Discrete Probability Distributions

 Random Variables
 Discrete Probability Distributions
 Expected Value and Variance
 Binomial Probability Distribution
 Poisson Probability Distribution
.40

.30

.20

.10

0 1 2 3 4
 Random Variables

A
A random
random variable
variable is
is aa numerical
numerical description
description of
of the
the
outcome
outcome of
of an
an experiment.
experiment.

A
A discrete
discrete random
random variable
variable may
may assume
assume either
either aa
finite
finite number
number of
of values
values or
or an
an infinite
infinite sequence
sequence ofof
values.
values.

A
A continuous
continuous random
random variable
variable may
may assume
assume any
any
numerical
numerical value
value in
in an
an interval
interval or
or collection
collection of
of
intervals.
intervals.
 Example: JSL Appliances

 Discrete random variable with a finite number

of values

Let
Let xx =
= number
number ofof TVs
TVs sold
sold at
at the
the store
store in
in one
one day,
day,
where
where xx can
can take
take on
on 5
5 values
values (0,
(0, 1,
1, 2,
2, 3,
3, 4)
4)
 Example: JSL Appliances

 Discrete random variable with an infinite

sequence of values

Let
Let xx =
= number
number ofof customers
customers arriving
arriving in
in one
one day,
day,
where
where xx can
can take
take on
on the
the values
values 0,
0, 1,
1, 2,
2, .. .. ..

We can count the customers arriving, but there is n

finite upper limit on the number that might arrive.
 Random Variables

Question Random Variable x Type

Family x = Number of dependents in Discrete
size family reported on tax return

Distance from x = Distance in miles from Continuous

home to store home to the store site
Own dog x = 1 if own no pet; Discrete
or cat = 2 if own dog(s) only;
= 3 if own cat(s) only;
= 4 if own dog(s) and cat(s)
 Discrete Probability Distributions

The
The probability
probability distribution
distribution for
for aa random
random variable
variable
describes
describes how
how probabilities
probabilities are
are distributed
distributed over
over
the
the values
values of
of the
the random
random variable.
variable.

We
We can
can describe
describe aa discrete
discrete probability
probability distribution
distribution
with
with aa table,
table, graph,
graph, or
or equation.
equation.
 Discrete Probability Distributions

The
The probability
probability distribution
distribution is
is defined
defined by by aa
probability
probability function
function,, denoted
denoted byby ff((xx),
), which
which provides
provides
the
the probability
probability for
for each
each value
value of
of the
the random
random variable
variabl

The
The required
required conditions
conditions for
for aa discrete
discrete probability
probability
function
function are:
are:
f(x) > 0

f(x) = 1
 Example: JSL Appliances

 Using past data on TV sales, …

 a tabular representation of the probability
distribution for TV sales was developed.

Number 80/200
Units Sold of Days x f(x)
0 80 0 .40
1 50 1 .25
2 40 2 .20
3 10 3 .05
4 20 4 .10
200 1.00
 Example: JSL Appliances

 Graphical Representation of the Probability

Distribution

.50
.40
Probability

.30
.20
.10

0 1 2 3 4
Values of Random Variable x (TV sales)
Discrete Uniform Probability Distribution

The
The discrete
discrete uniform
uniform probability
probability distribution
distribution is
is the
the
simplest
simplest example
example ofof aa discrete
discrete probability
probability
distribution
distribution given
given by
by aa formula.
formula.

The
The discrete
discrete uniform
uniform probability
probability function
function is
is

f(x) = 1/n the values of

the
random
where: variable
n = the number of values the
arerandom
equally
variable may assume likely
 Expected Value and Variance

The
The expected
expected value
value,, or
or mean,
mean, of
of aa random
random variable
variable
is
is aa measure
measure of
of its
its central
central location.
location.
E(x) =  = xf(x)

The
The variance
variance summarizes
summarizes the
the variability
variability in
in the
the
values
values of
of aa random
random variable.
variable.
Var(x) = 22 = (x - )22f(x)

The
The standard deviation,, ,, is
standard deviation is defined
defined as
as the
the positive
positive
square
square root
root of
of the
the variance.
variance.
 Example: JSL Appliances

 Expected Value of a Discrete Random Variable

x f(x) xf(x)
0 .40 .00
1 .25 .25
2 .20 .40
3 .05 .15
4 .10 .40
E(x) = 1.20

expected number
of TVs sold in a day
 Example: JSL Appliances

 Variance and Standard Deviation

of a Discrete Random Variable

x x- (x - )2 f(x) (x - )2f(x)

0 -1.2 1.44 .40 .576
1 -0.2 0.04 .25 .010
2 0.8 0.64 .20 .128
3 1.8 3.24 .05 .162 TVs
4 2.8 7.84 .10 .784 square
Variance of daily sales = 2 = 1.660 d
Standard deviation of daily sales = 1.2884 TVs
 Using Excel to Compute the Expected
Value, Variance, and Standard Deviation
 Formula Worksheet
A B C
1 Sales Probability Sq.Dev.from Mean
2 0 0.40 =(A2-$B$8)^2
3 1 0.25 =(A3-$B$8)^2
4 2 0.20 =(A4-$B$8)^2
5 3 0.05 =(A5-$B$8)^2
6 4 0.10 =(A6-$B$8)^2
7
8 Mean =SUMPRODUCT(A2:A6,B2:B6)
9 Variance =SUMPRODUCT(C2:C6,B2:B6)
10 Std.Dev. =SQRT(B9)
 Using Excel to Compute the Expected
Value, Variance, and Standard Deviation
 Value Worksheet
A B C
1 Sales Probability Sq.Dev.from Mean
2 0 0.40 1.44
3 1 0.25 0.04
4 2 0.20 0.64
5 3 0.05 3.24
6 4 0.10 7.84
7
8 Mean 1.2
9 Variance 1.66
10 Std.Dev. 1.2884
 Binomial Probability Distribution

 Four Properties of a Binomial Experiment

1.
1. The
The experiment
experiment consists
consists of
of aa sequence
sequence of
of n
n
identical
identical trials.
trials.

2.
2. Two
Two outcomes,
outcomes, success
success and
and failure
failure,, are
are possible
possible
on
on each
each trial.
trial.

3.
3. The
The probability
probability of
of aa success,
success, denoted
denoted by
by p
p,, does
does
not
not change
change from
from trial
trial to
to trial.
trial.
stationarit
4. y
4. The
The trials
trials are
are independent.
independent.
assumptio
n
 Binomial Probability Distribution

Our
Our interest
interest is
is in
in the
the number
number of
of successes
successes
occurring
occurring in
in the
the n n trials.
trials.

We
We let
let xx denote
denote the
the number
number of
of successes
successes
occurring
occurring inin the
the n
n trials.
trials.
 Binomial Probability Distribution

 Binomial Probability Function

n!
f (x)  px (1 p)(n x)
x!(n  x)!

where:
f(x) = the probability of x successes in n trials
n = the number of trials
p = the probability of success on any one trial
 Binomial Probability Distribution

 Binomial Probability Function

n!
f (x)  px (1  p)(n x)
x!(n  x)!

n!
px (1 p)(n x)
x!(n  x)!
Probability of a particular
Number of experimental
sequence of trial outcomes
outcomes providing exactly
with x successes in n trials
x successes in n trials
 Example: Evans Electronics

 Binomial Probability Distribution

Evans is concerned about a low retention
rate for employees. In recent years,
management has seen a turnover of 10% of
the hourly employees annually. Thus, for any
hourly employee chosen at random,
management estimates a probability of 0.1
that the person will not be with the company
next year.
 Example: Evans Electronics

 Binomial Probability Distribution

Choosing 3 hourly employees at random,
what is the probability that 1 of them will leave
the company this year?

Let: p = .10, n = 3, x = 1
n!
f ( x)  p x (1  p ) (n  x )
x !( n  x )!
3!
f (1)  (0.1)1(0.9)2 3(.1)(.81)  .243
1!(3  1)!
 Example: Evans Electronics
 Tree Diagram
1st Worker 2nd Worker 3rd Worker x Prob.
L (.1) 3 .0010
Leaves (.1)
S (.9) 2 .0090
Leaves
(.1) L (.1) 2 .0090
Stays (.9)
S (.9) 1 .0810
L (.1) 2 .0090
Leaves (.1)
Stays S (.9) 1 .0810
(.9) L (.1)
1 .0810
Stays (.9)
S (.9) 0 .7290
 Using Excel to Compute
Binomial Probabilities
 Formula Worksheet
A B
1 3 = Number of Trials (n )
2 0.1 = Probability of Success (p )
3
4 x f (x )
5 0 =BINOMDIST(A5,$A$1,$A$2,FALSE)
6 1 =BINOMDIST(A6,$A$1,$A$2,FALSE)
7 2 =BINOMDIST(A7,$A$1,$A$2,FALSE)
8 3 =BINOMDIST(A8,$A$1,$A$2,FALSE)
9
 Using Excel to Compute
Binomial Probabilities
 Value Worksheet
A B
1 3 = Number of Trials (n )
2 0.1 = Probability of Success (p )
3
4 x f (x )
5 0 0.729
6 1 0.243
7 2 0.027
8 3 0.001
9
 Using Excel to Compute
Cumulative Binomial Probabilities
 Formula Worksheet
A B
1 3 = Number of Trials (n )
2 0.1 = Probability of Success (p )
3
4 x Cumulative Probability
5 0 =BINOMDIST(A5,$A$1,$A$2,TRUE)
6 1 =BINOMDIST(A6,$A$1,$A$2,TRUE)
7 2 =BINOMDIST(A7,$A$1,$A$2,TRUE)
8 3 =BINOMDIST(A8,$A$1,$A$2,TRUE)
9
 Using Excel to Compute
Cumulative Binomial Probabilities
 Value Worksheet
A B
1 3 = Number of Trials (n )
2 0.1 = Probability of Success (p )
3
4 x Cumulative Probability
5 0 0.729
6 1 0.972
7 2 0.999
8 3 1.000
9
 Binomial Probability Distribution

 Expected Value

E(x) =  = np
 Variance
Var(x) = 22 = np(1  p)
 Standard Deviation

  np(1  p)
 Binomial Probability Distribution

 Binomial Probability Distribution

• Expected Value
E(x) =  = 3(.1) = .3 employees out of 3

• Variance
Var(x) = 22 = 3(.1)(.9) = .27

• Standard Deviation
  3(.1)(.9)  .52 employees
 Poisson Probability Distribution

A
A Poisson
Poisson distributed
distributed random
random variable
variable is
is often
often
useful
useful in
in estimating
estimating the
the number
number of
of occurrences
occurrences
over
over aa specified
specified interval
interval of
of time
time or
or space
space

It
It is
is aa discrete
discrete random
random variable
variable that
that may
may assume
assume
an
an infinite
infinite sequence
sequence of
of values
values (x
(x =
= 0,
0, 1,
1, 2,
2, .. .. .. ).
).
 Poisson Probability Distribution

Examples of a Poisson distributed random variable:

the
the number
number of
of knotholes
knotholes in
in 24
24 linear
linear feet
feet of
of
pine
pine board
board

the
the number
number ofof vehicles
vehicles arriving
arriving at
at aa
toll
toll booth
booth in
in one
one hour
hour
 Poisson Probability Distribution

 Two Properties of a Poisson Experiment

1.
1. The
The probability
probability of
of an
an occurrence
occurrence is
is the
the same
same
for
for any
any two
two intervals
intervals of
of equal
equal length.
length.

2.
2. The
The occurrence
occurrence or
or nonoccurrence
nonoccurrence in
in any
any
interval
interval is
is independent
independent ofof the
the occurrence
occurrence or
or
nonoccurrence
nonoccurrence in in any
any other
other interval.
interval.
 Poisson Probability Distribution

 Poisson Probability Function

 xe 
f ( x) 
x!
where:
f(x) = probability of x occurrences in an interva
 = mean number of occurrences in an interv
e = 2.71828
 Example: Mercy Hospital

 Poisson Probability Function

Patients arrive at the MERCY
emergency room of Mercy
Hospital at the average
rate of 6 per hour on
weekend evenings.
What is the
probability of 4 arrivals in
30 minutes on a weekend evening?
 Example: Mercy Hospital MERCY

 Poisson Probability Function

 = 6/hour = 3/half-hour, x = 4
34(2.71828) 3
f (4)   .1680
4!
 Using Excel to Compute MERCY

Poisson Probabilities
 Formula Worksheet
A B
1 3 = Mean No. of Occurrences ( )
2
Number of
3 Arrivals (x ) Probability f (x )
4 0 =POISSON(A4,$A$1,FALSE)
5 1 =POISSON(A5,$A$1,FALSE)
6 2 =POISSON(A6,$A$1,FALSE)
7 3 =POISSON(A7,$A$1,FALSE)
8 4 =POISSON(A8,$A$1,FALSE)
9 5 =POISSON(A9,$A$1,FALSE)
10 6 =POISSON(A10,$A$1,FALSE)
… and so on … and so on
 Using Excel to Compute MERCY

Poisson Probabilities
 Value Worksheet
A B
1 3 = Mean No. of Occurrences ( )
2
Number of
3 Arrivals (x ) Probability f (x )
4 0 0.0498
5 1 0.1494
6 2 0.2240
7 3 0.2240
8 4 0.1680
9 5 0.1008
10 6 0.0504
… and so on … and so on
 Example: Mercy Hospital MERCY

 Poisson Distribution of Arrivals

Poisson Probabilities
0.25

0.20
Probability

0.15 actually,
the
0.10 sequence
continues:
0.05
11, 12, …
0.00
0 1 2 3 4 5 6 7 8 9 10
Number of Arrivals in 30 Minutes
 Using Excel to Compute MERCY

Cumulative Poisson Probabilities

 Formula Worksheet
A B
1 3 = Mean No. of Occurrences ( )
2
Number of
3 Arrivals (x ) Cumulative Probability
4 0 =POISSON(A4,$A$1,TRUE)
5 1 =POISSON(A5,$A$1,TRUE)
6 2 =POISSON(A6,$A$1,TRUE)
7 3 =POISSON(A7,$A$1,TRUE)
8 4 =POISSON(A8,$A$1,TRUE)
9 5 =POISSON(A9,$A$1,TRUE)
10 6 =POISSON(A10,$A$1,TRUE)
… and so on … and so on
 Using Excel to Compute MERCY

Cumulative Poisson Probabilities

 Value Worksheet
A B
1 3 = Mean No. of Occurrences ( )
2
Number of
3 Arrivals (x ) Cumulative Probability
4 0 0.0498
5 1 0.1991
6 2 0.4232
7 3 0.6472
8 4 0.8153
9 5 0.9161
10 6 0.9665

… and so on … and so on