Prepared by:

Renna Magdalena
Chapter 6
Introduction to Continuous
Probability Distributions
Chapter Goals
After completing this chapter, you should be able to:
Convert values from any normal distribution to a
standardized z-score
Find probabilities using a normal distribution table
Apply the normal distribution to business problems
Recognize when to apply the uniform and exponential
distributions
Continuous Probability Distributions
A continuous random variable is a variable that can
assume any value on a defined continuum (can
assume an uncountable number of values) see
Chapter 5
thickness of an item
time required to complete a task
These can potentially take on any value, depending
only on the ability to measure accurately.
4
Types of Continuous Distributions
Three types
Normal
Uniform
Exponential
A B
Involves determining the probability for a RANGE
of values rather than 1 particular incident or
outcome
5
The Normal Distribution
Bell Shaped
Symmetrical
Mean=Median=Mode
Location is determined by the
mean,
Spread is determined by the
standard deviation,
The random variable has an
infinite theoretical range:
+ to
Mean
Median
Mode
x
f(x)

6
By varying the parameters and , we obtain different normal
distributions
Many Normal Distributions
7
The Normal Distribution Shape
x
f(x)

Changing shifts the

distribution left or right.
Changing increases or
decreases the spread.
8
Finding Normal Probabilities
a b
x
f(x)
P a x b (
)

Probability is measured by the area
under the curve
f(x)
x

Probability as
Area Under the Curve
0.5 0.5
The total area under the curve is 1.0, and the curve is symmetric, so
half is above the mean, half is below
1.0 ) x P(
0.5 ) x P( 0.5 ) x P(
10
The Standard Normal Distribution
Also known as the z distribution
Mean is defined to be 0
Standard Deviation is 1
z
f(z)
0
1
Values above the mean have positive z-values Values below the
mean have negative z-values
11
The Standard Normal
Any normal distribution (with any mean and
standard deviation combination) can be
transformed into the standard normal distribution
(z)
Need to transform x units into z units
Where x is any point of interest
Can use the z value to determine probabilities
12
Translation to the Standard
Normal Distribution
Translate from x to the standard normal (the z
distribution) by subtracting the mean of x and
dividing by its standard deviation:
z is the number of standard deviations units that
x is away from the population mean

x
z

13
Example
If x is distributed normally with mean of
100 and standard deviation of 50, the z
value for x = 250 is
This says that x = 250 is three standard
deviations (3 increments of 50 units) above
the mean of 100.
3.0
50
100 250

x
z

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Comparing x and z units
z
100
3.0 0
250 x
Note that the distribution is the same, only the scale has changed.
We can express the problem in original units (x) or in standardized
units (z)
= 100
= 50
15
The Standard Normal Table
The Standard Normal table in the textbook
(Appendix D)
Gives the probability from the mean (zero)
up to a desired value for z
z
0 2.00
0.4772
Example:
P(0 < z < 2.00) = 0.4772
The Standard Normal Table gives the probability
between the mean and a certain z value
The z value ALWAYS refers to the area between
some value (-z or +z) and the mean
Since the distribution is symmetrical, the Standard
Normal Table only displays probabilities for of the
full distribution
The Standard Normal Table
(continued)
17
The Standard Normal Table
The value within the
table gives the
probability from z =
0 up to the desired
z value
z 0.00 0.01 0.02
0.1
0.2



.4772
2.0
P(0 < z < 2.00) = 0.4772
The row shows the
value of z to the
first decimal point
The column gives the value of z to the
second decimal point
2.0
.
.
.
(continued)
18
General Procedure for Finding
Probabilities
1. Determine m and s
2. Define the event of interest
e.g., P(x > x
1
)
3. Convert to standard normal
4. Use the table to find the probability

x
z

19
z Table Example
Suppose x is normal with mean 8.0 and
standard deviation 5.0. Find P(8 < x < 8.6)
P(8 < x < 8.6)
= P(0 < z < 0.12)
Z 0.12 0
x 8.6 8
0
5
8 8

x
z

0.12
5
8 8.6

x
z

Calculate z-values:
20
z Table Example
Suppose x is normal with mean 8.0 and
standard deviation 5.0. Find P(8 < x < 8.6)
P(0 < z < 0.12)
z
0.12 0
x
8.6 8
P(8 < x < 8.6)
= 8
= 5
= 0
= 1
(continued)
21
Z
0.12
z .00 .01
0.0 .0000 .0040 .0080
.0398
.0438
0.2 .0793 .0832 .0871
0.3 .1179 .1217 .1255
Solution: Finding P(0 < z < 0.12)
0.0478
.02
0.1
.0478
Standard Normal Probability
Table (Portion)
0.00
= P(0 < z < 0.12)
P(8 < x < 8.6)
Finding Normal Probabilities
Suppose x is normal with mean 8.0
and standard deviation 5.0.
Now Find P(x < 8.6)
The probability of obtaining a value less than 8.6
Z
8.6
8.0
P = 0.5
Finding Normal Probabilities
Suppose x is normal with mean 8.0
and standard deviation 5.0.
Now Find P(x < 8.6)
(continued)
Z
0.12
0.0478
0.00
0.5000
P(x < 8.6)
= P(z < 0.12)
= P(z < 0) + P(0 < z < 0.12)
= 0.5000 + 0.0478 = 0.5478
Upper Tail Probabilities
Suppose x is normal with mean 8.0
and standard deviation 5.0.
Now Find P(x > 8.6)
Z
8.6
8.0
P(x > 8.6) = P(z > 0.12) = P(z > 0) - P(0 < z < 0.12)
= 0.5000 - 0.0478 = 0.4522
Now Find P(x > 8.6)
(continued)
Z
0.12
0
Z
0.12
0.0478
0
0.5000
0.4522
Upper Tail Probabilities
Lower Tail Probabilities
Suppose x is normal with mean 8.0
and standard deviation 5.0.
Now Find P(7.4 < x < 8)
Z
7.4
8.0
Lower Tail Probabilities
Now Find P(7.4 < x < 8)the probability
between 7.4 and the mean of 8
Z
7.4
8.0
The Normal distribution is symmetric,
so we use the same table even if z-
values are negative:
P(7.4 < x < 8)
= P(-0.12 < z < 0)
= 0.0478
(continued)
0.0478
28
Normal Probabilities in PHStat
We can use Excel and PHStat to quickly
generate probabilities for any normal
distribution
We will find P(8 < x < 8.6) when x is
normally distributed with mean 8 and
standard deviation 5
29
PHStat Dialogue Box
Select desired options and
enter values
30
PHStat Output
31
Empirical Rules
1 covers about 68% of
xs
f(x)
x
+1 1
What can we say about the distribution of values
around the mean if the distribution is normal?

68.26%
Recall
Tchebyshev
from Chpt. 3
The Empirical Rule
2 covers about 95% of xs
3 covers about 99.7% of xs
x
2 2
x
3 3
95.44% 99.72%
(continued)
Importance of the Rule
If a value is about 2 or more standard
deviations away from the mean in a normal
distribution, then it is far from the mean
The chance that a value that far or farther
away from the mean is highly unlikely, given
that particular mean and standard deviation
The Uniform Distribution
The uniform distribution is a probability distribution that
has equal probabilities for all possible outcomes of the
random variable
Referred to as the distribution of little information
Probability is the same for ANY interval of the same
width
Useful when you have limited information about how
the data behaves (e.g., is it skewed left?)
The Continuous Uniform Distribution:
otherwise 0
b x a if
a b
1

where
f(x) = value of the density function at any x value
a = lower limit of the interval of interest
b = upper limit of the interval of interest
The Uniform Distribution
(continued)
f(x) =
The mean (expected value) is:
2
b a
E(x)
+

where
a = lower limit of the interval from a to b
b = upper limit of the interval from a to b
The Mean and Standard Deviation
for the Uniform Distribution
The standard deviation is
12
a) (b

Steps for Using the

Uniform Distribution
1. Define the density function
2. Define the event of interest
3. Calculate the required probability
x
f(x)
2/1/2013 38
Uniform Distribution
Example: Uniform Probability Distribution
Over the range 2 x 6:
2 6
.25
f(x) = = .25 for 2 x 6
6 - 2
1
x
f(x)
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Uniform Distribution
Example: Uniform Probability Distribution
Over the range 2 x 6:
4
2
6 2
E(x)
+

1.1547
12
2) (6
12
a) (b

2 2

The Exponential Distribution

Used to measure the time that elapses between
two occurrences of an event (the time between
arrivals)
Examples:
Time between trucks arriving at a dock
Time between transactions at an ATM Machine
Time between phone calls to the main operator
Recall l = mean for Poisson (see Chpt. 5)
The Exponential Distribution
a
e 1 a) x P(0


The probability that an arrival time is equal to
or less than some specified time a is
where 1/l is the mean time between events and e = 2.7183
NOTE: If the number of occurrences per time period is
Poisson with mean l, then the time between occurrences is
exponential with mean time 1/ l and the standard deviation
also is 1/l
Exponential Distribution
Shape of the exponential distribution
(continued)
f(x)
x
l = 1.0
(mean = 1.0)
l= 0.5
(mean = 2.0)
l = 3.0
(mean = .333)
Time between arrivals is exponentially distributed with mean
time between arrivals of 4 minutes (15 per 60 minutes, on
average)
1/l = 4.0, so l = .25
P(x < 5) = 1 - e
-la
= 1 e
-(.25)(5)
= 0.7135
There is a 71.35% chance that the arrival time between
consecutive customers is less than 5 minutes
Example
Example: Customers arrive at the claims counter at the rate of
15 per hour (Poisson distributed). What is the probability that
the arrival time between consecutive customers is less than five
minutes?
44
Using PHStat
Chapter Summary
Reviewed key continuous distributions
normal
uniform
exponential
Found probabilities using formulas and tables
Recognized when to apply different distributions
Applied distributions to decision problems
Thank You
End of Chapter 6