Probability

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Probability

Attribution Non-Commercial (BY-NC)

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7.1 Describing a Continuous Distribution 7.2 Uniform Continuous Distribution 7.3 Normal Distribution 7.4 Standard Normal Distribution 7.5 Normal Approximations 7.6 Exponential Distribution

A probability distribution can be described either by its probability density function (PDF) or by its cumulative distribution function (CDF). For a continuous random variable, the PDF is an equation that shows the height of the curve f(x) at each possible value of X. The CDF is denoted F(x) and shows P(X x), the cumulative area to the left of a given value of X. The CDF is useful for probabilities, while the PDF reveals the shape of the distribution.

PROBABILITIES AS AREAS

With discrete random variables, we take sums of probabilities over groups of points. But continuous probability functions are smooth curves, so the area at any point would be zero. Instead of taking sums of probabilities, we speak of areas under curves. In calculus terms, we would say that P(a < X < b) is the integral of the probability density function f(x) over the interval from a to b. Because P(X = a) = 0 the expression P(a < X < b) is equal to P(a X b).

If X is a random variable that is uniformly distributed between a and b, its PDF has constant height, The uniform continuous distribution is sometimes denoted U(a, b) for short.

A normal probability distribution is defined by two parameters, and . It is often denoted N(, ). The domain of a normal random variable is < x < +. However, as a practical matter, the interval [ 3, + 3] includes almost all the area. Besides and , the normal probability density function f(x) depends on the constants e (approximately 2.71828) and (approximately 3.14159). The expected value of a normal random variable is and its variance is 2. The normal distribution is always symmetric. Its single peak and symmetry cause some observers to call it mound-shaped or bell-shaped. Its CDF has a lazy-S shape

Since there is a different normal distribution for every pair of values of and , we often transform the variable by subtracting the mean and dividing by the standard deviation to produce a standardized variable If X is normally distributed N(, ), the standardized variable Z has a standard normal distribution. Its mean is 0 and its standard deviation is 1, denoted N(0, 1). The maximum height of f(z) is at 0 (the mean) and its points of inflection are at 1 (the standard deviation). The shape of the distribution is unaffected by the z transformation.

We have seen that (unless we are using Excel) binomial probabilities may be difficult to calculate when n is large, particularly when many terms must be summed. Instead, we can use a normal approximation. The logic of this approximation is that as n becomes large, the discrete binomial bars become more like a smooth, continuous, normal curve.

When the count of customer arrivals has a Poisson distribution, the distribution of the time between two customer arrivals will have an exponential distribution In the exponential model, the focus is on the waiting time until the next event, a continuous variable. The exponential probability density function approaches zero as x increases, and is very skewed

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