Business Statistics

Course: BUSN 2429

Instructor: Bassem Hamid
“Continuous Probability
Distribution”
(Chapter 6)
1
 Business Statistics Map
Introduction + Probability + Inferential Statistics
Descriptive Statistics Probability Distributions

1. Introduction to Business Statistics 4. Introduction to Probabilities 8. Confidence Intervals

2. Displaying Descriptive Statistics 5. Discrete Probability Distribution 9. Hypothesis Test-One Sample Test
3. Calculating Descriptive Statistics 6. Continuous Probability Distribution 10. Hypothesis Test-Two Samples Test
7. Sampling & Sampling Distribution 14. Correlation and Single Regression Model

2
 Chapter Diagram-Road Map 1/3
Experiment Experiment

Continuous Variable Discrete Variable

Chapter 6 Chapter 5

The outcome is counted, # of students The outcome is measured, weight of product

Normal Uniform Exponential Binomial Poisson Hypergeometric

Business Application of Normal Distribution Business Application of Binomial Distribution

3
 Chapter Diagram-Road Map 2/3
Chapter 6
Business Application Chapter 5
The Normal Distribution The Binomial Distribution
f(x) f(x) The Shape of the
Binomial
Distribution Varies.
σ P(x,n) It Depends on the
Values of p & q

μ x≤a x x
x=a
To Calculate the Probability of the To Calculate the Probability of the
Individual, we use the following Formula Individual, we use the following Formula

1 n!
p(x) = e − (1/2)[(x − μ)/σ ]2 P(x,n) = p x q n− x
σ 2π (n − x)!x!
Or Or

TABLE #3 & #4 TABLE #1

 Chapter Diagram-Road Map 3/3
Chapter 6
Business Application Chapter 7
The Normal Distribution The Sampling Distribution
If the Population Distribution is Normal or Sample Size ≥ 30 →
The Sample Mean Distribution is Normal →
Apply Chapter 6 Concept

Distribution of x Distribution of x
f(x) f(x)

σ σ

μ x x Scale μx = μ x x Scale
-∞ P(Z) = ? Z Scale -∞ P(Z) = ? Z Scale

x− σ x − μx
µ,σ z= μx = μ σx = zx =
 n σx
You will be asked to calculate the You will be asked to calculate the
probability of x probability of x
 Chapter 6
Continuous Probability
Distribution

6
Outlines

This chapter covers the following points:

• #1 Continuous Probability Distribution
• #2 Normal Probability Distribution
• #3 Using the Normal Distribution to Approximate the Binomial
Distribution
• #4 Uniform Probability Distribution
• #5 General Exercises

7
Objectives

After completing this chapter, you will be able to:

• #1 Understand the properties of continuous random variables
• #2 Identify the characteristics of the normal probability distribution.
• #3 Calculate the normal probabilities
• #4 Interpret Z score for the normal probability distribution
• #5 Identify the characteristics of the uniform probability distribution
• #6 Calculate the uniform probabilities

8
#1 Continuous Probability Distribution
• #1.1 Continuous Probability Distribution Definition and Types

9
#1.1 Continuous Probability Distribution Definition and Types
• Continuous Probability Distribution is the result of organizing the
continuous variables in probability distribution
• Continuous probability distribution can have a variety of shapes such as
normal distribution, exponential distribution and uniform distribution

10
#2 Normal Probability Distribution
• #2.1 Normal Distribution Definition
• #2.2 Normal Distribution vs. Standard Normal Distribution
• #2.3 Calculating the Probability for the Normal Distribution

11
#2.1 Normal Distribution Definition
• The curve is continuous (There is no gaps, for each value of x there is a
corresponding value of Y)
• A normal distribution curve is bell shaped
• The curve is symmetric about the mean
• The mean, median, & mode are equal and are located at the center of the distribution
• The total data (Probability) under a normal distribution curve is 1.00

− ∞

P( −   x  ) = 1.0 12
#2.2 Normal Distribution vs. Standard Normal Distribution

What Are the Differences and Similarities ???

13
• The Standard Normal Distribution: is a normal distribution with a mean of 0
and standard deviation of 1
z =(x - µ)/σ

Z Scale

• The Normal Distribution: is a continuous, symmetric, bell-shaped distribution of

a variable
x =  + z

X Scale
P( −   x  ) = 1.0 14
#2.3 Calculating the Probability for the Normal Distribution
• The probability density function is a mathematical description of a
probability distribution. (It represents the relative distribution of frequency of a
continuous random variable)
• Formula for the Normal Probability Density Function:

e = 2.71828
π = 3.14159
μ = The mean of the distribution
σ = The standard deviation of the distribution
x = Any continuous number of interest
1 −(1/2)[(x − μ)/σ ] 2
f(x) = e
σ 2π
15
 Normal Distribution vs. Binomial Distribution
• The value of a random variable is often donated by x.
• In the discrete probability distribution, the probability
is calculated for x (Specific Random Variable). e.g. if
we flip coin once, the probability of getting exactly
one head is P(x=1) = 0.5
• In the continuous probability distribution, the P(x = A)
probability is calculated for x (Interval of the Random
Variable). However, P(x=Specific Number)= 0 Why?.
• P(x=A) = 0
P(x ≤ A)
Frequency in which x = A occurs in the interval P(x >A)

Total number of possible values of x in the interval P(x = A) = 0

= 1/∞ = 0
• As a result,
P(x ≤ A) = P(x=A) + P(x<A) = 0 + P(x<A)
16
 Normal Distribution Business Application ???
• The normal distribution can be used to describe a variety of variables such as
heights, weights and temperatures.
• The normal distribution can be used to solve the following issues:
o Find/Calculate area or probability under the standard normal distribution (Z)
o Answer the question of how many
o Find a data value given a specific probability (X)

17
 Calculating the Probabilities for
Normal Distribution Using The
Standard Normal Probability Table

18
Calculating Areas (Probability)Under the Standard Normal Distribution Curve
• Step1 Draw a picture
• Step2 Shade the area desired
• Step3 Transform the Normal Distribution to Standard Normal Distribution (X
to Z through Z= X - µ / σ)
• Step4 Use the appropriate table (3 or 4) to determine the value of Z (The
probability Areas)
Normal Distribution Standard Normal Distribution

Z = Positive Z = Negative
Use Table 4 Use Table 3
(µ,σ) (µ= 0, σ =1)
(X ) (Z)
 Table 3 Table 4

Probability Probability

-∞ 0 z 0 z
+∞ -∞ +∞
Z = -a Z= a

20
• Example#1: Find the area (probability) under standard normal distribution curve
between Z=0 and any Z=2.34
oDraw the picture and shade the desired area
oThe required area is between Z=0 and Z=2.34
oTable 4 gives the area of the positive Z value (Cumulative area from the -∞ till the
Z value).The Z value is the value where the column and raw meet in the table 4
“0.9904”. (0.9904 - 0.5= 0.4904) Second Digit of Z
0.04

First Digit of Z
Blue = Red – Green
0.4904 = 0.9904 – 0.5 2.3
Table 4 0.9904

*Note: X is already
0.5 0.4904 transformed to Z
**Note:
-∞ 0 Z = 2.34 +∞ The whole area is 1
Half of the area is 1/2
P(Z ≤ 2.34) = 0.9904
21
• Example#2: Find the area(probability) under standard normal distribution curve
between Z=0 and any Z= -1.75
oDraw the picture and shade the desired area
oThe required area is between Z=0 and Z= -1.75
oTable 3 gives the area for a negative value of Z. (Cumulative area from the -∞ till
the Z value). The Z value is the value where the column and raw meet in the table
“0.0401”. (0.5 – 0.0401 = 0.4599) Second Digit of Z
0.05
Blue = Green – Red

First Digit of Z
0.4599 = 0.5 – 0.0401
-1.7
Table 3 0.0401
0.5

0.4599 **Note:
0.0401 The whole area is 1
-∞ +∞ Half of the area is 1/2
Z = -1.75 0

P(Z ≤ -1.75) = 0.0401 22

• Example#3: Find the area (probability) to the right of Z=1.11
oDraw the picture and shade the desired area
oThe required area is in the tail of the curve
oTable 4 gives the area of the positive Z value (Cumulative area from the -∞ till the
Z value). The Z value is 0.8665.
oThe required area equal to 1- 0.8665 = 0.1335

Blue = Green – Red

0.1335 = 1 – 0.8665
Table 4
1

0.8665
0.1335
-∞ 0 Z = 1.11 +∞

P(Z ≤ 1.11 = 0.8665

23
• Example#4: Find the area (probability) to the left of Z= -1.93
oDraw the picture and shade the desired area
oThe required area is in the tail of the curve
oTable 3 gives the area for a negative value of Z. (Cumulative area from the -∞ till
the Z value). The Z value is 0.0268.
oThe required area equals to 0.0268

Blue = ?
0.0268
Table 3

0.0268
-∞ Z = -1.93 0 +∞

P(Z ≤ -1.93) = 0.0268 24

• Example#5: Find the area (probability) between Z= 2 & Z= 2.47
oDraw the picture and shade the desired area
oThe required area is between Z=2 and Z=2.47
oTable 4 gives the area of the positive Z value (Cumulative area from the -∞ till the Z
value).
oThe required areas equals to 0.9932 – 0.9772 = 0.0160

Blue = Green – Red

0.0160 = 0.9932– 0.9772 0.9932

Table 4 Table 4

0.9772
0.0160

-∞ 0 Z=2 Z = 2.47 +∞
P(Z ≤ 2.00 = 0.9772
P(Z ≤ 2.47 = 0.9932
25
• Example#6: Find the area (probability) between Z= - 2.48 & Z= - 0.83
oDraw the picture and shade the desired area
oThe required area is between Z=-2.48 and Z=-0.83
oTable 3 gives the area for a negative value of Z. (Cumulative area from the -∞ till
the Z value).
oThe required areas equal to 0.2033 – 0.0066 = 0.1967

Blue = Green – Red

0.1967= 0.2033– 0.0066
Table 3 Table 3
0.2033
0.1967

-∞ Z = -2.48 Z = -83 0 +∞
P(Z ≤ -2.48) = 0.0066
P(Z ≤ -0.83) = 0.2033
26
• Example#7: Find the area (probability) between Z= 1.68 & Z= - 1.37
oDraw the picture and shade the desired area
oThe required area is between Z=1.68 and Z=-1.37
oTable 3 gives the area for a negative value of Z. (Cumulative area from the -∞ till
the Z value). Table 4 gives the area of the positive Z value (Cumulative area from
the -∞ till the Z value).
oThe required areas equal to 0.9535 – 0.0853 = 0.8682

Blue = Green – Red

0.8682 = 0.9535– 0.0853 0.9535

Table 4 Table 3
0.8682

0.0853
-∞ Z = -1.37 0 Z = 1.68 +∞
P(Z ≤ -1.37 = 0.0853
27
P(Z ≤ 1.68 = 0.9535
• Example#8: Find the area (probability) to the left of Z =1.99
oDraw the picture and shade the desired area
oThe required area is left to Z=1.99
oTable 4 gives the area of the positive Z value (Cumulative area from the -∞ till the Z
value).
oThe required areas equal to 0.9767

Blue = ?
0.9767
Table 4

0.9767

-∞ 0 Z = 1.99 +∞
P(Z ≤ 2.00 = 0.9767

28
• Example#9: Find the area (probability) to the right of Z= -1.16
oDraw the picture and shade the desired area
oThe required area is right to Z=-1.16
oTable 3 gives the area for a negative value of Z. (Cumulative area from the -∞ till
the Z value).
oThe required areas equal to 1- 0.1230 = 0.8770

Blue = Green – Red

0.8770 = 1 – 0.1230 1
Table 3

0.8770
0.123
-∞ Z = -1.16 0 +∞

P(Z ≤ -1.16) = 0.1230

29
• Example#10: Find the area (probability) to the right of Z= 2.43 and to the left of
Z= -3.01
oDraw the picture and shade the desired area
oThe required area is outside Z=2.43 and Z= -3.01
oTable 3 gives the area for a negative value of Z. (Cumulative area from the -∞ till
the Z value). Table 4 gives the area of the positive Z value (Cumulative area from
the -∞ till the Z value).
oThe required areas are (1 - 0.9925 ) + ( 0.0013) = 0.0088
Blue = (Blue Right) + (Blue Left)
Blue = (Green – Red) + (Blue Left) 1
0.0088 = (1-0.9925) + (0.0013)
Table 4

0.9925
0.0013 0.0075
-∞ Z = -3.01 0 Z = 2.43 +∞
P(Z ≤ -3.01) = 0.0013
P(Z ≤2.43) = 0.9925 30
 Normal Distribution Example
• The time customers spend on the phone for service follows the normal
distribution with a mean of 12 minutes and a standard deviation of 3 minutes.
• What is the probability that the next customer who calls will spend 14
minutes or less on the phone?
• The probability is calculated through the following steps:
o Step1 Draw a picture
o Step2 Shade the area desired
o Step3 Transform X value to Z value
o Step4 Use the appropriate table to determine the value of Z (The probability Areas)

31
 Normal Distribution Example 1
• The time customers spend on the phone for service follows the normal
distribution with a mean of 12 minutes and a standard deviation of 3 minutes.
• What is the probability that the next customer who calls will spend 14
minutes or less on the phone?
The Time Customers Spend on The Phone
oStep1 Draw a picture
(μ=12 & σ= 3)
oStep2 Shade the area desired
oStep3 Transform X value to Z value 0.7486

x− 14 − 12
z= = = 0.67
 3
oStep4 Use the appropriate table to determine the value of Z 12 14 x
Use a standard normal probability table to calculate normal 0 0.67 z
probabilities. The table provides the cumulative area under a P(z ≤ 0.67) = 0.7486
standard normal distribution curve that lies to the left of the
z-score (Use Table 4 as the value of Z is positive)
Using Normal Probability Tables
The column represents the
P(z ≤ 0.67) = 0.7486 second digit of the desired z-score
z 0.00 … 0.06 0.07 …

0.0
0.1
0.2
The row shows .
the value of z to .
the first decimal 0.5
point 0.6 0.7486
0.7
.
. The value within the table gives the
probability from z = −  up to the
desired z value
33
 Normal Distribution Example 2
Finding the upper tail probabilities
• What is the probability that the next customer who calls will spend more than
14 minutes on the phone?
The area under the normal curve equals 1.0, so The Time Customers Spend on The Phone
(μ=12 & σ= 3)

1 – 0.7486
= 0.2514
P(z > 0.67) = P (x > 14) = 0.7486
1 – P(z ≤ 0.67) = 1 – 0.7486 = 0.2514 x
12 14
0 0.67 z
 Normal Distribution Example 3
Finding the z or x value
• Suppose that μ = 12 and σ = 3 for a normal distribution, find the x value so
that P(z)=0.95
Find the necessary z-score???? The Time Customers Spend on The Phone
(μ=12 & σ= 3)
-What z value is needed to include 95% of the
area under the curve?
0.0500
-Look in the body of the table for 0.9500 (Next Slide)
0.9500
-Find the x value that is z = 1.645 standard
deviations above the mean: 0 1.645 z
x− 12 16.94 x
z=

x =  + z
x = 12 + (1.645)(3) = 16.94
Using Normal Probability Tables

The value 0.9500 would be found in the 1.6 row and between the 0.04 and 0.05
columns. This means our point of interest is halfway between these columns at
1.6 + 0.045, or z = 1.645
36
 Normal Distribution Example 4
Finding the Probabilities for a negative z-score
• Suppose that μ = 12 and σ = 3 for a normal distribution, find P(x ≤ 8.5)

 8.5 − 12  The Time Customers Spend on The Phone

P( x  8.5 ) = P z   (μ=12 & σ= 3)
 3 
= P( z  −1.17 ) 0.1210

= 0.1210
z
Use Table 3 as the value of Z is negative -1.17 0
8.5 12 x
 Your Turn #1

• The average price of a 42-in. television on Best Buy’s Web site is $790. Assume
the price of these televisions follows the normal distribution with a standard
deviation of $160.
• A. What is the probability that randomly selected TV from the site sells for
o 1.Less than $700?
o 2.Between $400 and $500?
o 3.Between $900 and $1,000?
• C. The price intervals in part A/2 and A/3 are equal ($100). Why are the
probabilities so different?
• D. Suppose I am shopping on Best Buy’s Web site for a new 42-in.TV and my wife
suggest we set a budget of $750 for the purchase. There are 15 42-in TV on the site.
How many TV are within my budget?

38
 The TV Price Distribution The TV Price Distribution The TV Price Distribution
(μ=790 & σ= 160) (μ=790 & σ= 160) (μ=790 & σ= 160)

790 900 1000 x 400 500 790 x 700 790 x

0 0.69 1.31 z -2.44 -1.81 0 z -0.56 0 z

3.What is the Probability? 2.What is the Probability? 1.What is the Probability?

(Between $900 and $1,000) (Between $400 and $500) (Less than $700)
Z900 = (X-µ) /σ = (900-790)/160 = 0.69 Z400 = (X-µ) /σ = (400-790)/160= -2.44 Z700 = (X-µ) /σ =(700-790)/160= -0.56

Z1000 = (X-µ) /σ = (1000-790)/160 = 1.31 Z500 = (X-µ) /σ = (500-790)/160= -1.81

P($900 ≤ X ≤ $1000) = P( 0.69 ≤ z ≤ 1.31) P($400 ≤ X ≤ $500) = P(-2.44 ≤ z ≤ -1.81) P(X<700) = P(Z<-0.56) = 0.2877
= 0.9049 – 0.7549 = 0.1500 = 0.0351 – 0.0073 = 0.0278

39
• The average price of a 42-in. television on Best Buy’s Web site is $790. Assume the price
of these televisions follows the normal distribution with a standard deviation of $160.
• A. What is the probability that randomly selected TV from the site sells for
o 1.Less than $700? Z700 = (X-µ) /σ =(700-790)/160= -0.56. P(X<700) = P(Z<-0.56) = 0.2877
o 2.Between $400 and $500? Z400 = (X-µ) /σ = (400-790)/160= -2.44, Z500 = (X-µ) /σ = (500-
790)/160= -1.81. P($400 ≤ X ≤ $500) = P(-2.44 ≤ z ≤ -1.81) = 0.0351 – 0.0073 = 0.0278
o 3.Between $900 and $1,000? Z900 = (X-µ) /σ = (900-790)/160 = 0.69, Z1000 = (X-µ) /σ =
(1000-790)/160 = 1.31 . P($900 ≤ X ≤ $1000) = P( 0.69 ≤ z ≤ 1.31) = 0.9049 – 0.7549 = 0.1500
• C. The price intervals in part A/2 and A/3 are equal ($100). Why are the probabilities so
different? The interval (900-1000) is closed to the mean compared to the interval (400-
500)
• D. Suppose I am shopping on Best Buy’s Web site for a new 42-in.TV and my wife
suggest we set a budget of $750 for the purchase. There are 15 42-in TV on the site. How
many TV are within my budget? Z750 = (X-µ) /σ = (750 -790)/160 = -0.25.
P(X<750) = P (Z<-0.25) = 0.4013.
(0.4013) (15) = 6 TVs

40
Excel/PHStat Application

41
 Excel/PHStat Application
Calculating Normal Distribution Through Excel Function – X Option

• Excel’s NORM.DIST function can be used to find normal probabilities

• Format for the NORM.DIST function:
= NORM.DIST(x, mean, standard_dev, cumulative)
where:
Cumulative = FALSE if you want the probability density function
Cumulative = TRUE if you want the cumulative probability
• If a normal distribution has μ = 45 and σ = 5, what is P(x ≤ 48) ?

• Text tables 3 and 4 only use two decimal places for z-

scores
• Excel uses more than two decimal places
• The difference in reported values is usually small

0.7257

0 0.60 z
45 48 x

43
 Excel/PHStat Application
Calculating Normal Distribution Through Excel Function – Z Option

• Excel’s NORM.S.DIST function can also be used to find normal

probabilities when the z-score is known
• Format for the NORM.S.DIST function:
= NORM.S.DIST(z, cumulative)

where:
cumulative = FALSE if you want the probability density function
cumulative = TRUE if you want the cumulative probability

44
• For a standard normal distribution with μ = 1 and σ = 0
What is P(z ≤ -0.70) ?

0.2420

-0.70 0 z

45
 Excel/PHStat Application
Calculating Normal Probability Distribution

• Open Excel File

• Click on Add-ins
• Go to PHStat
• Select Descriptive Statistics/Probability and Probabilities
Distributions/Normal Probability Distribution

46
#3 Approximating the Binomial Distribution
• #3.1 Introduction
• #3.2 Sample

47
#3.1 Introduction

• The normal distribution can be used as an approximation to the binomial

distribution
o Normal probabilities are easy to look up in Appendix A, Tables 3 and 4
o Binomial probabilities are more difficult to calculate
• The normal distribution approximation can be used when the sample size is
large enough so that np ≥ 5 and nq ≥ 5

48
#3.2 Sample

• Suppose that 15% of people are left-handed.

What is the probability of finding exactly 9
left-handed people in a random sample of 50?
n!
According to P(x,n) = p x q n − x , the probability of
(n − x)!x!
x= 9 is P(9,50) = 0.1228
The mean and standard deviation of this distribution are:
 = np = (50)(0.15) = 7.5

 = npq = (50)(0.15) (0.85) = 2.525

49
 • Goal: Use the normal distribution to approximate P(x = 9)
• Use an interval instead of a single value since P(x = 9) = 0 for the continuous normal
distribution
• The interval is found using the continuity correction factor
• Use the interval from 8.5 to 9.5 (add and subtract 0.5)
• Use the normal distribution and estimate the binomial probability with P(8.5 ≤ x ≤ 9.5)

• Calculate the z-scores for x = 8.5 and x = 9.5 and find P(8.5 ≤ x ≤ 9.5):
x− 8.5 − 7.5 P(8.5  x  9.5)
z8.5 = = = 0.40
 2.525
= P(0.40  z  0.79)
x −  9.5 − 7.5
z9.5 = = = 0.79
 2.525 = P( z  0.79) − P( z  0.40)

This is very close to the results of the formula of P(x=9) = 0.1230 = 0.7852 − 0.6554 = 0.1298

50
51
#4 Uniform Probability Distribution
• #4.1 Uniform Distribution Definition
• #4.2 The Formula for The Uniform Probability Distribution

52
#4.1 Uniform Distribution Definition

• With the continuous uniform probability distribution, the probability of

any interval in the distribution is equal to any other interval with the same
width
f(x)

0.01

Area = 1.0

55 155 x

53
#4.2 The Formula for The Uniform Distribution
• Formula for the Continuous Uniform Probability Density Function:
1
f ( x) = if a  x  b a = Smallest allowable continuous random variable
b−a
b = Largest allowable continuous random variable
f ( x) = 0 otherwise

• Formula for the Uniform Cumulative Distribution Function:

x2 − x1 x1 = Lower endpoint of the interval of interest
P( x1  x  x2 ) =
b−a x2 = Upper endpoint of the interval of interest

Formula for the Mean & Standard Deviation of the Continuous Uniform
Distribution:
a+b b−a
= =
2 12 54
Example: Suppose the temperature of a solution varies with a uniform distribution
between 55 and 155 degrees. What is the probability that the next measured
temperature is between 70 and 90 degrees? Calculate the mean and standard deviation
f(x)

0.01 The total area under the

distribution must be 1.0, so if the a + b 55 + 155
width is 100 (155 degrees – 55
= = = 105
Area = 1.0 2 2
degrees), the height must be 0.01:

1 1 b − a 155 − 55
f(x) 55 155 x f ( x) = = = 0.01  = = = 28.87
b − a 155 − 55 12 12

0.01 The mean is 105 degrees,

P(70  x  90) and the standard deviation
0.20 is 28.87 degrees
90 − 70 20
= = = .20
155 − 55 100
55
55 70 90 155 x
#5 General Exercises
• Problem #5.1
• Problem #5.2
• Problem #5.3
• Problem #5.4

56
Problem #5.1
• For a standard normal distribution, determine the following:
oA. P(Z ≤ 1.50)
oB. P(Z ≤ -1.22)
oC. P(-0.86 ≤ Z ≤ 1.76)
oD. P(0.32 ≤ Z ≤ 2.15)

57
Problem #5.1
• For a standard normal distribution, determine the following:
oA. P(Z ≤ 1.50) = 0.9332
oB. P(Z ≤ -1.22) = 0.1112
oC. P(-0.86 ≤ Z ≤ 1.76) = 0.9608 - 0.1949 = 0.7659
oD. P(0.32 ≤ Z ≤ 2.15) = 0.9842 – 0.6255 = 0.3587

58
Problem #5.2
• For a standard normal distribution, determine the following:
oA. P(Z > 1.35)
oB. P(Z > -0.42)
oC. P(-1.70 ≤ Z ≤ -0.65)
oD. P(-1.69 ≤ Z ≤ 0.20)

59
Problem #5.2
• For a standard normal distribution, determine the following:
oA. P(Z > 1.35) = 1 - 0.9115 = 0.0885
oB. P(Z > -0.42) = 1 - 0.3372 = 0.6628
oC. P(-1.70 ≤ Z ≤ -0.65) = 0.2578 - 0.0446 = 0.2132
oD. P(-1.69 ≤ Z ≤ 0.20) = 0.5793 - 0.0455 = 0.5338

60
Problem #5.3
• Major League Baseball teams have become concerned about the length of games.
During a recent reason, games averaged 2 hours and 52 minutes (172 minutes) to
complete. Assuming the length of the games follows the normal distribution with a
standard deviation of 16 minutes.
oA. What is the probability that randomly selected game will be completed in
▪ 1.200 minutes or less?
▪ 2. More than 200 minutes?
▪ 3.150 minutes or less?
▪ 4. More than 150 minutes?
▪ 5. Exactly 150 minutes?
oB. What is the completion time in which 90% of the games will be finished?

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 The Length of the Baseball Games μ = 172, σ = 16

Area#1
Equal or Less than 200

172 200 x
0 1.75 z
A.What is the probability that randomly selected game will be completed in
1.200 minutes or less?
Z200 = (X-µ) /σ =(200-172)/16= 1.75.
P(X≤200) = P(Z≤1.75) = 0.9599

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 The Length of the Baseball Games μ = 172, σ = 16

Area#2
More than 200

172 200 x
0 1.75 z
A.What is the probability that randomly selected game will be completed in
2.More than 200 minutes?
P(X>200) = 1- P(X≤200) = 1-0.9599 = 0.0401

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 The Length of the Baseball Games μ = 172, σ = 16

Area#3
150 or less

150 172 x
-1.38 0 z
A.What is the probability that randomly selected game will be completed in
3.150 minutes or less?
Z150 = (X-µ) /σ =(150-172)/16 = -1.38.
P(X≤150) = P(Z≤-1.38) = 0.08845

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 The Length of the Baseball Games μ = 172, σ = 16

Area#4
90%

172 192.5 x
0 1.28 z
B. What is the completion time in which 90% of the games will be finished?
The Z score for 90% is 1.28 so X=µ + Zσ = 172 + (1.28) (16) = 192.5

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Problem #5.3
• Major League Baseball teams have become concerned about the length of games.
During a recent reason, games averaged 2 hours and 52 minutes (172 minutes) to
complete. Assuming the length of the games follows the normal distribution with a
standard deviation of 16 minutes.
oA. What is the probability that randomly selected game will be completed in
▪ 1.200 minutes or less? Z200 = (X-µ) /σ =(200-172)/16= 1.75. P(X≤200) = P(Z≤1.75) = 0.9599
▪ 2. More than 200 minutes? P(X>200) = 1- P(X≤200) = 1-0.9599 = 0.0401
▪ 3.150 minutes or less? Z150 =(X-µ) /σ=(150-172)/16 = -1.38. P(X≤150) = P(Z≤-1.38)= 0.08845
▪ 4. More than 150 minutes? P(X>150) = 1 – P(X≤150) = 1-0.0838 = 0.9162
▪ 5. Exactly 150 minutes? P(X=150) =0
oB. What is the completion time in which 90% of the games will be finished?
The Z score for 90% is 1.28 so X=µ + Zσ = 172 + (1.28) (16) = 192.5

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Problem #5.4
• C Assume the cost of an extended 100,000-mile warranty for particular SUV
follows the normal distribution with a mean of $1,600 and a standard deviation
of $75.
oA. Determine the interval of warranty costs from various companies that are
▪ 1.One standard deviation around the mean
▪ 2.Two standard deviation around the mean
▪ 3.Three standard deviation around the mean
oB. You see an ad for an extended warranty for this type of vehicle for $1,900.
Based on the previous results, what conclusions can you made?

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Problem #5.4
• Assume the cost of an extended 100,000-mile warranty for particular SUV follows
the normal distribution with a mean of $1,600 and a standard deviation of $75.
oA. Determine the interval of warranty costs from various companies that are
▪ 1.One standard deviation around the mean X=µ + Zσ = 1600 +/- (1) (75) = 1675 & 1525
▪ 2.Two standard deviation around the mean X=µ + Zσ = 1600 +/- (2) (75) = 1750 & 1450
▪ 3.Three standard deviation around the mean X=µ + Zσ = 1600 +/- (3) (75) = 1825 & 1375
oB. You see an ad for an extended warranty for this type of vehicle for $1,900. Based
on the previous results, what conclusions can you made? The $1,900 cost for this
warranty is much higher than competing companies due to the fact that it is more
than 3 standard deviations above the mean.

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Summary

• Continuous Probability Distribution

• Normal Probability Distribution
• Standard Normal Probability Distribution

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References

1. Bluman, A. G. (2009). Elementary statistics: A step by step approach

(6th ed). McGraw-Hill Higher Education.
2. Donnely, R. (2019). Business statistics (3rd ed). Pearson Education.

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