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5 Enote 6
5 Enote 6
Business Applications
Review
I. Whats in last two lectures?
Experiment, Event, Sample space, Probability,
Counting rules, Conditional probability,
Bayess rule, random variables, mean,
variance. Chapter 3.
II. What's in this lecture?
Binomial, Poisson and Hypergeometric
Probability Distributions.
Read Chapter 4.
Note 6 of 5E
Introduction
Discrete random variables take on
only a finite or countable number of
values.
There are several useful discrete
probability distributions. We will
learn Binomial and Poisson
distributions.
Note 6 of 5E
p(x)
1/8
3/8
3/8
1/8
Note 6 of 5E
P(H):
Tail: Doesnt have gene
have the gene.
Note 6 of 5E
Note 6 of 5E
Binomial or Not?
The independence is a key assumption
that often violated in real life applications
Binomial or Not?
1.
2.
3.
4.
SticiGui
nn kk nnkk
kk
nn!!
kk nnkk
pp qq for
forkk 00,1,1,,22,...
,...nn..
kk!!((nnkk)!)!
nn!!
Recall
Recall CC
kk!!((nnkk)!)!
with
withnn!! nn((nn11)()(nn22)...(
)...(22))11and
and00!!11..
nn
kk
Note 6 of 5E
Mean
:: np
Mean
np
22
Variance
:: npq
Variance
npq
Standard
deviation
:: npq
Standard
deviation
npq
Note 6 of 5E
Example
A marksman hits a target 80% of the
time. He fires five shots at the target. What is
the probability that exactly 3 shots hit the
target?
n= 5
success = hit
P ( x 3) C p q
n
3
n 3
p = .8
x = # of hits
5!
(.8)3 (.2)53
3!2!
Example
What is the probability that more than 3 shots
hit the target?
P ( x 3) C45 p 4 q 54 C55 p 5 q 55
5!
5!
4
1
(.8) (.2)
(.8)5 (.2) 0
4!1!
5!0!
Cumulative
Probability Tables
You can use the cumulative probability
tables to find probabilities for selected
binomial distributions.
Find
Find the
the table
table for
for the
the correct
correct value
value of
of n.
n.
Find
Find the
the column
column for
for the
the correct
correct value
value of
of
p.
p.
The
The row
row marked
marked k
k gives
gives the
the cumulative
cumulative
probability,
=6 ofk)
probability, P(x
P(x k)
k) == P(x
P(x == 0)
0) ++
++ P(x
P(x
k)
Note=
5E
Example
k
p = .80
.000
.007
.058
.263
.672
1.000
Note 6 of 5E
Example
k
p = .80
.000
.007
.058
.263
.672
1.000
Note 6 of 5E
Example
Would it be unusual to find that none
of the shots hit the target?
P(
P(xx == 0)
0) == P(x
P(x 0)
0) == 00
What is the probability that less than 3 shots hit
the target?
P(
P(xx << 3)
3) == P(x
P(x 2)
2) == 0.058
0.058
What is the probability that less than 4 but more
than 1 shots hit the target?
P(1<
P(1<xx << 4)
4) == P(x
P(x 3)
3) -- P(x
P(x 1)
1)
== .263-.007=.256
.263-.007=.256
Note 6 of 5E
Example
Note 6 of 5E
Examples:
The number of calls received by a
switchboard during a given period of time.
The number of machine breakdowns in a day
The number of traffic accidents at a given
intersection during a given time period.
Note 6 of 5E
Standard
deviation:
Standard deviation:
Note 6 of 5E
Example
The average number of traffic accidents on a
certain section of highway is two per week.
Find the probability of exactly one accident
during a one-week period.
k
2e
e
P( x 1)
k!
1!
2e
.2707
Note 6 of 5E
Cumulative
Probability Tables
You can use the cumulative probability
tables to find probabilities for selected Poisson
distributions.
Find
Find the
the column
column for
for the
the correct
correct value
value of
of ..
The
The row
row marked
marked k
k gives
gives the
the cumulative
cumulative
probability,
probability, P(x
P(x k)
k) == P(x
P(x == 0)
0) ++
++ P(x
P(x == k)
k)
Note 6 of 5E
Example
k
0
1
2
3
4
5
6
7
8
=2
.135
.406
.677
.857
.947
.983
.995
.999
1.000
P(
P(xx == 1)
1) == P(x
P(x 1)
1) P(x
P(x 0)
0)
== .406
.406 -- .135
.135
== .271
Check from formula:
.271
P(x = 1) = .2707
Note 6 of 5E
Example
k
0
1
2
3
4
5
6
7
8
=2
.135
.406
.677
.857
.947
.983
.995
.999
1.000
Note 6 of 5E
The Hypergeometric
Probability Distribution
m
m
m
m
m
m
m
A bowl contains M red M&M candies and NM blue M&M candies. Select n candies from
the bowl and record x the number of red
candies selected. Define a red M&M to be
a success.
The probability of exactly k successes in n trials is
M
k
M N
nk
N
n
C C
P( x k )
C
Note 6 of 5E
Mean
Mean:: nn
M
M
NN
Variance
Variance :: nn
22
M
M NN M
M
NN NN
NN nn
NN 11
Note 6 of 5E
Example
A package of 8 AA batteries contains 2
batteries that are defective. A student randomly
selects four batteries and replaces the batteries
in his calculator. What is the probability that
all four batteries work?
Success = working battery
N=8
M=6
n=4
6
4
C C
P ( x 4)
8
C4
2
0
6(5) / 2(1)
15
8(7)(6)(5) / 4(3)(2)(1) 70
Note 6 of 5E
Example
What are the mean and variance for the
number of batteries that work?
M
6
n
4 3
N
8
6
4
8
2
N
2
N M N n
N N 1
4
.4286
7
Note 6 of 5E
Key Concepts
The Binomial Random Variable
1. Five characteristics: n identical trials, each resulting in
either success S or failure F; probability of success is p and
remains constant from trial to trial; trials are independent; and
x is the number of successes in n trials.
2. Calculating binomial probabilities
a. Formula: P ( x k ) C n p k q n k
k
b. Cumulative binomial tables
3. Mean of the binomial random variable: np
4. Variance and standard deviation: 2 npq and npq
npq
Note 6 of 5E
Key Concepts
II. The Poisson Random Variable
1. The number of events that occur in a period of time or
space, during which an average of such events are expected
to occur
2. Calculating Poisson probabilities
a. Formula:
b. Cumulative Poisson tables
kkee
PP((xxkk))
kk!!
Note 6 of 5E
Key Concepts
III. The Hypergeometric Random Variable
1. The number of successes in a sample of size n from a finite
population containing M successes and N M failures
2. Formula for the probability of k successes in n trials:
CCkMkMCCnMnMkkNN
PP((xxkk))
CCnNnN
nn
M
M
NN
nn
22
M
M NNM
M
NN NN
NNnn
NN11
Note 6 of 5E