DEPARTMENT OF QUANTITATIVE METHODS & INFORMATION SYSTEMS
Introduction to Business Statistics QM 120 Chapter 5 Discrete random variables and their probability distribution distribution
- Dr. Mohammad Zainal
Introduction to Business Statistics QM 120 Chapter 5 Discrete - - PowerPoint PPT Presentation
DEPARTMENT OF QUANTITATIVE METHODS & INFORMATION SYSTEMS Introduction to Business Statistics QM 120 Chapter 5 Discrete random variables and their probability distribution distribution Spring 2008 Dr. Mohammad Zainal Chapter 5: Random
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Let x denote the number of PCs owned by a family. Then x
A random
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A random variable that assumes countable values is called a
Examples of discrete RVs:
Number of cars sold at a dealership during a week Number of houses in a certain block Number of fish caught on a fishing trip
Number of costumers in a bank at any given day
A random variable that can assume any value contained in
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Examples of continuous RVs:
Height of a person Height of a person Time taken to complete a test Weight of a fish
Price of a car
The number of new accounts opened at a bank during a week The time taken to run a marathon The price of a meal in fast food restaurant The price of a meal in fast food restaurant The score of a football game The weight of a parcel
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The probability distribution of a discrete RV lists all the
# of PC’s
Frequency Relative Frequency
Frequency 120 .12 1 180 .18 2 470 .47 3 230 .23 N 1000 S 1 000 N = 1000 Sum = 1.000
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The following two characteristics must hold for any discrete
The probability assigned to each value of a RV x lies in the range 0
The sum of the probabilities assigned to all possible values of x is
x P(x) x P(x) x P(x) .08 1 .11 2 39 .25 1 .34 2 28 4 .2 5 .3 6 6 2 .39 3 .27 2 .28 3 .13 6 .6 8 ‐.1
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6 5 4 3 2 1 x
.06 .09 .12 .15 .28 .19 .11 P(x)
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5 4 3 2 1
5 4 3 2 1 x 12 16 24 20 8 P(x)
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The mean μ ‐or expected value E(x)‐ of a discrete RV is the
It is denoted by
Illustration: Let us toss two fair coins, and let x denote the
2 1 x
1/4 1/2 1/4 P(x)
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The standard deviation of a discrete RV x, denoted by σ,
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A higher value of σ indicates that x can assume values over
The standard deviation σ can be found using the following
2 2
Hence, the variance σ2 can be obtained by squaring its
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5 4 3 2 1 x
.05 .10 .15 .20 .40 P(x)
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The symbol n!, reads as “n factorial,” represents the
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Combinations give the number of ways x elements can be
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x n x x n
It can be found using the following formula
x n n x
Remember: n is always greater than or at least equal to x.
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Values of Table III in Appendix C lists the number of
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Suppose the probability that a VCR is defective at a factory
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An experiment that satisfies the following four conditions is
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There are n identical trials Each trail has only two possible outcomes. The probabilities of the two outcomes remain constant. The trials are independent The trials are independent.
A success does not mean that the corresponding outcome is A success does not mean that the corresponding outcome is
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The RV x that represents the number of successes in n trials
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The probability distribution of x is called the binomial
Consider the VCRs example. Let x be the number of
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For a binomial experiment, the probability of exactly x
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x n x n x
x n x
−
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We can use the tables of binomial probabilities (Table IV)
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P
.95 … .2 .1 .05 x n .0500 … .8000 .9000 .9500 1 .9500 … .2000 .1000 .0500 1 .9500 … .2000 .1000 .0500 1 .0025 … .6400 .8100 .9025 2 .0950 … .3200 .1800 .0950 1 .9025 … .0400 .0100 .0025 2 .0001 … .5120 .7290 .8574 3 .0071 … .3840 .2430 .1354 1 .1354 … .0960 .0270 .0071 2 .8574 … .0080 .0010 .0001 3
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For any number of trials n
p .95 .9 … .5 … .1 .05 x n .0000 .0001 … .0625 … .6561 .8145 4
0.25 0.3 0.35 0.4
.0005 .0036 … .2500 … .2916 .1715 1 .0135 .0486 … .3750 … .0486 .0135 2 .1715 .2916 … .2500 … .0036 .0005 3
0.05 0.1 0.15 0.2 P(x)
.8145 .6561 … .0625 … .0001 .0000 4
1 2 3 4 x
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p
0.6 0.7
.95 .9 … .5 … .1 .05 x n .0000 .0001 … .0625 … .6561 .8145 4 .0005 .0036 … .2500 … .2916 .1715 1
0.2 0.3 0.4 0.5 P(x)
.0135 .0486 … .3750 … .0486 .0135 2 .1715 .2916 … .2500 … .0036 .0005 3 .8145 .6561 … .0625 … .0001 .0000 4
0.1 1 2 3 4 x
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p
0.6 0.7
.95 .9 … .5 … .1 .05 x n .0000 .0001 … .0625 … .6561 .8145 4 .0005 .0036 … .2500 … .2916 .1715 1
0.2 0.3 0.4 0.5 P(x)
.0135 .0486 … .3750 … .0486 .0135 2 .1715 .2916 … .2500 … .0036 .0005 3 .8145 .6561 … .0625 … .0001 .0000 4
0.1 0.2 1 2 3 4 x
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Although we can still use the mean and standard deviations
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An experiment that satisfies the following four conditions is
There are n identical trials Each trail has only two possible outcomes. The probabilities of the two outcomes remain constant. The trials are independent.
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We learned that one of the conditions required to apply the
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What if the probability of the outcomes is not constant? In such cases we replace the binomial distribution by the
Such a case occurs when a sample is drawn without Such a case occurs when a sample is drawn without
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Hypergeometric probability distribution
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r x N r n x N n
− −
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The Poisson distribution is another discrete probability
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It provides a good model for data that represent the number
Here are some examples of experiments for which the RV x
The number of phone calls received by an operator during a day
The number of customer arrivals at checkout counter during an hour The number of bacteria per a cm3 of a fluid The number of machine breakdowns during a given day The number of machine breakdowns during a given day The number of traffic accidents at a given time period
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The
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The occurrences are random in the sense they do not follow any
Independence of occurrences means that the occurrence or
The occurrences are always considered with respect to an
The interval may be a time interval, a space interval, or a
If the average number of occurrences (λ) for a given interval
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The following three conditions must be satisfied to apply
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x is a discrete RV. The occurrences are random. The occurrences are independent.
The Poisson probability formula is given by
xe
λ
−
where λ (pronounced lambda) is the mean number of
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The mean number of occurrences, denoted by λ, is called
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Remember: The interval of λ and x must be of the same
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The probabilities for Poisson distribution can also be found
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For the Poisson distribution