Quantitative Methods

MM ZG515 / QM ZG515

BITS Pilani L7: Probability Distributions

Pilani | Dubai | Goa | Hyderabad Srinivas Kota
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Pilani | Dubai | Goa | Hyderabad

Binomial Distribution
Binomial Probability Distribution B(n, p)

• The random variable X counts the number of successes in n trials

• The typical example: Tossing a Coin & we are interested in the number of Heads

• Four Properties of a Binomial Experiment

• The experiment consists of a sequence of n identical trials.
• Two outcomes, success and failure, are possible on each trial.
• The probability of a success, denoted by p, does not change from trial to trial.
• The trials are independent.
B(n, p) – Example 1

• Indibook sells encyclopedias targeted towards children using door-to-door

saleswomen. Ms. Rita, a saleswomen with Indibook, has randomly selected 20
houses in her neighborhood to sell the product. From past experience, Rita knows
that the probability that a sale will be made is 0.1.

• # of trials, n, is 20
• Trials are identical in the sense that each trial is a household
• Two outcomes: “Sale” or “No Sale”
• The probability may change: Initially p, the probability of success, may be 0.1. But
as the day progresses, Rita may get tired the success rate may decrease
• Trials are independent: Since the households were randomly selected
B(n, p) – Example 2

A 1000-strong IT firm is concerned about a low retention rate for its employees. In
recent years, management has seen a turnover of 10% of the employees annually.
HR takes a random sample of 5 employees and meets each one separately to
understand their concerns and also whether they are planning to leave.

1. # of trials, n, is 5; identical in the sense that each trial is an interview with an

employee
2. Two outcomes: Resign or No plans of resigning
3. Trials are independent – Since the employees were randomly selected
4. The probability will change.
B(n, p) – Probability Function, Mean and Variance

X ~ B(n, p)

p: Probability of Success
q: Probability of Failure

!
f(x) = P(X=x) = p q p q
! !

μ = n*p

2= npq

σ npq
B(10, 0.20) - Example
The Canteen Manager in a large factory estimated that 20% of the workers bring
lunch from home. A random sample of 10 workers are taken.
Q. Compute the probability that exactly 4 bring lunch from home
Q. Compute the probability that at least 2 workers bring lunch from home

10 p
x 0.1 0.2 0.3 0.4
X: # that bring lunch from home
0 0.3487 0.1074 0.0282 0.0060
1 0.3874 0.2684 0.1211 0.0403 X ~ B(10, 0.2)
2 0.1937 0.3020 0.2335 0.1209
3 0.0574 0.2013 0.2668 0.2150 Q1. P(X = 4) = 0.0881
4 0.0112 0.0881 0.2001 0.2508
5 0.0015 0.0264 0.1029 0.2007
6 0.0001 0.0055 0.0368 0.1115 Q2. P(X >= 2) = 1 – P(X < 2)
7 0.0000 0.0008 0.0090 0.0425 = 1 – [P(X = 0) + P(X = 1)]
8 0.0000 0.0001 0.0014 0.0106 = 1 - (0.1074 + 0.2684
9 0.0000 0.0000 0.0001 0.0016
10 0.0000 0.0000 0.0000 0.0001

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Summary

• Uniform Distribution
• Poisson Distribution
• Binomial Distribution, B(n, p)
• P(X = x)
• The Mean and the Standard Deviation
• n << N may be required when modelling with B(n, p)
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Pilani | Dubai | Goa | Hyderabad

Continuous Random Variables

Uniform Probability Distribution – U(a, b)

for a x b
• f x
0 elsewhere

• E(U)) = (a + b)/2
• Var(U) = (b - a)2/12

• P(x1 < U(a, b) < x2) = ?

U(5, 15) - Example

Kumar is usually late to office. HR believes that his arrival time is uniformly
distributed between 5m late and 15m late.
What is the probability density function?
What is the probability that today he will be late by at least 12m?
What is the average time he is late by? The variance?

x
0 5 10 12 15
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The Exponential Distribution

Exponential Probability Distribution – exp(μ)
• exp(μ) is useful in modeling
• time between vehicle arrivals at a toll booth
• time required to complete a questionnaire
• distance between major defects in a highway

• Exponential Distribution and the Poisson Distribution are related

• Average time between vehicle arrivals is μ = 5m = 1/12 h
• Average number of vehicles arriving in 1 hour is 12

• Probability Density Function: f(x) = (1/μ)e-x/μ f(x)

• μ is the average waiting time
• The mean and standard deviation are equal.
• The exponential distribution is skewed to the
right.
• P(X < x) = 1 – e-x/μ
• The distribution is memoryless! x

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Exp(3 minutes): At the Petrol Bunk
The time between arrivals of cars
follows an exponential probability
distribution with a mean time of 3
minutes.

What is the probability that the time

between two successive arrivals will be
2 minutes or less.

The clock is reset to 0, three minutes

after the second car arrives. What is
the probability that the waiting time for x
the next arrival is 2 minutes or less?!
 Exponential & Poisson Distributions
Suppose the rate at which cars cross the toll booth is 10 cars/h, and the arrival
process can be described by a Poisson Distribution. Write down the Poisson &
Exponential distributions that describe the process.
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Pilani | Dubai | Goa | Hyderabad

The Normal Distribution

Normal Probability Distribution N(μ, σ)
• It is widely used in statistical inference

• It has been used in a wide variety of applications including:

Heights of people Rainfall amounts Test scores

• We will use this extensively while describing

• Distribution of sample mean
• Distribution of a sample proportion

• The distribution is Symmetric

• The entire family of normal probability distributions is defined by its m and its s .

• Z ≡ N(0,1) is the standard normal distribution

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N(μ, σ) - Examples

 = 15

 = 25

x x
-10 0 25

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 Standard Normal Table
Normal Probability Distribution

.5 .5
x
μ
Reading the Table for N(0, 1)
P(Z ≤ 0) ? P(Z ≥ 0) ?

P(Z < 0.85) ?

P(Z ≤ 0.85) ?

P(Z < -0.85) ?

P(0.5 < Z < 0.85) ?

P(-0.85 < Z < -0.5) ?

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Transforming N(μ, σ) to N(0, 1)

X ~ N(μ, σ)
𝐱 𝛍
𝐳
𝛔

Z ~ N(0, 1)

z is the number of standard deviations x is from μ.

Example:
X ~ N(4, 2)
Q1. Compute P( X > 5)
Q2. Compute P(4 < X < 5)

X μ 5 4
P P z 0.5
σ 2
P 0 z 0.5
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