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Exponential Distribution

The document discusses the exponential distribution as a continuous probability distribution used to model phenomena like radioactive decay, time between failures, and time between events. It is defined by one parameter, usually denoted by β or λ, which represents the expected number of occurrences per unit time. The cumulative distribution function for an exponential random variable X is given by F(x) = 1 - e-λx. Examples are provided for calculating probabilities using the exponential distribution.

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Joshua Bautista
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169 views9 pages

Exponential Distribution

The document discusses the exponential distribution as a continuous probability distribution used to model phenomena like radioactive decay, time between failures, and time between events. It is defined by one parameter, usually denoted by β or λ, which represents the expected number of occurrences per unit time. The cumulative distribution function for an exponential random variable X is given by F(x) = 1 - e-λx. Examples are provided for calculating probabilities using the exponential distribution.

Uploaded by

Joshua Bautista
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Continuous Probability

Distribution
Part 3
Exponential Distribution

 Although the normal distribution can be used to


solve many problems in engineering and science,
there are still numerous situations that require
different types of functions. Such function, is the
exponential distributions
 Exponential Distribution is a continuous
distribution that is commonly used to measure the
expected time for an event to occur. In Physics, it is
used to measure radioactive decay,
Exponential Distribution

 Inengineering it is used to measure the time


associated with receiving a defective part on an
assembly line, and
 in finance it is often used to measure the likelihood
of the next default for a portfolio of financial assets.
It can also be used to measure the likelihood of
incurring a specified number of defaults within a
specified time period.
Poisson vs Exponential

 ThePoisson distribution deals with the number of


occurrences in a fixed period of time, and the
Exponential distribution deals with the time between
occurrences of successive events as time flows by
continuously.
 thePoisson distribution was developed as a single-
parameter distribution with parameter λ (also known
as the rate parameter), where λ may be interpreted as
the mean number of events per unit “time.”
λ is the inverse of the expected duration μ
Exponential Distribution

 Ifthe expected duration is 5 minutes then the rate


parameter value is .2

 The probability that the length of time until the first


event will exceed x is the same as the probability
that no Poisson events will occur in x. The latter, of
course, is given by e−λx. As a result,
Exponential Distribution

 Thus,the cumulative distribution function for X is


given by
Exponential Distribution

 the mean of the exponential distribution is the


parameter β, the reciprocal of the parameter in
the Poisson distribution. β is called mean time
between failures. Many equipment breakdowns do
follow the Poisson process, and thus the
exponential distribution does apply. Other
applications include survival times in biomedical
experiments and computer response time.
Examples
1. Assume that the length of a phone call in minutes
is an exponential random variable X with a
parameter = 1/10. If someone arrives at a phone
booth just before you arrive, find the probability
that you will have to wait a) less than 5 minutes
b) greater than 10 minutes c) between 5 and 10
minutes
2. Laptops produced by company xyz lasts on
average for 5 years. The life span follows an
exponential distribution. a) Calculate the rate
parameter. What is the probability that a laptop
will last less than 3 years?
Seatwork
1. Laptops produced by company xyz lasts on average
for 5 years. The life span follows an exponential
distribution. a) What is the probability that a laptop
will last between 4 and 7 years
2. An average of five calls per hour are received by
a machine repair department. Beginning the
observation at any point in time, determine the
probability that the first call for service will
arrive within a half hour?
3. On the average, a ship arrives at a certain dock
every second day. What is the probability that
after the departure of a ship four days will pass
before the arrival of the next ship?

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