Lecture 6

Continuous Probability
Distributions
 Lecture Outline
Uniform Probability Distribution
Normal Probability Distribution
Exponential Probability Distribution (optional)
f (x)

x


Slide 2
 Continuous Probability
Distributions
A continuous random variable can assume any
value in an interval on the real line or in a
collection of intervals.
It is not possible to talk about the probability of
the random variable assuming a particular value.
Instead, we talk about the probability of the
random variable assuming a value within a given
interval.
The probability of the random variable assuming
a value within some given interval from x1 to x2
is defined to be the area under the graph of the
probability density function between x1 and x2.

Slide 3
Uniform Probability Distribution
A random variable is uniformly distributed
whenever the probability is proportional to the
interval’s length.
Uniform Probability Density Function

f(x) = 1/(b - a) for a < x < b

=0 elsewhere

where: a = smallest value the variable can

assume
b = largest value the variable can
assume
Slide 4
Uniform Probability Distribution
Expected Value of x

E(x) = (a + b)/2

Variance of x

Var(x) = (b - a)2/12

where: a = smallest value the variable can

assume
b = largest value the variable can
assume

Slide 5
 Example: Slater's Buffet
Uniform Probability Distribution
Slater customers are charged for the
amount of salad they take. Sampling suggests
that the amount of salad taken is uniformly
distributed between 5 ounces and 15 ounces.
The probability density function is
f(x) = 1/10 for 5 < x < 15
=0 elsewhere
where:
x = salad plate filling weight

Slide 6
 Example: Slater's Buffet
Uniform Probability Distribution
What is the probability that a customer will
take between 12 and 15 ounces of salad?
f(x)

P(12 < x < 15) = 1/10(3) = .3

1/10

x
5 10 12 15
Salad Weight (oz.)

Slide 7
 Example: Slater's Buffet
Expected Value of x
E(x) = (a + b)/2
= (5 + 15)/2
= 10
Variance of x
Var(x) = (b - a)2/12
= (15 – 5)2/12
= 8.33

Slide 8
Normal Probability Distribution
Graph of the Normal Probability Density
Function
f(x)

x

Slide 9
Normal Probability Distribution
Characteristics of the Normal Probability
Distribution
The shape of the normal curve is often
illustrated as a bell-shaped curve.
Two parameters,  (mean) and s (standard
deviation), determine the location and shape
of the distribution.
The highest point on the normal curve is at
the mean, which is also the median and
mode.
The mean can be any numerical value:
negative, zero, or positive.

Slide 10
Normal Probability Distribution
Characteristics of the Normal Probability
Distribution
The normal curve is symmetric.
The standard deviation determines the width
of the curve: larger values result in wider,
flatter curves.
The total area under the curve is 1 (.5 to the
left of the mean and .5 to the right).
Probabilities for the normal random variable
are given by areas under the curve.

Slide 11
Normal Probability Distribution
% of Values in Some Commonly Used Intervals
68.26% of values of a normal random
variable are within +/- 1 standard deviation
of its mean.
95.44% of values of a normal random
variable are within +/- 2 standard deviations
of its mean.
99.72% of values of a normal random
variable are within +/- 3 standard deviations
of its mean.

Slide 12
Normal Probability Distribution
Normal Probability Density Function

1 − ( x −  )2 / 2s 2
f ( x) = e
2 s

where:
 = mean
s = standard deviation
 = 3.14159
e = 2.71828

Slide 13
 Standard Normal Probability
Distribution
A random variable that has a normal
distribution with a mean of zero and a
standard deviation of one is said to have a
standard normal probability distribution.
The letter z is commonly used to designate this
normal random variable.
Converting to the Standard Normal
Distribution

x−
z=
s

We can think of z as a measure of the number

of standard deviations x is from .

Slide 14
 Example: Pep Zone
Standard Normal Probability Distribution
Pep Zone sells auto parts and supplies including
a popular multi-grade motor oil. When the
stock of this oil drops to 20 gallons, a
replenishment order is placed.
The store manager is concerned that sales are
being lost due to stockouts while waiting for an
order. It has been determined that leadtime
demand is normally distributed with a mean of
15 gallons and a standard deviation of 6
gallons.
The manager would like to know the
probability of a stockout, P(x > 20).

Slide 15
 Example: Pep Zone
Standard Normal Probability Distribution
The Standard Normal table shows an area of .2967
for the region between the z = 0 and z = .83 lines
below. The shaded tail area is .5 - .2967 = .2033.
The probability of a stock-out is .2033.

z = (x - )/s Area = .2967

= (20 - 15)/6
= .83
Area = .5 - .2967
= .2033
Area = .5
z
0 .83
Slide 16
 Example: Pep Zone
Using the Standard Normal Probability Table

z .00 .01 .02 .03 .04 .05 .06 .07 .08 .09
.0 .0000 .0040 .0080 .0120 .0160 .0199 .0239 .0279 .0319 .0359
.1 .0398 .0438 .0478 .0517 .0557 .0596 .0636 .0675 .0714 .0753
.2 .0793 .0832 .0871 .0910 .0948 .0987 .1026 .1064 .1103 .1141
.3 .1179 .1217 .1255 .1293 .1331 .1368 .1406 .1443 .1480 .1517
.4 .1554 .1591 .1628 .1664 .1700 .1736 .1772 .1808 .1844 .1879

.5 .1915 .1950 .1985 .2019 .2054 .2088 .2123 .2157 .2190 .2224
.6 .2257 .2291 .2324 .2357 .2389 .2422 .2454 .2486 .2518 .2549
.7 .2580 .2612 .2642 .2673 .2704 .2734 .2764 .2794 .2823 .2852
.8 .2881 .2910 .2939 .2967 .2995 .3023 .3051 .3078 .3106 .3133
.9 .3159 .3186 .3212 .3238 .3264 .3289 .3315 .3340 .3365 .3389

Slide 17
 Example: Pep Zone
Standard Normal Probability Distribution
If the manager of Pep Zone wants the probability
of a stockout to be no more than .05, what should
the reorder point be?

Area = .05

Area = .5 Area = .45

0 z.05
Let z.05 represent the z value cutting the .05 tail
area.
Slide 18
 Example: Pep Zone
Using the Standard Normal Probability Table
We now look-up the .4500 area in the Standard
Normal Probability table to find the
corresponding z.05 value.
z .00 .01 .02 .03 .04 .05 .06 .07 .08 .09
. . . . . . . . . . .
1.5 .4332 .4345 .4357 .4370 .4382 .4394 .4406 .4418 .4429 .4441
1.6 .4452 .4463 .4474 .4484 .4495 .4505 .4515 .4525 .4535 .4545
1.7 .4554 .4564 .4573 .4582 .4591 .4599 .4608 .4616 .4625 .4633
1.8 .4641 .4649 .4656 .4664 .4671 .4678 .4686 .4693 .4699 .4706
1.9 .4713 .4719 .4726 .4732 .4738 .4744 .4750 .4756 .4761 .4767
. . . . . . . . . . .

z.05 = 1.645 is a reasonable estimate.

Slide 19
 Example: Pep Zone
Standard Normal Probability Distribution
The corresponding value of x is given by
x =  + z.05s
= 15 + 1.645(6)
= 24.87
A reorder point of 24.87 gallons will place the
probability of a stockout during leadtime at .05.
Perhaps Pep Zone should set the reorder
point at 25 gallons to keep the probability under
.05.

Slide 20
 Exponential Probability
Distribution
Exponential Probability Density Function

1
f ( x) = e− x / for x > 0,  > 0


where:  = mean
e = 2.71828

Slide 21
 Exponential Probability
Distribution
Cumulative Exponential Distribution Function

P ( x  x0 ) = 1 − e − xo / 
where:
x0 = some specific value of x

Slide 22
 Example: Al’s Carwash
Exponential Probability Distribution
The time between arrivals of cars at Al’s
Carwash follows an exponential probability
distribution with a mean time between arrivals
of 3 minutes. Al would like to know the
probability that the time between two
successive arrivals will be 2 minutes or less.

P(x < 2) = 1 - 2.71828-2/3 = 1 - .5134 = .4866

Slide 23
 Example: Al’s Carwash
Graph of the Probability Density Function
f(x)

.4
.3 P(x < 2) = area = .4866

.2
.1
x
1 2 3 4 5 6 7 8 9 10
Time Between Successive Arrivals (mins.)

Slide 24
Relationship between the Poisson
and Exponential Distributions

(If) the Poisson distribution

provides an appropriate description
of the number of occurrences
per interval

(If) the exponential distribution

provides an appropriate description
of the length of the interval
between occurrences

Slide 25