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Probability Distributions

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12 views56 pages

Probability Distributions

Uploaded by

mahesh Kumar
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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Statistical Learning

Outline
1. Introduction to Probability
2. Types of Probability
3. Bayes Theorem and its Applications
4. Binomial Distribution
5. Poisson Distribution
6. Normal distribution
7. Chi-square distribution
8. Student’s t-distribution
9. Summary of applications of different distributions
Introduction
• Managers will have to cope with uncertainty in many decision
situations. Concepts of probability will help you measure
uncertainty and perform associated analyses that are essential
in making effective business decisions.
Question
• What is the probability that a man lives for 1000 years?
• Ans – Empirical Probability
Probability – Meaning & Concepts
• Probability refers to chance or likelihood of a particular event-
taking place.

• An event is an outcome of an experiment.

• An experiment is a process that is performed to understand and


observe possible outcomes.

• Set of all outcomes of an experiment is called the sample space.


Example

• In a manufacturing unit three parts from the assembly are


selected. You are observing whether they are defective or non-
defective. Determine
a) The sample space.
b) The event of getting at least two defective parts.
Solution
Definition of Probability
3 Extreme Values of Probability
Types of Probability
• A Priori Classical Probability
• Empirical Probability
• Subjective Probability
Mutually Exclusive Events
Independent Events
• Two events A and B are said to be independent if the
occurrence of A is in no way influenced by the occurrence of B.
Likewise occurrence of B is in no way influenced by the
occurrence of A.
Rules for Computing Probability
Rules for Computing Probability
Example for Addition Rules
• From a pack of well-shuffled cards, a card is picked up at
random.

1) What is the probability that the selected card is a King or a


Queen?
2) What is the probability that the selected card is a King or a
Diamond?
Solution to Part 1)
Solution to part 2)
Multiplication Rule
Multiplication Rule
Multiplication Rule
Multiplication Rule
Marginal Probability
• Contingency table consists of rows and columns of two
attributes at different levels with frequencies or numbers in
each of the cells. It is a matrix of frequencies assigned to rows
and columns.
• The term marginal is used to indicate that the probabilities are
calculated using a contingency table (also called joint
probability table).
Marginal Probability - Example
Solution
a) What is the probability that a randomly selected family is a buyer of
the Car?
• 80/200 =0.40.

b) What is the probability that a randomly selected family is both a


buyer of car and belonging to income of Rs. 10 lakhs and above?
• 42/200 =0.21.

c) A family selected at random is found to be belonging to income of Rs


10 lakhs and above. What is the probability that this family is buyer of
car?
• 42/80 =0.525. Note this is a case of conditional probability of buyer
given income is Rs. 10 lakhs and above.
Marginal Probability - Problem
Solution
CD No CD

AC 20 50 70

No AC 20 10 30

40 60 100

P(CD/AC) = 20/70
Bayes’ Theorem
• Bayes’ Theorem is used to revise previously calculated
probabilities based on new information.
• Developed by Thomas Bayes in the 18th Century.
• It is an extension of conditional probability.
Bayes’ Theorem

Many modern machine learning techniques rely on Bayes' theorem. For instance, spam filters use
Bayesian updating to determine whether an email is real or spam, given the words in the email.
Additionally, many specific techniques in statistics, such as calculating p-values or interpreting
medical results, are best described in terms of how they contribute to updating hypotheses using
Bayes' theorem.
Bayes’ Theorem
Bayes’ Theorem - Example
Bayes’ Theorem - Example
Bayes’ Theorem - Problem
• A drilling company has estimated a 40% chance of striking oil
for their new well.
• A detailed test has been scheduled for more information.
Historically, 60% of successful wells have had detailed tests,
and 20% of unsuccessful wells have had detailed tests.
• Given that this well has been scheduled for a detailed test,
what is the probability that the well will be successful?
Solution
Success No Success

DT 24 12 36

No DT 16 48 64

40 60 100

P(S/DT) = 24/36 = 0.67


What is a Probability Distribution
• In precise terms, a probability distribution is a total listing of the
various values the random variable can take along with the
corresponding probability of each value. A real life example could be the
pattern of distribution of the machine breakdowns in a manufacturing
unit.
• The random variable in this example would be the various values the
machine breakdowns could assume.
• The probability corresponding to each value of the breakdown is the
relative frequency of occurrence of the breakdown.
• The probability distribution for this example is constructed by the actual
breakdown pattern observed over a period of time. Statisticians use the
term “observed distribution” of breakdowns.
Binomial Distribution
• The Binomial Distribution is a widely used probability distribution of a
discrete random variable.
• It plays a major role in quality control and quality assurance function.
Manufacturing units do use the binomial distribution for defective
analysis.
• Reducing the number of defectives using the proportion defective control
chart (p chart) is an accepted practice in manufacturing organizations.
• Binomial distribution is also being used in service organizations like
banks, and insurance corporations to get an idea of the proportion
customers who are satisfied with the service quality.
Defective vs Defects
• In a 1000 lines Code Program, if n number of lines have
problems, it is called defective
• However, the type of problem in each problematic line is called
a defect
• Binomial deals with defective analysis, while poisson deals with
the number of defects

• A computer is said to be defective. Binomial


• The type of defects in each defective computer. Poisson
Defective vs Defects
• Preparing a Project Report
• Number of Defective pages in the Report – Binomial (Defective/
Non Defective)
• Number of defects per page – Poisson
• We could say - Without Poisson , there is no Binomial
• Binomial deals with % defective
• Poisson deals with number of defects per item
• Number of people arriving at an atm - Poisson
Defective vs Defects
• Bank – Dissatisfied Customers percentage is Binomial
• Number of complaints made by each customer – Poisson

• Ashok Leyland chooses Leather covers


• Defective covers – Binomial
• Types of Defects in each cover – black spots, thread cuts etc -
Poisson
Conditions for Applying Binomial Distribution (Bernoulli
Process)
• Trials are independent and random.
• There are fixed number of trials (n trials).
• There are only two outcomes of the trial designated as success
or failure.
• The probability of success is uniform through out the n trials
Binomial Probability Function
Example for Binomial Distribution
• A bank issues credit cards to customers under the scheme of
Master Card. Based on the past data, the bank has found out
that 60% of all accounts pay on time following the bill. If a
sample of 7 accounts is selected at random from the current
database, construct the Binomial Probability Distribution of
accounts paying on time.

• Work Out Using Python


Mean and Standard Deviation of the Binomial Distribution
Poisson Distribution
• Poisson Distribution is another discrete distribution which also
plays a major role in quality control in the context of reducing
the number of defects per standard unit.
• Examples include number of defects per item, number of
defects per transformer produced, number of defects per 100
m2 of cloth, etc.
• Other real life examples would include 1) The number of cars
arriving at a highway check post per hour; 2) The number of
customers visiting a bank per hour during peak business period.
Poisson Process
• The probability of getting exactly one success in a continuous
interval such as length, area, time and the like is constant.
• The probability of a success in any one interval is independent
of the probability of success occurring in any other interval.
• The probability of getting more than one success in an interval
is 0.
Poisson Probability Function
Example – Poisson Distribution
• If on an average, 6 customers arrive every two minutes at a
bank during the busy hours of working, a) what is the
probability that exactly four customers arrive in a given
minute? b) What is the probability that exactly three customers
will arrive in a given minute?

• Work out using Python


Normal Distribution
Normal Distribution
Normal Distribution
Properties of Normal Distribution
Standard Normal Distribution
Example Problem
• The mean weight of a morning breakfast cereal pack is 0.295
kg with a standard deviation of 0.025 kg. The random variable
weight of the pack follows a normal distribution.

a)What is the probability that the pack weighs less than 0.280
kg?
b)What is the probability that the pack weighs more than 0.350
kg?
c)What is the probability that the pack weighs between 0.260 kg
to 0.340 kg?
Solution a)
Solution b)
Solution c)

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