Probability Distributions

What is a Probability Distribution?

Experiment: Toss a
coin three times.
Observe the number
of heads. The possible
results are: zero
heads, one head, two
heads, and three
heads.
What is the probability
distribution for the
number of heads?
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Probability Distribution of Number
of Heads Observed in 3 Tosses of a
Coin

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Characteristics of a Probability
Distribution

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Random Variables

Random variable - a quantity resulting from an

experiment that, by chance, can assume different
values.

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 Types of Random Variables

 Discrete Random Variable can assume only

certain clearly separated values. It is usually
the result of counting something

 Continuous Random Variable can assume an

infinite number of values within a given
range. It is usually the result of some type of
measurement

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 Discrete Random Variables -
Examples
 The number of students in a class.
 The number of children in a family.
 The number of cars entering a carwash in a hour.
 Number of home mortgages approved by Coastal
Federal Bank last week.

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Continuous Random Variables -
Examples

 The distance students travel to class.

 The time it takes an executive to drive to
work.
 The length of an afternoon nap.
 The length of time of a particular phone call.
 Typically, monetary amounts

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 Features of a Discrete Distribution

The main features of a discrete probability

distribution are:
 The sum of the probabilities of the various
outcomes is 1.00.
 The probability of a particular outcome is
between 0 and 1.00.
 The outcomes are mutually exclusive.

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 The Mean of a Probability
Distribution
MEAN
•The mean is a typical value used to represent the
central location of a probability distribution.
•The mean of a probability distribution is also
referred to as its expected value.

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 The Variance, and Standard
Deviation of a Probability
Distribution
Variance and Standard Deviation

• 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.
The standard deviation is found by taking the positive square root
of the variance.

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 Mean, Variance, and Standard
Deviation of a Probability Distribution - Example

John Ragsdale sells new cars for Pelican Ford.

John usually sells the largest number of cars
on Saturday. He has developed the following
probability distribution for the number of cars
he expects to sell on a particular Saturday.

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Mean of a Probability Distribution - Example

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 Variance and Standard
Deviation of a Probability Distribution - Example

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 Binomial Probability Distribution

 There are only two possible outcomes on a

particular trial of an experiment. (Yes or No,
Success or Failure, etc.)
 The outcomes are mutually exclusive,
 The random variable is the sum of a given
outcome over the trials
 Each trial is independent of any other trial
 Probability of outcome does not vary from
trial to trial

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Binomial Probability Formula

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 Binomial Probability - Example

There are five flights

daily from Pittsburgh
via US Airways into
the Bradford,
Pennsylvania,
Regional Airport.
Suppose the
probability that any
flight arrives late is .
20.
What is the probability
that none of the
flights are late today?

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Binomial Dist. – Mean and
Variance

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Binomial Dist. – Mean and Variance:
Example

For the example

regarding the number
of late flights, recall
that  =.20 and n = 5.
What is the average
number of late flights?
What is the variance of
the number of late
flights?

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Binomial Dist. – Mean and
Variance: Another Solution

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 Binomial Distribution - Table
• Five percent of the worm gears produced by an automatic, high- speed
Carter-Bell milling machine are defective. What is the probability that out of
six gears selected at random none will be defective? Exactly one? Exactly
two? Exactly three? Exactly four? Exactly five? Exactly six out of six?

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Binomial – Shapes for
Varying 
(n constant)

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Binomial – Shapes for
Varying n
( constant)

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 Cumulative Binomial Probability
Distributions
• A study in June 2003 by the Illinois Department of
Transportation concluded that 76.2 percent of front seat
occupants used seat belts. A sample of 12 vehicles is selected.
What is the probability the front seat occupants in at least 7 of
the 12 vehicles are wearing seat belts?

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 Binomial Probabilities from Excel

 Use function BINOMDIST(S,N,Prob,Logical)

 S is the number of successes
 N is the number of trials
 Prob is the probability of success
 Logical =1 indicates cumulative probability
and Logical = 0 indicates probability of
exactly S successes in N trials.

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Cumulative Binomial Probability
Distributions - Excel

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 Hypergeometric Distribution

The hypergeometric distribution has the

following characteristics:
 There are only 2 possible outcomes.
 The probability of a success is not the
same on each trial. (Sampling without
replacement)
 It results from a count of the number of
successes in a fixed number of trials.
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Hypergeometric Distribution

Use the hypergeometric distribution

to find the probability of a specified
number of successes or failures if:
– the sample is selected from a finite
population without replacement
– the size of the sample n is greater
than 5% of the size of the population
N (i.e. n/N  .05)

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Hypergeometric Distribution

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Hypergeometric Distribution -
Example
PlayTime Toys, Inc., employs
50 people in the Assembly
Department. Forty of the
employees belong to a
union and ten do not. Five
employees are selected at
random to form a committee
to meet with management
regarding shift starting
times. What is the
probability that four of the
five selected for the
committee belong to a
union?

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Hypergeometric Distribution -
Example

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Hypergeometric Distribution -
Excel

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 Hypergeometric Probabilities-
Excel

 Use function HYPERGEOMDIST(x,n,S,N)

 x is the number of successes
 n is sample size or number of trials
 S is the number of successes in the
population
 N is the size of the population.

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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
(1) The probability is proportional to the length of
the interval.
(2) The intervals are independent.

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Poisson Probability Distribution

The Poisson distribution can be

described mathematically using the
formula:

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 Poisson Probability Distribution

 The mean number of successes T

can be determined in binomial
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 .
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 Poisson Probability
Distribution - Example
Assume baggage is rarely lost by Northwest Airlines.
Suppose a random sample of 1,000 flights shows a
total of 300 bags were lost. Thus, the arithmetic
mean number of lost bags per flight is 0.3
(300/1,000). If the number of lost bags per flight
follows a Poisson distribution with u = 0.3, find the
probability of not losing any bags.

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Poisson Probability Distribution -
Table
Assume baggage is rarely lost by Northwest Airlines. Suppose a random
sample of 1,000 flights shows a total of 300 bags were lost. Thus, the
arithmetic mean number of lost bags per flight is 0.3 (300/1,000). If the
number of lost bags per flight follows a Poisson distribution with mean
= 0.3, find the probability of not losing any bags

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 Poison Probabilities from Excel

 Use function POISSON(x,μ,Logical)

 X is the number of success (occurrences)
 μ mean number of successes (occurrences)
 Logical =1 indicates cumulative probability
and Logical = 0 indicates probability of
exactly S successes in N trials.

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 Poission Vs Binomial
• If your question has an average probability of an event
happening per unit (i.e. per unit of time, cycle, event) and you
want to find probability of a certain number of events
happening in a period of time (or number of events), then use
the Poisson Distribution.
• If you are given an exact probability and you want to find the
probability of the event happening a certain number out
times out of x (i.e. 10 times out of 100, or 99 times out of
1000), use the Binomial Distribution formula.