Ch5 Statistics

10/25/2022
Business
STATISTICS Tenth Edition
CHAPTER 5 Discrete Probability

Distributions
STATISTICS - FALL 2022 271
OUTLINE
5-1
Introduction to Discrete Probability Distributions
5-2
The Binomial Probability Distribution
5-3
Other Probability Distribution
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OUTLINE
5-1  Be able to calculate and interpret
Introduction to Discrete
theProbability Distributions
expected value of a discrete
random variable.
5-2
 Be able to apply the binomial
The Binomial Probability Distribution
distribution to business decision-
making situations.
5-3
Other Probability  Be able to compute probabilities
Distribution
for the Poisson and
hypergeometric distributions and
apply these distributions to
decision-making situations.
5.1 INTRODUCTION TO DISCRETE

PROBABILITY DISTRIBUTIONS
Random Variable
CH5 CH6
Discrete Random Continuous Random

Variable Variables
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Discrete
Probability
Distributions
Binomial Poisson Hypergeometric

Multiple possible outcomes
 Number of complaints per day
 Number of TVs in a household
 Number of rings before the phone is answered
Only two possible outcomes
 Gender: male or female
 Defective item: yes or no
 Game result: won or lost
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Examples of discrete
probability
distribution…

Experiment: Toss 2 Coins. x = Number of heads
4 possible outcomes
T T x-value Probability
0 1/4 = 0.25
T H 1 2/4 = 0.50
2 1/4 = 0.25
H T The probability of observing a specific
outcome given the experiment design and
H H number of trial, e.g.
Prob[(H, H)|(p=0.5, n=2] = 0.25
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Experiment: Toss 2 Coins. x = Number of heads
Compute expected value and standard deviation
Expected Value x P(x)
E(x) = (0 x 0.25) + (1 x 0.50) + (2 x 0.25) = 1.0 0 0.25

1 0.50
Standard Deviation 2 0.25
MEAN AND STANDARD DEVIATION OF

DISCRETE DISTRIBUTIONS
Expected Value
 The mean of a probability distribution. The average value when the
experiment that generates values for the random variable is repeated over
the long run.
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MEAN AND STANDARD DEVIATION OF

DISCRETE DISTRIBUTIONS
Standard Deviation
 Standard deviation measures the spread, or dispersion, in a set of data.
 The standard deviation also measures the spread in the values of a random
variable.
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TEA BREAK
PARAMETRIC DISCRETE PROBABILITY

DISTRIBUTION
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THE BINOMIAL DISTRIBUTION

A distribution that gives the probability of x successes in n trials in a
process that meets the following conditions:
1. A trial has only two possible outcomes: a success or a failure.
2. There is a fixed number, n, of identical trials.
3. If p represents the probability of a success, then (1 – p) = q is the
probability of a failure.
4. The trials of the experiment are independent of each other. This means
that if one outcome is a success, this does not influence the chance of
another outcome being a success.
5. The process must be consistent in generating successes and failures. That
is, the probability, p, associated with a success remains constant from
trial to trial.
EXAMPLES OF THE BINOMIAL

DISTRIBUTION
A manufacturing plant labels items as either defective or
acceptable.
A firm bidding for a contract will either get the contract
or not.
A marketing research firm receives survey responses of
“yes I will buy” or “no I will not”.
New job applicants either accept the offer or reject it.
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THE BINOMIAL PROBABILITY

DISTRIBUTION
Binomial Formula
COMBINATIONS
A method for counting the number of ways binomial events

can occur.
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The outcomes of throwing a coin with probability, p, for head and (1-
p) for tail
2
=1
0
𝐧 2
𝐤
𝐩𝐤 (𝟏 − 𝐩)𝐧 𝐤 0 head 2 tail =2
1
Let n = 2, then 2
=1
𝑃𝑟𝑜𝑏 𝑘 = 0 𝑝 = 𝑃𝑟𝑜𝑏 0,0 𝑝 = 1 × 𝑝 (1 − 𝑝) 2
𝑃𝑟𝑜𝑏 𝑘 = 1 𝑝 = 𝑃𝑟𝑜𝑏 1,0 𝑝 + 𝑃𝑟𝑜𝑏 0,1 𝑝 = 2 × 𝑝 (1 − 𝑝)

𝑃𝑟𝑜𝑏 𝑘 = 2 𝑝 = 𝑃𝑟𝑜𝑏 0,0 𝑝 = 1 × 𝑝 (1 − 𝑝)
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EXAMPLE OF THE BINOMIAL

PROBABILITY DISTRIBUTION
35% of all voters support Proposition A. If a random sample of 10
voters is polled, what is the probability that exactly three of them
support the proposition?
Find P(x = 3) given n = 10 and p = 0.35
There is a 25.22% chance that exactly 3 out

of the 10 voters will support Proposition A
Recall Ch4, Let’s try

Binomial distribution
With n =2, p =0.12
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THE BINOMIAL PROBABILITY

DISTRIBUTION
Using the Binomial Table
 If a random sample of 10 voters is polled, what is the
probability that three or fewer of them support the
proposition?
n = 10, p = 0.35, x ≤ 3
P(x = 3…) + P(x = 2…) + P(x =1…) + P(x =0…)
= P(x ≤ 3, n =10, p = 0.35) = 0.5138
BUSINESS APPLICATION
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MEAN AND STANDARD DEVIATION OF THE

BINOMIAL DISTRIBUTION
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STANDARD DEVIATION OF A BINOMIAL

DISTRIBUTION
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THE SHAPE OF THE BINOMIAL

DISTRIBUTION
The shape of the binomial distribution depends on the values of p and
n.
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THE SHAPE OF THE BINOMIAL

DISTRIBUTION
The shape of the binomial distribution depends on the values of p and
n.
WHY DOES IT
MATTER?
How about the Normal
distribution?
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BREAKTIME
THE POISSON DISTRIBUTION
Describes a process that extends over space, time, or any

well defined interval or unit of inspection in which the
outcomes of interest occur at random and we can count the
number of outcomes that occur in any given interval.
 used when the total number of possible outcomes cannot be determined.
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CHARACTERISTICS OF THE POISSON

DISTRIBUTION
The outcomes of interest are rare relative to the possible
outcomes
The average number of outcomes of interest per time or
space interval is 
The number of outcomes of interest are random, and the
occurrence of one outcome does not influence the chances
of another outcome of interest.
The probability that an outcome of interest occurs in a
given segment is the same for all segments.
POISSON DISTRIBUTION EXAMPLES
Number of patients who arrive at a hospital emergency

room per hour.
Number of calls the Dell technical support receives in a
30-minute period.
Number of cars served at the gas station in 24-hour
period.
Number of defects per square meter of leather.
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THE POISSON DISTRIBUTION
BUSINESS APPLICATION
Distribution for the

number of arrivals
to the checkout
section of the store
per hour (t), λ = 16.
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THE SHAPE OF THE POISSON

DISTRIBUTION
The shape of the Poisson Distribution depends on the parameters λ
and t:
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THE MEAN AND STANDARD DEVIATION

OF THE POISSON DISTRIBUTION
Equi-dispersion (Mean =
Variance) is an
assumption of Poisson
distribution
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BREAKTIME
THE HYPERGEOMETRIC DISTRIBUTION
 The hypergeometric distribution is formed by the ratio of

the number of ways an event of interest can occur over
the total number of ways any event can occur.
 When sampling is performed without replacement from
finite populations, the binomial distribution produces
inaccurate probabilities.
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Gun roulette
n trials in a sample
taken from a finite population of size N
Sample taken without replacement
Trials are dependent (e.g.. N, N-1, N-2…N-n)
The probability changes from trial to trial
Concerned with finding the probability of x successes in
the sample where there are X successes in the population
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THE HYPERGEOMETRIC DISTRIBUTION CnNxX CxX

P( x) 
CnN
3 light bulbs were selected from 10. Of the 10 there

were 4 defective. What is the probability that 2 of
the 3 selected are defective?
Find P (x = 2) if N = 10, X = 4, n = 3, x = 2.
C310 2 4C24 C16C24 (6)(6)

P( x  2)   10   0.3
C310 C3 120
There is a 30% chance that exactly 2 out
of the 3 selected light bulbs are defective.
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BREAKTIME
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10/25/2022

CHAPTER 5 Discrete Probability

STATISTICS - FALL 2022 271

STATISTICS - FALL 2022 272

5.1 INTRODUCTION TO DISCRETE

Discrete Random Continuous Random

STATISTICS - FALL 2022 274

5.1 INTRODUCTION TO DISCRETE

Binomial Poisson Hypergeometric

STATISTICS - FALL 2022 275

5.1 INTRODUCTION TO DISCRETE

STATISTICS - FALL 2022 276

STATISTICS - FALL 2022 277

5.1 INTRODUCTION TO DISCRETE

Experiment: Toss 2 Coins. x = Number of heads

Compute expected value and standard deviation

Expected Value x P(x)

E(x) = (0 x 0.25) + (1 x 0.50) + (2 x 0.25) = 1.0 0 0.25

STATISTICS - FALL 2022 279

MEAN AND STANDARD DEVIATION OF

STATISTICS - FALL 2022 280

MEAN AND STANDARD DEVIATION OF

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STATISTICS - FALL 2022 282

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STATISTICS - FALL 2022 284

PARAMETRIC DISCRETE PROBABILITY

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THE BINOMIAL DISTRIBUTION

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EXAMPLES OF THE BINOMIAL

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THE BINOMIAL PROBABILITY

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A method for counting the number of ways binomial events

STATISTICS - FALL 2022 290

𝑃𝑟𝑜𝑏 𝑘 = 1 𝑝 = 𝑃𝑟𝑜𝑏 1,0 𝑝 + 𝑃𝑟𝑜𝑏 0,1 𝑝 = 2 × 𝑝 (1 − 𝑝)

STATISTICS - FALL 2022 291

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EXAMPLE OF THE BINOMIAL

Find P(x = 3) given n = 10 and p = 0.35

There is a 25.22% chance that exactly 3 out

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Recall Ch4, Let’s try

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THE BINOMIAL PROBABILITY

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MEAN AND STANDARD DEVIATION OF THE

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STANDARD DEVIATION OF A BINOMIAL

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THE SHAPE OF THE BINOMIAL

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THE SHAPE OF THE BINOMIAL

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THE POISSON DISTRIBUTION