1

CHAPTERFOUR
PROBABI LITYANDPROBABI LI
TYDI STRIBUTI ONS
4.1.Probabi l
ityTheory
BasicConcept s
Probabil
ityisameasur eofthel i
keli
hoodorchancet hat
anuncer t
ainev entwi lloccur.Itisanumer icalmeasure
oft he chance ofan out come’s occurr ence.Itcan
assumeav aluebetween0and1, i
ncl
usive.Apr obabil
it
y
nearzeroi ndicatest hatt heout comeisv eryunli
kelyto
occur,whileapr obabilit
ynear1i ndi
catest hattheevent
i
sal mostcer tai
nt ohappen.I fwegot ot heext r
eme,a
probabil
it
yofsomet hingwi l
lalway stohappen.Thus,
probabil
it
iesar enon-negat iveproperfractions.Itisthe
basisforinferentialstatist
ics

Experiment
Anexper i
mentisanywell-
definedsit
uat i
onorprocedur
e
thatresul
tsinoneormorepossi bl
eout comes.Orsimpl
y
i
tcanbedef i
nedasanypr ocesst hatgenerateswell
defi
nedout comes.Fori
nstance,tossingacoin,rol
li
nga
die,f
ootballmatch,
etccanbet akenasexper i
ments.

Outcome
Anout comei sapar ti
cularresul
tofanexperiment.For
example,get t
ing either head or tai
lis a possible
outcome oft he exper i
mentt ossi
ng a coi
n.Wi nni
ng,
l
oosingort ie/draw aret hepossibl
eoutcomesoft he
footballexperiment,andget ti
ng1,2,3,4,5,or6ar e
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possi
bleout
comesoft
her
oll
i
ngadi
eexper
iment
.

Ev ents
Anev entisaspecif
iccol
lect
ionofbasicout comes,that
i
s,asetcont ai
ningoneormor eoft hebasi coutcomes
from t hesampl
espace.Anexper i
menti dentif
iesoneor
mor eout comesofanexper iment.Forexampl e,i
nt he
rolli
ngadi eexperi
ment,thesimpl
ecol l
ectionoft woor
mor eoft hesixpossibl
eoutcomescanbet akenasan
ev ent.

SampleSpace
A samplespaceisacompl eterosterorlist
ingofall
possi
bleoutcomesofanexperi
ment.Thesampl espace
ofanexperimenti
susual
lyil
l
ustrat
edeitherbyal i
stor
some type ofdiagr
am – Venn di agr
ams and t ree
di
agrams.

Il
lust
rati
on ofan experi
ment,outcomes,ev ent
s,and
sampl espace.
Tossing/Fl
ippingacoi
ntwi
ce……………….Exper i
ment
HeadsorTai ls………………………………..Outcomes/el
ementar
y
events
HH, HT,TH, TT……………………………..4Events
(HH,HT, TH, TT)
……………………………Sampl eSpace

Exer
cise
I
denti
fytheex
per
iment
,out
comes,ev
ent
sandsampl
e
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 3
spacef orthefol
l
owingquest
ions.
1.Si
ttingforanexam ……………………………….Experi
ment
Scor i
ng A,B,C,D,F ……………………………. ..Possibl
e
outcomes
[
A,B, C,D,F]……………………………………. .
.SampleSpace
Scor i
ngBandabov e………………………………Ev ent
Candabove………………………………Ev ent
Dorbelow………………………………. .Ev
ent

2.
Footballgame………………………………………Exper
iment
Win,Loose,Ti
e/Dr
aw………………………………Outcomes
[W,L,T]………………………………………………SampleSpace
Notwinning(L,
D),Notl
oosi
ng(
W,D)……………Event
s

Events
1. Independentev ents
Twoormor eev entsareindependenti ftheoccurrenceor
nonoccur
r enceofoneoft heev ent sdoesnotaf fectthe
occurr
ence ornonoccur r
ence oft he ot her
s.Cer t
ain
exper
iment s,such as r oll
ing dice,y iel
di ndependent
event
s;eachdi eisindependentoft heother.Whethera6
i
sr ol
l
edont hef i
rstdiehasnoi nfluenceonwhet hera6
i
sr ol
led on thesecond di e.Coi nt ossesal waysar e
i
ndependentofeachot her.Thepossi bil
i
tyofget ti
nga
headont hef i
rsttossofacoi nini ndependentofget t
ing
aheadont hesecondt oss.

Thei
mpactofi
ndependentev
ent
sont
hepr
obabi
l
ityi
s
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 4
that,ift woev entsar ei ndependent,thepr obabi
li
tyof
attainingthesecondev entisthesamer egardlessofthe
outcomeoft hef irstevent.Thepr obabi
li
tyoft ossi
nga
head i s al
way s½ r egardless ofwhatwas t ossed
prev i
ously.Thus, ifsomeonet ossesacoi nsi xti
mesand
getssi xheads,t hepr obabil
ityoftossingaheadont he
sev enthtimei s½, becausecoi ntossesarei ndependent.
Inter msofsy mbol icnotati
on,ifXandYar eindependent:
P(X/ Y)=P( X)andP( Y/X)=P( Y)
,wher eP( X/Y)denotes
thepr obabili
tyofXoccur ri
nggi venthatYhasoccur red,
andP( Y/X)denot esthepr obabil
ityofYoccur ri
nggiven
thatXhasoccur red.

2.DependentEv ents
Twoormor eevent
sar edependenti ft heoccur renceor
nonoccur r
ence of one of t he ev ent s af fect s the
occurrence ornonoccur rence oft he ot hers.Cer t
ain
experiments,such as r olli
ng a die,y ields dependent
events;the occurrence ofone oft he si x ev entsi s
dependentont heoccur renceornonoccur renceofot her
events.
Thei mpactofdependentev entsont hepr obabi li
tyis
that,iftwo events ar e dependent,t he pr obabi l
i
tyof
attai
ningthesecondev enti sdiff
erentf rom t hatoft he
outcomeoft hefir
stev ent.Intermsofsy mbol icnot ati
on,
i
fXandYar edependent :P(X/Y)≠P( X)andP( Y/X)≠
P(Y),whereP(X/Y)denot est heprobabilit
yofXoccur r
ing
given thatY has occur r
ed,and P( Y/ X)denot es the
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 5
pr
obabi
l
ityofYoccur
ri
nggi
vent
hatXhasoccur
red.

3.Mut uall
yexclusi
veev ents/Disj
ointEvents–opposite
ofJointev ent
s
Two ormor e events are mut uall
y excl
usiveift he
occurrenceofoneev entprecludestheoccurrenceofthe
otherev ents.Thischaracteri
sti
cmeanst hatmut uall
y
exclusiv
e ev ents cannot occur si mul
taneously and
therefor
ecanhav enoi nter
secti
on.

Inthetossofasi nglecoin,
theeventsofheadsandt ai
ls
aremut uall
yexcl
usive.Thepersontossingthecoingets
eit
heraheadorat ai
lbutneverboth.Thepr obabi
li
tyof
two mut uall
yexclusiveevent
soccur ri
ngatt hesame
ti
mei szer o.I
ntermsofsetnot ati
on,ifeventsXandY
aremut uall
yexcl
usive,P(XnY)=0,ort hepr obabi
li
tyof
Xinter
sect i
ngYiszer o.

Relati
ng the abov et hr
ee ty
pes ofev ents,mut ual
ly
exclusi
ve event
s mustbe dependent ,butdependent
eventsneednotbemut ual
l
yexclusiv
e.Ev ent
st hatare
i
ndependentcannotbemut uall
yexclusive.Therefor
e,
mut ual
ly excl usive i mpli
es dependence and
i
ndependence impl i
es notmut ual
lyexclusiv
e,butno
othersimpleimplicat
ionsamongt heseconditionshold
tr
ue.

4.Col
lect
ivel
yexhaust
iveev
ent
s
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 6
Al i
stofcol lecti
vel
y exhausti
ve events contains al
l
possibleelementaryeventsforanexper i
ment.Thusal l
sampl e spaces are col
lecti
vel
y exhaust
ivelists.The
sampl espacef oranexper i
mentcanbedescr ibedasa
l
istofev entsthataremutuall
yexclusi
veandcol l
ectiv
ely
exhaustive.

5.Complement aryevents
The compl ementofan ev entA i s denot
ed .Al l
element
ar yeventsofanexper i
mentnoti nAcompr ise
i
tscompl ement .Forexample,ifinrol
li
ngonedi e,event
Ai sgett
inganev ennumber ,thecomplementofA i s
getti
nganoddnumber .I
fev entAi sgett
inga5ont he
roll
ofadie, t
hecompl ementofAi sgetti
nga1, 2,3,4,or
6.Thecompl ementofev entAcont ai
nswhateverportion
ofthesampl espacethateventAdoesnotcont ain.

Usingt
hecompl
ementofaneventcanbehel
pfulsome
ti
mesinsol
vi
ngforpr
obabi
li
ti
esbecauseoft
her ul
e:P
()=1-P(A).

Pri
nciplesofcounti
ng
Countingthenumberofway sinwhicheventsmayoccur
i
nanexper i
mentplaysamaj orr
oleinprobabil
it
y.Some
rul
esforcountingarepresent
edinthi
ssection.Thefir
st
oftheseiscall
edthefundamentalpri
nci
pleofcounting.

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 7
Permutat
ions
Other import
ant counti
ng r ules per
tai
n to t he
arr
angementofitemswit
hr egardtot
heorderofi
tems.
Inthi
scasewithusePer
mutations.

Permut
ati
ons are gr
oups ofit
ems wher
e bot
ht he
composi
ti
onofthegroupsandt
heor
derwit
hinagroup
arei
mport
ant
.

The number of permut

ati
ons in n dist
inct i
tems
arr
angedxatati
mei s ,wher
en!,
readnf act
ori
al,
i
s
n!=n(
n-1)(
n-2)
…….(
1).

Bydef
ini
ti
on,
0!=1.

Combinati
ons
Per
mut at
ionsconcern waysin whi
ch bot
h orderand
composit
ion are import
ant.In combinati
ons what
matt
ersisthecompositi
onofthegroupnottheorderof
i
temsaswhatwehav ei
npermutati
ons.

Thenumberofcombinat
ionspossi
blebysel
ect
ingxout
ofndi
sti
ncti
temsis: .

Met
hodsofassi
gni
ngpr
obabi
li
ti
es

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 8
Thet
hreegeneralmethodsofassigni
ngpr
obabil
it
iesare
The classicalmet hod – the equal
l
yl ikel
y
approach
Therelat
ivefrequencymethod
Thesubjectivemethod

Cl
assi
calMet
hod

Thecl assicalmet hodofassigni

ngpr obabil
i
tiesisbased
ont heassumpt i
ont hateachoutcomei sequallylikel
yto
occur.Cl assicalpr obabi
li
tyuti
l
izesr ul
esand l aws.I t
i
nv olv
es an exper i
mentand an ev ent
.The def ini
ti
on
assumest hatallnpossi bl
eout comeshav et hesame
chancef oroccur ring.Inthismet hodprobabil
ityv al
ues
areassignedasf oll
ows:

Asne cannev erbegr eatert hanN ( nomor et hanN

outcomes i nthe popul ati
on coul d possibl
y possess
att
ribut
ee) ,thehighestv alueofanypr obabil
it
yis1.I f
theprobabili
tyofanout comeoccur ri
ngis1, t
heev entis
certai
nt o occur.Thesmal l
estpossi bl
epr obabil
ityis
zero.I f none of t he out comes of N possi bili
ti
es
possessest hedesiredcharact er
ist
ic,e,t
heprobabilit
yis
0/N=0,andt heev enti
scer t
ainnottooccur .Ther ange
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 9
ofpossi
bil
i
tiesforprobabil
i
t i
esi
s:
Thustheprobabil
it
iesarenonnegativepr
operfr
act
ions
ornonnegativ
edecimal valuesl
esst
hanorequal
to1.

Relati
veFr equencyofOccur renceMet hod
The r elati
ve f requency of occur r
ence met hod of
assigningprobabi l
it
iesi sbasedoncumul atedhistor
ical
data.Wi t
ht his met hod,t he probabil
i
t y ofan event
occurri
ngi sequalt ot henumberoft i
mest heeventhas
occurred int he pastdi v
ided byt he totalnumberof
opportuniti
esf ortheev enttohaveoccurred:

Probabil
it
yby numberof
rel
ati
vef r
equency = t i
mesanev enthasoccur
red
ofoccurrence t
otal number of
opportuni
ties
fortheev entt
ooccur
Relat
ivefrequencyofoccur
renceisnotbasedonr ul
esor
l
awsbutonwhathasoccur r
edinthepast .

Subjecti
vemet hod
Thesubj ectivemet hodofassi gni
ngpr obabil
i
tyisbased
ont hefeel i
ngsori nsightsofaper sondet ermini
ngt he
probabil
i
t y. Subjecti
ve pr obabil
it
y comes f r
om t he
person’
si ntuit
ionorr easoning.Alt
houghnotasci ent
ifi
c
approacht opr obabili
ty,thesubjecti
vemet hodof tenis
basedont heaccumul ationofknowledge,understandi
ng,
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 10
andexperiencest
oredandprocessedinthehumanmi nd.
Attimesitismerelyaguess.Atot herti
mes,subj
ect
ive
probabi
l
itycanpotent
ial
l
yyiel
daccur at
eprobabi
li
ti
es.

Subjecti
veprobabili
tycanbeapot ent
iall
yusefulwayof
tappingaper son’sexper i
ence,knowledge,andinsi
ght
and using t
hem t of orecasttheoccur r
enceofsome
event.E.
g.Weat herfor
ecast

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 11
Typesofpr
obabi l
it
ies
Therear
efourtypesofpr obabi
li
ti
es.Thesear
e:
Simpleprobabili
ty
Jointprobabil
it
y
Mar gi
nalprobabili
ty
Conditi
onal pr
obabili
ty

Simpl
ePr obabil
it
y
Si
mplepr obabil
i
tiesarerel
ati
vel
ystr
aightfor
war
dwhich
areobtai
nedusingt heformul
aP( A)=n( A)/
n–rel
ati
ve
fr
equencymet hod.

Mar ginalprobabi li
ty
Mar gi
nalpr obabi l
it
yi sdenot edbyP( E),whereEi ssome
event.A mar ginalpr obabili
tyi susual l
ycomput ed by
divi
ding somesubt otalbyt hewhol e.Anexampl eof
mar gi
nalpr obabili
tyi sthepr obabilit
yt hatast udenti s
i
nfectedbyHI V/AIDS.Thi spr obabi l
i
tyi scomput edby
divi
dingt henumberofst udent sinfectedbyHI V/AIDSby
thetot alnumberofst udents.Thepr obabi l
it
yofaper son
wear i
ng gl asses i s also a mar gi
nalpr obabil
ity.Thi s
probabi l
it
yiscomput edbydi vi
dingt henumberofpeopl e
wear i
ng gl asses by t he t otalnumberofpeopl e.A
mar gi
nalpr obabi li
tyisf oundi nt hemar ginofanyj oint
probabi l
it
yt able.Itist hesum oft hejointpr obabili
ties
forasi ngl
ecat egoryofoneat tri
buteov erallpossi ble
categor i
esofanot herat t
ribute.

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 12
Exampl e:
ABCCompanymanuf actureswi ndowai rcondi ti
onersin
bothadel uxemodel( D)andast andardmodel( S).An
audi torengagedi nacompl i
anceaudi toft hef ir
mi s
validati
ngt hesal esaccountf ort hemont hApr il
.Shehas
collected200i nv oicesf ort hemont h,someofwhi ch
wer esentt o whol esalers( W)and t her emai nder sto
retailer
s( R).Oft he140r etailinv oices,28ar ef orthe
standar dmodel .Onl y24oft hewhol esaleinv oi
cesar e
fort hestandardmodel .Iftheaudi torselectsonei nv oi
ce
atrandom, fi
ndt hef ollowingpr obabi l
it
ies.
a) Theinvoicesel ectedi sfort hedel uxemodel .
b) Thei nvoicesel ectedi sf ort hestandardmodel .
c) Theinvoicesel ectedi sawhol esaleinvoice.
d) Thei nvoicesel ectedi sar etaili
nvoice.

Sol
uti
on
Wholesale,Ret
ail
,R Total
W
Deluxe,
D 36 0. 18* 112 0.56* 1480.74*
*
Standar
d, 24 0. 12* 28 0. 14* 52 0.26*
*
S
Total 60 0.30** 1400.70** 200
P( D)=148/200=0.74 P(W)=60/ 200=0.
30
P( S)=52/200=0.26 P( R)=140/200 =
0.
70

P(
D)=P(
WnD)+P(
RnD) P(
W)=P(
WnD)+P(
WnS)
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 13
=0.18+056 =0.18+0.
12
=0.74 =0.
30
*JointProbabil
it
ies
**MarginalProbabi
li
ti
es

Unionprobabili
ty
Asecondt ypeofpr obabili
tyist heuni onoftwoev ent s.
Unionprobabili
tyisdenot edbyP( E1 UE2)
,wher eE1 and
E2aretwoev ents.P( E1UE2)i sthepr obabil
it
yt hatE1wi l
l
occurort hatE2 wi l
loccurort hatbot hE1 andE2 wi l
l
occur.Anexampl eofuni onpr obabilit
yisthepr obability
thataper soni si nfectedbyHI V/AIDS orCancer .To
quali
fyfortheuni on,theper sonhast obei nfect edwi th
atleastoneoft hedi seases.Anot herexampl ei st he
probabi
li
tyofwear ingey eglassesori sasol dier.Al l
peoplewear i
ngey egl assesar ei ncludedint heuni on
alongwithal lpeoplewhoar esol diersandal lsol diers
whowearey eglasses.

Jointprobabi l
it
y
At hirdt ypeofpr obabil
ityist heint er
section oft wo
eventsorj ointprobabil
it
y .Aj oi
ntprobabili
tyshowst he
probabili
tythatanobser vationwill
possesst wo( ormor e)
characteri
sticssimultaneously.Thati s,i
tmeasur esthe
probabili
tyoft woormor eev entsoccur r
ingt ogether.
Thej oi
ntpr obabi
li
tyofev entsE1andE2occur ringis
denotedP( E1nE2).Somet i
mesP( E1nE2)isr eadast he
probabili
tyofE1 andE2.Toqual if
yf orthei nter
section,
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 14
botheventsmustoccur .Joi
ntprobabi
l
ityrangesfrom 0
to1,inclusi
v e[0,1].Thesum ofal ljointprobabi
li
ti
es
mustbeequalt o1.0.Anexampl eofjointprobabil
it
yis
theprobabil
ityofaper sontobei nf
ect
edwi thHIV/AIDS
andCancer .Beinginfectedwit
honeoft hediseasesis
notsuffi
cient.Asecondexampl eofjointprobabil
it
yis
theprobabili
tythattheper sonisasol dieraswel las
he/shewear seyeglasses.

Conditi
onalprobabi
li
ty
Thef ourt
ht y
pei sconditi
onalprobabili
ty.Condi ti
onal
probabi
li
tyisdenotedbyP( E1/E2).Thi
sexpr essi
oni s
readas:theprobabil
i
tythatE1 wi
l
loccurgi vent hatE2is
knownt ohaveoccur r
ed.Thecondi ti
onalpr obabil
it
yof
an eventE1,given eventE2 isthe rati
o oft he j
oint
probabi
li
tyoftwoeventstothemar gi
nalprobabi l
it
yofE2.

e)

Exampl e:
Blue Nile Univ
ersit
yr ecently conduct
ed a sur vey of
undergraduatestudentsi nordert ogatheri nfor
mat i
on
aboutt heusageoft hel i
brar
y.Thepopul ati
onf ort hi
s
studyincludedall4000under graduat
est udentsenr oll
ed
i
nt heuni versi
ty.Thel ibr
aryof f
icer
sar ei nter
est edin
i
ncreasingusage,par t
icul
arlyamongf emal es( F)and
senior
s( S)attheuni versi
ty.Oft he4000st udent s,800
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 15
studentsareseni or
s,1800st udentsar efemalesand
450oft he1800f emalesareseniors.
Required:
1.
Whati stheprobabil
i
tythatast udentselect
edatrandom
isaseniorgiventhattheselectedstudentisfemale?
2.
Whati stheprobabil
i
tythatast udentselect
edatrandom
isfemalegiventhattheselectedstudentissenior
?

Sol
uti
on:
Seni
or,
S Non- Tot
al
Seni
or,N
Female,
F 4500.
1125 1350 1800 0.
45
0.
3375
Male,
M 3500.
0875 1850 2200 .
055
0.
4625
Tot
al 800 0.20 3200 0.
80 4000

1.
P(S/
F)=P(
SnF)
/P(
F)=0.
1125/
.45=0.
25
2.
P(F/
S)=P(
SnF)
/P(
S)=0.
1125/
.20=0.
5625

Usi
ngcondi
ti
onalpr
obabi
li
ty,j
ointpr
obabi
l
ityofXandY
i
s cal
cul
ated as:

TheBay es’ Rul

e
Anext ensiontotheCondi
ti
onalLaw ofProbabi
li
ti
esis
Bayes’rule,whichwasdev
elopedbyandnamedf oran
Engli
shCl ergymanThomasBay es(1702-
1761).Bayes’
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15
 16
ruleisaf or mulat hatextendst heuseoft hel aw of
conditionalpr obabili
ti
es to all
ow r evi
sion ofor i
ginal
probabi l
it
ieswhennew i nformationi sneeded.Thet wo
corei deasi nBay es’Rul earet hepr i
orprobabi l
ityand
posterior/rev i
sedpr obabil
i
ty.
Prior pr obabi li
ty – i s i ni
ti
al pr obabili
ty whi ch is
determi nedbef or
enewi nformationisobt ained.Itisthe
start
ingpoi ntforBay estheorem.
Poster i
orpr obabil
ity-aprobabil
itythathasbeenr evi
sed
based on new i nformati
on,because i tr epresentsa
probabi l
it
ycal culatedafternewinf or
mat i
onisobt ained.

TheBay
es’theor
em si
mpli
fi
esthecomputati
onofP(
X/Y)
whenP(XnY)andP(Y)ar
enotgivendi
rect
ly.

 Condi
ti
onalPr
obabi
l
ityRul
e(TheBay
es’Theor
em f
or
OneEvent
)

Bay
es’
Theor
em f
orTwoEv
ent
s

Bay
es’
Theor
em f
orThr
eeEv
ent
s

Page|
16
 17

Thegener
alBay
es’
rul
eispr
esent
edbel
ow.

Exampl e:
1.Acompanyhast hreemachi nesA,BandCwhi chall
producet hesamet wopar t
s,XandY.ofal lthepar ts
produced, machi ne A pr oduces 60%, machi ne B
produces30%, andmachi neCpr oducesther est.40%of
thepartsmadebymachi neAar epartX,50%oft heparts
madebymachi neBar epar tX,and70% oft hepar ts
madebymachi neCar epartX.Apar tpr
oducedbyt his
companyi sr
andoml ysampl edandi sdet erminedt obe
anXpar t
.Wit
ht heknowledget hatitisanXpar t
,fi
ndthe
probabil
iti
est
hatthepar tcamef rom machi neA, BorC.
Soluti
on:
P( A)=0.6 P(X/A)=0. 4 P( A/X)
=?
P( B)=0.3 P(X/B)=0. 5 P( B/X)
=?
P( C)=0.1 P(X/C)=0. 7 P( C/X)
=?
Met hod1

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17
 18

NB:P( A/
X)+P( B/X)+P( C/X)=1.00
P(A/X)+P( A’/X)=1. 0
Method2
Machine
Product A B C Tot
al
X 0.
24 0.
15 0.
07 0.
46
Y 0.
36 0.
15 0.
03 0.
54
Total 0. 6 0.
3 0.
1 1.
00
P(A/X)=0.24/0.46=0. 52
P(B/X)=0.15/0.46=0. 33
P(C/X)=0.07/0.46=0. 15
1.
00 The sum ofj oi
ntand condi
ti
onal
probabili
ti
esshouldbeequalt
oone.

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18
 19

Method3–Bay esianTabl e
Eve Prior Condi tion Joint Post eri
or/
nt, probabi l
i
ty,al Pr ob.,prob., Rev i
sed
Ei P( Ei) P(X/ Ei) P( EinX) prob. ,
P(Ei/X)
A 0. 60 0.40 0.
24 0.24/ 0.
46
=0. 52
B 0. 30 0.50 0.
15 0.15/ 0.
46
=0. 33
C 0. 10 0.70 0.
07 0.07/ 0.
46
=0. 15
P(
X) =
0.
46 1.00
0.24
Method4–Tr eeDi agram X/ A P( A/
X)
=0.24/0.
46=0. 52
0.
40
0.
60 0. 60 0. 36
Y/A
A 0.15 P( X)=0.46
B 0.
30 X/ B0. 50 P( B/X)= 0. 15/0.
46 =
0.
33
0.50 0. 15
C Y/B 0.07 P(C/X)=0. 07/0.46=0.
15
Page|
19
 20
0.
10 X/
C 0.70 1.
00
0.
30 0.03
Y/C
Fi
nd: P(
Y)=0.
54
P(A/
Y)=0.
36/0.
54=0.
667
P(B/
Y)=0.
15/0.
54=0.
278
P(C/
Y)=0.
03/0.
54=0.
055
1.
000

2.Bruk, Al
emay ehuandy ohannesf il
lorder si nafastf ood
restaurant .Br ukf il
lsincorrectl
y20% oft heor der she
takes.Al emay ehuf i
l
lsincorrectl
y12% oft heor der she
takes,andYohannesf i
ll
sincorrectly5%oft heor dershe
takes.Br ukf il
ls30%ofal lorders,Alemay ehuf i
ll
s45%of
allorders,andYohannesf il
l
s25%ofal lor ders.Anor der
hasj ustbeenf ill
ed.
a)Whati st hepr obabil
it
ythatAl emay ehuf ill
edtheor der
?
0.45
b)I ftheor derwasf i
ll
ed byYohannes,whati st he
probabi lityt hatitwouldwasf il
l
edcor r
ect l
y?0. 95
c)Whof illedt heor derisunknown,butt heor derwas
fi
lledcor rect l
y.Whatar et herevisedpr obabi l
iti
est hat
Bruk,Al emay ehuorYohannesf i
ll
edtheor der?0. 2748,
0.4533and0. 2719
d)Whof i
lledt heor derisunknown,butt heor derwas
fi
lledi ncor rectl
y.Whatar et her evisedpr obabi l
i
ties
thatBr uk,Al emay ehuorYohannesf il
ledt heor der?
0.4743, 0.4269and0. 0988
Page|
20
 21

3. A maj orleague base bal lt eam has fourstar ti

ng
pi
t chers:Gir
ma, Robel,Sol omon, andAsrat.Eachpitcher
startsev eryfourth game.Thet eam wins60% ofal l
gamest hatGi r
mast arts,45% ofal lgamest hatRobel
starts,35%ofal lgamest hatSolomonst ar
ts,40%ofal l
gamest hatAsr atstarts.Anav idfanhasj ustret
ur ned
fr
om at hreeweekv acationint hewilder
nessandf ound
outt hattheteam playedy esterday.

a)
Whatist heprobabil
it
ythatGir
mastart
edt hegame?
0.25
b)Whati sthepr obabil
it
ythatSolomon start
ed the
game?0. 25
c)
Iftheteam wony est
erday
,revi
setheprobabil
it
yof
eachpitcherstar
ti
ngt hegame?0.333,0.250,0.
194
and0.222

LawsofPr obabil
it
y
Addit
iveLaw
Thegenerallawofaddit
ionisusedtofindt
heprobabi
l
ity
oftheunionoft woevents,P(E1 UE2)
.Thegener
alLaw
ofAddit
ionispresent
edasf ol
l
ows:

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21
 22

SpecialRuleofAddit
ion
Iftwoev entsaremut uall
yexclusi
ve,thepr obabil
i
tyof
theunionoft hetwoev ent
sistheprobabil
i
t yofthef i
rst
eventplustheprobabil
ityofthesecondev ent.Because
mutuallyexcl
usiv
eev entsdonoti nter
sect
,not hinghas
tobesubt r
actedout
.Thef ormulaisshownbel ow.

Exampl e:
1.Ahusbandandawi fe,each20y ear sold,aredebating
whethert osetupar eti
rementpr ogr am fort hemselv
es.
Benefitsarepaidt ot
hemanorwomanatt heageof70.
Ifbothhav edi
edbef orereachingage70, nobenef i
tsare
paid.Assumet hatthepr obabil
it
yt hatamanaged20
l
ives up t o age 70 i s appr oximat el
y 0.6 and t he
probabili
tya woman aged 20 l i
v es up to age 70 is
approximately0. 7.I
ft he husband and wi f ejoi
nt he
program,whati st heprobabil
ityt hateitherthemanor
the woman wi llcoll
ectbenef i
ts? Assume t hatt he
chancesoft hemanorwomandy ingar eindependentof
eachot her.
Soluti
on:
LetM=manl i
vesupt oage70,W =womanl i
vesupt o
age70.
P( M)=0. 60 P(W)=0. 70
P( WUM)=P( W)+P( M)–P( WnM)
=0.70+0. 60–P( WnM) .Sincet hetwoev entsare
Page|
22
 23
i
ndependent ,thej ointpr obabi li
tyt hatbot ht he
manandt hewomanl ivesupt oage70i sequal
to t he pr oduct of t he i ndividual mar ginal
probabi li
ti
es.P( WnM)=P( M)*P( W)
=0.60*0. 70
=0.42
=0.70+0. 60–0. 42
=0.88
2. Accor ding t o a r ecent st udy conduct ed by
businessmen,76% of al lshar eholder s hav e some
col
legeeducat ion.Supposet hat37% ofal ladultshav e
somecol legeeducat ionandt hat22% ofal ladult
sar e
sharehol ders.Forar andoml ysel ectedadul t:
a)Whati st hepr obabi l
i
tyt hatt heper sondi dnotown
sharesofst ock?0. 78
b) Whati st hepr obabi li
tyt hatt heper sonowns
sharesofst ockorhadsomecol legeeducat i
on?
0.4228
c)Whati st hepr obabi l
it
yt hatt heper sonhasnei t
her
somecol l
egeeducat i
onnorownsshar esofst ock?
P( )=1–P( AUB)=0. 5772
d) Whati sthepr obabili
tyt hatt heper sondoesnot
ownshar esofst ockorhasnocol legeeducat i
on?
P( )=1–P( AnB)=0. 8382
e)Whati st hepr obabili
tyt hatt heper sonownsonl y
sharesofst ockorhadsomecol l
egeeducat i
onbut
notbot h?P( AUB)– P( AnB)=0. 4227– 0. 1672=
0.2556
Page|
23
 24

3.A1999sur veyof20, 000sal espr ofessionalsconducted

by Et hiopian Tel ecommuni cat
ion Cor por
ation (ETC)
foundt hat15%ofal lsal espr of
essional susehomef ax
machi nesand35%usemobi letelephones.Supposet hat
1% ofal lsalespr ofessi onalshav ebot hf axmachi nes
andusemobi letelephones.
a)Whati st he probabi l
it
yt hata r andoml yselected
salespr ofessionalhasahomef axmachi neoruses
amobi l
etelephone?
b) Whati st hepr obabi l
it
ythatar andomlyselected
salespr ofessionalnei therhasahomef axmachi ne
norusesamobi let elephone?
c)Supposet hatnosal esprofessionalhasbot hahome
faxmachi neandusesamobi letelephone.Whati s
the pr obabili
tyt hat a r andoml y selected sales
professionalhasahomef axmachi neorusesa
mobi letel
ephone?

Multipl
icati
vel aw
Thepr obabili
tyoft heint
ersecti
onoftwoev ents(E1 E2)
i
s cal l
ed t he jointpr obabil
i
ty.The gener allaw of
multi
plicati
on i s used tof i
nd the probabil
it
y ofthe
i
ntersection oft wo ev ents orj oi
ntpr obabil
i
ty.The
general l
awofmul tipl
i
cati
onisstatedasfoll
ows:
Page|
24
 25

SpecialRul
eofMulti
pli
cat
ion
IfeventsE1 andE2 ar
eindependent
,aspeci allaw of
multi
pli
cati
oncanbeusedt ofindtheint
ersecti
onofE1
andE2.

Example:
1. Testt hemat r
ixfort he200executiv
er esponsesto
deter
mi ne whetheri ndustr
yt ype i
si ndependentof
geographiclocat
ion.
GeographicLocati
on
Industry North Sout h Mi d Wes Tot al
type East,
D East ,
E West ,Ft ,
G
Finance,A 24 10 8 14 56
Manuf actu 30 6 22 12 70
ring,B
Communi c 28 18 12 16 74
at i
on,C
Tot al 82 34 42 42 200

Sol
uti
on:
Page|
25
 26
Selectonei ndust ryt y
peandonegeogr aphiclocat
ion
(SayA–Fi nanceandG–West ).DoesP( A/G)=P( A)?
P( A/G)=P( AnG) /P( G)=0. 07/ 0.21=0. 33
P( A)=56/200=0. 28
Since P (A/G)≠P ( A) ,indust ry t ype and geographi
c
locati
onarenoti ndependent .
2. Consi der
ingt heabov epr oblem,i far espondentis
randomlyselectedf rom thesedat a:
a)Whatisthepr obabi li
tyt hatt hisexecut i
veisfrom the
midwest?0.21
b)Whati sthepr obabili
tyt hatar espondentisf r
om the
communi cat
ioni ndust ryorf rom nor theast?0.64
c)Whatisthepr obabilit
yt hatar espondenti sfrom the
southeastorf rom financei ndust r
y?0.36
d)Whati sthepr obabi l
itythatt hisexecut iveisfr
om the
southeastort hewest ?0. 38

3. The r esul
ts ofa sur
veyaski ng,“Do y
ou hav
ea
cal
culat
orand/ oracomput eriny ourhome?”areas
fol
l
ows:
Calcul
ator
Yes No
Compu Yes 46 3
ter No 11 15
Isthev ari
abl
ecalcul
atorindependentofthevari
abl
e
computer?Whyorwhynot?NO

Lawsofcondi
ti
onalpr
obabi
li
ty
Page|
26
 27
Condit
ionalprobabi
l
iti
esarebasedonknowl edgeofone
oft he vari
ables.I
fE1 and E2 ar etwo ev ent
s,the
condit
ionalprobabi
li
tyofE1 occurr
inggiv
ent hatE2 i
s
known orhas occur red i
s expr
essed as .The
for
mul
aforf
indi
ng a condi
ti
onalpr
obabi
l
ityi
s gi
ven
bel
ow.

SpecialLawofCondi ti
onalProbabili
ty
IfE1 and E2 ar
ei ndependentev ent
s,the condi
ti
onal
probabil
it
yandmar ginalpr
obabili
tyofthetwoeventsar
e
equal.Thati
s,P(E1/E2)=P(E1),andP( E2/
E1)=P(E2)
.

4.2.Probabili
tyDistri
but i
ons
Basi cconcepts
Av ari
ableisachar acterist
ict hatcan havedi fferent
valuesorout comes.Av ariablewhosenumer i
calval ueis
determinedbyanout comeofar andom experiment ,or,a
variabl
ewhoseout comesoccurbychancei scal leda
random v ar
iable.Dependi ngont hev al
uesar andom
variabl
e can t ake,t here ar et wo t ypes ofr andom
variabl
es:Di screterandom v ari
ables and Continuous
random v ari
ables.
DiscreteRandom Var iables:thesear erandom variables
whi ch can onlyassumenon- negativ
ewhol enumber s
Page|
27
 28
suchas0,1,2,3………,nf orexampl e,thenumberof
student si n a cl ass,t he numberoft elephone cal ls
receivedi nagi v enhour ,thenumberofpeopl el ivi
ngi n
certain area and t hel i
kecan t akeonl ynon- negati
v e
whol enumber s.Asar esult,ther ear egapsorv oidsi n
them al ongani nterv al.
Cont i
nuous Random Var iables: t hese ar e r andom
variableswhi chcant akeanyv alue,thati s,i
tcant ake
anyv alueov eran i nterval
.Thus,cont i
nuousr andom
variableshav enogapsorunassumedv al
ues.Thesear e
random v ari
abl es t hatcan assume an uncount ably
i
nf i
nitenumberofv alues.Forexampl e,thehei ghtofan
i
ndi vi
dual ,thedi stancet raveledbyat ruckdr i
verina
givenhour ,thet emper atureofar oom onagi venday ,
andt hel i
kepr oducesacont i
nuousr andom v ariable.
NB:Cont i
nuousr andom v ari
abl est ypicall
yr ecor dthe
valueofameasur ementsuchast ime,wei ght,volume, or
l
engt h.Whi l
e di scret er andom v ariable count st he
numberoft i
mesapar ti
cularattributeisobser ved.

Probability Distri
but i
on:isal i
sti
ng oft he possible
valuest hatar andom v ari
ablecanassumeal ongwi t
h
theirprobabili
ties.Itisanyr epr
esentati
onoft hevalues
ofar andom v ari
ableandt heassoci atedpr obabil
i
ties.
Dependi ngont hety pesofrandom v ari
ableswi thwhich
we dealwi t
h,we do hav et wo t y
pes ofPr obabili
ty
Distri
butions.:Di screte Probabili
ty Dist
ributi
ons and
Cont i
nuousPr obabi l
ityDist
ri
butions.
Page|
28
 29
Discr
et eProbabil
it
yDi str
ibutionisanyrepresent
ationof
the values of di screte r andom v ari
able and t he
associated probabil
i
ties.The mostcommonl y used
discr
etepr obabil
it
ydi str
ibutionsincl
udet heBi nomial
,
hypergeomet ri
candt hePoi ssondistr
ibut
ions.

TheBi nomi alDi st ri

bution
Per haps t he most wi dely known of al l discrete
probabi l
it
ydi stributioni st hebi nomialdist r
ibuti
on.The
binomi al di st r
ibut i
on has t he f oll
owing under lying
assumpt i
ons:
i.The exper i
ment i nvolves n i dent i
cal t r
ials or
sampl ingi sdonewi threplacement .
ii.Eacht r i
alhasonl yt wopossi blemut uall
yexcl usive
outcomes.[ Bi =Two]
i
ii.Eacht rial isindependentoft heprevioust ri
als
i
v .Thepr obabi lityofsuccess( P)andf ail
ure( q=1- P)
remai nconst antforeacht ri
al.
v .I nnt ri
al s,onl yXsuccessesar epossiblewher eXi s
awhol enumberbet ween0andn[ 0≤X≤n]
vi.I ti
sappl icabl eifthesampl esizenisl essthan5%of
thepopul ati
onsi zeN ori fsampl esar etakenwi th
replacement .

Tocomput et
heprobabil
i
tyofoccurr
encesinbinomial
di
stri
buti
onwedohavetheBi
nomialFormul
a.I
tisstat
ed
asfol
lows:

Page|
29
 30

Exampl e:
1. Ifwet ossacoi nt hreet imes, whatisthepr obabil
it
yof
get ti
ngexact l
ytwoheads?
Sol ution:
Inasi ngl et oss, t
hepr obabi li
tyofget t
ingaheadorat ail
is0. 5.I nt ossi ngt hecoi nt hreetimes,thef ol l
owingare
thepossi bleout comes.
HHH, HHT, HTH, HTT, THH, THT, TTH, TTH, TTT
Thepr obabi lit
yofget tingexact lytwoheadsi s,theref
ore,
comput edas
=( 0.5* 0.5* 0.5)+( 0.
5* 0.5*0.5)+( 0.
5*0.5*0.5)
=0. 125*3=0. 375
Usi ngt heBi nomi al f
ormul a
P=0. 50 q=1–0. 50=0. 50 n=3 x=2
P(x=2)=ncx*PX*q1-x
=3c2* 0.52* 51
0.
=
3( 0.25* 0.5)=3( 0.125)=0. 375
Ther ear et hreeway sofchoosi ngexact lyt woheads
from at otal ofthreetrials.
2. Ar esear cherwant st ot estt heclaimt hat10% ofal l
peopl e ar el eft-
handed by r andoml y select i
ng fort
y
student s ata uni versity. Whati sthe pr obabili
tyof
Page|
30
 31
getti
ngsi
xl ef
thandedstudent
samongf orty?
Soluti
on:
P=0. 10 q=1–0. 10=0.90 n=40 x=6
P(x=6)=0.1068
I
f10%oft hepopulat
ionislef
t-
handed,about10.68%of
the ti
me the resear
cherwoul d getsix who arelef
t
handedinasampl eoffort
y.

3.Basedonpastdat a,approximately30%oft heoilwel l

s
dril
led in ar
eashav ing a certai
nf avor
able geological
format i
onhav est ruckoil.A companyhasi dentifi
ed5
locati
onst hatpossesst hisi nfor
mat i
on.Assumingt hat
thechanceofst r
ikingoilonanyl ocat
ionisi
ndependent
ofanyot her
s,calculatethepr obabil
it
ythatexactly2of
the5wel lsstri
keoil.
Solution:
P=0. 30 q=1–0. 30=0. 70 n=5 x=2
P(x=2)=0. 3087
Ifthepr obabil
it
yofget ti
ngoi linar eashavingcer tai
n
favorablegeologi
cal for
mat i
oni s0.3,31%ofthet i
mewe
canget2dr i
ll
swhi chhav eoilinasampl eof5dr i
l
ls.

4. Thequal it
ycont r
oldepartmentofamanuf act ur
er
tested the most recent batch of 1000 cat alyti
c
conv er
ter
sproducedandf ound50oft hem def ectiv
e.
Subsequentl
y,an employee unwit
ti
ngly
/ uni
ntentionall
y
mi xedthedefect
iveconvert
erswiththenon- defect i
ve
ones.I fa sample oft hr
ee conver
tersi sr andoml y
Page|
31
 32
sel ectedf rom t hemi xedbat ch,whati st hepr obabi l
it
y
thatt heempl oy eemaygetonedef ectiveitem?
Sol ution:
Bef orewet r
yt osol vet hispr obl em,wehav et ocheck
whet heral ltheassumpt ionsofaBi nomi aldi stributi
on
aresat i
sfi
edornot .Oneoft heassumpt ionsst atesthat
thesampl esi ze,nmustbel esst hanf i
veper centoft he
popul ati
onsi ze,N.I nourcase,t hesampl esi zei sless
that5%oft hepopul at i
onsi ze[ 3/1000=0. 003<0. 05]so
we can use t he binomi aldi stribut i
on t o sol vet hi
s
speci ficexer cise.
N=1000 p=R/ N,wher eR-t henumberofsuccess
int hepopul ati
on, N
n=3 =50/ 1000=0. 05
x=1 q=1–0. 05=0. 95
P( x=1)=0. 1354
If5% oft he pr oductcont ains def ecti
ve conv ert
ers,
13. 54%oft het i
met hequal i
tycont roldepar t
mentwoul d
get1def ectiveitem inasampl eoft hreeconv er t
ers.
5. A t own has t hr ee ambul ances f or emer gency
transpor t
ationt oahospi tal.Thepr obabi li
tyt hatanyone
oft hesewi llbeav ai
lableatagi vent imei s0. 75.I fa
per soncal l
sf oranambul ance,whati st hepr obabi l
it
y
thatatl eastoneambul ancewi l
l beav ail
able?
Sol ution:
n=3 p=0. 75 q=0. 25
Pr obabi li
ty of get ti
ng ( at l east ) an ambul ance i s
cal culatedasonemi nust hepr obabi l
i
tyofget tingno
Page|
32
 33
ambul
ance.
P(
ambulance)=1–P( 0ambul ance)
0 3
=1–( 3c0*
0.75* 0.
25)
=1–0. 0156
=0.9844

UsingI ndiv
idualBinomialProbabil
ityTable
Tabl eshavebeendev elopedthatgivet heprobabil
i
tyofx
successesi nnt ri
alsforabi nomi alexper i
ment.These
tablesar egenerallyeasytouseandqui ckerthanthe
Binomi alFormula,especial
lywhent henumberoft r
ial
s
i
nv olvedorsampl esize,ni slarge.Inor dertouset hi
s
table,iti
snecessarytospecifythev aluesofn,pandx.

SomeBi nomi altablesonlyshowv aluesupt o0. 5.Thus,

i
twoul dappeart hesetablesarecannotbeusedwhen
thepr obabi li
tyofsuccessexceedsp= 0. 5.Howev er,
sucht abl escanbeusedbynot i
ngt hatthepr obabil
ityof
n-xfailuresi salsot heprobabil
it
yofxsuccesses.Thati s,
fi
ndingt hepr obabilit
yofxsuccessesi sequalt of i
nding
thepr obabi l
ityofn- xfail
ures.ncx andncn-x arealway s
equal .
Exampl e:
Supposet hat70% ofal lcol adrinkersselectnondi et
colas.I f10col adrinker
sar erandoml yselected,whati s
thepr obabi l
it
ythat4oft hem willbedietcoladrinkers?
Solution:
Finding t he pr obabil
it
y of 4 di et col
a dr inkersi s
Page|
33
 34
equi
val
entt
ofi
ndingthepr
obabi
l
ityof6nondietcol
a
dri
nker
s.
n=10 p=0.7 q=0.3 x= 6
P(
x=6)=0.
2001

Findingt hePr obabi l

i
tiest hatt heNumberofSuccesses
XLi eI naGi venInterval (Cumul ativePr obabil
it
ies)
Cumul ati
ve pr obabili
ties ar et he sum of i ndi
vidual
probabi li
tyvalues.TheBi nomi alf ormula
givesust hepr obabi li
tyofexact lyxsuccessesi nn
tri
als/sampl e size n.t of ind cumul ati
ve probabili
ties
such as P( x≥3),P( x≤2),P( x› 10) or P( X1≤X≤X2) =
P(10≤X≤20) , we shoul d add t he r espective
exact/ i
ndivi
dual probabi l
ityvalues.
Exampl e:
1.Apr ojectmanagerhasdet ermi nedt hatasubcont ractor
fail
st odel iverst andar dor der s20% oft hetime.The
projectmanagerhassi xor der st hathi ssubcont ractor
hasagr eedtodel i
v er
.Whati sthepr obabil
ityt
hat
a)The subcont r
act orwi l
ldel i
v eral loft he order s?
0.
2621
b) Thesubcont ractorwi l
ldel i
veratl eastfourofthe
or
der s?0.9011
c)Thesubcont r
actorwi lldel i
v erexact lyfiv
eor der s?
0.
3932
Page|
34
 35
d) Thesubcont ractorwillfailt
odel i
veratmostt wo
oftheor ders?0.9011
e) Whatdoy ouconcludefrom y ouranswer sinparts(b)
and( d)?Findingthepr obabil
ityofxsuccessesi sequal
tofindi
ngt hepr obabil
ityofn-xf ail
ures.
2.About20%ofal lprofootball
play ersareinjureddur i
nga
givenseason.At eam hasf ourst arplayers.Whati st he
probabi l
itythatatl eastoneoft hest arpl ayersget s
injured?
Sol uti
on:
n=4 p=0.2 q=0. 8 x≥ 1
P(
x≥1)=1–P( X≤0)=P(x=0)
=1–0.4096=0.5904

3.Al awy erest i

mat est hat40%oft hecasesinwhi chshe
represent edt hedef endantwer ewon.I fthel awy eris
presentlyr epresenting10def endant sindif
fer
entcases,
whati st hepr obabil
ityt hatatleast5oft hecaseswi l
lbe
won?Whatar eyouassumi ngher e?
Solution:
Theassumpt ionwear et akingher ei
sthecasesi nwhi ch
thel awy erisr epresent ingarei ndependent. Wi t
ht hi
s
assumpt ion:
n=10 p=0. 4 q=0.6 x≥5
P( x≥5)=P( x=5)+P( x=6)+P( x=7)+P( x=8)+P( x=9)
+P(x=10)
=0. 2007+0. 1115+0. 0425+0. 0106+0. 0016+
0.0001
Page|
35
 36
=0.3670
UsingCumul ativeBinomi alProbabil
it
yTable
If cumulati
v e pr obabili
tyt ablei s gi
ven,one must
subtract fr
om t he cumul ati
ve probabil
it
y of X t he
cumul at
ivepr obabili
tyofX- 1t ogettheexact /
indi
vi
dual
probabil
it
yv alueofX.Thati s,
P( X=a)=P( X≤a)–P( X≤a-
1)
E.g.P( X=3)=P( X≤3)–P( X≤2)
 P( X≥a)=1-P( X≤a-1)
E. g.P(X≥3)=1-P( X≤2)
 P( X>a)=1-P( X≤a)
E. g.P(X>3)=1-P( X≤3)
 P( a1≤X≤a2)=P( X≤a2)-P(X≤a1)
E. g.P(10≤X≤20)=P( X≤20)-P( X≤10)
 P( a1<X<a2)=P( X≤a2-
1)-P( X≤a1-
1)
E.g.P( 10<X<20)=P( X≤19)-P( X≤9)

Exampl e:
1.Accordingt oast udyconductedappr oxi
mat el
y55% of
allhospital
sinagi ventowncontained100ormor ebeds.
A r esearcher draws a sampl e of 15 hospi tal
s by
randoml yselecti
ngnamesf r
om adirect
oryofhospital
s.
a)Whati st he probabili
ty ofselecti
ng 10 ormor e
hospit
alsthathav e100ormor ebeds?
b)Whati sthepr obabil
it
yofsel ecti
ng lessthan fiv
e
hospit
alsthathav e100ormor ebeds?
c)Whati st hepr obabil
it
yofsel ecti
ngf r
om sixt oten
hospit
als,incl
usive,
thathave100ormor ebeds?
Page|
36
 37
2. A manuf acturi
ngcompanypr oduces10,000pl asti
c
partsperweek.Thi scompanysuppl iesplasticpar tsto
anothercompany ,whi chpackagest hepl asti
cpar t
sas
partofpi cnic sets.The second company r andoml y
sampl es10plasticpar t
ssentfrom thesuppl i
er.Iftwoor
less oft he sampl ed plasti
c part
s ar e defecti
v e,the
secondcompanyaccept sthelot
.Whati st heprobabi l
it
y
thatthel otwi l
lbeaccept edifthepar tmanuf act uri
ng
companyact ual
lypr oducingpart
sis10%def ecti
v e?20%
defective?30%def ective?40%defecti
v e?

Comput ati
onofMean( µ)andVar i
ance( δ2)ofaDi scret
e
Random Var iabl
e
Expected value ormean ofa r andom v ariabl
ei sa
measur eoft hecentr
allocationf ortherandom v ariable.
I
ti salongr unaverageofoccur r
ences.Wemustr eal i
ze
thatonanyonet r
ailusingadi screterandom v ariable,
therewillbeoneout come.Howev er,i
ft hepr ocessi s
repeat
edl ongenough,t herei ssomel i
keli
hoodt hatt he
resul
tswi l
lbegint oappr oachsomeexpect edv alueor
mean.Thi smeanorexpect edv al
uei scomput edas
µ=E( X)=∑[X*P(X)=

Where:E(
X)=l
ongrunav erage
X=anoutcome
P(X)= the probabil
i
ty of t
hat
out
come
Var
ianceofadi
scr
eter
andom v
ari
abl
e,whi
chmeasur
es
Page|
37
 38
howfarthevari
ablesaredi
sper
sedar
oundt
hemean,i
s
cal
cul
atedas
2 2
δ =∑(X-µ)* P(
X)

Where:X=anout come
µ=mean
P(X)=t heprobabil
it
yofthatout
come
Andthestandar
ddev iati
onofadi scr
eter
andom var
iabl
e
i
scal cul
atedsimplybyt aki
ngt hesquarerootofthe
2
var
iance.δ=√∑(X-µ) *P(X).

Mean,Var ianceandSt andar dDev i

ationofaBi nomi al
Distribut i
on
Binomi alprobabi l
itydi str
ibutioni sadi screteprobability
distribution.Andhence,t hemet hodusedt ocomput e
mean and st andard dev i
ation f ora di screter andom
variablei ssi milarwi tht hemet hodusedt ocomput e
and f orabi nomi aldi str
ibution.
Abi nomi aldistr
ibutionhasanexpect edv alueorlongr un
aver age,whi ch is denot ed by µ.The v alue ofµ i s
deter mi nedby n* p.Thel ongr unav erageorexpect ed
valuemeanst hati fni t
emsar esampl edov erandov er
agai nf oral ongper iodoft imeandi fPi st heprobability
ofget t
ingasuccessononet rial,theav eragenumberof
successpersampl ei sexpect edt oben* p.
Likef orot herdi scr etev ariabl es,t hev ar i
ance oft he
binomi aldistri
butioni scalcul atedasδ2 =∑( µ)2*
X- P(X)
whi chi salsoequalt onpq.Thest andarddev i
ati
onoft he
Page|
38
 39
bi
nomialdist
ri
buti
on isalso cal
cul
ated bytaki
ng the
2
squar
erootofthevar
iance.δ=√∑(X-
µ) *P(
X)=√npq.

Hy pergeomet ri
cDi st r
ibution
Thebi nomi aldistr
ibut i
onassumest hatthepr obabil
i
tyof
success ( p)and f ail
ure( q = 1 -p)ar ethe same
throughoutt heexper i
ment .Thi sisbecause
–ev entsar eindependent
–sampl i
ngi sdonewi thr eplacement
–n<0. 05N
–popul at i
onisi nf i
nit
e
Howev er,i n cases wher e sampl ing i s wi t
hout
replacementandt hesampl esizeexceeds5% oft he
popul at i
on si ze, i t i s necessar y t o use t he
hyper geomet r
ic di stri
bution t o det ermine cor rect
probabi li
ty.
The hy per geomet ric di stributi
on has t he foll
owi ng
char act eri
st i
cs.
-I tisadi scretedi stri
but i
on.
-Eachout comeconsi stsofei therasuccessora
failure.
-Sampl i
ngi sdonewi t
houtr eplacement .
-Thepopul ationsi zeisf init
eandknown.
-I ti s descr i
bed byt hree par amet ers:N,rand n.
becauseoft hemul t
itudeofpossi blecombi nati
ons
oft heset hreepar amet ers,cr eatingt abl
esf ort he
hy per geomet r
icdi str
ibut i
oni spr acti
cal
lyimpossibl e.
Page|
39
 40
-Thenumberofsuccessesi nthepopulati
on,r
,is
known.
-Thesampl esizeis≥5%oft hepopul
ation.
Under the abov e conditi
ons, we can use t he
hyper
geometr
icdistr
ibut
ionfordetermi
ningthecorr
ect
pr
obabil
it
y,wi
ththefoll
owingformul
a:

Wher
e:P(
X)=t
hepr
obabi
l
ityN=popul
ati
on
si
ze
n=samplesi
ze
r = number of successes i
n t
he
popul
ati
on
x=numberofsuccessesi nt hesampl e
forwhi chapr obabilit
yisdesi red
C=combi nation
N- r= t he number of i tems i n the
populat i
ont hatarelabeledassuccess
NCn=t henumberofway sasampl eofsi ze
ncanbesel ectedfrom apopul ationof
sizeN.
rCx=t henumberofway sxsuccessescan
be sel ected f rom a t otal of r
successesi nthepopul ati
on.
N-
rCn-x=t henumberofway sn-xf ail
ur escan
besel ectedf rom at otalofN- rf ailuresin
thepopul ation
Example:
1.24peopl
e,ofwhom ei
ghtar
ewomen,
hav
eappl
i
edf
ora
Page|
40
 41
j
ob.Iffiveoftheappli
cantsar
er andomlysel
ected,what
i
sthepr obabi
li
tyt
hatthreeofthosesampledarewomen?
Sol
ution:
N=24 n=5 r=8 x=3
=120x56/42,
504=0. 1581

2.Ashi pmentof10i temshast wodef ectiveandei ghtnon

-def ectiveunits.Int hei nspecti
onoft heshi pment,a
sampl e ofuni ts wi llbe sel ected and t ested.Ifthe
def ect i
veunitisf ound,t heshi pmentof10uni tswil
lbe
reject ed.
a) Ifasampl eoft hreei t
emsi ssel ected,whati sthe
probabili
tythattheshi pmentwi llber ej
ected?
b) I fmanagementwoul dl i
kea0. 90pr obabi
li
tyof
rejecti
ngashi pmentwi t
ht wodef ect
iveandei ght
non- def
ecti
veuni ts,how largeasampl ewouldy ou
recommend?

3.Supposet hatt
herear e18maj ori nsurancecompanies
inEt hiopiaandt hat12ar el ocatedi nAddi s.Ift
hree
insurancecompani esar er andoml ysel ect
edf r
om the
entir
el ist
, whati
st heprobabili
tythatoneormor eofthe
selectedcompani esar elocatedinAddi s?
Solution:
N=18 n=3 r=12 x≥1
P(x≥1)=P( x=1)+P( x=2)+P( x=3)
=0.2206+0. 4853+0. 2696
=0. 9755
Page|
41
 42

4.Acompanypr oducesandshi ps16per sonalcomput er s

knowing t
hat4 oft hem hav e defect i
ve wiring.The
companyt hathaspur chasedt hecomput er
si sgoingt o
testthor
oughl y3 oft he comput ers.The pur chasing
companycandet ectthedef ectivewi r
ingwheni tist
her e.
Whatisthepr obabi li
tyt hatthepur chasingcompanywi l
l
fi
nd:
a)
Nodef ecti
v ecomput er
?0. 3932
b) Exact l
yt hreedef ect
ivecomput ers?0.0071
c)
Twoormor edef ect i
vecomput ers?0.1357
d) Oneorl essdef ectiv
ecomput ers?0.8643

The Bi nomi al Appr oximation t o Hy pergeomet ri

c
Distr
ibution
Thebi nomi alpr obabili
tydistr
ibuti
onwi thpar ametersn
and p=r /N pr ov i
des a good appr oximati
on of
hypergeomet r
icpr obabil
it
ydistri
buti
oni fthesampl esize,
n,isnomor ethanf ivepercentofthepopul ationsize,N.
Thati sn≤5%N.Andasn/ N decreases,thebi nomi al
dist
ri
but ion bet ter approximates the hy pergeomet ri
c
dist
ri
but ion.
Exampl e:
1. Ani nternalrev enueservicedistr
ictof f
icehasf i
leson
500incomet axr eturnsthatwer eauditedin1996.Af t
er
theaudit, additi
onal t
axeswer erequiredon350oft hese.
In ordert ov eri
fyt hatpr operaudi tprocedures wer e
Page|
42
 43
fol
lowed,asuper vi
sorrandomlysel
ectsandexami
nes
10 oft he 500 ret
urns.Whati sthe pr
obabi
l
itythat
addit
ionaltaxeswererequir
edexactl
yonsixofthe10
ret
urnssampl ed?
Soluti
on:
Usinghypergeometri
cdist
ri
buti
on
N=500 n=10 r=350 x≥6
P(x=6)=0.2016

Usingbinomial
dist
ri
but
ion
n=10 p=r
/N=350/
500=0.
7 q= 0.
3
x=6
P(x=6)=0.2001

2. Ofagr oupof300men,240ar ephysi

cal
l
yf i
t.Iff
ive
menar erandomlyselected,whatist
heprobabi
lit
ythat
threeoft
hem arephysical
lyfit
?
Soluti
on:
Usinghypergeomet
ri
cdi str
ibuti
on
N=300 n=5 r=240 x=3
P(x=3)=0.2057

Usingbinomial
dist
ri
but
ion
n=5 p=r
/N=240/
300=0.
8 q= 0.
2
x=3
P(x=6)=0.2048

Si
mil
ari
ti
es oft
he Hy
per
geomet
ri
c and t
he Bi
nomi
al
Page|
43
 44
Di
stri
buti
ons
Di
stri
buti Assumpt ions For
mul
on a
Bi
nomi al -samplingwi t
hr eplacement
or f rom an i nfi
nit
e
populati
on( n<0. 05N)
-Pi sconst ant
Hypergeo -Sampl i
ngwi t
hr eplacement
metri
c fr
om af ini
tepopul ation
-P changes wi th each
sampleobser vati
ons

ThePoi ssonDi stri

buti
on
The Poi sson distri
bution is named af terthe French
Mat hemat ici
anSimeonDeni sPoisson( 1781-1840)
,who
publishedanar ticl
ein1837di scussingthedi st
ri
buti
on.
ThePoi ssondistri
butioni sanot herdiscret
epr obabil
it
y
distri
bution which is used t o descr i
be a numberof
processes,i ncl
udingthedi str
ibuti
onoft el
ephonecal l
s
goingt hroughaswi tchboar dsy stem,t hedemandof
patientsf orser
v i
ceataheal t
hi nst
itut
ion,thearri
valof
tr
ucksand car satat oolboot h,and t henumberof
accidentsatani nter
sect ion.

Whi
l
eabi
nomi
alr
andom v
ari
abl
ecount
sthenumberof
Page|
44
 45
successes thatoccuri naf i
xed numberoft r
ials,a
Poisson random v ar
iabl
e countsthe numberofr ar
e
events(successes)thatoccuri
naspeci f
iedcont
inuous
ti
mei nt
ervalorspecifi
edregi
on.

The Poisson di
str
ibut
ion has t
he f
oll
owi
ng
char
act
eri
sti
cs.

1.
The pr obabili
ty of an occur rence i s the same
throughoutthetimeinterv
al orspaceperuni t.
2.
The number of occur rences i n one i nt erv
al i s
independentoft henumberofoccur rencesinanot her
inter
val.
3.
The pr obabil
it
y oft wo ormor e occur r
ences i na
subinterval
issmallenought obei gnored.
4.
Itmustbe possi bl
et o divide the time intervalof
inter
estintomanysubi nt
er vals.
5.
Theexpect ednumberofoccur r
encesi nani ntervalis
proporti
onal t
othesizeoft hei nt
erval.

ExamplesofPoi
ssonrandom variabl
e
1.Thenumberofai rpl
anesar ri
vi
ngatanai r
porti
n
anhour.
2.Thenumberofaccidentsatafactoryi
naday.
3.Thenumberofcarscrossingabr i
dgedur
ingafiv
e
secondi
nter
val
4.Thenumberofmisprint
sonapageofnewspr i
nt
5.The numberofwhi te blood cel
lsin a bl
ood
Page|
45
 46
suspensi
on.
6.
Thenumberofty
pographi
cal
err
orsonapage.
7.
Thenumberofbact
eri
ainanounceoff
lui
d.

Thef
ormul
aforPoi
ssondi
str
ibut
ion

Exampl e:
1. Assumet hatabankknowsf r
om pastexper i
encet hat
between10and11a. m.ofeachday ,themeanar ri
v al
rateis60cust omer sperhour.Supposet hatthebank
wantst o determine t
he probabi
li
tyt hatexact l
yt wo
customer s willarri
vein a gi
ven mi nuteti
me mi nute
int
ervalbetween10and11a. m.Ar r
ivalsareassumedt o
beconst antov eragi venti
mei nterval
.Calculatet he
probabil
ity
.
Soluti
on:
λ=60cust omer s/hr t=1mi nute x = 2
customer s
µ=λ*ι=60cust omers/60mi
nutes*60mi nut
es=1
P(
x=2)= = =0.
1839
Thepr
obabil
i
tyofgett
ing2cust
omer
sduringt
henext
oneminut
ei n abankis0.
1839.Orther
eis18.
39%
Page|
46
 47
chancet
hatexact
ly2cust
omer
swi
l
lar
ri
vei
nonemi
nut
e
atabank.

2. Suppose t
hatbank customer s ar r
iverandoml yon
weekdayaft
ernoonsatanav er
ager ateof3.2customers
ever
yfourminutes.Whatistheprobabi li
tyofget
ting10
cust
omersduringaneightminuteinterval
?
λ=3.2customers/4minute t
=8mi nutes
x=10customer sµ=λ*ι=3. 2cust omers/4minutes*
8minut
es=6.4cust omers
P(
x=10)= = =0.
0528

Thepr obabi
li
tyofget
ti
ng10cust
omersduri
ngt
henext
ei
ghtmi nut
esinabanki s0.
0528.Orther
eis5.
28%
chancet hatexact
ly10cust
omerswil
larri
vei
neight
minutesatabank.

3. Ifar ealestat
eof fi
cesel l
s1. 6housesonav erage
weekdayandsal esofhousesonweekday sar
ePoisson
di
stribut
ed,whatistheprobabil
ityofsel
li
ng:
a)Fourhousesinaday?0. 0551
b) Nohousei naday ?0.2019
c)Morethanfiv
ehousesi naday ?0.0060
d) Tenormor ehousesi naday ?1–1=0. 000
e)Fourhousesintwoday s?0.1781

4.Asecr
etar
yty
pes75wor
dspermi
nut
eandav
eragessi
x
Page|
47
 48
er
rorsperhouroft y
ping.Assumi
nger r
oroccurr
ences
ar
eaPoi ssonprocess,whati
stheprobabi
li
tyt
hata225-
wordlet
terwil
lbetypedwithouter
ror?0.
7408

5.Apencompanyav erages1.2defectivepenspercar ton

produced( 200pens) .Thenumberofdef ect
spercar toon
isPoissondi st
ributed.
a)Whati st he pr obabili
tyofsel ecting a cart
oon and
fi
ndingnodef ect i
v epen?0.0312
b) Whati st he pr obabi l
i
tyoff inding ei
ghtormor e
defecti
vepensi nacar toon?0.0000
c)Suppose t hata pur chaseroft hese pens wi l
lquit
buyingfrom thecompanyi facar t
ooncont ai
nsmor e
thanthreedef ectives.Whati sthepr obabil
it
yt hatthe
purchaserwi l
lquitbuy ingfr
om thiscompany ?0. 0338

6. A cer tai
n manufact
urersel ls a machine thathas
numer ous mov i
ng part
s.A qual i
ty contr
olinspector
countst henumberofmov ingpartsthataremi sal
igned
as the numberofnonconf or
miti
es f ora par t
icul
ar
machi ne. It is believed t hat t he number of
nonconf ormi
ti
es per machi ne f oll
ows a Poi sson
di
stri
but i
on,withanav erageoft hreenonconf ormiti
es
permachi ne.
a)Determine the pr
obabili
tyt hatt he quali
ty control
i
nspect orf
indsnomor et hanonenonconf ormityona
par
ticularmachi
neselectedatrandom.0. 0996
b) What i s the probabi l
i
ty that t hr
ee or mor e
Page|
48
 49
nonconf ormi ti
es may be obt ained by t he qual it
y
controlinspect oront hreemachi nes?0. 9938
7.Thenumberofpai ntbl i
st erspr oducedbyanaut omat ed
painti
ng pr ocessatAssoci ated I ndust riesisPoi sson
distr
ibutedwi thar at
eof0. 06bl i
st erspersquar ef eet.
Thepr ocessi saboutt obeusedt opai ntani t
em t hat
measur es9by15f eet.
a)Whati st hepr obabi li
tyt hatt hef inishedsur f
acewi ll
havenobl isterinit?0. 0003
b) Whati st hepr obabi l
ityt hatt hef ini
shedsur facewi ll
havebet ween5and8, incl usi
ve?0. 4846
c)Whati st hepr obabi li
tyt hatt hef inishedsur f
acewi ll
havemor et han2bl i
st ers?0. 9873
8.Thedef ectsi nanaut omat edweav ingpr ocessatShar p
Industri
esar ePoi sson di stri
but ed atamean r ateof
0.00025persquar ef oot .Thepr ocessi st obeusedt o
weav eapi eceofmat er i
alst hatis5by16y ar
ds.
a)Whati st hepr obabi l
ityt hatt hispi ecewi llhav eno
defects?
b) Whati st hepr obabi l
ityt hatitwi l
l haveonedef ect?

MeanandVar i
anceofPoissonDistr
ibution
ThePoissondistr
ibut
ionhasonl yonepar ameter,the
expect
ed val
ue λι= µ.Addi ti
onally
,f orthe poison
dist
ri
buti
on,t
heexpectedvalueandv arianceareequal .
Theexpectedvaleandv ari
anceaPoi ssonprobabi l
it
y
dist
ri
buti
onar X)=µ=λι=δ2.
eE(
Page|
49
 50

Poisson Appr oximati

on t o Bi nomial Pr obabil
it
y
Distr
ibuti
on
ThePoi ssonpr obabi
li
tydistr
ibut
ioncanbeusedasan
approximation t othe binomialprobabili
tydistr
ibuti
on
whenP,t hepr obabil
it
yofsuccessi ssmal landn,t he
numberoft ri
als/samplesize,isl
arge.Simplysetµ=np
anduset hePoi ssontables.Asar ul
eoft humb,t he
approximationwi llbegoodwhenev erP≤0.05andn≥20.
Howev er,thisappr oxi
mat i
oni sreasonablyaccur at
ei f
n>20andnp≤5.

Bi
nomialtablesareof t
ennotavail
ableforlargeval
ues
ofn,sointhesecasest heappr
oxi
mat i
oncanbeusef ul
.
Soincaseswher eP≤0.05andn≥20,substi
tut
et hemean
ofthebi
nomi aldi
str
ibuti
on(µ=np)inplaceoft hemean
ofthePoissondistr
ibuti
on(µ=λι),sothatt hefor
mula

becomesP(
X)=
I
ngener
al,t
helar
gernisandsmal
l
erpi
s,t
hebet
terwi
l
l
bet
heapproxi
mati
on.

Whyappr oxi
mat ion?
-ThePoi ssonf ormulai
seasi
ertouset hanthebinomial
formula.
-Itcan be t abulated mor
e eff
ici
entlythan binomial
probabili
ti
es because Poi
sson distr
ibut
ion has only
onepar amet erµ( λι)
,whereasbi nomialdi
stri
buti
on
Page|
50
 51
hast
woparametersnandp.
Example:
n=500 p=0.02 µ=np=500*0.
02=10
n=1000 p=0.01 µ=np=1000*
0.01=10

Ifwewantt o cal cul

at eP(X)f orbot hcaseswecan
tabulate on a si ngle column-Poi sson.Had itbeen
binomi alf
ort heabov ecasesweshoul dhavefor
mul at
ed
twocol umns.
1.Acompanysel lsinsurancepol i
ciest oarandom sample
of1000menwhoar e35y earsofage.Thepr obabil
it
y
that a 35- year ol d man di es wi th in a y ear i
s
appr oximately0. 002.Whati st hepr obabi
l
itythatthe
insurancecompanywi llhavetopaycl aimson2ormor e
policiesnexty ear?
Solut i
on:
Steps: 1.Makesur eP≤0. 05andn≥20
P=0.002 n = 1000…………. Bot h
requirement ssatisfied
2.Calculateµ=np=1000* 0.002=2
3.CalculateP( X)
P(X≥2)=1–[ P(X=0)+P( X=1) ]

=1-[ +[ ]
=1–(0.
1353+0.
2707)
=0.
5940

Theexactbi
nomi
alpr
obabi
l
ityi
s0.
5942.
Page|
51
 52

2. Suppose t hatthe probabil

it
yofa bank maki ng a
mistake pr ocessing a depositi s 0.0003.If10,000
deposi tsareaudi ted,whatistheprobabili
tyt
hatexactl
y
sixmi stakeswer emadei nprocessi
ngdeposits?
Soluti
on:
Steps: 1.Makesur eP≤0.05andn≥20
P=0. 0003 n = 10, 000…………. Bot h
requir
ement ssat i
sfi
ed
2.Cal culateµ=np=10, 000*0.
0003=3
3.Cal culateP(X)

P(
X=6)=
=0. 0504
Cont i
nuousPr obabi l
ityDistri
but ion
Up t ot his poi nt,we hav ef ocused ourat tent i
on on
discrete distributions ofr andom v ari
abl es t hathav e
eitherafinitenumberofpossi bl ev al
ue( E.g.0, 1, 2,3…n)
oracount ablyi nfini
tenumberofv alues( E.g.0, 1, 2,3…),
and wecanal so listalloft hepossi blev aluesofa
discreterandom v ar
iableandi ti smeani ngf ul toconsi der
thepr obabi li
tyt hatapar ti
cul ari ndivi
dualv aluewi l
lbe
assumed.I ncont rast,acont i
nuousr andom v ariablehas
anuncount ablyi nfi
nitenumberofpossi blev aluesand
canassumeanyv al
uei nthei nterv albetweent wopoi nts
andb( a<x<b) . Asar esulttheonl ymeani ngfulwayt o
comput eapr obabi l
it
yi sthepr obabi l
it
yt hatt hev ar
iable
willfal
lwi thinaspeci f
iedregi on.Thati s,t hepr obabili
ty
Page|
52
 53
thatacontinuousrandom v
ari
abl
eX wi
l
lassumeany
part
icul
arv
alueiszero.

Itis anyrepresent
ati
on oft he val
ues ofconti
nuous
random var
iableandt heassociatedprobabi
li
ti
es.The
conti
nuousprobabil
it
ydistr
ibuti
oni ncl
udesthenormal
dist
ri
buti
onandexponential
distr
ibuti
on.

TheNor malDi st r
ibution
Thenor maldi stri
butioni sacont i
nuousdi stributi
ont hat
hasabel lshapeandi sdet erminedbyi tsmeanand
standar d dev iati
on.I t occupies a pl ace of cent ral
i
mpor tance i n cont inuous pr obabi l
i
ty di stributi
on i n
particularand st atistics in gener al
.I ti st he most
i
mpor tant t heor eti
cal di str
ibuti
on because of t he
foll
owi ngt hr
eer easons:
1.The nor maldi stri
but ion approximatest he obser v ed
frequencydi str
ibutionsofmanynat uralandphy sical
measur ement s,suchas,I QS,weights,hei ghts,sales,
productl if
et imes, et c.
2.Thenor maldi stri
but i
oncanof tenbeusedt oestimat e
binomi alpr obabi l
iti
eswhenn( sampl esi ze)i sgreater
than20.
3.Thenor maldi str
ibut ionisagoodappr oxi mati
onof
distri
but i
ons of bot h sampl e means and sampl e
propor ti
onsofl argesampl es( n>30) .

Char
act
eri
sti
csofnor
mal
dist
ri
but
ion
Page|
53
 54
i
.Iti
sacont inuousdi str
ibution.
i
i
.Ithasabel lshapeandi ssy mmet r
icalabouti ts
mean.
i
i
i. I tisasy mpt oti
ct otheX-axi s.
i
v. I text endsi nfinit
elyinei therdirect i
onf rom t he
mean.
v
.Itis def i
ned byt wo par amet ers:µ and δ.Each
combi nationoft heset wopar amet ersspeci fi
esa
uniquenor maldi st r
ibuti
on.Thev al
ueofµi ndicates
wheret hecent eroft hebel lli
es,whi leδr epresents
howspr eadout( orwi de)thedi stri
butioni s.
v
i. I ti smeasur edonacont i
nuousscal eandt he
probabilit
yofobt ainingapr eci
sev aluei szero.
v
ii
. Thet ot alareaundert hecur veisequalt o1. 0or
100%; 50%oft hear eai sabov et hemeanand50%i s
belowt hemean.
v
ii
i. Thepr obabili
tyt hatar andom v ariablewi llhave
av aluebet weenanyt wopoi ntsisequalt hear ea
undert hecur vebet weent hoset wopoi nts.

Eachcombi nati
onofµandδspeci f
iesauni quenor mal
di
st r
ibut
ion.Thisbr i
ngsabouthavi
ngani nfi
nitefamilyof
normaldi stri
buti
ons.Thispr obl
em ofdeal ingwi than
i
nf i
nit
e f amily of distr
ibut
ions can be sol ved by
tr
ansf or
mi ng allnormaldistri
but
ions t
ot he standard
normaldi str
ibuti
on,whichhasameanequalt o0anda
standard dev iati
on equal t o 1. Standar d Nor mal
Distr
ibuti
oni sanor maldi
stri
buti
oninwhi chthemeani s
Page|
54
 55
0andt
hest
andar
ddev
iat
ioni
s1.I
tisdenot
edbyz.

Anynor mal di
stri
butioncanbeconv ertedtothest
andar d
normal di str
ibuti
on by st andardizing each of i ts
observati
ons i nt erms of Z-v alues.The Z-v alue
measur est hedistanceinstandarddev iat
ionsbetween
themeanoft henor malcurv
eandt heX-v alueofi
nterest
.
Anyr andom v ari
ablecanbet ransformedt oastandar d
random variablebysubtract
ingthemeananddi vi
dingby
thestandarddev i
ation.

I
fa r andom vari
abl
e X has mean µ and st
andar
d
dev
iat
ionδ,thest
andar
dizedv
ari
abl
eZisdefi
nedas:

AZ-scor eisthenumberofst andarddev i

ationsthata
value,X,isawayf r
om themean.I fthevalueofXi sl ess
thant hemean,t heZ-scor
eisnegat iv
e;ifthev al
ueofX
i
sgr eaterthanthemean, t
heZ- scorei
sposi t
ive.Z-score
i
sal soknownasz- val
ue.Ast andardi
zedscor einwhi ch
themeani szeroandt hestandarddev i
ati
oni s1.TheZ
score i s used to r epr
esent t he standard nor mal
distr
ibuti
on

Thepr
obabi
l
itycal
cul
ati
onsi
nnor
maldi
str
ibut
ionar
e
Page|
55
 56
madebycomput i
ngar easundert hegr aph.Thus, tofind
thepr obabi l
it
yt hatar andom v ariablel ieswi thinany
specifici ntervalwemustcomput et hear eaundert he
normal cur v
eov ert hatinterv
al.
Probabi l
itiesforsomecommonl yusedi nterval
sar e:
a)68.26% of t he t ime,a nor malr andom v ari
able
assumesav aluewi thin±1δofi tsmean.
b) 95. 44% oft he t i
me,a nor malr andom v ari
able
assumesav aluewi thin±2δofi tsmean.
c)99.72% of t he t ime,a nor malr andom v ari
able
assumesav aluewi thin±3δofi tsmean.
Exampl e:
1.TheGr aduat eManagementAdmi ssionTest( GMAT)i s
widelyused bygr aduateschoolofbusi nessasan
entrancer equirement .Inonepar t
iculary ear,themean
scoref ort heGMATwas485, withast andar ddev i
ati
on
of105.assumi ng t hatGMAT scor es ar e normal l
y
distri
but ed,whati st hepr obabilit
yt hatar andoml y
selectedscor ef r
om t hisadmi ni
strationoft heGMAT:
a)Fallsbet ween600andt hemean, i
ncl usive?
b) I sgreat erthan650?
c)Islesst han300?
d) Fal l
sbet ween350and550, i
nclusive?
e)Islesst han700?
f)Isexact ly500?
g) I f500appl icantst akethet est,howmanywoul dyou
expectt oscor e590orbel ow?
Solution:
Page|
56
 57
St
epstof indt hepr obabili
tyvalueofar andom v
ari
abl
e
whi
chl
iesov erani nterv
al:
Cal cul
atet heappr opriat
ezv al
ues
Findt hear eas( probabil
i
ties)inthetable
I
nt erpretyourr esults

µ=485 δ=105 485≤X≤600

a)
P(485≤X≤600)=?
1.Fi
rstconver
tXv al
uesi
ntoZ-
scor
eusi
ngt
hef
ormul
a

Z485=0
Z600= =+1.
10

P(
485≤X≤600)=P(0≤Z≤+1.
10)
=P( 0to+1.
10)
=0.36433
b) P( X>650)=?
1.Fi
rstconver
tXv al
uesintoZ-scor
eusi
ngt
hef
ormul
a

Z650= =+1.
57

P(
X>650)=P( Z>+1.57)
=0.
5-P( 0to+1.57)
=0.5-0.44179
=0.05281

Page|
57
 58
c)
P(X<300)=?
1.Fi
rstconv
ertXv
aluesi
ntoZ-
scor
eusi
ngt
hef
ormul
a

Z300= =-
1.76

P(
X<300)=P( Z<-1.
76)
=0.5-P( 0to-1.
76)
=0.5-0.46080
=0.03920
d) P( 350≤X≤550)=?
1.Fi
rstconver
tXv al
uesintoZ-
scor
eusi
ngt
hef
ormul
a

Z350= =-
1.29
Z550= =+0.
62

P(350≤X≤550)=P( -
1.29≤Z≤-1.
29)
=P( 0to-1.
29)+P( 0to0.62)
=0.40147+0. 23237
=0.
63384
e)
P( X<700)=?
1.FirstconvertXval
uesi ntoZ-scor
eusingt
hef
ormul
a

Z700= =+2.
05

P(
X>300)=P(Z<+2.
05)
=P(X<485)+P(485≤X<700)
Page|
58
 59
=0.
5+P(0to+2.05)
=0.
5+0.47982
=0.
97982

f
)P(X=500)=0.Thepr obabil
it
yofanexact /si
ngl
ev al
ue
ofacontinuousrandom v
ariabl
eiszero.Consequent
ly,
theprobabil
it
yofani nt
ervalisthesamewhet herthe
endpointsareincl
udedornot.

g) To f i
nd the expected numberofappl icant
s who
score590orbel ow,wef ir
stfi
ndP( X≤590)andwe
mul t
ipl
yitbythenumberofapplicant
s.
P(X≤590)=?
1.FirstconvertXvaluesintoZ-scoreusingtheformul
a

Z590= =+1.
00

P(X≤590)=P( Z≤+1.
00)
=P( X<485)+P( 485≤X<590)
=0.5+P( 0to+1.00)
=0.5+0. 34134
=0.84134
If500applicantstakethet est
,thenumberofstudent
s
expected to score 590 orbel ow i
s 500(
0.84134)=
420.65or421st udents.

2. The r
esul
tofan exam scor
ef ora gi
ven classis
normal
lydi
str
ibut
ed.I
fthemeanscor
eis85poi ntsand
Page|
59
 60
thestandarddev iat
ioni sequalt
o20point
s,f i
ndt
he
cutof
fpassinggradesucht hat83.
4%oft
hosetaki
ngt
he
testwil
lpass.
Solut
ion:
µ=85 prob.Ofpassing=83.4%
δ=20 cutoffpoint=?

Since83.4%isgreat
ert han50%,thecut
of fpoi
ntshoul
d
belessthanthemean, andhencetheZ-v
alueisnegati
ve.
Andt hi
scall
sfortheinverseuseofthestandar
dnormal
table.

(
Z/P=0.
334)=-
0.97
-
0.97=
-19.
4=X- 85
X=65. 6Poi nt
s–Mi nimum pointt
opasst het est
.
3.Dataaccumul atedbyt heNationalClimat i
cDat aCent
er
showst hattheav eragewindspeedi nmi lesperhourfor
Addis i s 9.7mph. Suppose t hat wi nd speed
measur ements ar e normall
y distri
buted f ora given
geographicallocati
on.If22.45% oft het i
met hewind
speedmeasur ement saremor et han11. 6mph,whati s
thestandarddev i
ati
onofwi ndspeedi nAddi s?
Solut
ion:
µ=9. 7mph δ=? X>11. 6
P(X>11. 6)=22.45%
(Z/P=0. 2755)=+0. 76
+0.97=
Page|
60
 61
0.
97δ=1.
9
δ=2.5

4.Thecy l
i
ndermakingmachinehasδ=0. 5mm andµ=
25mm.wi t
hinwhatint
ervalofvaluescenter
edatt
he
meanwill
,thedi
amet
ersof80%ofthecyl
inderl
ie?
Sol
uti
on:
µ=25mm δ=0.5mm

From the st
atementi
tis clearthatthe i
nter
valis
center
edatthemean;i.
e.,50% ofthe80% (40%)l
ies
belowthemeanand50%li
esabovethemean.
(Z/P=0.
4)=±1.28
X1=µ-Zδ X2=µ+Zδ
-1.
28= +1.28=
-
0.64=X1-
25 +0.
64=X2-
25
X1=24.
36mm X2=25.
64mm

80% ofthe di
ameteroft
he cy
li
nderl
i
es bet
ween
24.
36mm and25.
64mm.

5.Thel ivesofli
ghtbul
bsf ol
low anormaldist
ri
buti
on.I
f
90%oft hebul
bshaveli
vesexceeding2000hrsand3%
havelivesexceedi
ng6000hr s.Whatarethemeanand
standarddevi
ati
onofthel
ivesofli
ghtbul
bs?
Soluti
on:
P(X>2000)=0.90 P(
X>6000)=0.03
µ=? δ=?
Page|
61
 62
(
Z/P=0.
4)=-1.
28 (Z/
P=0.
47)=+1.
88
-
1.28= +1.
88=
-
1.28δ=2000-µ +1.
88δ=6000-µ
µ=2000+1.28δ µ=6000-1.
88δ

Usi
ngsi
mult
aneousequat
ion,
µ=6000-1.
88δ
µ=2000+1.28δ
3.
16δ=4000
δ=1265.
82

µ=2000+1.28δ
=2000+1.
28( 1265.
82)
=3620.
25points

6. On a civilservi
ce exam,t he grades are normall
y
di
stri
butedwi t
hµ=70poi nt
sandδ=10poi nts.The
pol
icedepartmenthirestheappli
cantswhosegr adesare
among t he t
op 10% oft he popul
ation.Whati sthe
minimum graderequiredtobehired?
Solut
ion:
µ=70poi nt
s δ=10points

(
Z/P=0.
4)=+1.
28

+1.
28=
+1.
28=

Page|
62
 63
12.
8=X-µ
X-70=12.
8
X=82.
8–themi
nimum gr
ader
equi
redt
obehi
red.

7.Abaker yshopsell
sl oavesoffreshl
ymadebr ead.Any
unsol
dl oavesattheendoft hedayar eei
therdi scarded
orsoldelsewhereatal oss.Thedemandf orthisbr ead
hasfollowedanor maldi st
ri
buti
onwi thµ=35l oaves
andδ=8l oav
es.How manyl oavesshouldt hebaker y
makeeachdaysot hattheycanmeett hedemand90%
oftheti
me?
Solut
ion:
µ=70l oaves δ=8loav es
(
Z/P=0.4)=+1.28

+1.
28=
+1.
28=
10.24=X-35
X=45. 24≈46-bystocki
ng46loav
esofbreadseachday
,
thebakerywi
llmeetthedemandfort
hisproduct90%of
theti
me.

NormalAppr oximationtoBinomialProbabil
it
y
Whenabi nomi alproblem i
nvol
vesasn- v
aluelargerthan
20,thebinomi altablesmaynotbeused.I nsuchacase,
thePoissonappr oxi
mat i
onisnotappropri
ate,andhence
anothermet hodofsol vi
ngtheprobl
em mustbef ound–
thenormal distri
bution.
Page|
63
 64

Thenor maldistri
buti
oni sbell-
shapedandsy mmetri
cal
withmean,µ,andst andarddev i
ati
on,δ.However,t
he
bi
nomi aldist
ri
buti
oni ssymmet ri
calonl
yifP=0.
5.Hence,
i
fni slargeandpi scl oseto0.5,thenor
maldist
ri
buti
on
provi
des a good appr oxi
mation to the binomial
di
stri
bution.Theappr oxi
mat i
onsarequit
egoodwhennp
andnqar egreaterthan5.

I
nbi
nomialdistr
ibut
ion
-Whenpi ssmal l(e.g.0.
1) ,t
hedist
ri
buti
onisskewed
tot
her i
ght.Mode<Medi an<Mean.
-As p increases (e.g.0.3),the skewness i
sl ess
not
iceable.
-Whenp=0. 5thedistri
butionissymmetri
cal.Mode=
Median=Mean.
-Whenp>0. 5,t
hedi str
ibuti
onisskewedt otheleft
.
Mean>Medi an<Mode

Toappr oxi
mat ebi nomialbynor malthef oll
owingruleis
used:
 When t he nor malpr obabi l
itydistr
ibuti
on is used to
approxi
mat e bi nomi al di stributi
on, the mean and
standard deviati
on f ort he nor malappr oxi
mation are
basedont heexpect edv al ueandst andarddev i
ati
onof
thebinomialpr obabil
iti
es,i .e.,µ=npandδ=√npq.And
thenormaldi st r
ibuti
onpr ov i
desagoodappr oximation
tothebinomi alifni slarge( n≥50)andpi scl
oset o0.5
Page|
64
 65
andt
her
ebynpandnqar
egr
eat
ert
han5.

When we use a nor mal pr obabi

li
tyv alue as an
approximat i
on of a bi nomi al probabil
i
ty, we ar e
subst i
tuti
ngacont inuouspr obabili
tydistr
ibut
ionf ora
discrete probabi
l
ity distr
ibut
ion.Such a subst it
ution
requiresaCONTI NUI TYCORRECTI ONFACTOR( addi
tion
andsubt r
acti
onof0. 5t othedi scr
etevalueofx) ,i.
e.,a
correctionof±0.5dependi ngont heproblem i
srequired.

The need for conti

nui
ty cor
rect
ion f
act
or can be
summarizedasf
ollows:

Val
uesbei
ngdet
ermi
ned Cor
rect
ion
1.X> +0.5
2.X≥ -0.5
3.X< -0.5
4.X≤ +0.5
5.≤X≤ -0.
5and+0.5
6.<X< +0.5and–0.
5
7.X= -0.
5and+0.5

Withoutthecont
inui
tycor
rect
ion,
thenormaldist
ri
buti
on
wil
l generall
y underest
imat
e bi nomi
al probabi
li
ti
es
especial
l
yifnissmall.
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65
 66

To appr oximate a bi nomialdistr

ibution by nor mal
dist
ri
buti
on,at estmustbemadet odet erminewhet her
theinter
valµ±3δl iesbet ween0andn,whi charet he
l
ower and upper l imi tsrespecti
vely
,of a bi nomi al
dist
ri
buti
on.Thi si sbecauset heempi ricalrulestates
thatapproximatel
y99. 72%,oralmostall,ofthev al
uesa
normalcur veli
ewi thint hr
eestandarddev iati
onsoft he
mean.I fµ±3δdoesnotl i
ebetween0andn,don’ tuse
the normaldi str
ibution to work a binomi alproblem,
becauset heapproximat ionisnotgoodenough.

In shor t
,t o use a nor mal di str
ibut
ion as an
appr
oximat iontobinomi alwehav ethefoll
owingsteps.
1.
Checkt hatnislarge( n≥50)andpi scloseto0.5as
wel lasnpandnq>5.
2.
Cal culateµ(np)andδ( √npq).
3.
Checkt hatµ±3δl iesbet ween0andn.
4.
Uset hecont i
nuitycor recti
onf act
oranddet ermine
theappr opr
iat
einter val.
5.
Cal culatethepr obabi li
tyv al
ue,bycal cul
ati
ngt he
areawhi chiscover edbyt heinterv
al.
6.
Interprettheresults.

Example:
1.
Accor
ding t
o ar ecentstudyconduct
ed bytheAddi s
AbabaUniversi
ty,87% ofalleveni
ngcol
legestudents
alsowork.I
ft hi
sf i
gur
est i
llhol
dsandif120ev ening
Page|
66
 67
classcol l
egestudentsarerandomlyselect
ed,whati
s
thepr obabi
li
tyt
hatlessthan100alsowork?Usenormal
distr
ibuti
ontoapproximatet
hebinomial
.

Solution:
1.n=120-l ar
ge p=0.87–iscl oseto0.5
np=0. 87* 120=104. 40,nq=0. 13* 120=15. 6….
.
Bothgr eaterthan5.
2.µ = np = 120* 0.
87 = 104. 40and δ = √npq =
√120* 0. 87*0.13=3.684
3.µ±3δ=104. 40±3( 3.684)=104.40±11. 052=
92.948≤µ±3δ≤115. 052.Hence,theinterv
al(92.95
to115. 05)i sbetween0andn( 120).
4.P(X<100)ofbi nomialischangedintoP( X<99. 5)of
normal byappl yi
ngthecont i
nui
tycorrecti
onfactor.
5.P(X<99. 5)=?
Z99.5= =-1.33
P(X<99. 5)=P( Z<-1.
33)
=0.5-P( 0t o-1.33)
=0.5-0.40824
=0.09176
6.
If87%oft heal ltheev eni
ngcoll
egeclassstudents
wor k,9.
18%oft het i
met heAddisAbabaUni v
ersit
y
woul d getl ess t han 100 eveni
ng class coll
ege
studentswor kinginasampl eof120eveningcoll
ege
classstudents.

2. I
nat
rav
elst
udy
,theEt
hiopi
anTour
ism Commi
ssi
on
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67
 68
repor t
edt hatdur ingt heEt hi
o-Eritreanwar ,29% oft he
touristswhocamet oEt hiopiasai dt hatthecr i
siswoul d
affectt heirv acationpl ans.
a)Att heendoft hewari ft
hef igurei ssti
ll29%,i na
random sampl e of 150 t rav elers,what i st he
probabi lit
yt hat20orf ewerr espondedy esthatt he
Ethio-Eritreancr i
siswoul daffectt heirvacati
onpl ans?
0.0000
b)Howev er,ast udyatt heendoft hewari ndicatedthat
only7%oft het ravelersf el
tatt hatt imethattheEt hio-
Erit
r eancr i
siswoul daf fecttheirv acationplans.What
ist hepr obabi li
tyar andom sampl eof150t r
av el
er s
woul dresul tin20orf ewert rav el
er ssayi
ngy est hat
theEt hio-Eritreancr i
siswoul daf fecttheirvacat i
on
plans?0. 99934

3. At r
ue-f
alsetestcont
aini
ng100questi
onsisgiv
entoa
studentwhoi stotal
lyignor
antofthesubjectmatter
.
Whati sthepr obabi
li
tythatt
hestudentget
sexactl
y65
correct?0.00042

NormalAppr oxi
mat iontoPoissonPr obabil
it
ies
Whent hemean( λι)aPoissonpr obabil
i
tydistributi
onis
ver
yl arge,the nor maldi st
ribut i
on can be used t o
appr
oximatePoi ssonpr obabil
ities.Suchappr oxi mati
on
i
sgener al
lyconsideredtobeaccept abl
ewhenλι≥10.
Themeanandst andarddev i
ationusedwi t
ht henor mal
appr
oximation are base on t he expect ed v alue and
Page|
68
 69
st
andar
d dev
iat
ion f
ort he numberofevent
sint
he
Poi
ssonpr
obabi
li
tydi
str
ibut
ion.µ=λιandδ=√λι

Exactl
yasf ort he nor malappr oxi
mat ion ofbi nomial
probabil
iti
es,acor r ecti
onfactorforcontinui tyshouldbe
usedi nconj unctionwi ththenor malappr oximationof
Poissonpr obabili
ties.
Exampl e:
1. supposewewi sht odeterminethepr obabi l
i
t yt
hat15
or mor e mai ntenance cal l
s willbe r equi red on a
randoml yselectedday ,gi
venaPoi ssonr andom v ari
abl
e
withλ=10cal lsperdaybynor maldist
ri
but i
on.
Soluti
on:
Poisson Normal
λ=10cal l
sperday µ=λι=10
ι=1day δ=√λι=√10=3. 16
P( X≥15)=? P(X≥14. 5)=?
P( X≥15)=1-P( X≤14) Z14.5= =
+1.
42
=1–0. 9165
=0.0835 P(
X≥14.
5)=P
(
Z≥+1.42)
=0.
5–P( 0to+1.
42)
=0.
5–0.42220
=0.
0778

Aswecanseef rom t
heabov
er esul
t,t
hediffer
enceis
onl
y 0.
0057(
0.0835 -0.
0778).As µ i ncr
eases the
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69
 70
di
ff
erencedecr
eases.

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70