# The Binomial Distribution

     

Introduction and Concept Characteristics Binomial Formula Applications Binomial Tables Applications

Random Variables
A random variable is a numerical description of the A random variable is a numerical description of the outcome of an experiment. outcome of an experiment. A discrete random variable may assume either a A discrete random variable may assume either a finite number of values or an infinite sequence of finite number of values or an infinite sequence of values. values. A continuous random variable may assume any A continuous random variable may assume any numerical value in an interval or collection of numerical value in an interval or collection of intervals. intervals.

Example: JSL Appliances

Discrete random variable with a finite number of values

Let x = number of TVs sold at the store in one day, Let x = number of TVs sold at the store in one day, where x can take on 5 values (0, 1, 2, 3, 4) where x can take on 5 values (0, 1, 2, 3, 4)

Example: JSL Appliances
s

Discrete random variable with an infinite sequence of values Let x = number of customers arriving in one day, Let x = number of customers arriving in one day, where x can take on the values 0, 1, 2, .. .. .. where x can take on the values 0, 1, 2,

We can count the customers arriving, but there is no finite upper limit on the number that might arrive.

Random Variables
Question Family size Random Variable x Type

x = Number of dependents Discrete reported on tax return

Distance fromx = Distance in miles from Continuous home to store home to the store site Own dog or cat Discrete x = 1 if own no pet; = 2 if own dog(s) only; = 3 if own cat(s) only; = 4 if own dog(s) and cat(s)

Discrete Probability Distributions
The probability distribution for a random variable The probability distribution for a random variable describes how probabilities are distributed over describes how probabilities are distributed over the values of the random variable. the values of the random variable. We can describe a discrete probability distribution with a table, graph, or equation.

Discrete Probability Distributions
The probability distribution is defined by a The probability distribution is defined by a probability function,, denoted by f(x), which provides probability function denoted by f(x), which provides the probability for each value of the random variable. the probability for each value of the random variable. The required conditions for a discrete probability function are: f(x) > 0 Σ f(x) = 1

Discrete Probability Distributions
s s

Using past data on TV sales, … a tabular representation of the probability distribution for TV sales was developed. Number Units Sold of Days 0 80 1 50 2 40 3 10 4 20 200 x 0 1 2 3 4 f(x) .40 .25 .20 .05 .10 1.00
80/200

Discrete Probability Distributions

Graphical Representation of Probability Distribution .50
Probability

.40

.30 .20 .10 0 1 2 3 4

Values of Random Variable x (TV sales)

Discrete Uniform Probability Distribution
The discrete uniform probability distribution is the The discrete uniform probability distribution is the simplest example of a discrete probability simplest example of a discrete probability distribution given by a formula. distribution given by a formula. The discrete uniform probability function is The discrete uniform probability function is f(x) = 1/n
the values of the random variable are equally likely

where: n = the number of values the random variable may assume

Expected Value and Variance
The expected value,, or mean, of a random variable The expected value or mean, of a random variable is a measure of its central location. is a measure of its central location. E(x) = µ = Σ xf(x) The variance summarizes the variability in the The variance summarizes the variability in the values of a random variable. values of a random variable. Var(x) = σ
2 2 2 = Σ (x - µ )2f(x)

The standard deviation,, σ ,, is defined as the positive The standard deviation σ is defined as the positive square root of the variance. square root of the variance.

Expected Value and Variance

Expected Value
x 0 1 2 3 4 f(x) xf(x) .40 .00 .25 .25 .20 .40 .05 .15 .10 .40 E(x) = 1.20

expected number of TVs sold in a day

Expected Value and Variance

Variance and Standard Deviation
x
0 1 2 3 4

x-µ
-1.2 -0.2 0.8 1.8 2.8

(x - µ )2
1.44 0.04 0.64 3.24 7.84

f(x) (x - µ )2f(x)
.40 .25 .20 .05 .10 .576 .010 .128 .162 .784

TVs square Variance of daily sales = σ 2 = 1.660 d

Standard deviation of daily sales = 1.2884 TVs

Introduction and Concept
 

Based on Bernoulli Process. Is a discrete-time stochastic process consisting of a sequence of independent random variables taking values over two symbols We are not dealing with samples but with population values so dealing with parameters. Consider tossing a coin twice. The possible outcomes are: no heads: P (m = 0) = q2 one head: P (m = 1) = qp + pq (toss 1 is a tail, toss 2 is a head or toss 1 is head, toss 2 is a tail) = 2pq two heads: P(m = 2) = p2 Now recalling square of Binomial (p + q) is equal to the same as if added above.

Characteristics
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Experiment consist of n identical trials Each trial has only two outcomes The probability of one outcome is p and the other is q=1-p The probability stays the same from one trail to the next. The trials are statistically independent We are interested in r, the number of success observed during the n trials.

Binomial Formula

Binomial distribution: the probability of r success out of N trials

P (r , N , p ) = C N ,r p r q N − r =
0.40

( )p q
N r r

N −r

=

N! p r q N −r r!( N − r )!
0.14

0.30 P (k , 7, 1/3)

Expectation Value µ = np = 7 * 1/3 = 2.333...
P (k , 50, 1/3)

0.12 0.10 0.08 0.06 0.04 0.02

Expectation Value µ = np = 50 * 1/3 = 16.667...

0.20

0.10

0.00 0 2 4 k 6 8 10

0.00 0 5 10 15 k 20 25 3

Binomial Distribution
s

Binomial Probability Function

n! f (x) = px (1 − p)( n− x) x!(n − x)!
where: f(x) = the probability of x successes in n trials n = the number of trials p = the probability of success on any one trial

Binomial Formulas
Mean

∂  N N m N −m  ∑ m p q =0 ∂p  m = 0  
m=0

( )

∑m

N

( )p
N m

m −1 N − m

q

− ∑
N N m

N

p −1 ∑ m
m=0

N

( )p
N m

m N −m

q

= N (1 − p) −1 ∑

m= 0

( )p

m=0

( )p
N m m

m

( N − m)(1 − p ) N − m −1 = 0
N

(1 − p ) N − m − (1 − p) −1 ∑ m
m=0

( )p
N m

m

(1 − p ) N − m

p −1µ = N (1 − p ) −1 ⋅ 1 − (1 − p ) −1 µ

µ = Np
Standard Deviation

( m µ2 ( ,N ) ∑ − ) Pm ,p 2 = σ =m0 N =p N q Pm ,p ∑ ( ,N )
m0 =

N

Binomial Distribution
s

Binomial Probability Function n! f (x) = px (1 − p)( n− x) x!(n − x)!

Probability of a particular Number of experimental sequence of trial outcomes outcomes providing exactly with x successes in n trials x successes in n trials

Binomial Distribution
s

Example: Evans Electronics Evans is concerned about a low retention rate for employees. In recent years, management has seen a turnover of 10% of the hourly employees annually. Thus, for any hourly employee chosen at random, management estimates a probability of 0.1 that the person will not be with the company next year.

Binomial Distribution
s

Using the Binomial Probability Function Choosing 3 hourly employees at random, what is the probability that 1 of them will leave the company this year? Let: p = .10, n = 3, x = 1

n! f ( x) = p x (1 − p ) ( n − x ) x !( n − x )!
3! f (1) = (0.1) 1 (0.9) 2= 3(.1)(.81) = 1!(3 − 1)! .243

Binomial Distribution

Tree Diagram
1st Worker 2nd Worker Leaves (.1) Leaves (.1) 3rd Worker L (.1) S (.9) L (.1) Stays (.9) S (.9) Leaves (.1) Stays (.9) Stays (.9) S (.9) L (.1) S (.9) L (.1)

x
3 2 2 1 2 1 1 0

Prob. .0010 .0090 .0090 .0810 .0090 .0810 .0810 .7290

Binomial Distribution
s

Using Tables of Binomial Probabilities
p x 0 1 2 3 .05 .10 .15 .20 .25 .30 .35 .40 .45 .50

n 3

.8574 .7290 .6141 .5120 .4219 .3430 .2746 .2160 .1664 .1250 .1354 .2430 .3251 .3840 .4219 .4410 .4436 .4320 .4084 .3750 .0071 .0270 .0574 .0960 .1406 .1890 .2389 .2880 .3341 .3750 .0001 .0010 .0034 .0080 .0156 .0270 .0429 .0640 .0911 .1250

Binomial Distribution
s

Expected Value Varianc e Standard Deviation

E(x) = µ = np

s

Var(x) = σ

2 2

= np(1 − p)

s

σ = np(1 p) −

Binomial Distribution
s

Expected Value E(x) = µ = 3(.1) = .3 employees out of 3

s

Variance Var(x) = σ
2 2

= 3(.1)(.9) = .27

s

Standard Deviation

σ = 3(.1)(.9) = .52 employees

Applications

 

A committee consisting of 5 members votes on whether or not to hire a new manager. The probability that each member’s vote for candidate A is 0.6. Only if over half of the committee agrees to hire her does candidate A receive the offer. 1) What is the probability that the candidate A gets an offer. 2) What is the probability that the candidate A does not get the offer

Selected = 0.3456+ 0.2592+ 0.0778 =0.6826  Not Selected = 1-0.6826 = 0.3174

Binomial Tables
Binomial Tables are used to same time  Binomial Tables ..\Binom_Tab.pdf

Applications

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A committee consisting of 5 members votes on whether or not to hire a new professor. The probability that each member’s vote for candidate A is 0.6. Only if over half of the committee agrees to hire her does candidate A receive the offer. 1) What is the probability that the candidate A gets an offer. (Hint: 0.6=0.4) 2) What is the probability that the candidate A does not get the offer

Poisson Distribution
A Poisson distributed random variable is often A Poisson distributed random variable is often useful in estimating the number of occurrences useful in estimating the number of occurrences over a specified interval of time or space over a specified interval of time or space It is a discrete random variable that may assume It is a discrete random variable that may assume an infinite sequence of values (x = 0, 1, 2, .. .. .. ). an infinite sequence of values (x = 0, 1, 2, ).

Poisson Distribution
Examples of a Poisson distributed random variable: the number of knotholes in 14 linear feet of the number of knotholes in 14 linear feet of pine board pine board the number of vehicles arriving at a toll the number of vehicles arriving at a toll booth in one hour booth in one hour

Poisson Distribution
s

Two Properties of a Poisson Experiment for any two intervals of equal length. for any two intervals of equal length.

1. The probability of an occurrence is the same 1. The probability of an occurrence is the same 2. The occurrence or nonoccurrence in any 2. The occurrence or nonoccurrence in any

interval is independent of the occurrence or interval is independent of the occurrence or nonoccurrence in any other interval. nonoccurrence in any other interval.

Poisson Distribution

Poisson Probability Function
µ x e −µ f ( x) = x!

where: f(x) = probability of x occurrences in an interval µ = mean number of occurrences in an interval e = 2.71828

Poisson Distribution
s

Example: Mercy Hospital Patients arrive at the emergency room of Mercy Hospital at the average rate of 6 per hour on weekend evenings. What is the probability of 4 arrivals in 30 minutes on a weekend evening?

Poisson Distribution
s

Using the Poisson Probability Function

µ = 6/hour = 3/half-hour, x = 4
34 (2.71828)− 3 f (4) = = .1680 4!

Poisson Distribution
s

Poisson Distribution of Arrivals
Poisson Probabilities
0.25 0.20 0.15 0.10 0.05 0.00 0 1 2 3 4 5 6 7 8 9

Probability

actually, the sequence continues: 11, 12, …
10

Number of Arrivals in 30 Minutes

Poisson Distribution
A property of the Poisson distribution is that A property of the Poisson distribution is that the mean and variance are equal. the mean and variance are equal.

µ =σ

2

Poisson Distribution
s

Variance for Number of Arrivals During 30-Minute Periods

µ =σ

2 2

=3

Continuous Probability Distributions
Uniform Probability Distribution  Normal Probability Distribution  Normal Approximation of Binomial Probabilities  Exponential Probability Distribution

f (x)

Uniform Normal

f (x) Exponential

f (x)

x x

x

Continuous Probability Distributions
s

A continuous random variable can assume any value in an interval on the real line or in a collection of intervals. It is not possible to talk about the probability of the random variable assuming a particular value. we talk about the probability of the Instead, random variable assuming a value within a given interval.

s

s

Continuous Probability Distributions
s

The probability of the random variable assuming a value within some given interval from x1 to x2 is defined to be the area under the graph of the probability density function between x1 and x2. Exponential
Uniform

f (x)

f (x)

f (x)

Normal

x1 x2 1 2

x x1 x2 2 1 x

x1 1

x12 x2 x12 2

x

Uniform Probability Distribution
s

A random variable is uniformly distributed whenever the probability is proportional to the interval’s length. The uniform probability density function is: f (x) = 1/(b – a) for a < x < b f (x) = 1/(b – a) for a < x < b =0 elsewhere =0 elsewhere

s

where: a = smallest value the variable can assume b = largest value the variable can assume

Uniform Probability Distribution
s

Expected Value of x E(x) = (a + b)/2 E(x) = (a + b)/2

s

Variance of x Var(x) = (b - a)2/12 Var(x) = (b - a)2/12

Uniform Probability Distribution
s

Example: Slater's Buffet Slater customers are charged for the amount of salad they take. Sampling suggests that the amount of salad taken is uniformly distributed between 5 ounces and 15 ounces.

Uniform Probability Distribution
s

Uniform Probability Density Function f(x) = 1/10 for 5 < x < 15 f(x) = 1/10 for 5 < x < 15 =0 elsewhere =0 elsewhere where: x = salad plate filling weight

Uniform Probability Distribution
s

Expected Value of x E(x) = (a + b)/2 = (5 + 15)/2 = 10

s

Variance of x
2 Var(x) = (b - a)2/12 2 = (15 – 5)2/12 = 8.33

Uniform Probability Distribution

Uniform Probability Distribution for Salad Plate Filling Weight
f(x)

1/10 x

5 10 15 Salad Weight (oz.)

Uniform Probability Distribution
What is the probability that a customer will take between 12 and 15 ounces of salad? f(x) P(12 < x < 15) = 1/10(3) = .3 1/10 x

5 10 12 15 Salad Weight (oz.)

Normal Probability Distribution
 
s

The normal probability distribution is the most important distribution for describing a continuous random variable. It is widely used in statistical inference. It has been used in a wide variety of applications:of people • Heights • Scientific measurements • Test scores • Amounts of rainfall

Normal Probability Distribution
 Normal

Probability Density Function
1 − (x −µ )2 / 2 σ2 f ( x) = e σ 2π

where: µ σ π e

= = = =

mean standard deviation 3.14159 2.71828

Normal Probability Distribution
s

Characteristics The distribution is symmetric; its skewness measure is zero.

x

Normal Probability Distribution
s

Characteristics The entire family of normal probability distributions is defined by its mean µ and its standard deviation σ .
Standard Deviation σ

Mean µ

x

Normal Probability Distribution
s

Characteristics The highest point on the normal curve is at the mean, which is also the median and mode.

x

Normal Probability Distribution
s

Characteristics

The mean can be any numerical value: negative, zero, or positive.

x
-10 0 20

Normal Probability Distribution
s

Characteristics

The standard deviation determines the width of the curve: larger values result in wider, flatter curves.

σ

= 15

σ

= 25 x

Normal Probability Distribution
s

Characteristics

Probabilities for the normal random variable are given by areas under the curve. The total area under the curve is 1 (.5 to the left of the mean and .5 to the right).

.5

.5 x

Normal Probability Distribution
s

Characteristics

68.26% values of a normal random variable of are within of its mean. +/- 1 standard deviation 95.44% values of a normal random variable of +/- 2 standard deviations are within of its mean. 99.72% values of a normal random variable of +/- 3 standard deviations are within of its mean.

Normal Probability Distribution
s

Characteristics
99.72% 95.44% 68.26%

µ – 3σ µ – 1σ µ – 2σ

µ

µ + 3σ µ + 1σ µ + 2σ

x

Standard Normal Probability Distribution
A random variable having a normal distribution A random variable having a normal distribution with a mean of 0 and a standard deviation of 1 is with a mean of 0 and a standard deviation of 1 is said to have a standard normal probability said to have a standard normal probability distribution.. distribution

Standard Normal Probability Distribution
The letter z is used to designate the standard normal random variable.
σ = 1

0

z

Standard Normal Probability Distribution
s

Converting to the Standard Normal Distribution

x−µ z= σ

We can think of z as a measure of the number of standard deviations x is from µ .

Standard Normal Probability Distribution
s

Example: Pep Zone Pep Zone sells auto parts and supplies including a popular multi-grade motor oil. When the stock of this oil drops to 20 gallons, a replenishment order is placed.

Standard Normal Probability Distribution
s

Example: Pep Zone The store manager is concerned that sales are being lost due to stockouts while waiting for an order. It ha been determined that demand during replenishment lead-time is normally distributed with a mean of 15 gallons and a standard deviation of 6 gallons. The manager would like to know the probability of a stockout, P(x > 20).

Standard Normal Probability Distribution
s

Solving for the Stockout Probability

Step 1: Convert x to the standard normal distribution. z = (x - µ )/σ = (20 - 15)/6 = .83 Step 2: Find the area under the standard normal curve to the left of z = .83. see next slide

Standard Normal Probability Distribution
s

Cumulative Probability Table for the Standard Normal Distribution
.0 0 . .01 . .0 2 . .03 . .0 4 . .05 . .0 6 . .0 7 . .0 8 . .0 9 . .7123 .7157 .7190 .7224 .7454 .7486 .7517 .7549 .7764 .7794 .7823 .7852 .8051 .8078 .8106 .8133

z .

.5 .6915 .6950 .6985 .7019 .7054 .7088 .6 .7257 .7291 .7324 .7357 .7389 .7422 .7 .7580 .7611 .7642 .7673 .7704 .7734 .8 .7881 .7910 .7939 .7967 .7995 .8023

.9 .8159 .8186 .8212 .8238 .8264 .8289 .8315 .8340 .8365 .8389 . . . . . . . . . . .

P( z < . 83)

Standard Normal Probability Distribution
s

Solving for the Stockout Probability

Step 3: Compute the area under the standard normal Step 3: Compute the area under the standard normal curve to the right of z = .83. curve to the right of z = .83. P(z > .83) = 1 – P(z < .83) = 1- .7967 = .2033
Probability of a stockout P(x > 20)

Standard Normal Probability Distribution
s

Solving for the Stockout Probability Area = 1 - .7967 = .2033

Area = .7967

0 .83

z

Standard Normal Probability Distribution

Standard Normal Probability Distribution If the manager of Pep Zone wants the probability of a stockout to be no more than . 05, what should the reorder point be?

Standard Normal Probability Distribution
s

Solving for the Reorder Point

Area = .9500 Area = .0500

0

z.05

z

Standard Normal Probability Distribution
s

Solving for the Reorder Point

Step 1: Find the z-value that cuts off an area of .05 in the right tail of the standard normal distribution.
z . .0 0 . .0 1 . .0 2 . .0 3 . .0 4 . .0 5 . .0 6 . .0 7 . .0 8 . .0 9 . 1 .5 .9332 .9345 .9357 .9370 .9382 .9394 1 .6 .9452 .9463 .9474 .9484 .9495 .9505 1 .7 .9554 .9564 .9573 .9582 .9591 .9599 1 .8 .9641 .9649 .9656 .9664 .9671 .9678 .9406 .9418 .9429 .9441 .9515 .9525 .9535 .9545 .9608 .9616 .9625 .9633 .9686 .9693 .9699 .9706

1 .9 .9713 .9719 .9726 .9732 .9738 .9744 .9750 .9756 .9761 .9767 . . . . . . . . . . .

We look up the complement of the tail area (1 - .05 = .95)

Standard Normal Probability Distribution
s

Solving for the Reorder Point

Step 2: Convert z.05 to the corresponding value of x.. Step 2: Convert z.05 to the corresponding value of x x = µ + z.05 σ .0 5 = 15 + 1.645(6) = 24.87 or 25

A reorder point of 25 gallons will place the probability of a stockout during leadtime at (slightly less than) .05.

Standard Normal Probability Distribution
s

Solving for the Reorder Point By raising the reorder point from 20 gallons to 25 gallons on hand, the probability of a stockout decreases from about .20 to .05. This is a significant decrease in the chance that Pep Zone will be out of stock and unable to meet a customer’s desire to make a purchase.

Normal Approximation of Binomial Probabilities
 When the number of trials, n, becomes large,

evaluating the binomial probability function by hand or with a calculator is difficult easy-to-use approximation of binomial probabilities where n > 20, np > 5, and n(1 - p) > 5.

 The normal probability distribution provides an

Normal Approximation of Binomial Probabilities
s

Set

µ = np

σ = np(1 p) −
s

Add and subtract 0.5 (a continuity correction factor) because a continuous distribution is being used to approximate a discrete distribution. For example, P(x = 10) is approximated by P(9.5 < x < 10.5).

Exponential Probability Distribution
The exponential probability distribution is useful in describing the time it takes to complete a task. s The exponential random variables can be used to describe: • Time between vehicle arrivals at a toll booth • Time required to complete a questionnaire • Distance between major defects in a highway
s

Exponential Probability Distribution

Density Function
1 − x /µ f ( x) = e for x > 0, µ > 0 µ
where:

µ = mean e = 2.71828

Exponential Probability Distribution

Cumulative Probabilities
P ( x ≤ x0 ) = 1 − e − xo / µ
where: x0 = some specific value of x

Exponential Probability Distribution
s

Example: Al’s Full-Service Pump The time between arrivals of cars at Al’s full-service gas pump follows an exponential probability distribution with a mean time between arrivals of 3 minutes. Al would like to know the probability that the time between two successive arrivals will be 2 minutes or less.

Exponential Probability Distribution
f(x)

P(x < 2) = 1 - 2.71828-2/3 = 1 - .5134 = .4866 .4 P(x < 2) = 1 - 2.71828-2/3 = 1 - .5134 = .4866 .3 .2 .1 1 2 3 4 5 6 7 8 x 9 10

Time Between Successive Arrivals (mins.)

Relationship between the Poisson and Exponential Distributions
The Poisson distribution provides an appropriate description of the number of occurrences per interval

The exponential distribution provides an appropriate description of the length of the interval between occurrences