STATISTICAL DISTRIBUTION FUNCTIONS

1 INTRODUCTION
Although simulation can be a valuable tool for better understanding the underlying mechanisms that
control the behaviour of a system, using simulation to make predictions of the future behaviour of a
system can be difficult. This is because, for most real-world systems, at least some of the controlling
parameters, processes and events are often stochastic, uncertain and/or poorly understood. The
objective of many simulations is to identify and quantify the risks associated with a particular option,
plan or design. Simulating a system in the face of such uncertainty and computing such risks requires
that the uncertainties be quantitatively included in the calculations. To do this we collect data
about the system parameters and subject them to statistical analysis.

3.0 WHAT IS STATISTICS

The field of statistics is concerned with the collection, description, and interpretation of data (data are
numbers obtained through measurement). In the field of statistics, the term “statistic” denotes a
measurement taken on a sample (as opposed to a population). In general conversation, “statistics” also
refers to facts and figures.

3.1 What is a Statistical Distribution?

A statistical distribution describes the numbers of times each possible outcome occurs in a
sample. If you have 10 test scores with 5 possible outcomes of A, B, C, D, or F, a statistical distribution
describes the relative number of times an A,B,C,D or F occurs. For example, 2 A’s, 4 B’s, 4 C’s, 0 D’s,
0 F’s.

3.2 Measures of Central Tendency

Suppose we have a sample with the following 4 observations: 4, 1, 4, 3.
Mean - the sum of a set of numbers divided by the number of observations.
Median - the middle point of a set of numbers (for odd numbered samples).
the mean of the middle two points (for even samples).
Mode - the most frequently occurring number.
Mode = 4 (4 occurs most).
The mean, median and mode are called measures of central tendency.
3.3 Measures of Variation
Range - the maximum value minus the minimum value in a set of numbers.
Range = 4-1 = 3.
Standard Deviation - the average distance a data point is away from the mean.
Standard deviation computes the difference between each data point and the mean. Take the absolute
value of each difference. Sum the absolute values. Divide this sum by the number of data points.
Median: first arrange data points in increasing order.
Mean, Median, Mode, Range, and Standard Deviations are measurements in a sample (statistics) and
can also be used to make inferences on a population.
3.4 Showing Data Distribution in Graphs
Bar graphs use bars to compare frequencies of possible data values (see Fig a).
Double bar graphs use two sets of bars to compare frequencies of data values between two levels of
data (e.g. boys and girls) (see fig b).
Histograms use bars to show how frequently data occur within equal spaces within
an interval (see fig c & d).
Pie Charts use portion of a circle to show contributions of data values (see fig c &d).

3.5 The Difference between a Continuous and a Discrete Distribution

Continuous distributions describe an infinite number of possible data values (as shown by the curve).
For example someone’s height could be 1.7m, 1.705m, 1.71m,...
Discrete distributions describe a finite number of possible values. (shown by the bars)

Fig 2: Distribution of Height in Males

3.6 Normal Distribution
A normal distribution is a continuous distribution that is “bell-shaped”. Data are often
assumed to be normal. Normal distributions can estimate probabilities over a continuous
interval of data values.
The normal distribution refers to a family of continuous probability distributions
described by the normal equation.
In a normal distribution, data are most likely to be at the mean. Data are less likely to be
farther away from the mean.
The normal distribution is defined by the following equation:
Y = [ 1/σ * sqrt(2π) ] * e-(x - μ)2/2σ2
where X is a normal random variable, μ is the mean, σ is the standard deviation, π is
Approximately 3.14159, and e is approximately 2.71828.
The random variable X in the normal equation is called the normal random variable.
The normal equation is the probability density function for the normal distribution.
The graph of the normal distribution depends on two factors - the mean and the standard deviation. The
mean of the distribution determines the location of the center of the graph, and the standard deviation
determines the height and width of the graph. When the standard deviation is large, the curve is short
and wide; when the standard deviation is small, the curve is tall and narrow. All normal distributions
look like a symmetric, bellshaped curve.

3.6.1 Standard Normal Distribution

The standard normal distribution is a special case of the normal distribution. It is the
distribution that occurs when a normal random variable has a mean of zero and a standard
deviation of one.
The normal random variable of a standard normal distribution is called a standard score or a z-score.
Every normal random variable X can be transformed into a z score via the
following equation:
z = (X - μ) / σ
where X is a normal random variable, μ is the mean of X, and σ is the standard deviation of X.

3.6.2 The Normal Distribution as a Model for Measurements

Often, phenomena in the real world follow a normal (or near-normal) distribution. This allows
researchers to use the normal distribution as a model for assessing probabilities associated with real-
world phenomena. Typically, the analysis involves two steps.
Transform raw data. Usually, the raw data are not in the form of z-scores. They need to be
transformed into z-scores, using the transformation equation presented earlier: z = (X - μ) / σ.
Find the probability. Once the data have been transformed into z-scores, you can use standard normal
distribution tables, online calculators (e.g., Stat Trek's free normal distribution calculator) to find
probabilities associated with the z-scores. The problem in the next section demonstrates the use of the
normal distribution as a model for measurement.
Example 1 - Ada earned a score of 940 on a national achievement test. The mean test score was 850
with a standard deviation of 100. What proportion of students had a higher score than Ada? (Assume
that test scores are normally distributed.)
Solution - As part of the solution to this problem, we assume that test scores are normally distributed.
In this way, we use the normal distribution as a model for measurement.
Given an assumption of normality, the solution involves three steps.
First, we transform Ada's test score into a z-score, using the z-score transformation equation.
z = (X - μ) / σ = (940 - 850) / 100 = 0.90
Then, using a standard normal distribution table, we find the cumulative
probability associated with the z-score. In this case, we find P(Z < 0.90) = 0.8159.
Therefore, the P(Z > 0.90) = 1 - P(Z < 0.90) = 1 - 0.8159 = 0.1841.
Thus, we estimate that 18.41 percent of the students tested had a higher score than Ada.
Example 2 - An average light bulb manufactured by the Acme Corporation lasts 300 days with a
standard deviation of 50 days. Assuming that bulb life is normally distributed, what is the probability
that an Acme light bulb will last at most 365 days?
Solution: Given a mean score of 300 days and a standard deviation of 50 days, we want to find the
cumulative probability that bulb life is less than or equal to 365 days. Thus, we know the following:
The value of the normal random variable is 365 days.
The mean is equal to 300 days.
The standard deviation is equal to 50 days.
We enter these values into the formula and compute the cumulative probability.
The answer is: P( X < 365) = 0.90. Hence, there is a 90% chance that a light bulb will burn out
within 365 days.
3.6.3 Conversion to a Standard Normal Distribution
The values for points in a standard normal distribution are z-scores. We can use a
standard normal table to find the probability of getting at or below a z-score. (a percentile).
1. Subtract the mean from each observation in your normal distribution, the new mean=0.
2. Divide each observation by the standard deviation, the new standard deviation=1.
3.6.4 Skewed Distributions μ
Skewness is the degree of asymmetry or departure from symmetry, of a distribution.
Skewed distributions are not symmetric. If the frequency curve of a distribution has a longer tail to the
right of the right of the central maximum than to the left, the distribution is said to be skewed to the
right, or have a positive skewness. If the reverse is the case, it is said to be skewed to the left or
negative skewness.
For skewed distributions, the mean tend to lie on the same side of the mode as the longer tail. Thus a
measure of the asymmetry is supplied by the difference:
Mean – mode. This can be made dimensionless if we divide it by a measure of dispersion,
such as the standard deviation, leading to the definition:
Skewness = mean mode / SD mod / S ………….. (1)
To avoid using mode, we can use the empirical formula:
Skewness = 3(mean median) / SD 3(median)/ S ……….(2)
Equations (1) and (2) are called; Pearson’s first and second coefficients of skewness.

3.7 What is a Percentile?

A percentile (or cumulative probability) is the proportion of data in a distribution less than or equal
to a data point. If you scored a 90 on a math test and 80% of the class had scores of 90 or lower; your
percentile is 80. In the figure 4, b=90 and P(Z<b)=80.

3.8 Probabilities in Discrete Distributions

Suppose for your 10 tests you received 5 As, 2 Bs, 2 Cs, 1 D and want to find the
probability of receiving an A or a B. Sum the frequencies for A and B and divide by the sample size.
The probability of receiving an A or a B is (5+2)/10 = .7 (a 70% chance).

3.8.1 Probability and the Normal Curve

The normal distribution is a continuous probability distribution. This has several implications for
probability.
The total area under the normal curve is equal to 1.
The probability that a normal random variable X equals any particular value is 0.
The probability that X is greater than b equals the area under the normal curve bounded by b and plus
infinity (as indicated by the non-shaded area in the figure
The probability that X is less than a equals the area under the normal curve bounded by b and minus
infinity (as indicated by the shaded area in the figure4. below).