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Stat Week12

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Stat Week12

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iiii094579
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Continuous Probability

Distributions
Shih-Kai Chu

References:
Statistics for Business & Economics, Fifteenth Edition
Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson,
Dennis J. Sweeney and Thomas A. Williams
ISBN: 978-981-5119-32-9
outline
• Uniform probability distribution
• Normal probability distribution
• Normal approximation of binomial probabilities
• Exponential probability distribution
• Normal approximation of binomial probabilities
⎻ When the number of trials becomes large, evaluating the binomial
probability function by hand or with a calculator is difficult. In cases
where np ≥ 5, and n(1 - p) ≥ 5, the normal distribution provides an
easy-to-use approximation of binomial probabilities.
⎻ When using the normal approximation to the binomial, we set 𝜇 =
𝑛𝑝 and 𝜎 = 𝑛𝑝(1 − 𝑝) in the definition of the normal curve.
Example:
Suppose that a particular company has a history of making errors in
10% of its invoices (𝑝 = 0.10.), use a sample of 𝑛 = 100 invoices to
compute the probability that 𝑥 = 12 of the 100 invoices contain errors.

• To find the binomial probability of 𝑥 = 12 successes in 𝑛 = 100 trials, we can apply the normal
approximation of the binomial distribution because 𝑛𝑝 = 100 0.10 = 10 ≥ 5, and 𝑛 1 − 𝑝 =
100 1 − 0.10 = 90 ≥ 5.
• Thus, mean and standard deviation are
• 𝜇 = 𝑛𝑝 = 100 0.10 = 10
• 𝜎= 𝑛𝑝(1 − 𝑝) = 100(0.10)(0.90) = 9 =
3
• To approximate the binomial probability of 𝑥 = 12,
we apply the continuity correction factor
andcompute the area under the corresponding
normal curve between 11.5 and 12.5
• 𝑃 11.5 ≤ 𝑥 ≤ 12.5 = 𝑃 (11.5 − 10)⁄3 ≤ 𝑧 ≤ (12.5 − 10)⁄3
• = 𝑃 0.5 ≤ 𝑧 ≤ 0.83 = 𝑃 𝑧 ≤ 0.83 − 𝑃 𝑧 ≤ 0.50 = 0.7967 − 0.6915 = 0.1052
Exponential Probability Distribution (指數分配)
• The exponential probability distribution is useful in describing the
time it takes to complete a task.
• The exponential random variables can be used to describe:
• Time between vehicle arrivals at a toll booth
• Time required to complete a questionnaire
• Distance between major defects in a highway
Exponential Probability Distribution (cont’d)

• Its probability density function p.d.f is

where 𝜇 = expected value or mean and e = 2.71828


To compute exponential probabilities,
(Relationship between the
A function of cumulative probabilities: Poisson and Exponential
Distributions)
Example: Al’s Full-Service Pump
The time between arrivals of cars at Al’s full-service gas pump 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.
Thanks!

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