Professional Documents
Culture Documents
BUSINESS
STATISTICS
by
AMIR D. ACZEL
&
JAYAVEL SOUNDERPANDIAN
7th edition.
Chapter 3
Random Variables
McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
3-2
3 Random Variables
Using Statistics
Expected Values of Discrete Random Variables
Sum and Linear Composite of Random Variables
Bernoulli Random Variable
The Binomial Random Variable
Continuous Random Variables
Uniform Distribution
3-3
3 LEARNING OBJECTIVES
After studying this chapter you should be able to:
Distinguish between discrete and continuous random variables
Explain how a random variable is characterized by its probability distribution
Compute statistics about a random variable
Compute statistics about a function of a random variable
Compute statistics about the sum or a linear composite of a random variable
Identify which type of distribution a given random variable is most likely to
follow
Solve problems involving standard distributions manually using formulas
Solve business problems involving standard distributions using spreadsheet
templates.
3-4
Consider the different possible orderings of boy (B) and girl (G) in
four sequential births. There are 2*2*2*2=24 = 16 possibilities, so
the sample space is:
If girl and boy are each equally likely [P(G) = P(B) = 1/2], and the
gender of each child is independent of that of the previous child,
then the probability of each of these 16 possibilities is:
(1/2)(1/2)(1/2)(1/2) = 1/16.
3-5
Random Variables
Now count the number of girls in each set of four sequential births:
Notice that:
• each possible outcome is assigned a single numeric value,
• all outcomes are assigned a numeric value, and
• the value assigned varies over the outcomes.
BBBB 0
BGBB
GBBB 1
BBBG
BBGB
GGBB
GBBG X
BGBG 2
BGGB
GBGB
BBGG
BGGG
GBGG 3
GGGB
GGBG
GGGG 4 Points on the
Real Line
Sample Space
3-7
Since the random variable X = 3 when any of the four outcomes BGGG,
GBGG, GGBG, or GGGB occurs,
P(X = 3) = P(BGGG) + P(GBGG) + P(GGBG) + P(GGGB) = 4/16
The probability distribution of a random variable is a table that lists the
possible values of the random variables and their associated probabilities.
x P(x)
0 1/16 TheGraphical
GraphicalDisplay
Displayfor
forthis
this
1 4/16 The
2 6/16
ProbabilityDistribution
Probability Distribution
3 4/16 isisshown
shownon
onthe
thenext
nextSlide.
Slide.
4 1/16
16/16=1
3-8
ProbabilityDistribution
Probability Distributionof
ofthe
theNumber
Numberof
ofGirls
Girlsin
inFour
FourBirths
Births
0.4
0.4 6/16
6/16
0.3
0.3
P(X)
4/16 4/16
Probability,P(X)
4/16 4/16
Probability,
0.2
0.2
0.1
0.1
1/16 1/16
1/16 1/16
0.0
0.0
00 11 22 33 44
Numberof
Number ofGirls,
Girls,XX
3-9
Example 3-1
Consider the experiment of tossing two six-sided dice. There are 36 possible
outcomes. Let the random variable X represent the sum of the numbers on
the two dice: x P(x)** Probability Distribution of Sum of Two Dice
2 1/36
3 2/36 0.17
2 3 4 5 6 7 4 3/36
5 4/36 0.12
1,1 1,2 1,3 1,4 1,5 1,6 8 6 5/36
p(x)
2,1 2,2 2,3 2,4 2,5 2,6 9 7 6/36
0.07
3,1 3,2 3,3 3,4 3,5 3,6 10 8 5/36
9 4/36
4,1 4,2 4,3 4,4 4,5 4,6 11
10 3/36 0.02
5,1 5,2 5,3 5,4 5,5 5,6 12 11 2/36 2 3 4 5 6 7 8 9 10 11 12
x
6,1 6,2 6,3 6,4 6,5 6,6 12 1/36
1
* Note that: P ( x ) ( 6 ( 7 x ) 2 ) / 36
3-10
Example 3-2
2 0.3
P(x)
3 0.2 0.2
4 0.1
0.1
5 0.1
1 0.0
0 1 2 3 4 5
x
AAdiscrete
discreterandom
randomvariable:
variable:
hasaacountable
has countablenumber
numberofofpossible
possiblevalues
values
hasdiscrete
has discretejumps
jumps(or
(orgaps)
gaps)between
betweensuccessive
successivevalues
values
hasmeasurable
has measurableprobability
probabilityassociated
associatedwith
withindividual
individualvalues
values
counts
counts
AAcontinuous
continuousrandom
randomvariable:
variable:
hasan
has anuncountably
uncountablyinfinite
infinitenumber
numberofofpossible
possiblevalues
values
movescontinuously
moves continuouslyfrom
fromvalue
valueto
tovalue
value
hasno
has nomeasurable
measurableprobability
probabilityassociated
associatedwith
witheach
eachvalue
value
measures(e.g.:
measures (e.g.:height,
height,weight,
weight,speed,
speed,value,
value,duration,
duration,
length)
length)
3-12
2. P (x) 1
all x
Corollary: 0 P ( X ) 1
3-13
1 0.2 0.3 0 .8
0 .7
2 0.3 0.6 0 .6
F(x)
0 .5
3 0.2 0.8 0 .4
0 .3
4 0.1 0.9 0 .2
0 .1
5 0.1 1.0 0 .0
1.00 0 1 2
x
3 4 5
3-14
x P(x) F(x)
0 0.1 0.1
1 0.2 0.3
2 0.3 0.6
3 0.2 0.8
4 0.1 0.9
5 0.1 1.0
1
x P(x) F(x)
0 0.1 0.1
1 0.2 0.3
2 0.3 0.6
3 0.2 0.8
4 0.1 0.9
5 0.1 1.0
1
Note: P(X > 1) = P(X > 2) = 1 – P(X < 1) = 1 – F(1) = 1 – 0.3 = 0.7
3-16
x P(x) F(x)
0 0.1 0.1
1 0.2 0.3
2 0.3 0.6
3 0.2 0.8
4 0.1 0.9
5 0.1 1.0
1
Note: P(1 < X < 3) = P(X < 3) – P(X < 0) = F(3) – F(0) = 0.8 – 0.1 = 0.7
3-17
2.3
3 4 5
The mean is also known as the expected value (or expectation) of a random
variable, because it is the value that is expected to occur, on average.
x P(x) xP(x)
The expected value of a discrete random 0 0.1 0.0
variable X is equal to the sum of each 1 0.2 0.2
2 0.3 0.6
value of the random variable multiplied by
3 0.2 0.6
its probability. 4 0.1 0.4
E ( X ) xP ( x ) 5 0.1 0.5
all x 1.0 2.3 = E(X) =
3-18
A Fair Game
Supposeyou
Suppose youareareplaying
playingaacoin
cointoss
tossgame
gameininwhich
whichyouyouare
are
paid$1
paid $1ififthe
thecoin
cointurns
turnsup
upheads
headsand
andyou
youlose
lose$1
$1when
whenthe the
cointurns
coin turnsupuptails.
tails.The
Theexpected
expectedvalue
valueof
ofthis
thisgame
gameisisE(X)
E(X)==
0.0. AAgame
gameof ofchance
chancewith
withan
anexpected
expectedpayoff
payoffofof00isiscalled
calledaa
fairgame.
fair game.
x P(x) xP(x)
-1 0.5 -0.50
1 0.5 0.50 -1 1
0
1.0 0.00 =
E(X)=
3-19
Example 3-3:
3-3 Monthly sales of a certain Number
product are believed to follow the given of items, x P(x) xP(x) h(x) h(x)P(x)
probability distribution. Suppose the 5000 0.2 1000 2000 400
6000 0.3 1800 4000 1200
company has a fixed monthly production
7000 0.2 1400 6000 1200
cost of $8000 and that each item brings 8000 0.2 1600 8000 1600
$2. Find the expected monthly profit 9000 0.1 900 10000 1000
h(X), from product sales. 1.0 6700 5400
E [ h ( X )] h ( x ) P ( x ) 5400
all x Note: h (X) = 2X – 8000 where X = # of items sold
all x all x
The variance of the three random variables for the three sectors,
assuming independence is: 7002 + 1,1002 + 3002 = 1,790,000.
Thus the standard deviation is (1,790,000) = $1,337.9.
3-26
Outputfor
Output forExample
Example3-4
3-4
3-29
* The terms success and failure are simply statistical terms, and do not have
positive or negative implications. In a production setting, finding a
defective product may be termed a “success,” although it is not a positive
result.
3-30
Suppose we toss a single fair and balanced coin five times in succession,
and let X represent the number of heads.
There are 25 = 32 possible sequences of H and T (S and F) in the sample space for this
experiment. Of these, there are 10 in which there are exactly 2 heads (X=2):
HHTTT HTHTH HTTHT HTTTH THHTT THTHT THTTH TTHHT TTHTH TTTHH
10 (1/32)
Number of outcomes Probability of each
with 2 heads outcome with 2 heads
In general:
1. The probability of a given sequence 2. The number of different sequences of n trials that
of x successes out of n trials with result in exactly x successes is equal to the number
probability of success p and of choices of x elements out of a total of n elements.
probability of failure q is equal to: This number is denoted:
n n!
pxq(n-x) nCx
x x!( n x)!
3-33
1 .999 .977 .919 .737 .528 .337 .187 .087 .031 .007 .000 .000 .000
2 1.000 .999 .991 .942 .837 .683 .500 .317 .163 .058 .009 .001 .000
3 1.000 1.000 1.000 .993 .969 .913 .813 .663 .472 .263 .081 .023 .001
4 1.000 1.000 1.000 1.000 .998 .990 .969 .922 .832 .672 .410 .226 .049
h F(h) P(h)
Cumulative Binomial Deriving Individual Probabilities
Probability Distribution and 0 0.031 0.031
from Cumulative Probabilities
Binomial Probability 1 0.187 0.156
Distribution of H,the 2 0.500 0.313
F (x ) P( X x ) P(i )
all i x
Number of Heads 3 0.813 0.313 P(X) = F(x) - F(x - 1)
Appearing in Five Tosses of 4 0.969 0.156
a Fair Coin For example:
5 1.000 0.031
1.000
P (3) F (3) F (2)
.813.500
.313
3-35
n=15
p
0
.50
.000
.60
.000
.70
.000
F ( x) P( X x) P(i)
all i x
1 .000 .000 .000
2 .004 .000 .000
F (3) P ( X 3) 0.002
3 .018 .002 .000
4 .059 .009 .001
... ... ... ...
3-36
Meanof
Mean ofaabinomial
binomialdistribution:
distribution:
EE((XX))np
np For example, if H counts the number of
heads in five tosses of a fair coin :
Varianceof
Variance ofaabinomial
binomialdistribution:
distribution:
E ( H ) (5)(.5) 2.5
H
VV((XX))npq
npq
2
2
V ( H ) (5)(.5)(.5) 1.25
2
Standarddeviation
deviationof
ofaabinomial
binomialdistribution:
distribution:
H
Standard
P(x)
P(x)
0.3 0.3 0.3
Binomial Probability: n=10 p=0.1 Binomial Probability: n=10 p=0.3 Binomial Probability: n=10 p=0.5
n = 10
0.3 0.3 0.3
P(x)
P(x)
P(x)
0.2 0.2 0.2
Binomial Probability: n=20 p=0.1 Binomial Probability: n=20 p=0.3 Binomial Probability: n=20 p=0.5
n = 20
P(x)
P(x)
P(x)
0.1 0.1 0.1
For example:
Binomial: n=3 p=.5
Binomial
0.4 For example: Minutes to Complete Task
n=3 p=.5
In this case, 0.3
0.3
the shaded
x P(x)
P(x)
P(x)
the probability
1 0.375 0.1
that the task 0.1
2 0.375 0.0 takes between
3 0.125 0 1 2 3 0.0
C1 2 and 3
1.000 1 2 3 4 5 6
minutes. Minutes
3-41
0.10
P(x)
P(x)
P(x)
0.05
0.00
0.0
. 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 0 1 2 3 4 5 6 7 0 1 2 3 4 5 6 7
Minutes Minutes Minutes
function
shadedarea
shaded arearepresents
representsP(2 X).
P(2X ).
0 1 2 3 4 5 6 7
Minutes
3-42
AAcontinuous
continuousrandom
randomvariable
variableisisaarandom
randomvariable
variablethat
thatcan
cantake
takeon
onany
anyvalue
valueininan
an
intervalof
interval ofnumbers.
numbers.
Theprobabilities
The probabilitiesassociated
associatedwith
withaacontinuous
continuousrandom
randomvariable
variableXXare
aredetermined
determinedbybythe
the
probabilitydensity
probability densityfunction
functionofofthe
therandom
randomvariable.
variable. The
Thefunction,
function,denoted
denotedf(x),
f(x),has
hasthe
the
followingproperties.
following properties.
1.1. f(x)00for
f(x) forall
allx.x.
2.2. Theprobability
The probabilitythat thatXXwill
willbe
bebetween
betweentwo twonumbers
numbersaaand andbbisisequal
equaltotothe
thearea
area
underf(x)
under f(x) between
betweenaaand andb.b.
3.3. Thetotal
The totalarea
areaunder
underthe thecurve
curveofoff(x)
f(x)isisequal
equaltoto1.00.
1.00.
Thecumulative
The cumulativedistribution
distributionfunction
functionofofaacontinuous
continuousrandom
randomvariable:
variable:
F(x) P(Xx)x)=Area
F(x)==P(X =Areaunder
underf(x)
f(x)between
betweenthe
thesmallest
smallestpossible
possiblevalue
valueofofXX(often
(often-)
-)and
and
thepoint
the pointx.x.
3-43
F(b)
F(a)
} P(a X b)=F(b) - F(a)
0
a b x
f(x)
x
0 a b
3-44
{
1/(a – b) for a X b
f(x)=
0 otherwise
a a1 b1 b
x
3-45
{
1/5 for 0 X 5
f(x)=
0 otherwise
E(X) = 2.5
0.4
The entire area under f(x) = 1/5 * 5 = 1.00
0.3
f(x)
.0.0
-1 0 1 2 3 4 5 6
x
3-46