the required probability.
Example-12: Solution
 N = 25, r = 20, N – r = 5, n = 4, x = 3, n – x = 1

20! 5!

C x N  r Cn  x
r 20 C3 5C1 3!(20  3)! 1!(5  1)!
P ( x 3)   
N Cn 25 C 4
25!
4!(25  4)!
(1140)(5)
 .4506
12,650
Thus, the probability that three of the four parts sold are
good and one is defective is .4506.
Tutorial-4
Dawn Corporation has 12 employees who hold managerial
positions. Of them, 7 are female and 5 are male. The company
is planning to send 3 of these 12 managers to a conference. If 3
managers are randomly selected out of 12,

(a) Find the probability that all 3 of them are female

(b) Find the probability that at most 1 of them is a female

 Tutorial-4: Solution
(a)
N = 12, r = 7, N – r = 5, n = 3, x = 3, n – x = 0

C x N  r Cn  x 7 C3 5C0 (35)(1)
r
P ( x 3)    .1591
N Cn 12 C3 220

Thus, the probability that all 3 of managers selected are

female is .1591.
 Tutorial-4: Solution
 (b)
 N = 12, r = 7, N – r = 5, n = 3, x = 0 and 1, n – x = 3 and 2

C x N  r Cn  x
r C C (1)(10)
P ( x 0)  7 0 5 3  .0455
N Cn 12 C3 220
C x N  r Cn  x
r 7 C1 5C 2 (7)(10)
P ( x 1)    .3182
N Cn 12 C3 220
P ( x 1) P ( x 0)  P ( x 1) .0455  .3182 .3637

Thus, the probability that at most 1 of 3 managers selected

is female is .3637.
THE POISSON PROBABILITY
DISTRIBUTION
 Poisson, is another important probability distribution of a
discrete random variable which has a large number of
applications.

 Suppose a washing machine breaks down an average of

three times a month. We may want to find the probability
of exactly two breakdowns during the next month. This is
an example of a Poisson probability distribution problem.

 Each breakdown is called an occurrence in Poisson

probability distribution terminology. The Poisson
probability distribution is applied to experiments with
random and independent occurrences.
THE POISSON PROBABILITY
DISTRIBUTION
 The occurrences are random in the sense that they do
not follow any pattern, and, hence, they are
unpredictable. Independence of occurrences means that
one occurrence (or nonoccurrence) of an event does not
influence the successive occurrences or nonoccurrences
of that event.
 The occurrences are always considered with respect to
an interval. In the example of the washing machine, the
interval is one month. The interval may be a time
interval, a space interval, or a volume interval. The actual
number of occurrences within an interval is random and
independent.
 If the average number of occurrences for a given interval
is known, then by using the Poisson probability
distribution, we can compute the probability of a certain
number of occurrences (actual), x, in that interval.
THE POISSON PROBABILITY
DISTRIBUTION
Conditions to Apply the Poisson Probability Distribution

The following three conditions must be satisfied to apply the

Poisson probability distribution:

1. x is a discrete random variable.

2. The occurrences are random.
3. The occurrences are independent.
THE POISSON PROBABILITY
DISTRIBUTION
Examples of discrete random variables for which the
occurrences are random and independent to which the
Poisson probability distribution can be applied.

1. Consider the number of telemarketing phone calls

received by a household during a given day. In this
example, the receiving of a telemarketing phone call by a
household is called an occurrence, the interval is one day
(an interval of time), and the occurrences are random (that
is, there is no specified time for such a phone call to come
in) and discrete. The total number of telemarketing phone
calls received by a household during a given day may be 0,
1, 2, 3, 4, and so forth. The independence of occurrences in
this example means that the telemarketing phone calls are
received individually and none of two (or more) of these
phone calls are related.
THE POISSON PROBABILITY
DISTRIBUTION
2. Consider the number of defective items in the next 100
items manufactured on a machine. In this case, the interval
is of 100 items. The occurrences (number of defective
items) are random and discrete because there may be 0, 1,
2, 3, ..., 100 defective items in 100 items. We can assume
the occurrence of defective items to be independent of one
another.

3. Consider the number of defects in a 5-foot-long iron rod.

The interval, is of 5 feet. The occurrences (defects) are
random because there may be any number of defects in a
5-foot iron rod. We can assume that these defects are
independent of one another.
Examples of Poisson Probability Distribution
1. The number of accidents that occur on a given highway
during a 1-week period.

2. The number of customers entering a grocery store during a 1–

hour interval.

3. The number of television sets sold at a department store

during a given week.
THE POISSON PROBABILITY
DISTRIBUTION
 In contrast, consider the arrival of patients at a
physician’s office. These arrivals are nonrandom if the
patients have to make appointments to see the doctor.

 The arrival of commercial airplanes at an airport is

nonrandom because all planes are scheduled to arrive at
certain times, and airport authorities know the exact
number of arrivals for any period (although this number
may change slightly because of late or early arrivals and
cancellations).

 The Poisson probability distribution cannot be applied to these

examples.
THE POISSON PROBABILITY
DISTRIBUTION
 Poisson Probability Distribution Formula

 According to the Poisson probability distribution, the

probability of x occurrences in an interval is


 ex
P( x) 
x!
 where λ is the mean number of occurrences in that
interval and the value of e (Euler’s Number!) is
approximately 2.71828.
Example-13
 On average, a household receives 9.5 telemarketing phone
calls per week. Using the Poisson distribution formula, find
the probability that a randomly selected household receives
exactly 6 telemarketing phone calls during a given week.
Example-13: Solution

x e   (9.5) 6 e  9.5
P ( x  6)  
x! 6!
(735,091.8906)(. 00007485)

720
0.0764
 Example-14
 A washing machine breaks down an average of three times
per month. Using the Poisson probability distribution formula,
find the probability that during the next month this machine
will have

(a) exactly two breakdowns


(b) at most one breakdown
Example-14: Solution
(a ) P(exactly two breakdowns)
(3)2 e  3 (9)(.04978707)
P ( x 2)   .2240
2! 2

(b ) P(at most 1 breakdown) = P(0 or 1 breakdown)

(3)0 e  3 (3)1e  3
P ( x 0)  P ( x 1)  
0! 1!
(1)(.04978707) (3)(.04978707)
 
1 1
 .0498  .1494  .1992
Example-15
Cynthia’s Mail Order Company provides free examination of
its products for 7 days. If not completely satisfied, a
customer can return the product within that period and get a
full refund. According to past records of the company, an
average of 2 of every 10 products sold by this company are
returned for a refund. Using the Poisson probability
distribution formula, find the probability that exactly 6 of the
40 products sold by this company on a given day will be
returned for a refund.
Example-15: Solution
λ = 8, x = 6

x e   (8) 6 e  8 (262,144)(. 00033546)

P ( x 6)    .1221
x! 6! 720

Thus, the probability is .1221 that exactly 6 products out

of 40 sold on a given day will be returned.

 One important point about the Poisson probability distribution is

that the intervals for λ and x must be equal. If they are not, the
mean should be redefined to make them equal.

 The given mean is defined per 10 products, but x is defined for

40 products. As a result, we should first find the mean for 40
products. Because, on average, 2 out of 10 products are
returned, the mean number of products returned out of 40 will
be 8!
 Example-16
 On average, two new accounts are opened per day at an
Imperial Saving Bank branch. Using Table, find the probability
that on a given day the number of new accounts opened at
this bank will be
(a) exactly 6 (b) at most 3 (c) at least 7
Table-15: Portion of Table III for λ = 2.0
Example-16: Solution
(a) P(x = 6) = .0120

(b) P(at most 3) = P(x = 0) + P(x = 1) + P(x = 2) + P(x = 3)

=.1353 +.2707 + .2707 + .1804 = .8571

(c) P(at least 7) = P(x = 7) + P(x = 8) + P(x = 9)

= .0034 + .0009 + .0002 = .0045
 Note that 9 is the last value of x for λ = 2.0 in the Table. Hence, 9 is the
last value of x whose probability is included in the sum. However, this
does not mean that on a given day more than 9 new accounts cannot be
opened. It simply means that the probability of 10 or more accounts is
close to zero.
Example-17
An auto salesperson sells an average of .9 car per day. Let
x be the number of cars sold by this salesperson on any
given day. Using the Poisson probability distribution table,
write the probability distribution of x. Draw a graph of the
probability distribution.
Table-16: Probability Distribution of x for λ
= .9
Figure-9: Bar graph for the probability
distribution of Table-16.
Mean and Standard Deviation of the Poisson
Probability Distribution

 
 
2

  
Example-18
An auto salesperson sells an average of .9 car per day. Let x
be the number of cars sold by this salesperson on any given
day. Find the mean, variance, and standard deviation.

  .9 car
  .9
2

    .9 .949 car