Chapter 5

Discrete Probability
Distributions

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5.1 Introduction to Discrete Probability
Distributions
• Random Variable
– Takes on different numerical values based on
chance
• Discrete Random Variable
– Can only assume a finite number of values or
an infinite sequence of values such as 0,1,2,…
• Continuous Random Variable
– Can assume an uncountable infinite number of
values
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Discrete Random Variable
• Many possible outcomes:
– number of complaints per day
– number of TVs in a household
– number of rings before the phone is answered
• Only two possible outcomes:
– gender: male or female
– defective item: yes or no
– game result: won or lost

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Discrete Random Variable - Example

Suppose we are interested in the number of heads

showing face up with 3 tosses of a coin.
The possible outcomes are 0 heads, 1 head, 2 heads,
and 3 heads.

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Discrete Random Variable – Example
Graphical Presentation of Probability Distribution
Probability distribution table and chart for the events of
zero, one, two, and three heads.

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Discrete Probability Distributions

3 possible outcomes 21 possible outcomes

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Expected Value of a Discrete
Probability Distribution
• The mean of a discrete probability
distribution. The average value when the
experiment that generates values for the
discrete random variable is repeated over
the long run.

E(x) = Expected value of x

x = Values of the discrete random variable
P(x) = Probability of the random variable
taking on the value x
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Expected Value of a Discrete Random
Variable - Example
Number of Bedrooms in Home for Sale – Calculate the
Expected Value.
E ( x) =  xP ( x)
The expected
number of
bedrooms is
2.85 which
represents the
mean of the
probability
distribution.

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Expected Value of a Discrete Random
Variable - Example
Suppose you are given a chance to pay $3 to play a game
in which one 6-sided die is rolled and you receive a payout
equal to $1 times the value that comes up on the die. What
is the expected profit for this game?
𝐸(𝑥) = ෍ 𝑥𝑃(𝑥)

You could expect to

win $.50 on average
each time you play the
game.

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Standard Deviation of a Discrete
Random Variable
• Standard deviation measures the spread, or
dispersion, in a set of data.
• The standard deviation also measures the
spread in the values of a random variable.
• Standard Deviation of a Discrete Probability Distribution
is

E(x) = Expected value of x

x = Values of the discrete random variable
P(x) = Probability of the random variable
taking on the value x

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Standard Deviation of a Discrete
Random Variable - Example
Number of Bedrooms in Home for Sale – Calculate the
Standard Deviation

E ( x) =  xP( x) = 2.85
 x = [ x − E ( x)] P( x) 2

 x = 1.427 = 1.195

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Standard Deviation of a Discrete
Random Variable - Example
Dice Game – Pay $3 to play – win $1 times the value on the
die
E ( x) =  xP( x) = $.50
 x = [ x − E ( x)] P( x) = 2.923 = $1.71
2

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Expected Value and Standard
Deviation Example
Experiment: Toss 2 Coins. x = Number of heads
4 possible outcomes

T T x-value Probability
0 1/4 = 0.25
T H 1 2/4 = 0.50
2 1/4 = 0.25
H T

H H
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Expected Value and Standard
Deviation Example
Experiment: Toss 2 Coins. x = Number of heads
Compute expected value and
standard deviation

Expected Value x P(x)

E(x) = (0 x 0.25) + (1 x 0.50) + (2 x 0.25) = 1.0 0 0.25

1 0.50
Standard Deviation 2 0.25

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Expected Value and Standard
Deviation Example
Calculate the Expected Payoff and Standard
Deviation for Each Investment Option.

Do you prefer 1 or 2? Why?

Do you prefer 1, 2, or 3? Why?

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Expected Value and Standard
Deviation Example
Investment # 1

E ( x) = $35
 x = 125 = $11.18
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Expected Value and Standard
Deviation Example
Investment # 2

E ( x) = $35
 x = 105 = $10.25
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Expected Value and Standard
Deviation Example
Investment # 3

E ( x) = $26
 x = 719 = $26.81
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5.2 The Binomial Probability
Distribution
• A distribution that gives the probability of x successes in
n trials in a process that meets the following conditions:
1. A trial has only two possible outcomes:
a success or a failure.
2. There is a fixed number, n, of identical trials.
3. The trials of the experiment are independent
of each other. This means that if one outcome
is a success, this does not influence the chance of another
outcome being a success.
4. The process must be consistent in generating successes and
failures. That is, the probability, p, associated with a success
remains constant from trial to trial.
5. If p represents the probability of a success, then
(1 – p) = q is the probability of a failure.

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Binomial Distribution Examples
• A manufacturing company inspects products
and classifies them as either defective or
acceptable
• A firm bidding for a contract will either get the
contract or not
• 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
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Binomial Distribution Example

A Bank believes that 80% of its customers prefer the bank

to close early on Friday but be open on Saturday morning.
Suppose three customers are randomly surveyed and that
the binomial distribution applies. Develop the probability
distribution for the number of these customers who like the
Saturday option.

Events: S =prefer Saturday F = prefer longer Friday

P ( S ) = 0.80
P ( F ) = 0.20
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Binomial Distribution - Bank Example

Begin by listing the Sample Space

x = number of S customers

x = 0 {F , F , F }
x = 1 {S , F , F } {F , S , F } {F , F , S }
x = 2 {S , S , F } {S , F , S } {F , S , S }
x = 3 {S , S , S }

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Binomial Distribution - Bank Example

Assign Probabilities Using Multiplication Rule for

Independent Events and the Addition Rule

P ( F , F , F ) = (0.20  0.20  0.20) = 0.008

P ( S , F , F ) or P( F , S , F ) or P( F , F , S ) = (0.80  0.20  0.20) + (0.20  0.80  .20) + (0.20  0.20  0.80) = 0.096
P ( S , S , F ) or P( S , F , S ) or P( F , S , S ) = (0.80  0.80  0.20) + (0.80  0.20  .80) + (0.20  0.80  0.80) = 0.384
P ( S , S , S ) = (0.80  0.80  0.80) = 0.512

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Binomial Distribution - Bank Example

Suppose the bank interviews 8 customers rather than

3. It’s too hard to list out the sample space. We
need an alternative method for determining the
binomial distribution.

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Counting Rule for Combinations
• A method for counting the number of ways
binomial events can occur

Cxn

n! = n(n - 1)(n - 2) . . . (2)(1)

x! = x(x - 1)(x - 2) . . . (2)(1)
0! = 1 by definition
The order of events does not matter.

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Binomial Distribution - Bank Example
Interview n=8 customers

𝑛!
𝐶𝑥𝑛 =
𝑥! (𝑛 − 𝑥)!
8!
𝐶38 = = 56
3! (8 − 3)!

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Binomial Formula

P(x) - probability of x successes in n trials,

with probability of success p on each trial
x - number of successes in sample,
(x = 0, 1, 2, ..., n)
p - probability of a success
q - probability of a failure q = 1 – p
n - number of trials (sample size)
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Binomial Distribution - Bank Example
Interview n=8 customers
Use Binomial Formula to find the probability of
x = 3 customers in a sample of n = 8 who prefer
Saturday opening.

P(S) = p = 0.80
𝑛!
𝑝(𝑥) = 𝑝 𝑥 𝑞 𝑛−𝑥
𝑥! (𝑛 − 𝑥)!
8!
𝑝(𝑥 = 3) = 0.803 ⋅ 0.208−3 = 0.009
3! (8 − 3)!

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Binomial Distribution - Bank Example
Interview n=8 customers

𝑛!
𝑝(𝑥) = 𝑝 𝑥 𝑞𝑛−𝑥
𝑥! (𝑛 − 𝑥)!
8!
𝑝(𝑥 = 3) = 0.803 ⋅ 0.208−3
3! (8 − 3)!
= 0.009

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Using the Cumulative Binomial Table
35% of the population support a new regulation, if a random
sample of 10 voters is polled, what is the probability that three
or fewer of them support the proposition?
n = 10
x p=.15 p=.20 p=.25 p=.30 p=.35 p=.40 p=.45 p=.50
0 0.1969 0.1074 0.0563 0.0282 0.0135 0.0060 0.0025 0.0010
1 0.5443 0.3758 0.2440 0.1493 0.0860 0.0464 0.0233 0.0107
2 0.8202 0.6778 0.5256 0.3828 0.2616 0.1673 0.0996 0.0547
3 0.9500 0.8791 0.7759 0.6496 0.5138 0.3823 0.2660 0.1719
4 0.9901 0.9672 0.9219 0.8497 0.7515 0.6331 0.5044 0.3770
5 0.9986 0.9936 0.9803 0.9527 0.9051 0.8338 0.7384 0.6230
6 0.9999 0.9991 0.9965 0.9894 0.9740 0.9452 0.8980 0.8281
7 1.0000 0.9999 0.9996 0.9984 0.9952 0.9877 0.9726 0.9453
8 1.0000 1.0000 1.0000 0.9999 0.9995 0.9983 0.9955 0.9893
9 1.0000 1.0000 1.0000 1.0000 1.0000 0.9999 0.9997 0.9990
10 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000

n = 10, p = 0.35, x ≤ 3:
P(x ≤ 3, n =10, p = 0.35) = 0.5138
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Finding an Exact Probability Using
the Cumulative Binomial Table
An airline has determined that the probability that a
customer who has purchased a first-class ticket between
San Francisco and Boston will not show for the flight is
0.08. Suppose the airline has sold 10 first-class tickets
for an upcoming flight. What is the probability that
exactly 2 people will be no-shows?

P ( x = 2) = P ( x  2) − P( x  1)

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Finding an Exact Probability Using
the Cumulative Binomial Table

n = 10; p = 0.08

P ( x = 2) = P ( x  2) − P ( x  1)
P ( x = 2) = 0.9599 − 0.8121 = 0.1478
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Mean and Standard Deviation for a
Binomial Distribution

 = E ( x) = np
 x = npq

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Mean and Standard Deviation for a
Binomial Distribution
Bank Example

 = E ( x) = 6.40 For  = E ( x) = np = 8  0.80 = 6.40

 x = 1.275 = 1.13 Binomial  = npq = 8  0.80  0.20 = 1.13
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Application 1
A large corporation in search of a CEO and a CFO has narrowed the
fields for each position to a short list. The CEO candidates graduated
from Chicago (C) and three Ivy League universities: Harvard (H),
Princeton (P), and Yale (Y). The four CFO candidates graduated from
MIT (M), Northwestern (N), and two Ivy League universities:
Dartmouth (D) and Brown (B). The personnel director wishes to
determine the distribution
of the number of Ivy League graduates who could fill these positions.

a. Assume the selections were made randomly.

Construct the probability distribution of the number of Ivy League
graduates who could fill these positions.
b. Would it be surprising if both positions were filled with Ivy League
graduates?
c. Calculate the expected value and standard deviation of the number
of Ivy League graduates who could fill these positions.

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Application 2
Hewlett-Packard receives large shipments of microprocessors
from Intel Corp. It must try to ensure the proportion of
microprocessors that are defective is small. Suppose HP
decides to test five microprocessors out of a shipment of
thousands of these microprocessors. Suppose that if at least
one of the microprocessors is defective, the shipment is
returned.

a. If Intel Corp.’s shipment contains 10% defective

microprocessors, calculate the probability the entire shipment
will be returned.
b. If Intel and HP agree that Intel will not provide more than 5%
defective chips, calculate the probability that the entire
shipment will be returned even though only 5% are defective.

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Cumulative Binomial Distribution Table

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5.3 Other Discrete Probability
Distributions
• Poisson Distribution
– Describes a process that extends over space,
time, or any well-defined segment/interval or
unit of inspection in which the outcomes of
interest occur at random and the number of
outcomes that occur in any given interval are
counted
– Is used when the total number of possible
outcomes cannot be determined

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Poisson Distribution Examples
• Number of patients who arrive at a
hospital emergency room per hour
• Number of calls the Dell technical support
receives in a 30-minute period
• Number of cars served at the gas station
in 24-hour period
• Number of defects per square meter of
leather

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Characteristics of the Poisson
Distribution
• The average number of outcomes of interest per
segment interval is .
• The intervals are independent.
– The number of calls arriving between 7:00 p.m. and 8:00
p.m. has no influence on the number of calls between
9:00 p.m. and 10:00 p.m.
• The probability of successes in an interval is the
same for all intervals of the same size.
– The probability distribution of emergency calls is the
same for any one-hour period of time at the hospital

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The Poisson Distribution
• Mean or Expected Standard Deviation
Value

• Probability Distribution

t - Number of segments of interest

x - Number of successes in t segments
λ - Expected number of successes in one segment
e - Base of the natural logarithm system (2.71828)
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Poisson Distribution
Distribution
for the
number of
arrivals
to the
checkout
section of a
store
per hour
(t=1), λ = 16.

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Using the Poisson Distribution
• Step 1: Define the segment units. The segment
units are usually blocks of time, areas of space,
or volume.
• Step 2: Determine the mean of the random
variable.
• Step 3: Determine t, the number of the segments
to be considered, and then calculate λt.
• Step 4: Define the event of interest and use the
Poisson formula or the Poisson table to find the
probability.
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Poisson Distribution - Example

At a Major League Baseball park, five customers arrive at a

concession stand on average in a ten minute period. What
is the probability that in a ten minute period exactly three
people will arrive at the concession stand?

Segment size = 10 minutes

 = 5.0
t = 1 segment of 10 minutes
t = (5.0)(1) = 5.0 𝑃(𝑥 = 3) =
(𝜆𝑡)𝑥 𝑒 −𝜆𝑡 5. 03 ⋅ 2.71828−5.0
= = 0.1404
𝑥! 3⋅2⋅1

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Poisson Distribution - Example
Baseball concession example – Find Probability of 3 or
fewer customers arriving in 20 minutes?
 = 5.0
t = 2 segments of 10 minutes
Two Segments
t = (5.0)(2) = 10.0
P ( x  3) = P( x = 3) + P( x = 2) + P( x = 1) + P( x = 0)
P ( x  3) = 0.0076 + 0.0023 + 0.0004 + 0.0000 = 0.0103
For example,
(𝜆𝑡)𝑥 𝑒 −𝜆𝑡 10. 03 ⋅ 2.71828−10.0
𝑃(𝑥 = 3) = = = 0.0076
𝑥! 3⋅2⋅1

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Using the Cumulative Poisson Table
Baseball concession example – Find Probability of 3 or
fewer customers arriving in 20 minutes?

 = 5.0
t = 2 segments of 10 minutes
t = (5.0)(2) = 10.0
P ( x  3) = 0.0103

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The Hypergeometric Distribution
• The hypergeometric distribution is formed
by the ratio of the number of ways an
event of interest can occur over the total
number of ways any event can occur.
• When sampling is performed without
replacement from finite populations, the
binomial distribution produces inaccurate
probabilities.

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Hypergeometric Distribution
• n trials in a sample taken from a finite population
of size N
• Sample taken without replacement
• Trials are dependent.
• The probability changes from trial to trial.
• Concerned with finding the probability of x
successes in the sample where there are X
successes in the population

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The Hypergeometric Distribution
• Two Possible Outcomes per Trial:

N−X X
C C
P( x) = n− x
N
x

C n

N - Population size
X - Number of successes in the population
N–X - Number of failures in the population
n - Sample size
x - Number of successes in the sample
n–x - Number of failures in the sample

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Hypergeometric Distribution Example
• Example: 3 light bulbs were selected from 10. Of the 10
there were 4 defective. What is the probability that 2 of
the 3 selected are defective?
Find P(x = 2) if N = 10, n = 3, X = 4, and x = 2.

10−4 4
𝑁−𝑋 𝐶 𝑋
𝐶𝑛−𝑥 𝑥 𝐶3−2 𝐶2 𝐶16 𝐶24 (6)(6) 𝐶𝑥𝑛 =
𝑛!
𝑃 𝑥=2 = 𝑁 = 10 = 10 = = 0.3 𝑥! (𝑛 − 𝑥)!
𝐶𝑛 𝐶3 𝐶3 120

There is a 30% chance that exactly 2 out

of the 3 selected light bulbs are defective.

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Hypergeometric Distribution Example

A company has 20 employees of which 8 have college

degrees. According to the company owner, 3 employees
were recently selected at random to be transferred to
another state. Suppose all three of those selected did
not hold a college degree. What is the probability of this
happening by chance?
20−12 12
𝐶3−3 𝐶3 𝐶08 𝐶312 (1)(22)
𝑃(𝑥 = 3) = = 20 = = 0.1930
𝐶320 𝐶3 114

8 College Graduates
0 college grads.

3 no degree
12 Not College Graduates

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