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6th $%ition
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After completing this chapter, you should be able to: Apply the binomial distribution to applied problems
Compute probabilities for the Poisson and hypergeometric distributions Find probabilities using a normal distribution table and apply the normal distribution to business problems
Recognize when to apply the uniform and Business Statistics: A Decisionexponential Making Approach, 6edistributions 2005 Prentice-Hall, nc! "hap 5-2
Probability Distributions
Probability Distributions Discrete Probability Distributions Binomial Poisson Business Statistics: A DecisionHypergeometric Making Approach, 6e 2005 Prentice-Hall, nc! Continuous Probability Distributions ormal !niform "xponential "hap 5-#
A discrete random #ariable is a #ariable that can assume only a countable number of #alues
Many possible outcomes: number of complaints per day number of $%&s in a household number of rings before the phone is answered
Only two possible outcomes: gender' male or female defecti#e' yes or no spreads peanut butter first #s( spreads )elly first Business Statistics: A DecisionMaking Approach, 6e 2005 Prentice-Hall, nc! "hap 5-$
A continuous random #ariable is a #ariable that can assume any #alue on a continuum *can assume an uncountable number of #alues+
thic,ness of an item time re-uired to complete a tas, temperature of a solution height. in inches
$hese can potentially ta,e on any #alue. only on the ability to measure Business depending Statistics: A Decisionaccurately( Making Approach, 6e 2005
Prentice-Hall, nc!
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A trial has only two possible outcomes / 0success1 or 0failure1 $here is a fixed number. n. of identical trials $he trials of the experiment are independent of each other $he probability of a success. p. remains constant from trial to trial 2f p represents the probability of a success. then Business Statistics: *34p+ 5 - A is Decisionthe probability of a failure Making Approach, 6e 2005 Prentice-Hall, nc! "hap 5-%
A manufacturing plant labels items as either defecti#e or acceptable A firm bidding for a contract will either get the contract or not A mar,eting research firm recei#es sur#ey responses of 0yes 2 will buy1 or 0no 2 will not1
ew )ob A applicants Business Statistics: Decision- either accept the offer or re)ect6e it 2005 Making Approach, Prentice-Hall, nc! "hap 5-&
A combination is an outcome of an experiment where x ob)ects are selected from a group of n ob)ects
n6 C = x6 *n x +6
n x
where'
Business Statistics: A Decision86 5 3 *by definition+ Making Approach, 6e 2005 Prentice-Hall, nc!
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Bino*ial Distri&ution
Mean
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n 5 < p 5 8(<
( % " & # '
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A = np7
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Bino*ial "haracteristics
"xamples
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A = np- = *<+*(<+*3 (<+
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"xamples'
n 5Statistics: 38. p 5 (=<. 5 =' P*x 5 =Gn 538. p 5 (=<+ 5 (7<77 Business AxDecisionMaking 6ex 2005 P*x 5 7Gn 538. p 5 (D<+ 5 (888; n Approach, 5 38. p 5 (D<. 5 7' Prentice-Hall, nc! "hap 5-($
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Here' n 5 38 p 5 (=< Kutput for x 5 8 to x 5 38 will be generated by PH?tat Kptional chec, boxes for additional Business Statistics: A output Decision-
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PHStat /utput
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$he outcomes of interest are rare relati#e to the possible outcomes $he a#erage number of outcomes of interest per time or space inter#al is $he number of outcomes of interest are random. and the occurrence of one outcome does not influence the chances of another outcome of interest
$he probability of that an outcome of interest occurs in a gi#en segment is the same for all segments Business Statistics: A DecisionMaking Approach, 6e 2005 Prentice-Hall, nc! "hap 5-('
* t + e P* x + = x6
x
where' t 5 size of the segment of interest x 5 number of successes in segment of interest 5 expected number of successes in a segment of unit size
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@ = Mt
A 7 = Mt
A = Mt
where
5 number of successes in a segment of unit size Statistics: Decisiont 5 the A size of the segment of interest
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8 3 " = ; < C D
t + !' 8(C8C< 8(=8== 8(8D<E 8(837C 8(883C 8(8887 8(8888 Statistics: 8(8888
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$he shape of the Poisson Distribution depends on the parameters and t'
t 5 8(<8 t 5 =(8
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P)x*
P)x*
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37
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0n1 trials in a sample ta,en from a finite population of size ?ample ta,en without replacement $rials are dependent Concerned with finding the probability of 0x1 successes in the sample where there are 0O1 successes in the population
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P* x + =
Bhere
O ( n x
O x
Cn
5 Population size O 5 number of successes in the population n 5 sample size x 5 number of successes in the sample Statistics: A Decisionn / x 5 number of failures in the sample
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"xample' = Qight bulbs were selected from 38( Kf the 38 there were ; defecti#e( Bhat is the probability that 7 of the = selected are defecti#eR
5 38 O5;
n5= x57
P*x = 7+ =
O n x
O x
Cn
C 3
; 7
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PH?tat H Probability I Prob( Distributions H Hypergeometric J
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(continued )
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2ocation is determined by the mean, 3 /pread is determined by the standard de4iation, 5 6he random 4ariable has an Business Statistics: A Decisioninfinite theoretical range: Making Approach, 6e 2005 S to Prentice-Hall, nc! 3
.y 4arying the parameters 3 and 5, we obtain Business Statistics: A Decisiondifferent normal distributions Making Approach, 6e 2005 Prentice-Hall, nc! "hap 5-##
f)x*
Changing 3 shifts the distribution left or right( Changing A increases or decreases the spread( x "hap 5-#$
by the area P *a x b+
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$*pirical +ules
Bhat can we say about the distribution of #alues around the meanR $here are some general rules'
f)x*
3 %5 encloses about
$-8 of x0s
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2f a #alue is about 7 or more standard de#iations away from the mean in a normal distribution. then it is far from the mean $he chance that a #alue that far or farther away from the mean is highly unli,ely. gi#en that particular mean and standard de#iation
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abo#e the mean ha#e positi#e z4#alues. Business%alues Statistics: A Decision#alues below the mean ha#e negati#e z4#alues Making Approach, 6e 2005 Prentice-Hall, nc! "hap 5-$0
Any normal distribution *with any mean and standard de#iation combination+ can be transformed into the standard normal distribution *z+ eed to transform x units into z units
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$ranslate from x to the standard normal *the 0z1 distribution+ by subtracting the mean of x and di#iding by its standard de#iation'
x @ z= A
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$2a*ple
2f x is distributed normally with mean of 388 and standard de#iation of <8. the z #alue for x 5 7<8 is
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;ote that the distribution is the same, only the scale has changed! <e can express the problem in Business Statistics: A Decisionoriginal units )x* or in standardi:ed units ):* Making Approach, 6e 2005 Prentice-Hall, nc! "hap 5-$$
$he ?tandard ormal table in the textboo, *Appendix D+ gi#es the probability from the mean *zero+ up to a desired #alue for z
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"xample' P*8 T z T 7(88+ 5 (;DD7 Business Statistics: A DecisionMaking Approach, 6e 2005 Prentice-Hall, nc! "!
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$he #alue within the table gi#es the probability from z 5 8 up to the desired z #alue "hap 5-$6
Draw the normal cur#e for the problem in terms of x $ranslate x4#alues to z4#alues ormal $able
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!se theA ?tandard Business Statistics: DecisionMaking Approach, 6e 2005 Prentice-Hall, nc!
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?uppose x is normal with mean E(8 and standard de#iation <(8( Find P*E T x T E(C+
Calculate z4#alues'
4 )a&le e2a*ple
?uppose x is normal with mean E(8 and standard de#iation <(8( Find P*E T x T E(C+
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P*x T E(C+ 5 P*z T 8(37+ 5 P*z T 8+ S P*8 T z T 8(37+ Business Statistics: Decision5 (< S (8;DE 5 A (<;DE Making Approach, 6e 2005 Prentice-Hall, nc!
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Be can use "xcel and PH?tat to -uic,ly generate probabilities for any normal distribution Be will find P*E T x T E(C+ when x is normally distributed with mean E and standard de#iation <
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?elect desired options Business Statistics: A Decisionand Making Approach, 6e enter 2005 #alues Prentice-Hall, nc!
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PHStat /utput
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f*x+ 5
3 ba 8
if a x b otherwise
where f*x+ 5 #alue of the density function at any x #alue a 5 lower limit of the inter#al Statistics: A Decisionb 5 upper limit of the inter#al
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.ni,or* Distri&ution
"xample' !niform Probability Distribution K#er the range 7 U x U C' 3 f*x+ 5 C 4 7 5 (7< for 7 U x U C
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!sed to measure the time that elapses between two occurrences of an e#ent *the time between arri#als+
"xamples' $ime between truc,s arri#ing at an unloading doc, $ime between transactions at an A$> >achine $ime between phone calls to the main operator Business Statistics: A DecisionMaking Approach, 6e 2005 Prentice-Hall, nc! "hap 5-65
$he probability that an arri#al time is e-ual to or less than some specified time a is
P*8 x a+ = 3 e
Ma
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$2ponential Distri&ution
(continued )
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$2a*ple
"xample' Customers arri#e at the claims counter at the rate of 3< per hour *Poisson distributed+( Bhat is the probability that the arri#al time between consecuti#e customers is less than fi#e minutesR $ime between arri#als is exponentially distributed with mean time between arri#als of ; minutes *3< per C8 minutes. on a#erage+ 3H 5 ;(8. so 5 (7<
4a 4*(7<+*<+ P*x T <+ 5 3 4 e 5 3 / e 5 (D3=< Business Statistics: A DecisionMaking Approach, 6e 2005 Prentice-Hall, nc! "hap 5-6&
"hapter Su**ar'
Found probabilities using formulas and tables Recognized when to apply different distributions
Applied distributions to decision problems Business Statistics: A DecisionMaking Approach, 6e 2005 Prentice-Hall, nc! "hap 5-6'