Discrete Probability Distributions

Dr. Saud Ahmed Khan 1

 Random Variable
• Random variable
– Outcomes of an experiment expressed
numerically
– e.g.: Toss a die twice; Count the number of times
the number 4 appears (0, 1 or 2 times)

Dr. Saud Ahmed Khan 2

 Discrete Random Variable

• Discrete random variable

– Obtained by counting (1, 2, 3, etc.)
– Usually a finite number of different
values
– e.g.: Toss a coin five times; Count
the number of tails (0, 1, 2, 3,
4, or 5 times)

Dr. Saud Ahmed Khan 3

Discrete Probability Distribution
Example
Event: Toss 2 Coins. Count # Tails.

Probability Distribution
Values Probability

T 0 1/4 = .25
1 2/4 = .50
T 2 1/4 = .25

T T
Dr. Saud Ahmed Khan 4
 Discrete Probability Distribution
• Probability Distribution of a Random Variable: Is a table,
graph, or mathematical expression that specifies all possible values (outcomes) of a
random variable along with their respective probabilities.

Random
Variables

Probability Probability
Distribution of a Distribution of a
Discrete Continuous
Ch.5 Ch.6
Random Variable Random Variable

Dr. Saud Ahmed Khan 5

 • A discrete probability distribution applied to countable values
(That is to a random variables resulting from counting, not
measuring)
• Example: Using the records for past 500 working days, a
manager of auto dealership summarized the number of cars
sold per day and the frequency of each number sold.

No. of Cars Sold 0 1 2 3 4 5 6 7 8 9 10 11

(X)

Frequency 40 100 142 66 36 30 26 20 16 14 8 2

Dr. Saud Ahmed Khan 6

Questions:

What is the average number of cars sold per day?

What is the dispersion of the number of cars sold per day?

What is the probability of selling less than 4 cars per day?

What is the probability of selling exactly 4 cares per day?

What is the probability of selling more than 4 cars per day?

To answer these questions, we need the mean and the standard

deviation of the distribution.
Dr. Saud Ahmed Khan 7
• Expected Value (or mean) of a discrete distribution (Weighted Average)
N
  E(X)   X i *P( X i )
i 1

• Variance of a discrete random variable

N
σ   [X  E(X)] 2 * P(X )
2
i i
i 1

• Standard Deviation of a discrete random variable

N
σ  σ2  2
 [X  E(X)] * P(X )
i i
i 1

where:
E(X) = Expected value of the discrete random variable X=Mean
Xi = the ith outcome of the
Dr. Saud variable
Ahmed Khan X 8
P(Xi) = Probability of the Xi occurrence
 Number of Cars Sold, X Frequency P(X) X*P(X) [X-E(X)]^2 [X-E(X)]^2*P(X)

0 40 0.08 0 9.339136 0.74713088

1 100 0.2 0.2 4.227136 0.8454272

2 142 0.284 0.568 1.115136 0.316698624

3 66 0.132 0.396 0.003136 0.000413952

4 36 0.072 0.288 0.891136 0.064161792

5 30 0.06 0.3 3.779136 0.22674816

6 26 0.052 0.312 8.667136 0.450691072

7 20 0.04 0.28 15.555136 0.62220544

8 16 0.032 0.256 24.443136 0.782180352

9 14 0.028 0.252 35.331136 0.989271808

10 8 0.016 0.16 48.219136 0.771506176

11 2 0.004 0.044 63.107136 0.252428544

Total 500 Mean = 3.056 Variance = 6.068864

Std Dev = 2.463506444

X is the number of cars sold per day; P(X) is the probability that that many are sold per
day. Dr. Saud Ahmed Khan 9
• NOTE: The usefulness of the Table

• P(X < 4) = P(X = 0) + P(X = 1) + P(X = 2) + P(X = 3)

= (0.08 + 0.2 + 0.284 + 0.132) = 0.696

• P(X  4) = P(X < 4) + P(X = 4) = 0.696 + 0.072 = 0.768

• P(X  4) = 1 – P(X < 4) = 1 – 0.696 = 0.304

• P(X = 4) = 0.072
• P(X > 4) = 1 – P(X  4) = 1 – 0.768 = 0.232
•

Dr. Saud Ahmed Khan 10

 Laws of Expected Value & Variance
1. E(c)= c

2. E(c1X + c2) = c1E(X1) + c2

Variance:

1. V(c) = 0
• The variance of a constant (c) is zero.

2. V(X + c) = V(X)
• The variance of a random variable and a constant is just the variance of the
random variable.

3. V(cX) = c2V(X)
• The variance of a random variable and a constant coefficient is the
coefficient squared times the variance of the random variable.

Dr. Saud Ahmed Khan 11

 Important Discrete
Probability Distributions

Discrete Probability
Distributions

Binomial Poisson

Dr. Saud Ahmed Khan 12

 Binomial Probability Distribution
(a special discrete distribution)
• Characteristics
• A fixed number of identical observations, n. Each observation is drawn
from:
– Infinite population without replacement or
– Finite population with replacement
• Two mutually exclusive (?) and collectively exhaustive (?) categories
– Generally called “success” and “failure”
– Probability of success is p, probability of failure is (1 – p)
• Constant probability for each outcome from one observation to all
observations.
• Observations are independent from each other
– The outcome of one observation does not affect the outcome of the other

Dr. Saud Ahmed Khan 13

Binomial Distribution has many application in Business,
ECONOMICS and other social and natural sciences
Examples:
• A firm bidding for contracts will either get a contract or not
• A manufacturing plant labels items as either defective or
acceptable
• A marketing research firm receives survey responses of “yes I
will buy” or “no I will not”
• New job applicants either accept the offer or reject it
• An account is either delinquent or not
• What is the expected effect of government intervention
• The chance of return on some investment

Dr. Saud Ahmed Khan 14

Binomial Probability Distribution Function

n!
PX   p 1  p 
X n X

X ! n  X !
P  X  : probability of X successes given n and p
X : number of "successes" in sample  X  0,1, , n 
p : the probability of each "success"
n : sample size Tails in 2 Tosses of Coin
X P(X)
0 1/4 = .25
1 2/4 = .50
2
Dr. Saud Ahmed Khan 1/4 = .25 15
Dr. Saud Ahmed Khan 16
 Binomial distribution: example

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

probability of getting exactly 10 heads?

20
C (.5) (.5)
10
10 10
 .176

Dr. Saud Ahmed Khan 17

 Binomial distribution: example

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

probability of getting 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
Dr. Saud Ahmed Khan 18
 Characteristics of a Binomial Distribution
1. For each pair of n and p a particular probability distribution can be
generated.
2. The shape of the distribution depends on the values of p and n.
3. If p=0.5, the distribution is perfectly symmetrical
4. If p< 0.5, the distribution is right skewed
5. If p>0.5, the distribution is left skewed
6. The closer p to 0.5 and the larger the sample size, n, less skewed the
distribution
7. The mean of the distribution = μ  E(x)  np

8. The standard deviation = σ  np(1 - p)

9. Or you can download the binomial table from the following Web site.
(You need to learn how to use this table for the test).

1. http://wps.prenhall.com/wps/media/objects/9431/9657451/Ch_05/levine-smume6_topic_BINO.pdf

Dr. Saud Ahmed Khan 19

– Practice Question:

Suppose 4 credit card accounts are examined for over the limit charges.
Overall probability of over the limit charges is known to be 10 percent
(one out of every 10 accounts).

What is the probability of at least 3 accounts being over

the limit.

Answer:
0.0037 = 0.37%

Dr. Saud Ahmed Khan 20

 Practice Questions
Q: 1 As voters exit the polls on Nov. 4, you ask a representative random
sample of 6 voters if they voted for Obama. If the true percentage of voters who
vote for Obama on Nov. 4 is 55.1%, what is the probability that, in your sample,
exactly 2 voted for Obama and 4 did not? (18.5%)

Q: 2 You are performing a cohort study. If the probability of developing

disease in the exposed group is .05 for the study duration, then if you sample
(randomly) 500 exposed people, how many do you expect to develop the
disease? Give a margin of error (+/- 1 standard deviation) for your estimate.

b. What’s the probability that at most 10 exposed people develop the disease?

Dr. Saud Ahmed Khan 21

 Practice Questions

Q: 3 If the probability of being a smoker among a group of

cases with lung cancer is 0.6, what’s the probability that in a
group of 8 cases you have less than 2 smokers? More than 5?
What are the expected value and variance of the number of
smokers?

Dr. Saud Ahmed Khan 22

 Answer
Q: 1 P(2 yes votes exactly) = C26 (0.551)2 (0.449)4 = 18.5%

Q:2 You are performing a cohort study. If the probability of developing disease
in the exposed group is .05 for the study duration, then if you sample (randomly) 500
exposed people, how many do you expect to develop the disease? Give a margin of
error (+/- 1 standard deviation) for your estimate.

X ~ binomial (500, .05)

E(X) = 500 (.05) = 25
Var(X) = 500 (.05) (.95) = 23.75
StdDev(X) = square root (23.75) = 4.87
25  4.87
Dr. Saud Ahmed Khan 23
 Answer

2. What’s the probability that at most 10 exposed subjects

develop the disease?

This is asking for a CUMULATIVE PROBABILITY: the probability of 0 getting the

disease or 1 or 2 or 3 or 4 or up to 10.

P(X≤10) = P(X=0) + P(X=1) + P(X=2) + P(X=3) + P(X=4)+….+ P(X=10)=

 500  0 500  500  1 499  500  2 498  500  10 490

 (.05) (.95)   (.05) (.95)   (.05) (.95)  ...   (.05) (.95)  .01
 0  1  2  10 

Dr. Saud Ahmed Khan 24

 Answer
Q: 3 P(<2)=.00065 + .008 = .00865 P(>5)=.21+.09+.0168 = .3168

X P(X)
8
0 1(.4) =.00065
1 7
1 8(.6) (.4) =.008
2 6
2 28(.6) (.4) =.04
3 5
3 56(.6) (.4) =.12 E(X) = 8 (.6) = 4.8
4 4
4 70(.6) (.4) =.23 Var(X) = 8 (.6) (.4) =1.92
5 3
5 56(.6) (.4) =.28 StdDev(X) = 1.38
6 2
6 28(.6) (.4) =.21
7 1
7 8(.6) (.4) =.090
8
8 1(.6) =.0168 Dr. Saud Ahmed Khan 25
 Poisson Distribution
• Named for Simeon Poisson, the Poisson distribution is a
discrete probability distribution and refers to the number of
events (successes) within a specific time period or region of
space. For example:
• The number of cars arriving at a service station in 1 hour.
(The interval of time is 1 hour.)
• The number of flaws in a bolt of cloth. (The specific
region is a bolt of cloth.)
• The number of accidents in 1 day on a particular stretch of
highway. (The interval is defined by both time, 1 day, and
space, the particular stretch of highway.)

Dr. Saud Ahmed Khan 26

 Poisson Probability Distribution…
• The probability distribution function:

• Note: μ is the only parameter [tell me μ and I can calculate

the probabilities]
• and e is the natural logarithm base.

• FYI:

Dr. Saud Ahmed Khan 27

 Example
• The number of typographical errors in new editions of
textbooks varies considerably from book to book. After some
analysis he concludes that the number of errors is Poisson
distributed with a mean of 1.5 typos per 100 pages. The
instructor randomly selects 100 pages of a new book. What is
the probability that there are no typos?

• That is, what is P(X=0) given that = 1.5?

“There is about a 22% chanceDr.

ofSaud
finding zero errors”
Ahmed Khan 28
 Poisson Distribution…
• As mentioned on the Poisson experiment slide:

• The probability of a success is proportional to the size of the

interval

• Thus, knowing an error rate of 1.5 typos per 100 pages, we can
determine a mean value for a 400 page book as:

• =1.5(4) = 6 typos / 400 pages.

Dr. Saud Ahmed Khan 29

 Example
• For a 400 page book, what is the probability that there are no
typos?

• P(X=0) =

“there is a very small chance there are no typos”

Dr. Saud Ahmed Khan 30

 Example
• For a 400 page book, what is the probability that there are five
or less typos?

• P(X≤5) = P(0) + P(1) + … + P(5)

= .446

=6 & X≤ 5
“there is about a 45% chance there are 5 or less typos”

Dr. Saud Ahmed Khan 31

 Example
• …Excel is an even better alternative:

Dr. Saud Ahmed Khan 32

 Poisson Practice
Q # 1: The number of infections [X] in a hospital each week has
been shown to follow a Poisson distribution with mean 3.0
infections per week. Calculate the following probabilities.
• P(X = 0) =
0.049787
• P(X < 4) =
0.815263
• P(X > 9) =
0.003511

Dr. Saud Ahmed Khan 33

 Poisson Practice

2a. If calls to your cell phone are a Poisson process with a

constant rate μ=2 calls per hour, what’s the probability that, if
you forget to turn your phone off in a 1.5 hour movie, your
phone rings during that time?

2b. How many phone calls do you expect to get during the
movie?

Dr. Saud Ahmed Khan 34

 Answer
2a. If calls to your cell phone are a Poisson process with a constant
rate μ=2 calls per hour, what’s the probability that, if you forget to
turn your phone off in a 1.5 hour movie, your phone rings during that
time?
X ~ Poisson (μ=2 calls/hour)
P(X≥1)=1 – P(X=0)

( 2 * 1.5) 0 e 2 (1.5) (3) 0 e 3

P ( X  0)   e 3  .05
0! 0!
P(X≥1)=1 – .05 = 95% chance

2b. How many phone calls do you expect to get during the movie?

E(X) =μ t = 2(1.5) = 3
Dr. Saud Ahmed Khan 35
 Poisson Practice

Q:3 A small life insurance company has determined that on the average it
receives 6 death claims per day. Find the probability that the company
receives at least four death claims on a randomly selected day.(0.848796 )

Q:4 The number of traffic accidents that occurs on a particular stretch of road
During a month follows a Poisson distribution with a mean of 9.4. Find the
probability that less than two accidents will occur on this stretch of road during a
randomly selected month. (0.00086 )

Dr. Saud Ahmed Khan 36

 Poisson Practice

Q:5. The number of road construction projects that take place at any one
time in a certain city follows a Poisson distribution with a mean of 3. Find
the probability that exactly five road construction projects are currently
taking place in this city. (0.100819)

Q:6. The number of road construction projects that take place at any one
time in a certain city follows a Poisson distribution with a mean of 7. Find
the probability that more than four road construction projects are currently
taking place in the city. (0.827008)

Q:7. Suppose the number of babies born during an 8-hour shift at a hospital's
maternity wing follows a Poisson distribution with a mean of 6 an hour. Find
the probability that five babies are born during a particular 1-hour period in
this maternity wing. (0.160623)

Dr. Saud Ahmed Khan 37