Professional Documents
Culture Documents
and Economics
Anderson
Williams
Sweeney
Slides by
John Loucks
St. Edwards University
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Probability Distribution
1. Random Variables
2. Discrete Probability Distribution
2.1 Binomial Probability Distribution
2.2 Poisson Probability Distribution
3. Continuous Probability Distribution
3.1 Normal Probability Distribution
3.2 Exponential Probability Distribution
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
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1. 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 of
of
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.
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Let
Let xx =
= number
number of
of 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 55 values
values (0,
(0, 1,
1, 2,
2, 3,
3, 4)
4)
We can count the TVs sold, and there is a finite
upper limit on the number that might be sold (which
is the number of TVs in stock).
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Let
Let xx =
= number
number of
of 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
no finite upper limit on the number that might arrive.
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
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Random Variables
Question
Family
size
Random Variable x
Type
Continuous
Discrete
x = 1 if own no pet;
= 2 if own dog(s) only;
= 3 if own cat(s) only;
= 4 if own dog(s) and cat(s)
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
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or duplicated, or posted to a publicly accessible website, in whole or in part.
0.4500
0.25
0.20
0.15
0.10
0.05
0.00
0.4000
0.3500
0.3000
0.2500
0.2000
0.1500
0.1000
0.0500
0.0000
0
Poisson Probabilities
1 2 of
3 Arrivals
4 5 6 in7 308 Minutes
9 10
0Number
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n!
f (x)
px (1 p)(n x)
x!(n x)!
where:
x = the number of successes
p = the probability of a success on one trial
n = the number of trials
f(x) = the probability of x successes in n trials
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
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n!
f (x)
px (1 p)(n x)
x!(n x)!
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Binomial Probability
p(x)
p(x)
0.327
0
7
0.409
1
6
0.204
2
8
0.051
3
2
0.006
4
4
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, 0.000
or posted to a publicly accessible website, in whole or in part.
0.4500
0.4000
0.3500
0.3000
0.2500
0.2000
0.1500
0.1000
0.0500
0.0000
Slide
11
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12
or duplicated, or posted to a publicly accessible website, in whole or in part.
Slide
13
Using the
p = .10, n = 3, x = 1 probability
function
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)!
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
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2nd Worker
Leaves (.1)
Leaves
(.1)
3rd Worker
L (.1)
x
3
Prob.
.0010
S (.9)
L (.1)
.0090
.0090
S (.9)
.0810
L (.1)
.0090
S (.9)
L (.1)
.0810
.0810
S (.9)
.7290
Stays (.9)
Leaves (.1)
Stays
(.9)
Stays (.9)
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Expected Value
E(x) = = np
Variance
Var(x) = 2 = np(1 p)
Standard Deviation
np(1 p)
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Expected Value
Variance
Var(x) = np(1 p) = 3(.1)(.9) = .27
Standard Deviation
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
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or duplicated, or posted to a publicly accessible website, in whole or in part.
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
19
or duplicated, or posted to a publicly accessible website, in whole or in part.
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 of
of the
the occurrence
occurrence or
or
nonoccurrence
nonoccurrence in
in any
any other
other interval.
interval.
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
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or duplicated, or posted to a publicly accessible website, in whole or in part.
x e
f ( x)
x!
where:
x = the number of occurrences in an interval
f(x) = the probability of x occurrences in an interval
= mean number of occurrences in an interval
e = 2.71828
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
21
or duplicated, or posted to a publicly accessible website, in whole or in part.
0 1 2 3 4 5 6 7 8 9 10
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Using the
probability
function
= 6/hour = 3/half-hour, x = 4
34(2.71828)3
f (4)
4!
.1680
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
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or duplicated, or posted to a publicly accessible website, in whole or in part.
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
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or duplicated, or posted to a publicly accessible website, in whole or in part.
0.25
0.20
actually,
the
sequence
continues:
11, 12,
0.15
0.10
0.05
0.00
0
10
= 2
=2=3
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
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or duplicated, or posted to a publicly accessible website, in whole or in part.
= 22 = 3
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f (x)
f (x) Exponential
Normal
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f (x) Exponential
Normal
x11 x22
x11
xx1122 x22
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or duplicated, or posted to a publicly accessible website, in whole or in part.
people
Rainfall
amounts
Scientific
measurements
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1 (x )2 / 2 2
f (x)
e
2
where:
=
=
=
=
mean
standard deviation
3.14159
2.71828
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Characteristics
The distribution is symmetric; its skewness
measure is zero.
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
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Characteristics
The entire family of normal probability
distributions is defined by its mean and its
standard deviation .
Standard Deviation
Mean
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
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Characteristics
The highest point on the normal curve is at the
mean, which is also the median and mode.
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
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Characteristics
x
-10
25
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Characteristics
= 15
= 25
x
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Characteristics
.5
.5
x
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3
1
2
+ 3
+ 1
+ 2
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Characteristics
A
A random
random variable
variable having
having aa normal
normal distribution
distribution
with
with aa mean
mean of
of 00 and
and aa standard
standard deviation
deviation of
of 11 is
is
said
said to
to have
have aa standard
standard normal
normal probability
probability
distribution.
distribution.
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
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Characteristics
The letter z is used to designate the standard
normal random variable.
z
0
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x
z
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or duplicated, or posted to a publicly accessible website, in whole or in part.
P(z < .
83)
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Step
Step 3:
3: Compute
Compute the
the area
area under
under the
the standard
standard normal
normal
curve
curve to
to the
the right
right of
of zz =
= .83.
.83.
P(z > .83) = 1 P(z < .83)
= 1- .7967
= .2033
Probability
of a
stockout
P(x >
20)
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Area = .7967
Area = 1 - .7967
= .2033
0 .83
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
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Area = .9500
Area = .0500
z.05
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Step
Step 1:
1: Find
Find the
the z-value
z-value that
that cuts
cuts off
off an
an area
area of
of .05
.05
in
in the
the right
right tail
tail of
of the
the standard
standard normal
normal
distribution.
distribution.
We look up
the
complement
of the tail area
(1 - .05 = .95)
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Step
to the corresponding value of x.
Step 2:
2: Convert
Convert zz.05
.05 to the corresponding value of x.
x = + z.05
.05
= 15 + 1.645(6)
= 24.87 or 25
A reorder point of 25 gallons will place the probability
of a stockout during leadtime at (slightly less than) .05.
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Probability of
a
stockout
during
replenishment
lead-time = .
05
15
24.87
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or duplicated, or posted to a publicly accessible website, in whole or in part.
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Density Function
f ( x)
where:
1 x /
e
for x > 0
= expected or mean
e = 2.71828
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Cumulative Probabilities
P ( x x0 ) 1 e xo /
where:
x0 = some specific value of x
The time between arrivals of customers at a bank follows an
exponential probability with a mean of 12 minutes. What is
probability that the arrival time between the next two
customers is 12 minutes or less? 8 minutes or less? In
between 8 to 12 minutes?
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-2/3 = 1 - .5134 =
.4866
.4 P(x < 2) = 1 - 2.71828-2/3
.3
.2
.1
0
x
9 10