ITM UNIVERSITY,GURGAON

Poisson Distribution

Submitted To Dr. Charu Shri

Submitted by Gaurav Chhabra
(14-mba-011)


5.5 Poisson distribution
Poisson distribution is named for Simeon Denis Poisson (1781-1840)
The poisson distribution is used to describe number of processes,
including the distribution of telephone calls going through a
switchboard system, the demand(needs) of patients for service at
a health institution, the arrivals of trucks and cars at a toolbooth
and the no. Of accidents at intersection .There is a common
element in all the the examples. They can be described by a
discrete random variable that takes on integer(whole)
values(0,1,2,3,4,5 and so on). The no. of patients who arrive at
physician clinic in a given interval of time will be 0,1,2,3,4,5 or some
other whole no. Similarly, if you count the number of cars arriving
at a toolbooth on the XYZ toll during some 10-period, the number
will be 0,1,2,3,4,5 and so on.
Characteristics of processes that produce poisson probability
distribution
1. The average(mean ) no. of vehicles that arrive per rush hour
can be estimated from past traffic data.
2. If we divide the rush hour into periods(intervals) of one second
each, we will find these statements to b true :-
a) The probability that exactly one vehicle will arrive at the single
booth per second
b) The probability that two or more vehicles will arrive within a one
second interval is so small that we can assign it a zero value.
c) The no, of vehicles that arrive in a given one-second interval is
independent of the time which that one second interval occurs
during rush hour.
d) No. of arrivals in any one second interval is not dependent on the
no. of arrivals in any other one second interval.
Basic formulae P(x)=
x
X e
-

x!
=Lambda(the mean no. of occurrences per interval of time)raised to x
power
e
-


= 2.71828(the base of the Napierian or natural, logarithm system), raised
to the negative lambda power
x!= x factorial
Note:- appendix table needed which has been provided to you.
Examples :
1. Suppose that we are investigating the safety of a dangerous intersection .Post
police records indicate a mean of five accidents per month at this
intersection. The no. of accidents is distributed acc. To poisson distribution
and the highway safety division wants us to calculate the probability in any
month of exactly 0,1,2,3 or 4 accidents and then we are supposed to calculate
of accidents even more then 4 accidents .(use the table provided to you to
avoid lengthy calculations)
Hint: =5
P(x)=
x
X e
-

x!
Probability of zero accidents
P(0)=(5)
0
(

e
-5
)
0!
= (1)(0.00674)
1
= 0.00674
And so on :

Formulae of poisson distribution as approximation of the binomial
P(x)= (np)
x
X e
-

np

x!
n= no. of trials







SELF CHECK EXERCISES
SC 5-7 Given =4.2, for a poisson distribution, find
A) P(x<2)
B) P(x>5)
C) P(x=8)
SC 5-8 Given a binomial distribution with n=30 trials and p=0.04,use the
Poisson approximation to the binomial to find
A) P(r=25)
B) P(r=3)
C) P(r=5)
BASIC CONCEPTS
SC 5-27 Given a binomial distribution with n=28 trials and p=0.025,use the
poisson approximation to the binomial to find:
A) P(r>3)
B) P(r<5)
C) P(r=9)
SC 5-28 If the prices of new cars increase an average of four times every three
years, find the probability of
a) No price hike in a randomly selected period of 3 years
b) Two price hikes
c) Four price hikes
d) Five or more

SC 5-29 Given a binomial distribution with n=25 and p=0.032,use the poisson
approximation to the binomial to find:
A) P(r=3)
B) P(r=5)
C) P(r< 2)
SC 5-30 Given =6.1 for a Poisson distribution, find
A) P(x<3)
B) P(x>2)
C) P(x=6)
D) P(1<x< 4)