646 1- MODERN QUANTTTATTVC TECHNIQUES FOR BUSINESE (B.COM.

N
As in the va_e of rat dom experiment outcome depends upon chance ihercfore the value taken by
random variable also depends upon chance. Random variable is, therefore, also called as chance take
väriabie or stochastic variable. in t
It noted that
may be the actual value which the event assumes is not
example, in three iosses of coin, the number of heads obtained is a random
a random variable. For
variable which can take
àny one of the three values 0, 1, 2 or 3 as long as the coin is not tossed. But after it is tossed and we
get one head then I is net a random variable.
Random variable may be discrete or continuous random variable.
Discrete Random Variable. A random is said to be discrete random variable if it takes
only the
integer values, such as 0, 1, 2, 3 Mathematically, if random variable X takes values x. X
X with probabilities pi.P2. Pj3 PX is called as discrete random variable. It can be
written as below
X P
P
P2
P3
PA

varia
Pn
E
Totai= 1
The schedule is called as probability distribution. Because in the above
example, X is a discrete
random variable the probability, distribution is discrete probability distribution.
Some examples. Meaning of discrete random variadle can be
explained with the help of following
examples:
Exampe 1.
D
No when die is thrown Probabilities
X
1/6
1/6 E
1/6
1/6
l/6
6 1/6

Total =1
Example 2.
No. of heads when Probability
2 coins are tossed
X P
0 1/4 Prc
1/2 exclus
2 1/4
Total=1 Acc
Some other examples of discrete random variables are number of printing mistakes in each page
the book, the number of telephone calls received by the telephone operater of the firm, the number and
children ina family etc. Acc
 1 697
.cOM J PROBABILITY THEORY fit
aken by Onnuous Random Variable. A random va;iable is said to be continuee ran y written
S chance takes all the possible values within a specified inte vai. Continuous random variabie i 5
in the form of class interval as shown below
able. For
can take P
d and Xo-X P
X-X P
only the XX P
es P1
It can be

Xn-1*n Pn
Total 1
randon
schedule is cailed asprobability distribution. Because variable X is a continuous
nis
variable, probability distribution is continuous probability distribution.
Some Examples
Example .
Height of the siuderts Probability
a discrete X (centimetres) P (supposed)
150-152 15
152-1544 20
following
154-156 25
156-158 30
158-160 10
1 00
Example I
Marks of the Probability
Students X p (supposed)
30-40 5/40
40-50 10/4
50-60 20/40
60-70 5/40
Total =1
SUMMARY
Probability is a statistical technique dealing with certain events. If out of 'w'
exclusive, equally likely cases, m are favourable to the occurrence of event E, ther
exhaustive, mutua y
P P IE] =q= P()-
According to Addition Theorem if two events are mutually exclusive,
ch pageo P[A +B] = P(A) + P (B)
and if even's are not mutually exclusive
number P [A +B] P(A) 4 P (B) - P (AB).
According Multiplication Theorem, if two events
to are independent,
 698 MODERN QUANTITATIVE TECHNiQUES FOR BUSINESS (B.COM. D PROBA
P[AB) - P(A).F (B)

and if they are not indcpendent

P[AB] P(A) P (B/A)
With each random Q.1
experiment we assocíate a variable called as random variable or chance variable. 0ne he:

gUESTIONS Hin
Q. 1. Explain the meaning of following terms- .
(a) Unceriain Events
(b) Triall Hin
(c) Exhaustive Events
(d) Mutua!ly Exclusive Events Q.1
(e) GN.D.U BCom. 1 Professional, April 2012) of card
Equally Likely Events (GNDU. B.Com. April 2005, 2007) Hint
Independent Events
(&) Dependent Events. (G.N.DU BCom 1 (P) April 2001)
Q. 2. Define probability. Show that
PtqI| Q.1
Q. 3. State and explain Addition Theorem of Find th
Q. 4. State and explain Multiplication TheoremProbability.
of Probability. Give some
examples.
Q. 5. What is the difference between: (GN.D.U. B.B.A. I, 1999)
(a) Dependent Events and Independent Events. GN.D U. BCom. I April 2001)
(6) Simple Probability and Compound Hint
(c) Simple Probability and Conditional Probability.
Q. 6. State and prove Addition Theorem Probability.
of Frobability.
Q.7. (a) Explain Multiplication theorem
Q. 7. (o) Define random
of probability. (GN.D.U. B Com. 1. April 200)
experiment, trial and event. (GN.D.U. B.Com. I 2012)
(6) I
SOME PRACTICAL QUESTIONS
Q. 8. From a well mixed pack iint
of cards, a card is drawn. What is the
(a) black card probability that it is a

(6) black ten card

(c) jack card Q.1
() king of diamond. is tne p

Hints. (a) m=26 n = 52

P Ans Hint

(b) m =2 ,n = 52
P 52 Ans.
Q.
4 method.
(c) m =4 n = 52 P Ans. (a) r
52
1 (bn
(d) m =1 n - 52
P5Ans. Hint
Q. 9. An urn contains two blue balls and three white balls. Fird the probability of a blind
man obtaining one blue ball in a single draw.
Hint. m =2 n =5 2
pAns.
Q. 10, In a threw of two dice, what is the probability of throwing:
(a) two sixes Q. 1
(b)total9. Hint

Hint (a) m = 1, n 36, P Ans.

PROBABILITY. THEGRY
(b) m = 4, 4
n 36,
Q. 11. Three
p 36 Ans.
perfect coins are tossed together. What
one head ? is the probability of getting
(GN.D U. B.BA.II, 1990)
at least
Hint. i8 m = 7

Q. 12. What is the

P RAns.
piotability that a vowel selected at random in
any Eng!ish book is an "7 ?
Hint. m = 1
n=5 P Ans.
Q. 13. Fiad the probability of
of cards. drawing a face card in a
single draw from well mixed
a
pack
Hint. Face cards mean
photo cards, i.e. king, queen and jack.
m = 12,
n = 52, 12
Q. 14. (a) A bag contains 25 balls
P Ans.
Find the probability that it has a numbered from 1 to 25. One ball te he drawa
at random.
number
(a) multiple of 5
(6) multiple of 7
c)multip!e of 5 or 7.
Hint. (a) m=5 n=25
p Ans.
(6) m= 3 25
3
25 Ans,

(c) m 8 n 25 P Ans.
(b) Determine the probability wiien at least one head
appears in two tosses of a coin.
Hint. n = 4, m =3 (G.N.D.U. B.Com. I (P) April 2005)
m= =
075 Ans.
Q. 15. In a bag there are 5 red and 4 black bails.
is the Three balls are drawn et
probability that out of three, two will be red and one black? random. What
Hint. m
x "C, =40
40 10
n C84,p =
84 21 Ans.
Q. 16. From a group of 4 we boys and 2 girls, are to form
method. What is the a committee of two by
(a) no boy probability that it will have lottery
(b) no girl.
Hint. (a) m=
*CoC2 =|
n =

C2= 15 P
5 Ans.
(b) n = C2 C, =6

6
n C2: P Ans.
Q. 17. What is the prubability of
Hint. Addition Theorem drawing a black card or a
king from a
pack of cards ?

p Ans.
 MODERN gUANTITATIVE TECHNIQUES FOR BUSiNESS (B.COM. D PROBAP
700Q. till he is 65
18. Suppose it is 9 to 7 against person A who is now 35 years of age living
and 3 to 2 against person B now 45 living till he is 75. Find the chance that at least one will
be alive 30 years hence.
Hnt. P [At least one]= - P [None]

Ans. Own 1
Q. 19. A problem in statistics is given to thrce students A, B and C whose chance of solving No

() V
it are andrespectively.What is the probability that the problem will be solved? (i) I
that he ha
Hint. P[At least one] = 1- P[None]
household
- 1-xx-Ans. Hint.
Q. 20. A problem in Statistics is given to five students A, B, C, D and E whose chance of B:Th
C Th
solving it are and respectively. What is the probability that the problem will be
solved?
(GN.D U April, 1998)
()
Hint. P[AL least one] =I - P (None)

=
1- P{ DNJ (it)

1-.2..4.-S Q.24.
that an er
6
Q. 21. From a pack of cards three cards are drawn one after the other without replacement.
0-70. Wh:
What is he probability of getting: that he is
(a) King in the first. king in the secend and king in the third ? Hint
(b)
(c)
Ace in the first, a queen
in the second and ten in the third?
Four cards are drawn without replacement. What is the probabiity that they are ali kings ?
B:A

(GN.D.U B Com I (P) April 2005)

Hi t. (a) Ans
P 52 51sc 5525
8 29os
(b) P 23 50 16575
Ans,
Thus

25
(c) P 52 s1 49 replaced.
Hint.
24
6497400 Ans,
or P
an engine failure is
22.
Q. The An air craft is equipped with three engines. The probability of
0-01. engine is required for the successful operation of an aircraft. What is the probability
of air raft failure ?
Hi t. P[All engines fail] = [0-01J [0-01] [0-01]
= 0-000001 Ans.

certain attitudes in a small

Q. 23. A market research firm is interested in surveying of a
down according to inconme, ownership Thus
comm anity. There are 125 households broken

telept one and ownership of a T.V.

 LUwwwwUUT
3.COM
he
PROBAPILIY FHEORY
701
Household with annual
tone, wi income of Rs. 8000 Household with
annual income
or less
above Rs. 8000
Telephone No.
Telephone No.
Subscriber Telephone Subscriber Telephore
Own T.V. set 27 20 18 10
of soiving No T.V. set 18 10 12 l0
What is the probability of cbtaining a TV owner in drawing at random ?
(ii) lf a household has income over Rs. 8000 and is a telephone
ghat he has a T.V. ? subscriber, what is the probability
(ii) What is the conditional probability of drawing a household that owns a T.V., given that the
household is a telephone subscriber ?
Hint. A: The household owns a T.V.
B: The household is a telephone subscriber.
Charce o C: The household has annual income over Rs. 8000.
m will be
P(A) =
() 125 06
ril, 1998 P(ANBnC) 18/125
ii) P(A/B nC) =

P 0-6
(BnC) 30/125
P(A/B) =
P(AN B) 45/125
(ii) (8) 75/12506

Q. 24. The probability that a trainee will remain with the company is 0-60. The probability
bat an employce earns more than Rs. 10,000 per year is 0-50. The probability that an employee
a trainee who remained with the company or who carns more than Rs. 10,000 per year is
i 7 0 . What is the probability that an employee earns more than Rs. 10,000 per year, given
hat he is a trainee who stayed with the company ?
Hint: A : A trainee will iemain with the cempan.
B: An einplcvee who ea:ns inore than Rs. 10,000.
all kings P (A) = 0-60, P(B) = C50 and P (A UB) = 0-70

pril 2005) = P (A U B) = P(A)+ P (B) - F (A nB)

or 0 70 0-60 +
0:50 - P (AnB)
or
P (A nB) =0-4

Thus P(B/A) Ans.

0 6 3
and not
6 black balls. 4 balls are successively drawn out
Q. 25. A bag contains 10 white and are alternately of different
colours ?
rplaced. What is the probability
that ihey
Hint. (i) White, black, white, biack.
white.
(ii) Black, white, black,
P(A) =P (i) + P (ii)
failur 45
robabilib 1069,5
PO) 16 15 14 13 728
Pin- x
1 6 15 1413 728 Ans
na s a 90
45 0.!24
rship Thus
P(A)128 728 728
 FOR BUSINESS (B.COM. 1)
TECHNIQUES
QUANTITATTVE
MODERN Three
702 stucients and 35
M.A. final students.
there are 40 M.A. previous the chance that they
Q.26. Ina college these are to speak
on a topic. What is
random from
students selected at
of different classes ?
a r e alternately final year student.
Final student, previous year student,
Hint. (i) year
previous year student.
Previous year student, fina! year student,
(i)
Required Probability-P()+ P(i)
34 952
P ( 0 - x x = 8103
73
39 1092
P ()
=5 74 73 8103
2044 cha
Ans.
P ()+Pu)8103
wil
Q. 27. Discuss and criticise the following:

PA)=PB)andP(C)
exclusive events Á, B and C.
for theprobabilities of three mutually
Ans. Impossible because
26
P(A+B+C)= afte
following statement:
mistake in the thir
Q. 28. Explain why there must be a
that a large consignment of giass
A quality control engineer claims that the probabilities
bricks contains 0, 1, 2, 3, 4 or 5 defectives are 0-11, 0-23, 0:37,
0-16, 0-09 and 0-05 respectively.
Ans. Total of probabilities is 1-0i, which is impossibie.
36% read B aewspaper, 14%
Q. town 20% of the population read A newspaper,
29. In 2
5% read both A and C newspapcrs,
read C uewspaper, 8% read both A and E newspapers,
read both B andC newspapers, 2%% read all
the three newspapers. What is the percentage
? (GNDU April 200co)
population wto reads at lest one of the newspapers
P(BnC) P(A nC) P(A
n
Bot)
n B)
+

P(AUBUC)=P(A)+P(B)+ P(C)- P(A

-
-

Hints.
2
lo1485_4 find
P(A U BU )=4
100 100 100 100 100 100 100

-=35% Ans.
100
of Statistics is given to three students A, B and C. What is the probability
Q. 30. A protlem
that problem will be solved.
Hint. P[Prolblem will be solved]
=
P[At least one will be able to solve it
P(AB) P(BC) P(CA) + P (ABC)
P(B) + P(C)
PsUBUC]= P(A) +
-
-

or P(AUBUC)=1-P[AnBnC]
= 1 - P(A) P(B) P (C) Ans.
it
31. A p1 oblem of Statistics is given to two students A and B whose chances of solving
Q.
porba
are andres
2 pectively. What,is the probability that :
Wins,
() 1he proolem will be solved. secon
(i) Oaly oe of them solved the problem.
 PROBABILITY THEORY 703
3.COMD
s. Three (ii) Fzacthy one of them solvled the problem.
(Pb. Uni. B. Ccm. i, April, 2001)
that they Hint. () P[Problem will be solved] = P[At least one of them solved the problem.
Applying addition theorem

P[A B]=P(A) +P(B) P(AB)- +-=Ans.Ans.

2 3 2'3A
-

i) P[Only one of them solved the problem) P{AB]+ P[BAJ

=

AnS
(ii) Same as part (ii) Ans.
Q. 32. A problem of L.P is given to five students Mr.A, Mr. B, Mr. C, Mr. D and Mr. E. Their
1 1 1.
chances ofsolving it are andrespectively. What is the probability that the problem
will besolved?
(P.B.U. B. Com. I, ápril, 2005)
Hint. Required Probability =1-P[A.B.C.D.E]

Q.33. A
-1-An
bag contains 3 white black and 5 red balls. Three balls are drawn at random one
after another witheut replacement. Fiad the probabiity that the first is white, second black and
third one is red ball '

it of gla
spectively. Hint. P(WB2nR3)
=0 045. Ans.
per, 14% BAYES'THEOREM
apers, 4% Q.34. Three boxes are given each cortaining red and white balls
entage of Box I:6 red and 4
as given below
white
pril 2000) Bcx II:7 red and 3 white
BnC) Box III: 5 red and 5 white
A box is selected at random and a bail is drawn from
find out the
the selected box. If the found to be
red,
probability the box I was chosen.
Hint. PA;)= P{A2)=PA)
3
6
robability PEIA)=0.6,
10 P(EIA2)= 0.7,
10 P(E / A3)= =0.5
10
PA E)x0.6-PA2 nE)=x 0.7=PAjn E)={x 0.5 =
0.6 3
0.6
P(AE)=-0.6 0.7, 0.5 =0.33
1.8
Ans.
sol ing t 3 3 3
Q.35. Two candidates are competing for the post of
Mahaging Director of a Company. The
porbabilities that the first and second will win are 0.6 and 0.4
wins, the probability of introducing a new respectively. If the first candidate
product is 0.8 and the corresponding
second candidate wins is 0.3. What is the probability if th
probability that the new product is introduced ?
If th
704 MODERN gUANTITATTVE TECHNIQUES FOR BUSINESS (B cOM. n
new produet is introderedt, find out the p-obability that second candidale got the post of Managing
Director.
Hint. P(A,) = 0.6 P(A,) - 0.4

P[E/A) 0.8 P[E/A, 0.3

P[A, nEJ -
0.6 x 0.8 =
0.48 PIAnB= 0,4 x 0.3 =0.12
P[E]=0.48 +0.12=0.6C Ans.
0.12
PE/A2
P[E/A,]= 0.60 0.2 Ans.
Q. 36. In bolt factory, machines A, B and C manufacture
a
If the totai of their respectively 25%, 35% and 40%.
output 5%, 4% and 2% are defective bolts. A bolt is drawn from the product
and is found to be defective. What is
the probability that it was manufactured
by machine C.
Hint. Suppose
A, A2 and Aq, respectively represent the manufacturing by machine A. B and C
respectively. Further suppose E represents the event of drawing a defective bolt.
PCA)= 0.25 P(A,) = 0.35 P(A) = 0.40
P[E/A,] = 0.05
P{E/A] = 0.04 P[E/A] = 0.02
P[A,nE] =0.25 x 0.05s PIA2E]= 0.35 x 0.04 P[AE] = 0.40x 0.02
0.0125 0.1040 = 0.080

0.080 16
P[A3/E]= 0.0125+0.0140+0.080 0.23 Ans.
69

Q.37. Suppose Mr. Sharma, Mr.

of the
Kapoor and Mr. Das are competing for the post of Principal
College. Their probabilities of getting the post 0.50 and 0.30 and
are 0.20 respectively. The
probability that co-education will be introdaced in the Commerce
the Principal is 0.30. Similar F2culty if Mr. Sharma is appointc
What is the
probabilities for Mr. Kapoor and Mr. Das are 0.70 and 0.80
probability that co-eudcation is introduced ? If co-education is respectively.
the
probability that Mr. Sharma was appointed the Principal. iniroduced, find out
Hint. P(A) = 0.50
P(A) = 0.30
P(A,) = 0.20
P[E/A] - 0.30 P[E/A,] = 0.70
P[E/A= 0.80
P[A E]) =0.50x J.30 P[A, E) =
0.30 x 0.70 P[A E ] = 0.20 x 0 802
= 0.15
= 0.21
-0.16.
PE==0.15 +0.20+0.16=0.52 Ans. 0.15
P.A2 / E] =
- 0.29 Ans.
0.52
M. 1

aging
Binomial,Poisson and
Chapter16
"Models are io be used but not to be believed."
Normal Probability
Distribution
- H. Theil

40%.
oduct Introduction
Probability distributior. is a distribution which gives us probabilities for the differcnt values of a
and C variable. !fprobabilities are calculated according to some definite probability law which can be
expressed matheinatically, probability distribution is called as theoretical probability distribution. There
are many theoretical probability distributions. Eut here we will discuss only three such distributicns ie.

5inomial probability distribution, Poisson probability distribution and Normal probability distribution.
The discussion of others is beyond the scope of this book.
Binomial Distribution - Its Definition
A randem variable X is said to follow
binomial distributioa,
if it takes noa -

negative
discr.ie values 0, 1, 2, 3. , ...n with probabilities given by the mathematical law

PIX nC,p" qhr

where n is the total nuinber of trials, r is tiie number of successes, p is the probability of
cipal
success in a single trail and q is the probability cf failure in a single trial.
. The
ointe
Probabilities for the different values of a random variable will be as below
tively. PIX 0="C%p°q*-" =q"
d out P[X 1]="C p' q' = qn-

PIX 3]= "C3p q' = q"-3

. .... . . .

P[X r]= "C,p' q'="

802
P[X n "C, p" q" - =p
Since the probabilities of the different tems is
given by the binemial
expansion [a t p}". therefore
the above distribution is called as binormial distribution.
Binomial Probability distribution was discovered by James Bemoulli in the year 1700 but was
publi:hed in 1713.
Conditions For Application. Binomial distribution can be used under the following conditions
i) The random experiment is performed repeatedly a finite and fixed
number of times. In othej
word, n the number of trial is finite and fixed.
(i) Results of any trial can be classilied into iwo mutually exclusive categories one called,
success and the other failure. For cxample, if we toss a coin, cither there will
be head (success)
will b: tail (failure):
or th
705
706 MODERN QUANTITATIVE TECHNIQUES FOR BUSINESS (B.cOM. D
(ii) Probabiliuy of success in 2cl1 tial remains constant end
does not
BINOM
change from trial to trial, (vi
For example, in tossing of a coin, probability of head reinains mean ar
in all the trials.
ix
(iv) Trnals are
independent. It means result of the 2nd trial is not affected to np +
by the result of the lst
triai. Fur example, in tossing ofa coin
of the Ist trial.
probability
of getting head in
2nd trial is independent of the result
Binomial Distribution Its characteristics. Binomial
()
-

distribution because binomial variable takes probability is a discrete probability

only discrete values 0, 1,2 . . .
(i) Binomial variable takes only non-negative values.
binomial variable denotes number of successes. Negative values are not possible because Ex
(ii) Binomial Distribution has two constants, ie. (a)
the probability of success in a parameter n the number of trials and p c)
single trial. The entire binomial distribution can be determined if n and Sol
are given because q is equal to 1 -p.
(iv) Mean of binomial distribution is always
equal to np.
(v) Variance of binomiel distribution is always
equal to npq and standard deviation is equal
tonpq.
(vi) For binomial distribution variance is less than mean.
(a)
(vii) Skewness of Binomial Distribution will depend upon the values of p and q."
(a) Binomial distribution is withcut skewnc:s
if p-q=
(b) Binomial distribution is positively skewed if p is less than q (p < q).
(c) Binomiel distribution is negatively skewed ifp is more than 9 (p> q).
(ii) The shape of binomial distribution depends upon the vaiue of n and p: (b)
The following diagrams show the nature of binomial distribution aspis increased keeping n constant.
Binomial Probability Distribution for n = 6.

0.6

0.1 P 0.9
94
(c)
24

(d)
P-U.2

Exar
that out o

Solui
P 0.5
P03

as
02

e r e

P
 LBINOMIAL, POISSON AND NORMAL PROBABILITY I 707
DISTRIBUTION
(vii) Binomial distribution is nnimodal if np is a whole number (that is integi r). In is case
nican and mode are cqual and aic both equal to np.
(ix) np
If is not a whole nuinber binomial distribution is bimodal. It has two modals, one cqual
to np +
p and the other is equal to np
- q.
() As n « and p0, binomial distribution takes the form
and p q , binomial distribution takes the formofofpoisson
distributlon.
(xi)As n » uormal distribution.

SOME PRACTICAL EXAMFLES

Example 1. 4 fair coin is tossed 3 times. Find out the probability that there will be
(a) Three heads (6) Two heads
(c) One hec d d) No head.
SoBution. n= 3 Y

P[H]= p
1
PIT)-9
(a) P[X 3 ="C^p''-)

Ans.
(6) PX-21-Cpy2- tc,|
-

() P[X=1]=-"Cp'g- 'c =

3 Ans.

(d) P[X= J="Cop°4-0 -*co

=1. An
Example 2.. ftwenty percent ofthe items produced by c machine is defective, find out the probability
that out of 4 goo's selected at random three will be defective.

Solution. p= P(defective)- 100 5 20

n4

4-3

X-3-"Cp'-tc,[(.- 16 Ans
125
708 MODERN QUANTITATIVE TECIINIQUES FOR BUsINESS (B.COM. D
Example 3. The incidence ofoccupationai disease in an ind:sry is such that the workmen have a
20% of chance of suffering from it. What is the probabiliy that out of six workmen four or more will
contact the disease ?
Solution. p P[Worker Suffer from a disease]
20
100

The probability that 4 or more workers contact the disease is

PIX 2 4]- P [X = 4]+ P [X = 5] + P [X = 6]

I5x 16 6x 4 1 265 o.016Ars

15625 15625 15525 15625
Example 4. In a family of 4 children, (a Find the probahility there will be at least one boy
(b) What percentage would you expect to have at least one boy.
What percentage would you expect to have at most 2 giils.
(c)

Assume that probability of male birth is GN.D.U. B.Com. 1. April 2012)

Solution. p P[Boy 2
, n4

PIX > 1 P [X 1] P IX 2] P [X 3] + P X =4]

6.46* 1616 Ans.

2nd way: 1P [No boy]

PIA least one boy]
=

= 1- P{X =0] = 1 - *C

=
1 -

1.1. =1-= 16 Ans.

16

have atleast one boy 1x100 5016 =93.75%

(b) Expected percentage te 16

Probability to have at most

2 girls
(c)

P IGirl 4 ,
n
=
4

21
[X . I| + PIX
PIX 2 1 P IX OP
(B:NOMIAL POISSON AND NORMAL PROBAI iLITY DISTRIBUTION 709

Expected percentage o have atmost to girls x 100 = 68.75%

16
Example 5. An owner ofa small kotel with 5 rooms is thinking of buying T. V sets to rent them to
room occupants when demanded. He expects that about half of his customers will be willing :o get sets
on rent. He buvs three T.V Sets. Assuming 100% occupancy at all times, find out the probobility thu:
(a) a
customer who requests for T.V will get one
(6) some demand will be refused.
Solution. P[Demand for set) = p =

n=5
(a) A customer who
requests for T.V. will get one, i.e., Demand is less than or cqual to three
PX 3]= P {X 01+P [X 1] P [X 2] + P {X 3]
=
+ =

=1.15. 10 10 3223232
26 Ans.
32 16
(b) Some demand will be refused means demand will be more than 3:
PIX> 3 = P[X = 4]+ PiX = S]

tTG) -
32 .3232
3An:
Ans.
Alternative way:
P[X>3]- 1- P[X s3]= 1- =13 Ans.
16 16
Example 6. (a) 80% of televis ion viewers watch Sass Bhi Kabli Bahu Thi.
What is he
probability that at least 89% of the viewers in a
sample of 5 watch this programme?
(PU. BCom. 1, Sept 2005)
80
Solution. p 100
or0:8, q =1 - 08 = 02

Applying binomial d stribution

n= 5

80
p 80%
100

q153
 B6
Nittttttttrtt
(B.COM. D BINO
MODERN QUANTITATIVE TECINIQUES FOR BUSINESS
710 E
of 5
80% of television viewers in sample ofthe
Se
80x5
100
4
Probabiity that atleast 80% of television viewers i.e., 4 watch the programme
-
P[X 2 4] St
P[X 4]+ P[X =
5] E
We know that P[X = r! = "Crp" q"-
correct
Se
exampl

Ix1280
1 1024
3125 x1 Di
1280 1024
3125 3125
2304
3125
0 073. Ans.
Example 6.(6) Ina binomial distribution consisting ofS trials probabilities ofone and two successes
E
correct
are 0-4096 and 0-2048 respectively. Find out the binomial distribution. So
Solution. n = 5 Suppos: p is probability of success]
P [X = 1] = 0-4096

PIX 2] = 0-2048 Di

C, (p)' (q =
0-4096

C (p (g)3 - 0-2048 ...(ii)

Dividing equation (ii) by equation (i), we get Iti
Th
C2 0.2048 Ex
C1P' 0.4096 2 So

10p
Din
ross multiplying, 20p 5q .(i)
20p 5 (1-p) lg1-pi
20p 5-Sp
25p 5

p
25
p 0.2, q = 1 - 0.2 = 0.8

Distribution of X will be X~ B[5, 0.2)

X foliows binomial distribution with parameters 5 and 0.2
Dis
and PIX r-5C, [0.2Y [0.8)p- Ans.
 NOMLAL,
BIN POISSON AND NORMAL PROBABILITY DISTRIBUTION
Example 7.1f the probability of defective bolts is 0 4, find out the mean and 711
defective bolts in a
of theSolution.n total of 500 standard deviation
S00, p = 0 4

l-0-4 =0.6
Mean np = 500 (0-4) 200 Ans.

Standard devietion lnpq V500(0.4) (0-6) 120 =10.95 Ans.

=
=
=

Example 8. Mean of the binomial distribution is 8 and variunce is 10.

Whether this statement
correct? is

Solution. No, because for

binomia distributicn variance is always less than mean. In the above
example
Mean = np = 8

Variance = npq = 10 ..)

Dividing equation no. (ii) by equation no. (i) ..ii)
npq
np 4
q = 1-25 which is not possible. Ans.

Example 9. Mean of the binomial distribution is 5 and variance is 3. Whether the statement is
correct?

Solution. Given
Mean =np=5
Variance = npq = 3 ..(1)
Dividing equation (in) by cquation () -(i)

npg 5
np
G06
It is possible.
Therefore, statement is corect. Ans.
Example 10. For a biromial distribution mean is 30 and variance is 21. Find out the distribution.
Solution. Given
Mean = np = 30

Variance = npq = 21 .(i)

Dividing equation no. (ii) by equatiun no. (i) (ii)

npe21
np 30
90.7

P=l-q
P l -7
p 0-3

Mean = np Mean
n
P
30
0 . 3 = 100
0.3
Disiribution of X wiil be
X-B .100, 0-3]
P[X = r= 100 (0-:3 (07100-r
 712 1- MODERN QUANTITATIVF. 1ECHNIQUES FOR BUSINESS (B.COM. )|
Example 11. Assuming tha: haif the population is vegetarian so that the chcnce of an individual

being a vegetarian is and as uming that 100 investigators can take sam1ple of 10 individuals to see
whether they are vegetcrians, how riany investigators would you expect to repor that three people or
less were vegetarian ?
Solution. Probability of a person being a vegetarian
P 2

P [X 3) =

P (X 0) +
P (X =1) + P (X 2) + P (X 3)

1 10 120

Number of investigators N = 100

1024 1024 1024 1024 1760:172
1024

Investigators expected to report that three or less were vegctarians

= !00x 0-172

172 or 17 Ans.
Example 12. Is there any inconsistency in the statement, the mean of binomial distribution is 40
and its standard deviation is 4. Ifno
inconsistency is found, what shall be the value of p, q and n ?
IGND.U. B.Com. I & B.Com. I (P) April 2005
Solution. np 40
...(0)
vpg 4

or
npg 16
Dividing (i) by (i) ...(i)
npq 16
np 40
or
0-4, p =06
np 40

n 06 =
40
or 40 or 67
n
06
=
Approx. Ans.

Example 13. Bring out the fallacy in the following statement "Mean of binemial distribution is
10 and its S.D. is 6". GN.D.U. B Com. 1 (P) April 2001)
Solution. np = 10 and ynpq = 6

or npg 36

np 363-6
10
or 36

which is not possible.

Therefore the given statement is wrong.
 aNOMIAL.
BINO POIESON AND NORMAL. PROBABILITY DISTRIBUTION
Erample 14. On an ave:uge
1713 J
ships oui of 10 arrive safely to ports. ibtain mean end S.D. of
ual shipsreturning safely out of total of 200 ships. (G.N.D.U. B.Com. I April 2001)
9 9
ee Solution. 1O 102 0 0
O
-9
X = np 200x = 180 Ans.
10

Vnpg 200xx
4.24 Ans.
Fitting of Binomial Distribution:
Suppose a random cxperiment ccnsists of n trials, satisfying the conditions of binomial distribution
and further suppose that this experiment is repeated N times. Then the frequency of r successes is
given by the following formula
Nx P(X=r)= Nx", qh='; r =0, 1, 2,
Puttingr=0, 1,2,.., n ; we get the expected ortheoretical frequencies of the Binomial distrioution,
which are given in the foilowing table:
Nc. cf successes Expectcd or Theoretical
frequencies
N* P X = r)
0 Ng"
Nx C - ' p
2 NxC2-2p2

Np"
If p. the probabiity of success is not known,we first find the mean of the given frequency
fX
distribution by the formula and equate it to np which is the mean of the binomial probability
distribution. Hence p can be calculated by the relation

np Xx or P n
then 1 p.
Example 15. Fit a binomial distribution to the following data
2

f: 28 62 46 10
Solution. We are given,
n4 and N= f = 150; for fitting binomial distr bution, we require the values ofp and q.
We know, fer binomial distribution
np mean
of the distribution =
X ...(i)
2SX X
X =
SX
0 28
200
or 62 62
150
2 46 92
714I MODERN QUANTTATIVE 1ECHNIQUES FOR BUSINESS (B.COM. D siHOM
or 3 10 30
16
150 200
Substituting the value of in (i)
Now
np
4p3*Pi
Thus
(No.
The expected binomial probabilities are given by:
0
p X r) =
"C, p' q=" ='c, .i)
Putting=0, 1, 2, 3, and 4 in (i); we get the expected binomial probabilities given
following table: as in the

X P (X) Expected îrequency

NP (X)

-1YG)- 150x=
1S0x6

81
29-63 30-30

150 = 59 26 59
81

150 x=
81
44 44 44

)- 150 x
8
81
=14 8! 15

4.
150x=
81
1-85 2
X
Total1
Total 150 Freq
Hence the fitted binomial Exan
X
distribution is
0 2 3 Total Successe.
f 30 59 44 15 2 150
Example 16. Five fair coins
were lossed 100 times. From the standard
expectedfrequencies. following outcomes calcu ate the
No. of heads Solut
3
Observed frequency 2 i0 24
Solution. We are given, 38 18
n =
5 and N =
2f =
100
 H715
DISTRIBUTION

PROBABIITY
NORMAL
DEINOMIAL,
POiSSON AND
B.COM.
fair coin
head in a singie throw of a
probability of

1-
as follows:
the expected
binomial frequencies
we can obtain
Now

Expected frequeucy
P (X r )
X
(No.of heads)
N xF (X =r)

00x 3 1253
)-
en in the 100x = 15 625 16

00x =31:25 31

100x = 31.125 31

100x= 15 625 16

100x 3-1253

Total 1 lotal 100

X 2 4 Total
Frequency 16 31 31 100 16
Example 17. 8 fair coins are tossed at a time, 256 times. Find the expected frequencies of
ccesses (geting a head) and tabulate the results obtained. Aisoo tain the values ofthe mean and
standard deviation of the fitted distribution.
ulate the
Solution. We are given,
n 8 andN = 2f= 256
 AINOMIA

716 MODERN QUANTITATTIVE TECHNIQUES FOP BUSINESS B.COM. D Exam

row isr
p probability of success (head) in a single throw of a coin 5 No of

Fregue
Fii ab
1-
alue nfi
Now, we can obtain the expected bionomial frequencies as follows
Soluti
X X r] Expected frequeny
No. of Heads N P[X al

256x56
256x 8 8
25

28 256x 28
256
3
256x=56

c.(- 20
256256 70

256x 56

256x 256 28

1
256 68
256
 OMIAL
RING
POISSON AND NORMAL PROiBAB LITY DISTRIBUTION
SA ample 18. Seven coins are tossed at t time for i28 times
717
Number of heads oñserved at eurh
wis reccrded ard the results are given below
No of heads 3 4 5 6 7
Frequency 6 19 35 30 23 7
Fita binomial distribution under the hypothcsis that the ccins are
unbiased. What are the theoretical
ne of its mean and standurd deviation. (PU. April 2007)
Solution. Here n =
7, N= 128, p 9
X
P[X r] Expected Frequency
N[P(X = r)

128

128-
35
A
128 3535
28 128
21
128 128 : I
L128

7
128 128128

1
1285
=

128
L128
 MODERN QUANTITATIVE TECIHNIQUES FOR BUSINESS (B.COM. D
718
EXERCISE 1 |
Q. 1. (a) Define Binomial variable. Discuss the various properties of binomial distribution.
(6) Define Binomial distribution (GN DU I (P) & B Com
Com I April
2001) B
Q.2. What are the characteristics of Binomial distribution ? Highlight the importance of Binomial
distribution. (Punjab University B Com 1, April 2012)
Q.3. Eight coins are tossed simultaneousiy. Find the chance of obtaining
(ano head
(b) all heads
(c) At least 6 heads. G.NDU BCom. 1, April 2003)

Hint: (a) p Binomial

256 Ans.

(6)
)A Ans.

(c) SAns.
Q.4. The normal rate of infection of a certain disease is 40%. What is the probability that out of
5 individuals studied no one will have infection ? (G.N.D.U. B com. 1 1999)
Hint p = 0:4, q = 0-6 Binomial

C (0-4 (0-61= 0-0467 Ans.

Q. 5. For 2 binomial distr:bution mean is 6 and variance is 2. Find the distributior.
Hint i = 6 , npg =2

literate. What is the probability thdt cut of individuals

Q. 6. In any population 20% of people are

studied 3 will de literate ?

Hint:p= 02. q 0-8
=

P (X 3) 10C, (0-2'(0-8)= 0-2014 Ans.

chance of obtaining at least 6 heads.
Q. 7. Eight coins are thrown simultaneously; find the

Hints n = 8, r = 6, 7, 8, p
9
37
Ans.
P(X 2 6) *c| 256
bolt is 0.1, find (a) the mean and (6) the standard deviation
Q.8. Ifthe probability of a defective
of defective bolts in a total of 900.
Hint np
=
900 (0-1) 90
= Ans.
=
900 (0-1) (0.9)
=
81 Ans.
npq
 OMLAL. POISSON ANND NORMAL PROBABILITY DISTRIBUTIONF
9The mean of Bnomial Distribution is 20 and S.D. is 4. Calcuiate
1 719
, p and q.

Hint: Given * =
np= 20
(G.N.D.U., B.6.A. Ii, 1999)
Variance =

npq =
16
01)
ial 45 P5 and n 100 Ans.
0. 10. The mean ånd standard deviation of a binomial
the fallacy, if any in the
distribution is i5 and 5 respectively. Bring
given statement.
Hint: np 15, npq 25, q167 which =

is inpossible.
0. 11. An accountant is to audit 24 accounts of
aistomers. If the accountant selects 4 of the accounts fim. Sixteen of these are of
a

at random, what is the

highly-valued
chooses ai least one.highly-valucd account ? probability that he
16 2
Hint:n 4, p= 24 4
Required probability p =
1 - p {No highly valued account)
P (X 2 1) = 1 -

p (X =0)

PX2 1) -
1-co{JG}=A
Q. 12. (a) The probability of a bomb hitting a target is Two bombs are enough to destroy a
hridge. If six dembs are aimed at the bridge, fiud the.probability that the bridge is desiroyed.
Hint n 6,p q =
The bridge is destroyed if at least two of the bombs hit it. Hence the
bridge is destroyed is required probability P that the
(X2 2) =

(X
2) +p (X 3) +p (X
= =

1 - p (X
=
4) +p (X -
5) +p (X =
6)
0) +p (X = 1)] =

=1 2048
= 0:3446 Ans.
3125

(6) The chances that a ship reachcs safely on port is Find the picbability that out of 5 ships
Cxpected to arrive at lcast one would arrive safely. (PU. Com. I Apr1! 2004)
Hint. p = 9 = 1 - p =4 n = 5

P (at least one) =

1 -P (X =0)
or P (at least one) =
1 -

°C%|
=1l024 2101
312s Ans.
3125
 NOLN8NLSIO ALTTEVTO

fTetttttttTTt
TECHNIQUES FOR BUSINESS (B.COM. D BICM
QUANTTATIVE
MODERN
find how many days
220 J certain brecd lay eggs on ays a week on an average,
will cxpect to
receive at least Me
Q. 13. If hens of with 5 hens of this breed,
100 days a poultry keeper
a season of
during
4 cggs ?

Hint: 5, N
-

100, p 7.97 and (X 2 4)

F 0-5577 =

P (X =
4) + P (X =
5) expect to
find P (X 4) 2 of 5 hens will
We are to
of 100 days, a poultry keeper .
of days during a season
Hence the no.
100 * 0:5577 55:77= 56 Days. Ans
=
ollowin
* P (X 2 4)
=

receiveat least4 cggs is N 6 ar.d if 9P (X 4) P (X 2). = =

=

if n
binomial random variable X,
*
containe
for 2002)
(G.N.D.U., B.Com. I (Professional) April
Find a
Q. 14. p
No
9P (X 4 ) = P (X = 2) No
Hint
9p- Fit
9x Cpg C2p*4
8p+ 2p - 1 0
=

9p2 (1 -p = 1 +p - 2p
is
D24+4x8-236-2t6-84
28 16 16 16
Hi
Ans.
Since p canrot be negative, theresore p=
and standard deviations 12 and 2 respectively, find n
Q. 15. In a binomial distribution the mean are

and p.
Hint. np= 12, ynpq = 2 or npq = 4
Var

np
Ex
Q.
12 n18. p= 3
Ans. seeds. Fi

Q.16. Five coins are tossed 3,200 times, find the frequencies cf the distribution of heads and tails
and tabulate the esults. Als: obtain the mean number of successes and standard deviation.

1:p-q=i- No. of heads

n = 5 and N = f = 3200 Hi

Expected frequency
(X) NxP (X = r)
Ex
0
3200c 100

3200 c - 500 Int

I837. It
3200C 1000 Binomia
when p,
called as
3200xC = 1,000

Del
4 With
3200x 500

5
3200xC 100
whe
risthe