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ISOM 491 Session 2 28aug2015

To be able to learn more about accounting

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0% found this document useful (0 votes)
26 views115 pages

ISOM 491 Session 2 28aug2015

To be able to learn more about accounting

Uploaded by

Andrea Abella
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Session 2

 Chapter 5
o Experiment, Outcome and Event
o Approaches to Probability
o The Complement Rule
o Rules of Addition
o Rules of Multiplication
o Conditional Probability & Contingency Table
o Counting Rules: Multiplication, Combination and Permutation

 Chapter 6
o Random Variables
o Discrete Probability Distribution
o Binomial Probability Distribution
o Poisson Probability Distribution

 Chapter 7
o Continuous Random Variable
o Uniform Probability Distribution
o Normal Probability Distribution

1-1
A Survey of Probability
Concepts
Chapter 5
o Experiment, Outcome and Event
o Approaches to Probability
o The Complement Rule
o Rules of Addition
o Rules of Multiplication
o Conditional Probability & Contingency Table
o Counting Rules: Multiplication, Combination and Permutation
LO5-1

Probability
PROBABILITY A value between zero and one,
inclusive, describing the relative possibility (chance or
likelihood) an event will occur.

1-3
LO5-1

Experiment, Outcome, and Event


 An experiment is a process that leads to the occurrence of one and
only one of several possible results.
 An outcome is the particular result of an experiment.
 An event is the collection of one or more outcomes of an
experiment.

1-4
LO5-2

Ways to Assign Probabilities


There are three ways to assign probabilities:

1. CLASSICAL PROBABILITY
Based on the assumption that the outcomes of an experiment are
equally likely.
2. EMPIRICAL PROBABILITY
The probability of an event happening is the fraction of the time similar
events happened in the past.
3. SUBJECTIVE PROBABILITY
The likelihood (probability) of a particular event happening that is
assigned by an individual based on whatever information is available.

1-5
LO5-2

Classical Probability
 Flip a coin, what are the outcomes?
 Head & Tail
 What is the probability of a Head?
 50%
 What is the probability of a Tail?
 50%

 Roll a dice, what are the outcomes?


 What is the probability of a 2?
 1/6
 What is the probability of an even number facing up? (2,4 or 6)
 3/6 (50%)

1-6
LO5-2

Classical Probability

Consider an experiment of rolling a six-sided die. What is


the probability of the event: “an even number of spots
appear face up”?
The possible outcomes are:

There are three “favorable” outcomes (a two, a four, and a


six) in the collection of six equally likely possible outcomes.

1-7
LO5-2

Empirical Probability, Example


What is the probability that NASA’s next space shuttle
mission is going to be successful?

On February 1, 2003, the Space Shuttle Columbia


exploded. This was the second disaster in 123 space
missions for NASA. On the basis of this information,
what is the probability that a future mission is
successfully completed?

Number of successful flights


Probability of a successful flight 
Total number of flights
121
 0.98
123
1-8
LO5-2

Empirical Probability

Empirical approach to probability is based on what


is called the Law of Large Numbers.

The key to establishing probabilities empirically: a


larger number of observations provides a more
accurate estimate of the probability.

1-9
LO5-2

Subjective Probability - Example

 If there is little or no data or information to calculate a


probability, it may be arrived at subjectively.

 Illustrations of subjective probability are:


1. Estimating the likelihood the New England Patriots will play
in the Super Bowl next year.
2. Estimating the likelihood a person will be married before the
age of 30.
3. Estimating the likelihood the U.S. budget deficit will be
reduced by half in the next 10 years.

1-10
LO5-2

Summarizing Probability

1-11
Probability Rules
 The Complement Rule
 Special Rule of Addition
 General Rule of Addition
 Special Rule of Multiplication
 General Rule of Multiplication

1-12
LO5-1

The Complement Rule of Probability


 If probability of rain is 20%, what is the probability of no
rain?
 80%
 We roll a dice, what is the probability of a 2?
 1/6
 What is the probability of anything other than a 2?
 5/6

1-13
LO5-1

The Complement Rule of Probability


The complement rule is used to determine the probability
of an event occurring by subtracting the probability of the
event not occurring from 1.

P(A) = 1 - P(~A)

OR

P(A) + P(~A) = 1

1-14
LO5-3

Special Rule of Addition


We roll a dice:

 What is the probability of a 2?


 1/6
 What is the probability of a 3?
 1/6
 What is the probability of a 2 OR a 3?
 2/6

Note that the two events are not overlapping: Mutually Exclusive
1-15
LO5-3

Special Rule of Addition


 Special Rule of Addition - If two events A and B are mutually
exclusive, the probability of one or the other event occurring equals
the sum of their probabilities.
P(A or B) = P(A) + P(B)

 Events are mutually exclusive if the occurrence of any one event


means that none of the others can occur at the same time.

1-16
LO5-3

Class Group Exercise #1


A machine fills plastic bags with a mixture of beans, broccoli, and
other vegetables. Most of the bags contain the correct weight, but
because of the variation in the size of the beans and other
vegetables, a package might be underweight or overweight. A check
of 4,000 packages filled in the past month revealed:

What is the probability that a particular package will be either


underweight or overweight?

Hint: You can solve this problem in two different ways, special rule of
addition and complement rule.
1-17
LO5-3

Class Group Exercise #1

What is the probability that a particular package will be either underweight


or overweight?

Using the Special Rule of Addition

P(A or C) = P(A) + P(C) = .025 + .075 = .10

Using the Complement Rule


P(~B) = 1 – P(B) = 1 - .900 = .10

1-18
LO5-3

General Rule of Addition


We roll a dice:

 What is the probability of a 2?


 1/6
 What is the probability of an even number (2,4 or 6)?
 3/6
 What is the probability of a 2 OR an even number?

Note that the two events are overlapping: NOT Mutually Exclusive
5-19
LO5-3

General Rule of Addition


The General Rule of Addition - If A and B are two events that are not

mutually exclusive, then P(A or B) is given by the following formula:

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

P( A and B) is called a joint probability.


5-20
LO5-3

General Rule of Addition


We roll a dice:
 What is the probability of a 2?
 1/6
 What is the probability of an even number (2,4 or 6)?
 3/6
 What is the probability of a 2 OR an even number?

 The two events are overlapping: Not Mutually Exclusive.


 Using the General Rule of Addition: 1/6 + 3/6 – 1/6 = 3/6

5-21
General Rule of Addition– Example
What is the probability that a card chosen at
random from a standard deck of cards will be
either a king or a heart?

1-22
LO5-3

General Rule of Addition– Example


What is the probability that a card chosen at random from a
standard deck of cards will be either a king or a heart?

P(King or Heart) = P(King) + P(Heart) - P(King & Heart)


= 4/52 + 13/52 - 1/52
= 16/52, or .3077 or 30.77%
1-23
LO5-3

Class Group Exercise #2


The Venn Diagram shows the results of a survey of 200 tourists who visited
Florida during the year. The results revealed that 120 went to Disney World,
100 went to Busch Gardens, and 60 visited both.

What is the probability a selected


person visited either Disney
World or Busch Gardens?

1-24
LO5-4

Special Rule of Multiplication


We flip a coin two times:
 What is the probability of a head on the 1st trial?
 1/2
 What is the probability of a Head on the 2nd trial?
 1/2
 What is the probability of a Head on both 1st AND 2nd
trials?

• P(Head on both trials) =


1 out of 4 outcomes = ¼
• Special Rule of Multiplication:
½ * ½ = 1/4

1-25
LO5-4

Special Rule of Multiplication


 The special rule of multiplication calculates the joint
probability of two events A and B that are
independent.

 Two events A and B are independent if the occurrence


of one has no effect on the probability of the
occurrence of the other.

 This rule is written: P(A and B) = P(A)×P(B)

1-26
LO5-4

Special Rule of Multiplication-Example


 We roll a dice twice. What is the probability that we get a 2 on
the 1st trial and an even number on the 2nd trial?
 “2 on the first trial” and “Even number on the 2nd trial” are two independent
events.
 P = P(2 on the 1st trial) * P(Even # on the 2 nd trial)
= 1/6 * 3/6 = 3/36
 We pick a card from a standard deck of cards, look at it, put it
back in the deck, shuffle and randomly pick a card again. What
is the probability that we get a Heart on both 1st and 2nd trials?
 Because we put the card back again, “Heart on the first trial” and “Heart on
the 2nd trial” are two independent events.
 P = P(Heart on the 1st trial) * P(Heart on the 2nd trial)
= 13/52 * 13/52 = 0.0625

1-27
LO5-4

General Rule of Multiplication


We pick a card from a standard deck of cards, put it aside, randomly
pick another card from the remaining 51 cards.
What is the probability that we get a Heart on both 1 st and 2nd trials?

 What happens on the 1st trial, changes the probabilities on the 2nd trial.
 “Heart on the first trial” and “Heart on the 2 nd trial” are NOT
INDEPENDENT EVENTS. Probability of a Heart on the 2nd trial
DEPENDS on what happened on the 1st trial.

Two Possible Scenarios


 If we got a heart on the 1st trial:
 P(Heart on the 2nd trial) = 12/51

 If we didn’t get a heart on the 1st trial:


 P(Heart on the 2nd trial) = 13/51

1-28
LO5-4

General Rule of Multiplication

The general rule of multiplication is used to find


the joint probability that two events will occur when
they are not independent.

It states that for two events, A and B, the joint


probability that both events will happen is found by
multiplying the probability that event A will happen by
the conditional probability of event B occurring
given that A has occurred.

1-29
LO5-4

General Rule of Multiplication


We pick a card from a standard deck of cards, put it aside,
randomly pick another card from the remaining 51 cards.
What is the probability that we get a Heart on both 1 st and 2nd
trials?

P(Heart on the 1st trial AND Heart on the 2nd trial) =


P(Heart on the 1st trial) * P(Heart on the 2nd | Heart on the 1st trial) =
13/52 * 12/51 = 0.0588

1-30
LO5-4

Conditional Probability
 A conditional probability is the probability of a
particular event occurring, given that another event has
occurred.

 The probability of the event A given that the event B has


occurred is written P(A|B).

1-31
LO5-4

General Rule of Multiplication -


Example
A golfer has 12 golf shirts in his closet. Suppose 9 of these shirts are
white and the others blue. He gets dressed in the dark, so he just grabs
a shirt and puts it on. He plays golf two days in a row and does not do
laundry.

What is the likelihood both shirts selected are white?

1-32
LO5-4

General Rule of Multiplication - Example


A: Firs shirt is white

B: Second shirt is white

 P(1st Shirt is White) = 9/12.


 P(2nd Shirt is White) is dependent on the first selection.
 P(2nd Shirt is White | 1st Shirt is White)=P(B|A)=8/11.
 Apply the General Multiplication Rule: P(A and B) = P(A) * P(B|A)
 The joint probability of selecting 2 white shirts is:
P(A and B) = P(A) * P(B |A) = (9/12)*(8/11) = 0.55

1-33
LO5-5

Contingency Tables
150 adults are surveyed about their attendance of
movies during the last 12 months. Each respondent is classified
according to two criteria—the number of movies attended and
gender.

1-34
LO5-5

Contingency Tables
A contingency table is used to classify sample
observations according to two or more identifiable
characteristics measured.

1-35
LO5-5

Contingency Table - Example


Based on the survey, what is the probability that a person
attended zero movies?

P(zero movies) = 60/150 = 0.4

1-36
LO5-5

Contingency Table - Example


Based on the survey, what is the probability the person
who took the survey was male?

P(male) = 70/150 = 0.47

1-37
LO5-5

Contingency Table - Example


Based on the survey, what is the probability that a person
attended zero movies or is male?

Applying the General Rule of Addition:

P( zero movies or male) = P( zero movies) + P(male) – P(zero movies and male)

P(zero movies or male) = 60/150 + 70/150 – 20/150 = 0.733

1-38
LO5-5

Contingency Table - Example


Based on the survey, what is the probability that a person
attended zero movies if a person is male?

Applying the concept of conditional probability:


P( zero movies | male) = 20/70 = 0.286

1-39
LO5-5

Contingency Table - Example


Based on the survey, what is the probability that a person
is male and attended zero movies?

• Simple Way: 20 / 150


• Applying the General Rule of Multiplication:
P( male and zero movies) = P(male) * P(zero movies|male)
= (70/150)(20/70) = 0.133

1-40
LO5-5

Class Group Exercise #3

 What is the probability that the person is female?


 What is the probability that the person attended 1 movie?
 What is the probability that the person is female AND attended 1 movie?
 What is the probability that the person is female OR attended 1 movie?
 What is the probability that the person is female IF attended 1 movie?
 What is the probability that the person attended 1 movie IF a female?

1-41
LO5-5

Conditional Probability Example


Pay attention to what the problem is asking you!

What is the probability that a person attended zero movies if a person is male?

This problem is asking the likelihood of attending zero movies within the male population. Or if
the person is male what is the probability of attending zero movies? So we need to look at the
data for men only. There were total of 70 men in the survey, of which 20 attended zero movies.
P( zero movies | male) = 20/70 = 0.286

What is the probability that a person is male if he/she attended zero movies?

This problem is asking the likelihood of being a male among those who attended zero movies. Or
if the person attended zero movies, how likely is it that the person is male? There were total of 60
people who attended zero movies of which 20 were male and 40 female.
P( male | zero movies ) = 20/60 = 0.333
1-42
Counting Rules
 Multiplication
 Combination
 Permutation

1-43
LO5-7

Counting Rules: Multiplication


There are 2 female students and 3 male students.
Count the number of ways in which we can make a
committee of 2 students one male and one female.

Options Female Member Male Member


1 F1 M1
2 F1 M2
3 F1 M3
4 F2 M1
5 F2 M2
6 F2 M3

1-44
LO5-7

Counting Rules – Multiplication


The multiplication formula indicates that if there
are m ways of doing one thing and n ways of
doing another thing, there are m x n ways of doing
both.

Example: Jack has 10 shirts and 8 ties. How


many shirt and tie outfits does he
have?
(10)(8) = 80

1-45
LO5-7

Class Group Exercise #4


An automobile dealer wants to
advertise that for $29,999 you can
buy a convertible, a two-door
sedan, or a four-door model with
your choice of either wire wheel
covers or solid wheel covers. How
many different arrangements of
models and wheel covers can the
dealer offer?

1-46
LO5-7

Counting Rules: Combination


 In how many ways can we pick 2 objects from a set
of 3? (Objects: a,b,c)
a,b
a,c
b,c
 In how many ways can we choose 2 students for a
committee of 2 from a group of 5? (Students:
1,2,3,4,5).
1,2 2,3 3,4
1,3 2,4 3,5
1,4 2,5 4,5
1,5

1-47
LO5-7

Counting Rules - Combination


A combination is the number of ways to choose r objects
from a group of n objects without regard to order.

Examples for Factorial Calculations:

3! = 3*2*1 = 6
4! = 4*3*2*1 = 24
2! = 2*1 = 2
1! = 1
0! = 1
1-48
LO5-7

Counting Rules: Permutation


 In how many ways can we arrange 2 objects from a
set of 3? (objects: a, b, c)
a,b b,a
a,c c,a
b,c c,b
 In how many ways can we choose a president and a
vice president from a group of 5 students?
(students: 1,2,3,4,5)
1,2 - 2,1 2,3 – 3,2 3,4 – 4,3
1,3 - 3,1 2,4 – 4,2 3,5 – 5,3
1,4 - 4,1 2,5 – 5,2 4,5 – 5,4
1,5 - 5,1

1-49
LO5-7

Counting Rules - Permutation


A permutation is any arrangement of r objects selected
from n possible objects. The order of arrangement is
important in permutations.

1-50
LO5-7

Class Group Exercise #5


COMBINATION EXAMPLE PERMUTATION EXAMPLE
There are 12 players on a Suppose that in addition to
basketball team. The Coach selecting the group, he must
must pick five players among also rank each of the players
the twelve on the team to in that starting lineup
comprise the starting lineup. according to their ability.
How many different groups are How many different rankings
possible? are possible for five players
selected from the 12?
LO5-7

Class Group Exercise #5


COMBINATION EXAMPLE PERMUTATION EXAMPLE
There are 12 players on a Suppose that in addition to
basketball team. The Coach selecting the group, he must
must pick five players among also rank each of the players
the twelve on the team to in that starting lineup
comprise the starting lineup. according to their ability.
How many different groups are How many different rankings
possible? are possible for five players
selected from the 12?

12! 12!
12 C5  792 12 P 5  95,040
5!(12  5)! (12  5)!
Discrete
Probability
Distributions
Chapter 6
o Random Variables
o Discrete Probability Distribution
o Binomial Probability Distribution
o Poisson Probability Distribution
LO6-1

Random Variable and Probability


Distribution

Experiment: Toss a coin 3 times. Observe the number of heads.

Possible Result for # of Heads: 0, 1, 2 or 3

“# of Heads” is a discrete random variable.

1-54
LO6-2

Random Variables
RANDOM VARIABLE A quantity resulting from an experiment that, by chance,
can assume different values.

DISCRETE RANDOM VARIABLE A random variable that can assume only


certain clearly separated values. It is usually the result of counting something.
(Example: The number of students in a class)

2-55
LO6-1

Random Variable and Probability


Distribution
Random Variable: # of Heads in 3 flips of a Coin

1-56
LO6-1

Probability Distribution?
PROBABILITY DISTRIBUTION

A listing of all the outcomes of an experiment and the probability associated


with each outcome.

CHARACTERISTICS OF A PROBABILITY DISTRIBUTION

 The probability of a particular outcome is between 0 and 1 inclusive.


 The outcomes are mutually exclusive events.
 The sum of the probabilities of the various events is equal to 1.

1-57
LO6-1

How do we use the Probability Distribution?

We can answer the questions such as:


• What is the probability that we observe 1 head in 3 flips of a coin?
• What is the probability that we flip a coin 3 times and observe at least
1 head?

1-58
LO6-3

The Mean of a Discrete


Probability Distribution - Example

1-59
LO6-3

The Mean of a Discrete


Probability Distribution
 The mean of all possible values of the random
variable.
 The mean of a probability distribution is also
referred to as its expected value.

1-60
LO6-3

The Variance and Standard


Deviation of a Discrete Probability
Distribution - Example

1-61
LO6-3

The Variance and Standard


Deviation of a Discrete Probability
Distribution
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.

1-62
Class Group Exercise #6
A bag contains 3 balls: 2 blue and 1 red. We
randomly pick 2 balls and observe the number of
blue balls that were picked.
 Define the experiment?
 What are the possible outcomes?
 Define a random variable.
 Is it discrete? Why or why not?
 What are the possible values of the random variable?
 Graph the probability distribution.
 What is the mean of the random variable?
 What is the variance of the random variable?

1-63
Class Group Exercise #6

1-64
LO6-4

Binomial Probability Distribution


EXAMPLE
We flip a coin 3 times. Observe the number of Heads.

Discrete Random Variable: Number of Heads in 3 flips of a coin

Some Characteristics of this experiment:


 The random variable is the result of counts.
 There are only two possible outcomes on a particular trial.
 The outcomes are mutually exclusive.
 Each trial is independent of any other trial.

1-65
LO6-4

Binomial Probability Distribution


 A widely occurring discrete 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.

1-66
LO6-4

Binomial Probability Distribution


We
 flip a coin 3 times. Observe the number of Heads.
 
Random Variable X: # of Heads in 3 flips of a coin

P(X=0) = *= 0.125
P(X=1) = = 0.375
P(X=2) = = 0.375
P(X=3) = = 0.125

1-67
LO6-4

Binomial Probability Formula

1-68
LO6-4

Binomial Probability Formula

 Success:
o
  Head
o π: Probability of Success: ½
o Number of trials: n = 3

P(X=0) = = 0.125
There are Tables on the back of the
P(X=1) = = 0.375
book pages 726-731 that have the
P(X=2) = = 0.375
Binomial Probability Distribution
P(X=3) = = 0.125
values for different values of n, X and
π

1-69
LO6-4

Mean and Variance of a


Binomial Distribution
Knowing the number of trials, n, and the probability of a success, , for a
binomial distribution, we can compute the mean and variance of the
distribution.

1-70
LO6-4

Class Group Exercise #7


A study by the Illinois Department of Transportation showed that 76.2% of
front seat occupants used seat belts. If a sample of 12 cars traveling on a
highway are Selected. Observe the number of cars out of the 12 where the
front seat passenger has used the seat belt.

• Is it a Binomial process? Why?


• Define the random variable.
• What are the two outcomes of each trial here?
• What is the success and “probability of success” here?
• What are the values of n, π and x in each case?
• Use the Binomial formula to fill out the probabilities in the table on the next page.

1-71
LO6-4

Class Group Exercise #7

 What is the probability


that the front seat
occupants in exactly 7
of the 12 cars are
wearing seat belts?

 What is the probability


that the front seat
occupants in at least 10
of the 12 cars are
wearing seat belts?

 What is the probability


that the front seat
occupants in less than
5 vehicles are wearing
seat belts?
1-72
LO6-6

Poisson Probability Distribution


The Poisson probability distribution is characterized by
the number of times an event happens during some
interval or continuum.

Examples:
 The number of misspelled words per page.
 The number of calls per received per hour.
 The number of vehicles sold per day at Applewood Auto Group.
 The number of goals scored in a college soccer game.

2-73
LO6-6

Poisson Probability Distribution


If we know the average rate of the success in a particular
interval, we can calculate the Poisson Distribution for
Different values of X using the formula:

1-74
LO6-6

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.

Assumptions of the Poisson Distribution:


 The probability is proportional to the length of the
interval.
 The intervals are independent.

1-75
LO6-6

Poisson Probability Distribution


 
P(X) =

Example
Mary receives 3 phone calls per hour on the average.

 What is the probability that she receives 5 calls in the next hour?
 P(x=5) = = 0.14

 What is the probability that she receives 1 call in the next hour?

 P(x=1) =

1-76
Poisson Probability Distribution

1-77
LO6-6

Poisson Probability Distribution –


Example
Assume the number of lost bags per flight follows a
Poisson distribution with µ = 0.3.
 
P(X) =

 Find the probability of 1 lost bag in a flight.


 =.22

 Find the probability of 0 lost bag in a flight.


 =.74

1-78
LO6-6

Poisson Probability Distribution Table


Recall from the previous illustration that the number of lost bags
follows a Poisson distribution with a mean of 0.3. A table can be used
to find the probability that no bags will be lost on a particular flight.
What is the probability no bag will be lost on a particular flight?

1-79
LO6-6

Poisson Probability Distribution


 The mean number of successes, μ, can
be determined in Poisson 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 .

1-80
Continuous
Probability
Distributions
Chapter 7
o Continuous Random Variable
o Uniform Probability Distribution
o Normal Probability Distribution
Continuous Random Variable
• Height of females between the age of 20-29 years old in USA.
• It could have different values between 50~80 inches.

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LO6-2

Random Variables

RANDOM VARIABLE A quantity resulting from an experiment that, by chance,


can assume different values.

CONTINUOUS RANDOM VARIABLE A random variable that can assume an


infinite number of values within a given range. It is usually the result of some
type of measurement. (Example: the weight of each student in this class)

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Continuous Random Variable:
Probability Distribution

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How do we use the Probability
Distribution of a continuous random
variable?

Probability that a random female’s height is between 66 and 68 inches


equals the area under the curve between the two red lines.

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The Uniform Distribution


Southwest Arizona State University provides bus service to students.
On weekdays, a bus arrives at the North Main Street and College Drive
stop every 30 minutes between 6 a.m. and 11 p.m. Students arrive at
the bus stop at random times. The time that a student waits is uniformly
distributed from 0 to 30 minutes.

 Random Variable: The time that a student waits


 Why is it contentious?

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The Uniform Distribution –


Probability Distribution
The uniform probability distribution is perhaps the simplest
distribution for a continuous random variable.
This distribution is rectangular in shape and is defined by minimum (a)
and maximum (b) values.

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The Uniform Distribution


The uniform probability distribution is perhaps the simplest
distribution for a continuous random variable.
This distribution is rectangular in shape and is defined by minimum
(a) and maximum (b) values.

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The Uniform Distribution –


Example
Southwest Arizona State University provides bus service to students.
On weekdays, a bus arrives at the North Main Street and College Drive
stop every 30 minutes between 6 a.m. and 11 p.m. Students arrive at
the bus stop at random times. The time that a student waits is uniformly
distributed from 0 to 30 minutes.

1. Draw a graph of this distribution.


2. Show that the area of this uniform distribution is 1.00.
3. What is the probability a student will wait more than 25 minutes?
4. What is the probability a student will wait between 10 and 20
minutes?

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The Uniform Distribution -


Example
1. Graph of uniformly distributed waiting times
between 0 and 30:

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The Uniform Distribution –


Example
Note that the area of the uniform distribution is 1.00.

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The Uniform Distribution –


Example
3. What is the probability a student will
wait more than 25 minutes?

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The Uniform Distribution –


Example
4. What is the probability a student will wait
between 10 and 20 minutes?

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Normal Distribution
Distribution of Height of Females between the age of 20~29 years old

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LO7-2

Characteristics of a Normal
Probability Distribution
 It is bell-shaped and has a single peak at the center of the distribution.
 It is symmetrical about the mean.
 It is asymptotic: The curve gets closer and closer to the X-axis but never
actually touches it. To put it another way, the tails of the curve extend
indefinitely in both directions.
 The location of a normal distribution is determined by the mean, . The
dispersion or spread of the distribution is determined by the standard
deviation, σ.
 The arithmetic mean, median, and mode are equal.
 As a probability distribution, the total area under the curve is defined to be
1.00.
 Because the distribution is symmetrical about the mean, half the area under
the normal curve is to the right of the mean, and the other half to the left of it.

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The Normal Distribution –


Graphically

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The Family of Normal Distributions

Equal Means and Different Different Means and


Standard Deviations Standard Deviations

Different Means and Equal Standard Deviations

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Standard Normal

 A specific Normal Distribution with µ=0 and σ=1


 There are tables that could give us all the required probabilities for
all possible values of Z in s Standard Normal Distribution.

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Standard Normal: Area under
the curve

 What is the probability that a random variable from a standard


normal distribution would be between 0 and 1.5?
 We need to find the area under the curve between the two red lines.

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LO7-3
Areas Under the Normal Curve Using a
Standard Normal Table
(Page 732 of the text book)

What is the probability that Z is between 0 and 1.5?

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How to use the Standard Normal Table?
 Table is on page 732 of the book.
 For finding the area under the curve where x is
between 0 and z:
o Write z as addition of 2 numbers.
Example: 1.5 = 1.5 + 0.00
1.96 = 1.9 + 0.06
3.2 = 3.2 + 0.00
2.45 = 2.4 + 0.05
o First number shows the row and second number
shows the column on the table.
o Find the area between 0 and z from the table using
the right row and columns.
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Converting a Normal Distribution to
Standard Normal
 What is the probability that a
female’s height is between 65 and
71 inches?
 Any normal distribution can be
converted to a standard normal.
Z = (X - µ ) / σ

X=65 Z=(65-65)/3.5=0
X=71 Z=(71-65)/3.5=1.71

 Then we can find the area under


the curve from the standard
normal graph.

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The Standard Normal Probability


Distribution
 The standard normal distribution is a normal
distribution with a mean of 0 and a standard
deviation of 1.
 It is also called the z distribution.
 A z-value is the signed distance between a
selected value, designated x, and the population
mean, , divided by the population standard
deviation, σ.
 The formula is:

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Normal Distribution – Finding


Probabilities (Example 1)
In an earlier example we
reported that the mean
weekly income of a shift
foreman in the glass
industry is normally
distributed with a mean
of $1,000 and a standard
deviation of $100.

What is the likelihood of


selecting a foreman
whose weekly income is
between $1,000 and
$1,100?

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LO7-3

The Normal Distribution –


Example
The weekly incomes of shift foremen in the
glass industry follow the normal probability
distribution with a mean of $1,000 and a
standard deviation of $100.

What is the z value for the income, let’s


call it x, of a foreman
 who earns $1,100 per week?
 who earns $900 per week?

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LO7-3

Normal Distribution – Finding


Probabilities (Example 1)

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LO7-3

Normal Distribution – Finding


Probabilities (Example 2)
Refer to the information
regarding the weekly
income of shift foremen in
the glass industry. The
distribution of weekly
incomes follows the normal
probability distribution with a
mean of $1,000 and a
standard deviation of $100.

What is the probability of


selecting a shift foreman in
the glass industry whose
income is between $790
and $1,000?

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LO7-3

Normal Distribution – Finding


Probabilities (Example 3)
Refer to the information
regarding the weekly
income of shift foremen in
the glass industry. The
distribution of weekly
incomes follows the normal
probability distribution with a
mean of $1,000 and a
standard deviation of $100.

What is the probability of


selecting a shift foreman in
the glass industry whose The probability of selecting a shift
income is less than $790? foreman with income less than
$790 is 0.5 - .4821 = .0179.
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LO7-3

Normal Distribution – Finding


Probabilities (Example 4)
Refer to the information
regarding the weekly
income of shift foremen in
the glass industry. The
distribution of weekly
incomes follows the normal
probability distribution with
a mean of $1,000 and a
standard deviation of $100.

What is the probability of


selecting a shift foreman in
the glass industry whose
income is between $840
and $1,200?

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LO7-3

Normal Distribution – Finding


Probabilities (Example 5)
Refer to the information
regarding the weekly
income of shift foremen in
the glass industry. The
distribution of weekly
incomes follows the normal
probability distribution with
a mean of $1,000 and a
standard deviation of $100.

What is the probability of


selecting a shift foreman in
the glass industry whose
income is between $1,150
and $1,250?

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Using Z to Find X for a Given


Probability - Example
Layton Tire and Rubber Company wishes to set a minimum
mileage guarantee on its new MX100 tire. Tests reveal the mean
mileage is 67,900 with a standard deviation of 2,050 miles and
that the distribution of miles follows the normal probability
distribution. Layton wants to set the minimum guaranteed mileage
so that no more than 4 percent of the tires will have to be
replaced.

What minimum guaranteed mileage should Layton announce?

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Using Z to Find X for a Given


Probability – Example

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Using Z to Find X for a Given


Probability – Example

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The Empirical Rule – Verification


 For z=1.00, the table’s
value is 0.3413; times 2
is 0.6826.
 For z=2.00, the table’s
value is 0.4772; times 2
is 0.9544.
 For z=3.00, the table’s
value is 0.4987; times 2
is 0.9974.

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Homework Problems
 Chapter 5
 3,5,7,11,13,14,15,18,19,21,23,25,27,31,39,41,4
3,46Chapter 5
 Chapter 6
 1,4,6,8,9,11,15,17,19,24,31,34,36,37,38,39,41,
43,46,48,49,62,63,68
 Chapter 7
 1,2,3,4,8,7,9,12,13,15,16,,18,19,21,23,26

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