Probability Distribution

Continuous Distribution
By
Alok Kumar Singh

A.K.Singh, IIM Nagpur

Introduction
• A continuous variable is a variable that can assume any value on a
continuum.
• In other words it can assume an uncountable number of values

• These can potentially take on any value depending only on the ability
to precisely and accurately measure.
• Uniform, Normal and Exponential distribution will be discussed as a
part of this course.

A.K.Singh, IIM Nagpur

 UNIFORM
DISTRIBUTION

A.K.Singh, IIM Nagpur

Introduction
• The uniform distribution is a probability
f(X)
distribution that has equal probabilities
for all possible outcomes of the random
variable. f(x)

• Also called a rectangular distribution. X

a b

A.K.Singh, IIM Nagpur

Uniform Distribution Formula and Other characteristics
• The general formula for Uniform distribution is given as
(also known as Probability
Density Function.)
• The probability of an event to happen for some random value less than some
specified value x is given as
.
Where ,
x = any random value between a and b.
• The mean of a uniform distribution is .
• The variance of a uniform distribution is .
• The standard deviation of a Uniform distribution is .

A.K.Singh, IIM Nagpur

Practice Problem 1 to 4
• The time waiting in line at convince store is uniformly distributed with times
ranging from 0 to 8 minutes. Find the probability that a randomly selected
customer will wait less than 2 minutes in que.
• The speed at which a bottle of milk is filled and sealed is uniformly
distributed and takes between 120 to 145 seconds. What is the probability
that a bottle of milk can be filled and sealed between 125 and 142 seconds?
• Assume that the amount of time that it takes an employee to service a car
at an oil change facility follows the uniform probability distribution
between 21 and 38 minutes. What is the probability that a randomly
selected car will require more than 30 minutes to service?
• Suppose that the value of stock varies each day from $14 to $21 with a
uniform distribution. Given that the stock is greater than $17, find the
probability that the stock is more than $19.
A.K.Singh, IIM Nagpur
THE EXPONENTIAL
DISTRIBUTION

A.K.Singh, IIM Nagpur

Introduction
• Often used to model the length of time between two occurrences of
an event (the time between arrivals).
• There are fewer large values and more small values.
• Examples:
• Time between trucks arriving at an unloading dock.
• Time between transactions at an ATM Machine.
• Time between phone calls to the main operator.
• Service Time of customers from a bank.
• Time between arrival of customers at a restaurants.

A.K.Singh, IIM Nagpur

Exponential Distribution formula and other characteristics

• Defined by a single parameter, λ, also known as decay rate.

• The Probability Density Function for a exponential distribution is given as
f for all x >0
• The probability that an arrival time is less than some specified time x is given as
.
Where ,
x = any random value between 0 and ∞.
1/λ = Mean time between arrivals.
• The mean of a exponential distribution is
• The variance of a exponential distribution is
• The standard deviation of an exponential distribution is
• Lack of Memory

A.K.Singh, IIM Nagpur

Practice Problem 5, 6 and 7
• Customers arrive at the service counter at the average of 20 per hour. What is the
probability that the arrival time between consecutive customers is less than six minutes?
• The number of days ahead travelers purchase their airline tickets can be modeled by an
exponential distribution with the average amount of time equal to 15 days. Find the
probability that a traveler will purchase a ticket fewer than ten days in advance. How
many days do half of all travelers wait?
• The time spent waiting between events is often modeled using the exponential
distribution. For example, suppose that an average of 30 customers per hour arrive at a
store and the time between arrivals is exponentially distributed.
a) On average, how many minutes elapse between two successive arrivals?
b) When the store first opens, how long on average does it take for three customers to arrive?
c) After a customer arrives, find the probability that it takes less than one minute for the next
customer to arrive.
d) After a customer arrives, find the probability that it takes more than five minutes for the next
customer to arrive.
e) Seventy percent of the customers arrive within how many minutes of the previous customer?

A.K.Singh, IIM Nagpur

Practice Problem 8
The exponential distribution can be used to solve Poisson-type problems in
which the intervals are not time.
The Air Travel Consumer Report published by the U.S. Department of
Transportation reported that in a recent year, Virgin America led the nation in
fewest occurrences of mishandled baggage, with a mean rate of 3.39 per 1,000
passengers. Assume that mishandled baggage occurrences are Poisson
distributed. Using the exponential distribution to analyze this problem,
• Determine the average number of passengers between mishandling
occurrences.
Suppose baggage has just been mishandled.
• What is the probability that at least 500 passengers will have their baggage
handled properly before the next mishandling occurs?
• What is the probability that the number will be fewer than 200 passengers?
A.K.Singh, IIM Nagpur
 NORMAL
DISTRIBUTION

A.K.Singh, IIM Nagpur

Introduction to Normal Distribution

• Bell Shaped.
• Symmetrical. f(X)
• Mean, Median and Mode are Equal.
• Location is determined by the mean, μ.
• Spread is determined by the standard σ
deviation, σ. X
μ
• The random variable has an infinite
theoretical range: Mean
- to +. = Median
= Mode

A.K.Singh, IIM Nagpur

The Normal Distribution Density
Function
 The formula for the normal probability density function is:
2
1 𝑋 −𝜇
1 − ( )
𝑓 (𝑥 )= 𝑒 2 𝜎
𝜎 ∗√ 2 𝜋

Where e = the mathematical constant approximated by 2.71828

π = the mathematical constant approximated by 3.14159
μ = the population mean
σ = the population standard deviation
X = any value of the continuous variable

A.K.Singh, IIM Nagpur

Standard Normal Distribution
• Any normal distribution (with any mean and standard deviation
combination) can be transformed into the standardized normal
distribution (Z).
• To compute normal probabilities need to transform X units into Z
units. To translate to the standardized normal (the “Z” distribution) ,
subtract the mean of X and divide by its standard deviation given as

• The standardized normal distribution (Z) has a mean of 0 and a

standard deviation of 1.

A.K.Singh, IIM Nagpur

A.K.Singh, IIM Nagpur
Practice Problem 9 and 10
• Entry to a certain University is determined by a national test. The scores on
this test are normally distributed with a mean of 500 and a standard
deviation of 100. Tom wants to be admitted to this university and he knows
that he must score better than at least 70% of the students who took the
test. Tom takes the test and scores 585. Will he be admitted to this
university?
• The length of similar components produced by a company are
approximated by a normal distribution model with a mean of 5 cm and a
standard deviation of 0.02 cm. If a component is chosen at random
a) what is the probability that the length of this component is between 4.98
and 5.02 cm?
• b) what is the probability that the length of this component is between 4.96
and 5.04 cm
A.K.Singh, IIM Nagpur
Practice Problem 11 and 12
• The length of life of an instrument produced by a machine has a normal
distribution with a mean of 12 months and standard deviation of 2
months. Find the probability that an instrument produced by this
machine will last
a) less than 7 months.
b) between 7 and 12 months.
• The annual salaries of employees in a large company are approximately
normally distributed with a mean of $50,000 and a standard deviation
of $20,000.
a)What percent of people earn less than $40,000?
b)What percent of people earn between $45,000 and $65,000?
c) What percent of people earn more than $70,000?
A.K.Singh, IIM Nagpur
A.K.Singh, IIM Nagpur