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Thinking Challenge
• You’re taking a 33 question
multiple choice test. Each
question has 4 choices.
Clueless on 1 question, you
decide to guess. What’s the
chance you’ll get it right?
• If you guessed on all 33
questions, what would be your
grade? Would you pass?

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 4.1

Two Types of Random Variables

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 Random Variable

A random variable is a variable that assumes

numerical values associated with the random
outcomes of an experiment, where one (and only
one) numerical value is assigned to each sample
point.

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 Discrete
Random Variable

Random variables that can assume a countable

number (finite or infinite) of values are called
discrete.

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 Discrete Random Variable
Examples

Experiment Random Possible

Variable Values
Make 100 Sales Calls # Sales 0, 1, 2, ..., 100

Inspect 70 Radios # Defective 0, 1, 2, ..., 70

Answer 33 Questions # Correct 0, 1, 2, ..., 33

Count Cars at Toll # Cars 0, 1, 2, ..., ∞

Between 11:00 & 1:00 Arriving
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 Continuous
Random Variable

Random variables that can assume values

corresponding to any of the points contained in
one or more intervals (i.e., values that are
infinite and uncountable) are called continuous.

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Continuous Random Variable
Examples

Experiment Random Possible

Variable Values
Weigh 100 People Weight 45.1, 78, ...
Measure Part Life Hours 900, 875.9, ...
Amount spent on food $ amount 54.12, 42, ...
Measure Time Inter-Arrival 0, 1.3, 2.78, ...
Between Arrivals Time

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 4.2

Probability Distributions for

Discrete Random Variables

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 Discrete
Probability Distribution

The probability distribution of a discrete

random variable is a graph, table, or formula
that specifies the probability associated with each
possible value the random variable can assume.

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 Requirements for the
Probability Distribution of a
Discrete Random Variable x
1. p(x) ≥ 0 for all values of x
2.  p(x) = 1

where the summation of p(x) is over all possible

values of x.
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 Discrete Probability
Distribution Example
Experiment: Toss 2 coins. Count number of
tails.
Probability Distribution
Values, x Probabilities, p(x)
0 1/4 = .25
1 2/4 = .50
2 1/4 = .25

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© 1984-1994 T/Maker Co.
 Visualizing Discrete
Probability Distributions
Listing Table
{ (0, .25), (1, .50), (2, .25) } f(x) p(x)
# Tails Count
0 1 .25
1 2 .50
Graph
2 1 .25
p(x)
.50
.25 Formula
.00 x n!
p (x ) = px(1 – p)n – x
0 1 2 x!(n – x)!

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 Summary Measures
1. Expected Value (Mean of probability distribution)
• Weighted average of all possible values
•  = E(x) = x p(x)
2. Variance
• Weighted average of squared deviation about
mean
• 2 = E[(x 2(x 2 p(x)
3. Standard Deviation
●   2
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 Summary Measures
Calculation Table

x p(x) x p(x) x– (x – 2 (x – 2p(x)

Total x p(x) (x 2 p(x)

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 Thinking Challenge

You toss 2 coins. You’re

interested in the number of
tails. What are the expected
value, variance, and
standard deviation of this
random variable, number of
tails?
© 1984-1994 T/Maker Co.

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 Expected Value & Variance
Solution*

x p(x) x p(x) x– (x –  2 (x –  2p(x)

0 .25 0 –1.00 1.00 .25

1 .50 .50 0 0 0
2 .25 .50 1.00 1.00 .25
 = 1.0 2 .50
 .71
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Probability Rules for Discrete
Random Variables
Let x be a discrete random variable with probability
distribution p(x), mean µ, and standard deviation .
Then, depending on the shape of p(x), the following
probability statements can be made:
Chebyshev’s Rule Empirical Rule
P x    x  µ    0  .68
P x  2  x  µ  2   34  .95
P x  3  x  µ  3   89  1.00
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 4.3

The Binomial Distribution

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 Binomial Distribution
Number of ‘successes’ in a sample of n
observations (trials)
• Number of reds in 15 spins of roulette wheel
• Number of defective items in a batch of 5 items
• Number correct on a 33 question exam
• Number of customers who purchase out of 100
customers who enter store (each customer is
equally likely to pyrchase)

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 Binomial Probability
Characteristics of a Binomial Experiment
1. The experiment consists of n identical trials.
2. There are only two possible outcomes on each trial. We
will denote one outcome by S (for success) and the other
by F (for failure).
3. The probability of S remains the same from trial to trial.
This probability is denoted by p, and the probability of
F is denoted by q. Note that q = 1 – p.
4. The trials are independent.
5. The binomial random variable x is the number of S’s in
n trials. © 2011 Pearson Education, Inc
 Binomial Probability
Distribution
 n  x n x n! n x
p ( x)    p q  p (1  p )
x

 x x ! (n  x)!
p(x) = Probability of x ‘Successes’
p = Probability of a ‘Success’ on a single trial
q = 1–p
n = Number of trials
x = Number of ‘Successes’ in n trials
(x = 0, 1, 2, ..., n)
n – x = Number of failures in n trials
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 Binomial Probability
Distribution Example
Experiment: Toss 1 coin 5 times in a row. Note
number of tails. What’s the probability of 3 tails?
n!
p( x)  p x (1  p) n  x
x !(n  x)!
© 1984-1994 T/Maker Co.

5!
p (3)  .53 (1  .5)53
3!(5  3)!

 .3125
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Binomial Probability Table
(Portion)
n=5 p
k .01 … 0.50 … .99
0 .951 … .031 … .000
1 .999 … .188 … .000
2 1.000 … .500 … .000
3 1.000 … .812 … .001
4 1.000 … .969 … .049
Cumulative Probabilities
p(x ≤ 3) – p(x ≤ 2) = .812 – .500 = .312
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 Binomial Distribution
Characteristics
n = 5 p = 0.1
Mean P(X)
1.0
  E(x)  np .5
.0 X
Standard Deviation 0 1 2 3 4 5

  npq n = 5 p = 0.5
P(X)
.6
.4
.2
.0 X
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 Binomial Distribution
Thinking Challenge
You’re a telemarketer selling service
contracts for Macy’s. You’ve sold 20
in your last 100 calls (p = .20). If you
call 12 people tonight, what’s the
probability of
A. No sales?
B. Exactly 2 sales?
C. At most 2 sales?
D. At least 2 sales?
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Binomial Distribution Solution*
n = 12, p = .20
A. p(0) = .0687
B. p(2) = .2835
C. p(at most 2) = p(0) + p(1) + p(2)
= .0687 + .2062 + .2835
= .5584
D. p(at least 2) = p(2) + p(3)...+ p(12)
= 1 – [p(0) + p(1)]
= 1 – .0687 – .2062
= .7251

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 4.4

Other Discrete Distributions:

Poisson and Hypergeometric

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 Poisson Distribution
1. Number of events that occur in an interval
• events per unit
— Time, Length, Area, Space

2. Examples
• Number of customers arriving in 20 minutes
• Number of strikes per year in the U.S.
• Number of defects per lot (group) of DVD’s

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Characteristics of a Poisson
Random Variable
1. Consists of counting number of times an event
occurs during a given unit of time or in a given
area or volume (any unit of measurement).
2. The probability that an event occurs in a given unit
of time, area, or volume is the same for all units.
3. The number of events that occur in one unit of
time, area, or volume is independent of the number
that occur in any other mutually exclusive unit.
4. The mean number of events in each unit is denoted
by .
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 Poisson Probability
Distribution Function
x –
e
p (x )  (x = 0, 1, 2, 3, . . .)
x!

2 
p(x) = Probability of x given 
 = Mean (expected) number of events in unit
e = 2.71828 . . . (base of natural logarithm)
x = Number of events per unit
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 Poisson Probability
Distribution Function
= 0.5
P(X)
.8
Mean .6
.4
  E(x)   .2
.0 X
0 1 2 3 4 5

= 6
Standard Deviation P(X)
.3

  .2
.1
.0 X

10
0

8
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Poisson Distribution Example
Customers arrive at a
rate of 72 per hour.
What is the probability
of 4 customers arriving
in 3 minutes?
© 1995 Corel Corp.

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Poisson Distribution Solution
72 Per Hr. = 1.2 Per Min. = 3.6 Per 3 Min. Interval

-
 e
x
p( x) 
x!
 3.6 
4 -3.6
e
p (4)   .1912
4!

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Poisson Probability Table
(Portion)
x
 0 … 3 4 … 9
.02 .980 …
: : : : : : :
3.4 .033 … .558 .744 … .997
3.6 .027 … .515 .706 … .996
3.8 .022 … .473 .668 … .994
: : : : : : :
Cumulative Probabilities
p(x ≤ 4) – p(x ≤ 3) = .706 – .515 = .191
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 Thinking Challenge
You work in Quality Assurance
for an investment firm. A clerk
enters 75 words per minute
with 6 errors per hour. What is
the probability of 0 errors in a
255-word bond transaction?

© 1984-1994 T/Maker Co.

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Poisson Distribution Solution:
Finding *
• 75 words/min = (75 words/min)(60 min/hr)
= 4500 words/hr
• 6 errors/hr = 6 errors/4500 words
= .00133 errors/word
• In a 255-word transaction (interval):
 = (.00133 errors/word )(255 words)
= .34 errors/255-word transaction
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Poisson Distribution Solution:
Finding p(0)*

-
 e
x
p( x) 
x!
 .34 
0 -.34
e
p (0)   .7118
0!

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 Characteristics of a
Hypergeometric
Random Variable
1. The experiment consists of randomly drawing n
elements without replacement from a set of N
elements, r of which are S’s (for success) and (N –
r) of which are F’s (for failure).
2. The hypergeometric random variable x is the
number of S’s in the draw of n elements.

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 Hypergeometric Probability
Distribution Function
 r   N  r
 x   n  x 
p x   [x = Maximum [0, n – (N – r), …,
 N Minimum (r, n)]
 n 

nr r N  r n N  n 
µ  
2

N N 2 N  1

where . . .
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Hypergeometric Probability
Distribution Function

N = Total number of elements

r = Number of S’s in the N elements
n = Number of elements drawn
x = Number of S’s drawn in the n elements

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