PROBABILITY

-RANDOM VARIABLES
&
PROBABILITY
DISTRIBUTIONS
SITI SUHAIDAH BINTI SAHAB


DEPT. OF BUILDING

FACULTY OF ARCHITECTURE PLANNING AND SURVEYING

UNIVERSITI TEKNOLOGI MARA

SHAH ALAM


 OBJECTIVES
—Describe and provide examples of both discrete
and continuous random variables.
—Explain the difference between discrete and
continuous probability distributions.
—Calculate expected values and variances and use
the Normal table.
 OUTLINE
—Introduction
—Random Variables
—Probability Distributions
—Discrete Probability Distributions
—Expected Value of DPD
—Variance of DPD
—Binomial Distribution
—Normal Distribution
 INTRODUCTION
—Remove all cards except aces and kings from a
deck, so that only eight cards remain, of which
four are aces and four are kings. From this
abbreviated deck, deal two cards to a friend.
 INTRODUCTION
—If he looks at his card and announces (truthfully)
that his hand contains an ace, what is the
probability that both his cards are aces?
—
 INTRODUCTION
—If he announces instead that one of his cards is the
ace of spades, what is the probability then that
both his cards are aces? Are these two
probabilities the same?
—
 INTRODUCTION

—First case:
 There are 28 possible `hands' that can be dealt
(choose 2 cards out of 8). Out of these 28 hands,
exactly 6 contain no aces (choose 2 cards out of
4). Hence 28-6=22 contain at least one ace. Our
friend tells us he has an ace, hence he has been
dealt one of these 22 hands. Out of these exactly
6 contain two aces (again choose 2 out of 4).
Therefore he has a probability of 6/22=3/11 of
having two aces.
 INTRODUCTION
—Second case:
One of his cards is the ace of spades. There are 7


possibilities for the other card, out of which 3 will

yield a hand with 2 aces. Thus the probability is
3/7.


—Any implicit assumptions??

 Yes: we assume all hands are equally likely.
 DEFINITION
RANDOM VARIABLES
Discrete random variable


—Assume only a finite or limited set of values

- i.e., the number of automobiles sold in a year.
-
Continuous random variable


—Can assume any one of an infinite set of values

 - i.e., temperature, product lifetime.
RANDOM VARIABLES – (numeric)
Experiment Outcome Random Variable Range of
Random
Variable
Stock 50 Number of X = number of 0,1,2,, 50

Discrete
Xmas trees trees sold trees sold
Inspect 600 Number Y = number 0,1,2,…,
items acceptable acceptable 600
Send out Number of Z = number of 0,1,2,…,
5,000 sales people people responding 5,000
letters responding
Build an % completedR = % completed 0≤ R≤100
apartment after 4 after 4 months

Continuous
building months
Test the Time bulb S = time bulb 0≤ S≤80,000
lifetime of a lasts-up to burns
light bulb 80,000
(minutes) minutes
RANDOM VARIABLES – (non-numeric)
 PROBABILITY DISTRIBUTION

—Probability distribution – the set of all possible

values of a random variable and their
associated probabilities.
—2 Types of Probability Distributions
 a) Discrete When the parameter being measured
—can only take on certain values, such as the integers
0, 1, 2, …, the probability distribution is called a
discrete distribution.
 b) Continuous When a variable being measured is

—expressed on a continuous scale, its probability

distribution is called a continuous distribution.
 DISCRETE PROBABILITY
DISTRIBUTION
—The number of events (things that can happen) is
countable (i.e., can be placed in correspondence
with integers)
—Probability value assigned to each event.
—These value must be between 0 and 1, and sum to
1.
—Probability cannot be a negative number or
greater than 1
—Types of distribution; binomial distribution
 DISCRETE PROBABILITY
DISTRIBUTION
Example (1)


— The 100 students in ACC325 class have just completed the

instructor evaluations at the end of the course. One of the
question on the evaluation survey was: “The course was
well taught and helped me acquire the necessary
information”.
 5. Strongly agree

 4. Agree

 3. Neutral

 2. Disagree

 1. Strongly disagree


 DISCRETE PROBABILITY
DISTRIBUTION
— Example (1) cont’d
 The students’ response to this question is summarized below.

The probability values are often presented

in graph form.
Probability

The shape of the graph help us identify the

central tendency of the distribution, called
expected value, and the amount of
variability or spread of the distribution,
called the variance.
Possible Values for the RV (X)
 EXPECTED VALUE OF DICRETE
PROBABILITY DISTRIBUTION
Expected Value of a Discrete Probability


Distribution
—The expected value or μ (mean), a measure of
central tendency, is computed as weighted
average of the values of the random variable:
 EXPECTED VALUE OF DICRETE
PROBABILITY DISTRIBUTION
— Example 2
Find the expected value for the instructor evaluation of


ACC325 class.
5
E(X) = X i P(X i) = μ (mean)
i =1

= X 1 P(X 1) + X 2 P(X 2) + X 3P(X 3) + X 4P(X 4) + X 5P(X 5)

= (5) (0.1) + (4) (0.2) + (3) (0.3) + (2)(0.3) + (1) (0.1)

E(X) = μ = 2.9

The expected value of 2.9 implies that the mean response is between
disagree (2) and neutral(3) and that the average response is closer to
neutral , which is 3. Looking at the graph, this is consistent with shape
of the probability function .
 VARIANCE OF DICRETE PROBABILITY
DISTRIBUTION

—Variance of PD is a number that reveals the

overall spread or dispersion of the distribution.
—Meaning:
—- low variability will make the outcome of an experiment
close to the average or expected value;
—- high variability, probability distribution is spread out over
the various RV values, there is less chance that the
outcome of an experiment will be close to the expected
value
—Standard deviation (Ω) is a measure of the
dispersion of a set of values.
 BINOMIAL DISTRIBUTION

—The binomial distribution is a probability

distribution with:
—trials that follow a Bernoulli process and have two
possible outcomes.
—probabilities that stay the same from one trial to the
next.
—trials that are statistically independent.
—a positive integer number of trials.
 BINOMIAL DISTRIBUTION

—The binomial formula can be used to determine

the probability of r successes in n trials.


—Where,
 n = number of trials
 r = number of successes
 p = probability of success
 q = probability of failure (1-p)
 BINOMIAL DISTRIBUTION
—For a binomial distribution, the expected value, or
mean, is:
—
µ = np
—The variance is:
—
— σ 2 = np(1 − p)
—The standard deviation is:
— 2
σ= σ
 NORMAL DISTRIBUTION
—The normal distribution is the most popular and
useful continuous probability distribution.
—Specified completely by the mean and standard
deviation
—Symmetrical, with the midpoint representing the mean
—Values on the X axis are measured in the number of
standard deviations away from the mean.
—As the standard deviation becomes larger the curve
flattens.
—The total area under the curve is 1.00; half the
area under the normal curve is to the right of this
NORMAL DISTRIBUTION
 NORMAL DISTRIBUTION
-3 COMMON AREAS UNDER THE CURVE

—Three
commonly
used areas
under the
normal curve
are +/- 1, 2
and 3
standard
deviations
 NORMAL DISTRIBUTION
— standard normal distribution is a normal distribution with a mean of 0 and a
standard deviation of 1.
— It is also called the z distribution.
— A z-value is the distance between a selected value designated X, and the
population mean μ, divided by the population standard deviation, .
— The formula is:
— X = Value of RV that want to measure
— μ = mean of distribution
σ = standard deviation of the distribution
—
Z = number of standard deviation from X to the mean, μ
—
— Z for any particular X value shows how many standard deviations X is away from
the mean for all X values.
— Probability of X value can be refer to Standard Normal Table (Appendix A)
 NORMAL DISTRIBUTION
— Example 4
• If μ = 100, σ = 15, find the probability that the random variable X is less than
130, P(X< 130)
 Z = (X-μ) = 130 - 100
 σ 15
 = 30 = 2 standard deviation
 15
§ This mean that the point X is 2.0 standard deviation to the right of the mean. This is
shown in figure below. From Z table, P (X < 130)
 = P (Z < 2.00) = 97.7%.
— From the graph, this probability
— could also have been derived from
the middle graph.
— Note that, 1.0 – 0.977
= 0.023
— = 2.3%,
which is the area in the right- hand
tail of the curve
 NORMAL DISTRIBUTION

Example 5


—Pep Zone sells auto parts and supplies including

multi-grade motor oil. When the stock of this oil
drops to 20 gallons, a replenishment order is
placed. The store manager is concerned that sales
are being lost due to stock outs while waiting for an
order. It has been determined that leadtime
demand is normally distributed with a mean of 15
gallons and a standard deviation of 6 gallons.
—In Summary; we have a N (15, 6): A normal
random variable with mean of 15 and std of 6.
—The manager would like to know the probability of a
stockout, P(x > 20).
 NORMAL DISTRIBUTION
— Example 5 cont’d
 z = (x - µ )/ σ
 = (20 - 15)/6
 = .83


Area = .5
z
0 0.83
 NORMAL DISTRIBUTION
—The Probability of Demand Exceeding 20
—
Area = .2967

Area = .2033

Area = .5
z
0 .83
The Standard Normal table shows an area of .2967 for the region between the
z = 0 line and the z = .83 line above. The shaded tail area is .5 - .2967 = .
2033. The probability of a stockout is .2033.
THANK YOU…

NEXT WEEK…
DECISION THEORY