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# Chapter 3, Part B

f (x)

## Uniform Probability Distribution

Normal Probability Distribution
Exponential Probability Distribution
f (x) Exponential

Uniform

f (x)

Normal
x

x
x

## 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.
random variable assuming a value within a
given interval.

f (x)

## 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.

f (x) Exponential

Uniform
f (x)

x11 x22

Normal

x11
x11 x22

xx1122 x22

## A random variable is uniformly distributed

whenever the probability is proportional to the
intervals length.
The uniform probability density function is:
ff (x)
(x) =
= 1/(b
1/(b a)
a) for
for aa <
< xx <
< bb
=
elsewhere
= 00
elsewhere

## where: a = smallest value the variable can assume

b = largest value the variable can assume

## Uniform Probability Distribution

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

Variance of x
22
Var(x)
=
(b
a)
Var(x) = (b - a) /12
/12

## Uniform Probability Distribution

Slater customers are charged
for the amount of salad they take.
Sampling suggests that the
uniformly distributed
between 5 ounces and 15 ounces.

## Uniform Probability Density Function

f(x)
f(x) =
= 1/10
1/10 for
for 55 <
< xx <
< 15
15
=
elsewhere
= 00
elsewhere
where:
x = salad plate filling weight

## Example: Slater's Buffet

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

Variance of x
Var(x)
Var(x) =
= (b
(b -- a)
a)22/12
/12
=
= (15
(15 5)
5)22/12
/12
=
= 8.33
8.33

f(x)

1/10

5
10
15

## Example: Slater's Buffet

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

5
10 12 15

10

## The normal probability distribution is the most

important distribution for describing a
continuous random variable.
It is widely used in statistical inference.

11

applications:
Heights
Heights
of
of people
people
Scientific
Scientific
measurements
measurements

12

applications:
Test
Test
scores
scores
Amounts
Amounts
of
of rainfall
rainfall

13

## Normal Probability Density Function

1 (x )2 / 2 2
f (x)
e
2
where:

=
=
=
=

mean
standard deviation
3.14159
2.71828

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Characteristics
The
The distribution
distribution is
is symmetric,
symmetric, and
and is
is bell-shaped.
bell-shaped.

15

## Normal Probability Distribution

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

Mean

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

17

Characteristics

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

x
-10

20

18

## Normal Probability Distribution

Characteristics

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

= 15

= 25
x

19

## Normal Probability Distribution

Characteristics

Probabilities
Probabilities for
for the
the normal
normal random
random variable
variable are
are
given
given by
by areas
areas under
under the
the curve.
curve. The
The total
total area
area
under
under the
the curve
curve is
is 11 (.5
(.5 to
to the
the left
left of
of the
the mean
mean and
and
.5
.5 to
to the
the right).
right).

.5

.5
x

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## Normal Probability Distribution

Characteristics

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

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Characteristics
99.72%
95.44%
68.26%

3
1
2

+ 3
+ 1
+ 2

22

## Standard Normal Probability Distribution

AA random
random variable
variable having
having aa normal
normal distribution
distribution
with
with aa mean
mean of
of 00 and
and aa standard
standard deviation
deviation of
of 11 is
is
said
said to
to have
have aa standard
standard normal
normal probability
probability
distribution.
distribution.

23

The
The letter
letter zz is
is used
used to
to designate
designate the
the standard
standard
normal
normal random
random variable.
variable.

z
0

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x
z

## We can think of z as a measure of the number of

standard deviations x is from .

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## Using Excel to Compute

Standard Normal Probabilities
Excel has two functions for computing
probabilities and z values for a standard
normal distribution:
NORM
S DIST is
NORMSDIST
NORMSDIST
is used
used to
to compute
compute the
the cumulative
cumulative
probability
probability given
given aa zz value.
value.

is
NORMSINV
NORM
S INV
NORMSINV
is used
used to
to compute
compute the
the zz value
value
given
given aa cumulative
cumulative probability.
probability.
(The S in the function names reminds
us that they relate to the standard
normal probability distribution.)

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## Using Excel to Compute

Standard Normal Probabilities

Formula Worksheet
1
2
3
4
5
6
7
8
9

A
B
Probabilities: Standard Normal Distribution
P (z < 1.00)
P (0.00 < z < 1.00)
P (0.00 < z < 1.25)
P (-1.00 < z < 1.00)
P (z > 1.58)
P (z < -0.50)

=NORMSDIST(1)
=NORMSDIST(1)-NORMSDIST(0)
=NORMSDIST(1.25)-NORMSDIST(0)
=NORMSDIST(1)-NORMSDIST(-1)
=1-NORMSDIST(1.58)
=NORMSDIST(-0.5)

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## Using Excel to Compute

Standard Normal Probabilities

Value Worksheet
1
2
3
4
5
6
7
8
9

A
B
Probabilities: Standard Normal Distribution
P (z < 1.00)
P (0.00 < z < 1.00)
P (0.00 < z < 1.25)
P (-1.00 < z < 1.00)
P (z > 1.58)
P (z < -0.50)

0.8413
0.3413
0.3944
0.6827
0.0571
0.3085

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## Using Excel to Compute

Standard Normal Probabilities

Formula Worksheet
1
2
3
4
5
6

A
B
Finding z Values, Given Probabilities
z value with .10 in upper tail
z value with .025 in upper tail
z value with .025 in lower tail

=NORMSINV(0.9)
=NORMSINV(0.975)
=NORMSINV(0.025)

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## Using Excel to Compute

Standard Normal Probabilities

Value Worksheet
1
2
3
4
5
6

A
B
Finding z Values, Given Probabilities
z value with .10 in upper tail
z value with .025 in upper tail
z value with .025 in lower tail

1.28
1.96
-1.96

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## Standard Normal Probability Distribution

Pep Zone sells auto parts and supplies
oil. When the stock of this oil drops to
Pep
20 gallons, a replenishment order is Zone
5w-20
placed.

Motor Oil

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Pep
Zone
5w-20
Motor Oil

## Standard Normal Probability Distribution

The store manager is concerned that sales
are being lost due to stockouts while waiting
for an order. It has been determined that
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).

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Pep
Zone

## Solving for the Stockout Probability

5w-20
Motor Oil

Step
Step 1:
1: Convert
Convert xx to
to the
the standard
standard normal
normal distribution.
distribution.
zz =
= (x
(x -- )/
)/
=
= (20
(20 -- 15)/6
15)/6
=
= .83
.83
Step
Step 2:
2: Find
Find the
the area
area under
under the
the standard
standard normal
normal
curve
curve between
between the
the mean
mean and
and zz =
= .83.
.83.
see
see next
next slide
slide

33

Pep
Zone
5w-20
Motor Oil

## Probability Table for the

Standard Normal Distribution

z
.

.00

.01

.02

.03

.04

.05

.06

.07

.08

.09

## .5 .1915 .1695 .1985 .2019 .2054 .2088

.6 .2257 .2291 .2324 .2357 .2389 .2422
.7 .2580 .2611 .2642 .2673 .2704 .2734
.8 .2881 .2910 .2939 .2967 .2995 .3023

## .2123 .2157 .2190 .2224

.2454 .2486 .2517 .2549
.2764 .2794 .2823 .2852
.3051 .3078 .3106 .3133

.9 .3159 .3186 .3212 .3238 .3264 .3289 .3315 .3340 .3365 .3389
.
.
.
.
.
.
.
.
.
.
.

83)

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Pep
Zone

5w-20
Motor Oil

Step
Step 3:
3: Compute
Compute the
the area
area under
under the
the standard
standard normal
normal
curve
curve to
to the
the right
right of
of zz =
= .83.
.83.
P(z
P(z >
> .83)
.83) =
= .5
.5 P(0
P(0 <
< zz <
< .83)
.83)
=
= 11- .2967
.2967
=
= .2033
.2033
Probability
of a
stockout

P(x >
20)

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Pep
Zone

5w-20
Motor Oil

## Solving for the Stockout Probability

Area = .2967

Area = .5 - .2967
= .2033

0 .83

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Pep
Zone
5w-20
Motor Oil

## 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?

37

Pep
Zone

5w-20
Motor Oil

Area = .4500
Area = .0500

z.05

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Pep
Zone
5w-20
Motor Oil

Step
Step 1:
1: Find
Find the
the z-value
z-value that
that cuts
cuts off
off an
an area
area of
of .05
.05
in
in the
the right
right tail
tail of
of the
the standard
standard normal
normal
distribution.
distribution.
z
.

.00

.01

.02

.03

.04

.05

.06

.07

.08

.09

## 1.5 .4332 .4345 .4357 .4370 .4382 .4394

1.6 .4452 .4463 .4474 .4484 .4495 .4505
1.7 .4554 .4564 .4573 .4582 .4591 .4599
1.8 .4641 .4649 .4656 .4664 .4671 .4678

## .4406 .4418 .4429 .4441

.4515 .4525 .4535 .4545
.4608 .4616 .4625 .4633
.4686 .4693 .4699 .4706

1.9 .4713 .4719 .4726 .4732 .4738 .4744 .4750 .4756 .4761 .4767
We look up the
.
.
.
.
.
.
.
.
.
.
.

area
(.5 - .05 = .45)

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Pep
Zone
5w-20
Motor Oil

## Solving for the Reorder Point

Step
to the corresponding value of x.
Step 2:
2: Convert
Convert zz.05
.05 to the corresponding value of x.
xx =

= +
+ zz.05
.05

=
= 15
15 +
+ 1.645(6)
1.645(6)
=
= 24.87
24.87 or
or 25
25
A reorder point of 25 gallons will place the probability
of a stockout during leadtime at (slightly less than) .05.

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Pep
Zone
5w-20
Motor Oil

## 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
customers desire to make a purchase.

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## Using Excel to Compute

Normal Probabilities

## Excel has two functions for computing

cumulative probabilities and x values for any
normal distribution:
NORMDIST
NORMDIST is
is used
used to
to compute
compute the
the cumulative
cumulative
probability
probability given
given an
an xx value.
value.
NORMINV
NORMINV is
is used
used to
to compute
compute the
the xx value
value given
given
aa cumulative
cumulative probability.
probability.

42

## Using Excel to Compute

Normal Probabilities
Formula Worksheet

1
2
3
4
5
6
7
8

Pep
Zone
5w-20
Motor Oil

A
B
Probabilities: Normal Distribution
P (x > 20) =1-NORMDIST(20,15,6,TRUE)
Finding x Values, Given Probabilities
x value with .05 in upper tail =NORMINV(0.95,15,6)

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## Using Excel to Compute

Normal Probabilities
Value Worksheet

1
2
3
4
5
6
7
8

Pep
Zone
5w-20
Motor Oil

A
B
Probabilities: Normal Distribution
P (x > 20) 0.2023
Finding x Values, Given Probabilities
x value with .05 in upper tail 24.87

Note: P(x > 20) = .2023 here using Excel, while our
previous manual approach using the z table yielded
.2033 due to our rounding of the z value.

44

## Exponential Probability Distribution

The exponential probability distribution is
useful in describing the time it takes to
The exponential random variables can be used
to describe:
Time
Time between
between Time
Distance between
between
Time required
required Distance
vehicle
major
vehicle arrivals
arrivals to
major defects
defects
to complete
complete
at
in
at aa toll
toll booth
booth aa questionnaire
in aa highway
highway
questionnaire

SLOW

45

Density Function

1 x /
f ( x) e
for x > 0, > 0

where:

= mean
e = 2.71828

46

## Exponential Probability Distribution

Cumulative Probabilities

P ( x x0 ) 1 e xo /
where:
x0 = some specific value of x

47

## Using Excel to Compute

Exponential Probabilities
The
The EXPONDIST
EXPONDIST function
function can
can be
be used
used to
to compute
compute
exponential
exponential probabilities.
probabilities.
The
The EXPONDIST
EXPONDIST function
function has
has three
three arguments:
arguments:
st
1st

nd
2nd
1/m
rd
3rd

## the inverse of the

mean
TRUE or FALSEnumber of
occurrences
in an interval
we will always enter
TRUE because were
seeking a cumulative
probability

48

## Using Excel to Compute

Exponential Probabilities

Formula Worksheet
A

1
2
3 P (x < 18)
4 P (6 < x < 18)
5 P (x > 8)
6

B
Probabilities: Exponential Distribution
=EXPONDIST(18,1/15,TRUE)
=EXPONDIST(18,1/15,TRUE)-EXPONDIST(6,1/15,TRUE)
=1-EXPONDIST(8,1/15,TRUE)

49

## Using Excel to Compute

Exponential Probabilities

Value Worksheet
A

1
2
3 P (x < 18)
4 P (6 < x < 18)
5 P (x > 8)
6

B
Probabilities: Exponential Distribution
0.6988
0.3691
0.5866

50

## Exponential Probability Distribution

The time between arrivals of cars
at Als 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.

51

## Exponential Probability Distribution

f(x)
-2/3 = 1 - .5134 =
P(x <
< 2)
2) =
=1
1 -- 2.71828
2.71828-2/3
= 1 - .5134 = .4866
.4866
.4 P(x

.3
.2
.1
1

x
9 10

52

## Using Excel to Compute

Exponential Probabilities

Formula Worksheet
1
2
3
4

A
B
Probabilities: Exponential Distribution
P (x < 2)

=EXPONDIST(2,1/3,TRUE)

53

## Using Excel to Compute

Exponential Probabilities

Value Worksheet
1
2
3
4

A
B
Probabilities: Exponential Distribution
P (x < 2)

0.4866

54

## 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