E370

5/13/17
Week 06: Discrete vs
Continuous Variables
Part 4: From the Finite
to the Infinite
 What differences exist between
discrete and continuous random
variables?
Continuous random variables:
AnRV that can take on any value in an
interval

No gaps between values

Because there is an infinite number of X

values, we cannot associate a probability
with a single value, only a range of values.

Continuous vs Discrete RVs

Probability Density Function
(pdf)

the technical name of the curve

often represented as f(x) (say f
of x)
f(x) 0 for all x (probabilities
cant be negative)
f(x)dx = 1 (probabilities sum to 1)

CONTINUOUS LANGUAGE
 For continuous distributions, P(X=a) = 0.
eg, probability that a person randomly drawn
from a population is exactly 54.23 inches tall is
equal to 0.
Onlythe probability that X falls in an
interval can be measured, and is measured
as an area under the curve.
It is possible to evaluate the likelihood that a
random person is between 54 and 55 inches tall.
Thus, P(a < X < b) is identical to P(a < X <
b).
If interval limits are included in the interval or
not, the probability stays the same.

Hence, continuous facts

 Some Discrete Variables we treat as
continuous:
Family Income
Corporate Taxes
Sales Revenues
Any monetary figure
dollar amounts are measured to the
nearest penny, but are usually considered
continuous.
Why would we treat discrete random
variables as if they are continuous?

Discrete can be continuous?

Characteristics
The simplest continuous distribution
pdf is a horizontal line.
The height of the line is calculated by
where a and b are the endpoints of the
interval over which the variable is
defined.
Probabilities are calculated as areas of
rectangles.
A two-parameter distribution, X~U(a,b)

The Uniform Distribution

 AtBloomington Valley Nursery daily demand
for hardwood mulch is uniformly distributed
from 100 cubic feet to 195 cubic feet during
the months of April and May. The nursery
begins each day with 175 cubic feet of
hardwood mulch.

An Example
f(x)=(1/(195-100))=0.010526 Supply
Demand

The Market
f(x)=(1/(195-100))=0.010526 Supply
Demand

How likely is it that any given day

they will be unable to completely
meet demand?
The area from (175 to 195) * 0.010526
=20*0.010526 =0.211
How likely is it that demand will be
140 cubic feet at most?

Whatis Bloomington Valley Nurserys
expected demand for hardwood mulch?
147.5 ft3
Byhow many ft3 will the demand
vary on average?

Howlikely is it that a days demand will

be within 1 standard deviation of the
mean?
=2*f(x)=2*27.42*(0.010526) = 0.577

Uniform Expected Values