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Edwards University

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Uniform Probability Distribution Normal Probability Distribution Exponential Probability Distribution f(x)

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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. Instead, we talk about the probability of the random variable assuming a value within a given interval. 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.

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A random variable is uniformly distributed whenever the probability is proportional to the intervals length. Uniform Probability Density Function f(x) = 1/(b - a) for a < x < b =0 elsewhere where: a = smallest value the variable can assume b = largest value the variable can assume

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Variance of x Var(x) = (b - a)2/12 where: a = smallest value the variable can assume b = largest value the variable can assume

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Uniform Probability Distribution 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. The probability density function is f(x) = 1/10 for 5 < x < 15 = 0 elsewhere where: x = salad plate filling weight

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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.)

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Expected Value of x E(x) = (a + b)/2 = (5 + 15)/2 = 10 Variance of x Var(x) = (b - a)2/12 = (15 5)2/12 = 8.33

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Characteristics of the Normal Probability Distribution The shape of the normal curve is often illustrated as a bell-shaped curve. Two parameters, (mean) and (standard deviation), determine the location and shape of the distribution. The highest point on the normal curve is at the mean, which is also the median and mode. The mean can be any numerical value: negative, zero, or positive. continued

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Characteristics of the Normal Probability Distribution The normal curve is symmetric. The standard deviation determines the width of the curve: larger values result in wider, flatter curves. The total area under the curve is 1 (.5 to the left of the mean and .5 to the right). Probabilities for the normal random variable are given by areas under the curve.

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

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1 ( x )2 / 22 f ( x) = e 2

where:

= = = e=

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A random variable that has a normal distribution with a mean of zero and a standard deviation of one is said to have a standard normal probability distribution. The letter z is commonly used to designate this normal random variable. Converting to the Standard Normal Distribution

x z=

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Standard Normal Probability Distribution 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. The store manager is concerned that sales are being lost due to stockouts while waiting for an order. It has been determined that leadtime demand is normally 15 distributed with a mean of 15 gallons and a

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Standard Normal Probability Distribution The Standard Normal table shows an area of . 2967 for the region between the z = 0 and z = .83 lines below. The shaded tail area is .5 - . 2967 = .2033. The probability of a stock-out is .2033. Area = .2967 z = (x - )/ = (20 - 15)/6 = .83 Area = .5 - .2967 = .2033 z

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Area = .5 0 .83

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.04 .05 .06 .07 .08 .09 .0160 .0199 .0239 .0279 .0319 .0359 .0557 .0596 .0636 .0675 .0714 .0753 .0948 .0987 .1026 .1064 .1103 .1141

.00 .01 .02 .03 z .0 .0000 .0040 .0080 .0120 .1 .0398 .0438 .0478 .0517 .2 .0793 .0832 .0871 .0910

.3 .1179 .1217 .1255 .1293 .1331 .1368 .1406 .1443 .1480 .1517 .4 .1554 .1591 .1628 .1664 .1700 .1736 .1772 .1808 .1844 .1879 .5 .1915 .1950 .1985 .2019 .2054 .2088 .6 .2257 .2291 .2324 .2357 .2389 .2422 .7 .2580 .2612 .2642 .2673 .2704 .2734 .8 .2881 .2910 .2939 .2967 .2995 .3023 .2123 .2157 .2190 .2224 .2454 .2486 .2518 .2549 .2764 .2794 .2823 .2852 .3051 .3078 .3106 .3133

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

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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?

Area = .05 Area = .5Area = .45 z.05 0 Let z.05 represent the z value cutting the .05 tail area.

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Using the Standard Normal Probability Table We now look-up the .4500 area in the Standard Normal Probability table to find the corresponding z.05 value.

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 . . . . . . . . . . .

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Standard Normal Probability Distribution The corresponding value of x is given by x = + z.05 = 15 + 1.645(6) = 24.87 A reorder point of 24.87 gallons will place the probability of a stockout during leadtime at .05. Perhaps Pep Zone should set the reorder point at 25 gallons to keep the probability under .05.

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1 x / f ( x) = e

where:

= mean e = 2.71828

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P ( x x0 ) = 1 e xo /

where: x0 = some specific value of x

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Exponential Probability Distribution The time between arrivals of cars at Als Carwash 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. P(x < 2) = 1 - 2.71828-2/3 = 1 - .5134 = . 4866

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Graph of the Probability Density Function f(x) .4 .3 P(x < 2) = area = .4866 .2 .1 1 2 3 4 5 6 7 8 x 9 10

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(If) the Poisson distribution provides an appropriate description of the number of occurrences per interval

(If) the exponential distribution provides an appropriate description of the length of the interval between occurrences

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End of Chapter 6

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