Disttool distribution functions:

The binomial and beta

distributions
Binomial Distribution
(a discrete distribution)

Model characteristics:
 Dichotomous outcomes

 Two possible outcomes

 One outcome can occur
 Constant probability of “success”
 Independence

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 Binomial Probability
Distribution
 A fixed number of observations (trials), n
 e.g., 15 tosses of a coin; 20 patients; 1000 people
surveyed
 A binary random variable
 e.g., head or tail in each toss of a coin; defective or not
defective light bulb
 Generally called “success” and “failure”
 Probability of success is p, probability of failure is 1 – p
 Constant probability for each observation
 e.g., Probability of getting a tail is the same each time we
toss the coin
 Binomial example
Take the example of 5 coin tosses. What’s
the probability that you flip exactly 3 heads
in 5 coin tosses?
 Binomial distribution(Conti..)
Solution:
One way to get exactly 3 heads: HHHTT

What’s the probability of this exact arrangement?

P(heads)xP(heads) xP(heads)xP(tails)xP(tails) =(1/2)3 x
(1/2)2

Another way to get exactly 3 heads: THHHT

Probability of this exact outcome = (1/2)1 x (1/2)3 x (1/2)1
= (1/2)3 x (1/2)2
 Binomial distribution
In fact, (1/2)3 x (1/2)2 is the probability of each
unique outcome that has exactly 3 heads and 2
tails.

So, the overall probability of 3 heads and 2 tails

is:
(1/2)3 x (1/2)2 + (1/2)3 x (1/2)2 + (1/2)3 x (1/2)2
+ ….. for as many unique arrangements as
there are—but how many are there??
 Outcome Probability
  THHHT (1/2)3 x (1/2)2
HHHTT (1/2)3 x (1/2)2
TTHHH (1/2)3 x (1/2)2
HTTHH (1/2)3 x (1/2)2 The probability
ways to
5 arrange 3
HHTTH (1/2)3 x (1/2)2 of each unique
  heads in 5 THTHH
HTHTH
(1/2)3 x (1/2)2
(1/2)3 x (1/2)2
outcome (note:
 3
trials they are all
HHTHT (1/2)3 x (1/2)2 equal)
THHTH (1/2)3 x (1/2)2
HTHHT (1/2)3 x (1/2)2
10 arrangements x (1/2)3 x (1/2)2
C3 = 5!/3!2! = 10  
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 5
P(3 heads
 
and 2 tails) =   x P(heads)3 x P(tails)2 =
 3

10 x (½)5=31.25%
Example 2
As voters exit the polls, you ask a representative
random sample of 6 voters if they voted for
proposition 100. If the true percentage of voters
who vote for the proposition is 55.1%, what is the
probability that, in your sample, exactly 2 voted
for the proposition and 4 did not?
 
 Solution:
Outcome Probability
YYNNNN = (.551) 2 x (.449)4
NYYNNN (.449)1 x (.551)2 x (.449)3 = (.551)2 x (.449)4
6
  NNYYNN (.449)2 x (.551)2 x (.449)2 = (.551)2 x (.449)4
 2 NNNYYN (.449)3 x (.551)2 x (.449)1 = (.551)2 x (.449)4
ways to arrange
2 Obama votes NNNNYY (.449)4 x (.551)2 = (.551)2 x (.449)4
among 6 voters
.
.

15 arrangements x (.551)2 x (.449)4  

P(2 yes votes exactly) =  6x (.551)2 x (.449)4 = 18.5%

 
 2
 Binomial distribution,
generally
Note the general pattern emerging  if you have only two possible
outcomes (call them 1/0 or yes/no or success/failure) in n independent
trials, then the probability of exactly X “successes”=
n = number of trials

n X n X
  p (1  p )
X 1-p = probability
of failure
X=# p = probability of
successes out success
of n trials
Definitions: Binomial
 Binomial: Suppose that n independent experiments, or
trials, are performed, where n is a fixed number, and that
each experiment results in a “success” with probability p
and a “failure” with probability 1-p. The total number of
successes, X, is a binomial random variable with
parameters n and p.
 We write: X ~ Bin (n, p) {reads: “X is distributed
binomially with parameters n and p}
 And the probability that X=r (i.e., that there are
exactly r successes) is:
n r
P ( X  r )    p (1  p ) n  r
r
Definitions: Bernouilli
Bernouilli trial: If there is only 1 trial with
probability of success p and probability of
failure 1-p, this is called a Bernouilli
distribution. (special case of the binomial
with n=1)
1 1
P ( X  1)    p (1  p )11  p
Probability of success: 1
Probability of failure: 1 0
P( X  0)    p (1  p )10  1  p
0
 Binomial distribution: example

 If I toss a coin 20 times, what’s the

probability of getting exactly 10 heads?

 20  10 10
 (.5) (.5)  .176
 10 
 Binomial distribution: example
 If I toss a coin 20 times, what’s the
probability of getting 2 or fewer heads?

 20  20!
0
 (.5) (.5) 
20
(.5) 20  9.5 x10  7 
0 20!0!
 20  20!
  (.5)1
(.5)19
 (.5) 20  20 x9.5 x10 7  1.9 x10 5 
1 19!1!
 20  20!
2 18
 (.5) (.5)  (.5) 20  190 x9.5 x10  7  1.8 x10  4
2 18!2!
 1.8 x10  4
**All probability distributions are
characterized by an expected value and a
variance:

If X follows a binomial distribution with

parameters n and p: X ~ Bin (n, p)
Then:
x= E(X) = np
x2 =Var (X) = np(1-p)
x =SD (X)= np(1  p)
Characteristics of Bernouilli
distribution
For Bernouilli (n=1)
E(X) = p
Var (X) = p(1-p)
Binomial Distribution
Cumulative distribution function:
 Probability of k or fewer “successful”

outcomes
k
 F (x ≤ k) = ∑ ( n) px qn-x
X=0
x

 Syntax:

 p = binocdf(x,p,q)
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 Binomial Distribution
Example application:

Items are manufactured in large lots, from each of which

twenty units are selected at random. The lot is accepted if
the sample contains three or fewer defectives. If the
production process yields, on the average, ten percent
defectives, what is the probability of lot acceptance?

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 Binomial Distribution
Formulation:
Determine the probability of three or fewer
“successes” in 20 independent trials, each having 0.1
probability of success.
3
20
F (x ≤ 3) = ∑ ( x ) (0.1)x (0.9)20-x = 0.867
X=0

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Beta Distribution
Model characteristics:
 Variable bounded at both ends

 Numerous distribution shapes

 Events are independent

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Beta Distribution – Probability
Density Function
 A random variable X is said to have a Beta Distribution with
parameters, α, β, A and B if
 the probability density function of X is

and is 0 otherwise

where α > 0 , β > 0

Standard Beta Distribution

 If X ~ B(α, β, A, B), A =0 and B=1, then X is said to

have a Standard Beta Distribution with probability
density function

(   )  1  1
f ( x;  ,  )  x (1  x)
( )(  )
 and 0 otherwise
0  x  1
Graphs of Standard Beta Probability Density
Function

f ( x;  ,  ) 8  2
  0.5

4  5
    0.5  2

2
x
0
0 0.5 1
 Beta Distribution – Mean and
Standard Deviation

 If X ~ B(α, β, A, B), then

 Mean or Expected value

  A  B  A
 
 Standard Deviation

B  A 
 
        1
Beta Distribution – Example

 Project managers often use a method labeled PERT for

Program Evaluation and Review Technique to coordinate
the various activities making up a large project. A
standard assumption in PERT analysis is that the time
necessary to complete any particular activity once it has
been started has a beta distribution with A = the
optimistic time (if everything goes well) and B = the
pessimistic time (If everything goes badly). Suppose that
in constructing a single-family house, the time X (in days)
necessary for laying the foundation has a beta
distribution with A = 2, B = 5, α = 2, and β = 3. Then
Beta Distribution – Example Continued


Since
 0 .4   2  ( 3 )( 0 . 4 )  3 . 2 .
 


 For these values of α and β, the probability density functions of X is a

simple polynomial function. The probability that it takes at most 3
days to lay the foundation is
3 2
1 4!  x  2   5  x 
P ( X  3)       dx
2
3 1!2!  3   3 
3
4 4 11 11
   x  2  5  x      0 . 407 .
2

27 2 27 4 27
 Beta Distribution
Cumulative distribution function: q
______________
(n – 1)!
 F (Q ≤ q | r,n) = ∫ υr-1 (1 – υ) dυ
(r – 1)! (n – r – 1) 0

 Called Incomplete Beta Function

 Equivalence to binomial cumulative distribution function

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Beta Distribution
 Frequent application situations:
 Proportions or percentages
 Physical variables in restricted intervals
 Tolerances in quality control and reliability
 PERT networks (generalized form)
 Bayesian analysis (informative a priori)

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 Beta Distribution
Example Application:
 Suppose that the percentage of employees who submit
medical benefits claims each year is a beta random
variable. As the benefits coordinator for a small firm with
40 employees, you currently expect that about 30
percent will most likely submit claims this year.
Determine the probability that more than 16 employees
will submit claims.

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Beta Distribution
Formulation:
 Determine the probability that 16 or fewer of 40
employees will submit claims, and take the
complement.
 μ = r/n = 0.30 = r = (0.30)(40) = 12
q = 16/40 = 0.40
 From table values or software,
Fβ (Q ≤ 0.40 | 12, 40) = 0.91
 Thus Pβ (Q > 0.40) = 1 – 0.91 = 0.09

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Thank you