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Probability Distribution

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Probability Distribution

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mppwf7cbq8
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© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
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ESM 210

BASIC STATISTICS FOR REAL


ESTATE II
Probability of Binomial Distribution
A binomial distribution can be thought of as simply the
probability of a SUCCESS or FAILURE outcome in an
experiment or survey that is repeated multiple times. The
binomial is a type of distribution that has two possible
outcomes (the prefix “bi” means two, or twice).
For example, a coin toss has only two possible outcomes:
heads or tails and taking a medical test could have two
possible outcomes: Positive or Negative, also writing
ESM 210 test or exams could have two possible outcome:
pass or fail.
Binomial distribution formula

Where;
P= Binomial probability
X=number of times for a specific outcome within n trials
P= probability of success on a single trial
q = probability of failure on a single trial
n =number of trials
Note: q= 1-p
Criteria
Binomial distributions must also meet the following three criteria:
1. The number of observations or trials is fixed. In other words, you
can only figure out the probability of something happening if you
do it a certain number of times. This is common sense—if you toss
a coin once, your probability of getting a tails is 50%. If you toss a
coin a 20 times, your probability of getting a tails is very, very close
to 100%.
2. Each observation or trial is independent. In other words, none of
your trials have an effect on the probability of the next trial.
3. The probability of success (tails, heads, fail or pass) is exactly the
same from one trial to another.
Example
1. A coin was tossed 10 times. What is the probability of
getting exactly 6 heads?

2. 60% of people who purchase sports cars are men. If 10


sports car owners are randomly selected, find
the probability that exactly 7 are men.
3. A computer installation has 10 terminals. Independently,
the probability that any one terminal will require attention
during a week is 0.1. Find the probabilities that (a) 0, (b), 1
(c) 2, (d) 3 or more, terminals will require attention during
the next week.
Example
A service engineer is can be called out for maintenance on the photocopiers in the
offices of four large companies, A, B, C and D. On any given week there is a
probability of 0.1 that he will be called to each of these companies. The event of
being called to one company is independent of whether or not he is called to any
of the others.
Find the probability that, on a particular day,
(i) he is called to all four companies,
(ii) he is called to at least three companies,
(iii) he is called to at least one
(iv) He is called to At most two
Example
The probability that a mountain-bike rider travelling
along a certain track will have a tyre burst is 0.05. Find
the probability that among 17 riders:
(a) exactly one has a burst tyre
(b) at most three have a burst tyre
(c) two or more have burst tyres.
Example
The probability that a machine will produce all bolts in a
production run within specification is 0.998. A sample of 8
machines is taken at random. Calculate the probability
that
(a) all 8 machines,
(b) 7 or 8 machines,
(c) at least 6 machines will produce all bolts within
specification
Summary
The binomial distribution describes the behavior of a count
variable X if the following conditions apply:
1: The number of observations n is fixed.
2: Each observation is independent.
3: Each observation represents one of two outcomes ("success" or
"failure").
4: The probability of "success" p is the same for each outcome.
Probability of Poisson distribution
What Is a Poisson Distribution?
In Statistics, a Poisson distribution is a Probability
distribution that is used to show how many times an event is
likely to occur over a specified period. In other words, it is a
count distribution. Poisson distributions are often used to
understand independent events that occur at a constant rate
within a given interval of time.
Poisson distribution Continued………..
A Poisson distribution can be use to estimate how likely it is
that something will happen "X" number of times. For
example, if the average number of people who buy chocolate
from a fast-food chain on a Friday night at a single restaurant
location is 200, a Poisson distribution can answer questions
such as,

"What is the probability that more than 300 people will buy
chocolate?"
Poisson distribution formula
Lambda in Poisson distribution
In Poisson distribution, lambda is the average rate of value for
a function. It is also known as the mean of the Poisson
distribution.

For Poisson distribution, variance is also the same as the mean


of the function hence lambda is also the Variance of the
function that follows the Poisson distribution.
Poisson characteristics
1. Discrete outcomes
2. The number of occurrences in each interval can range from zero to
infinity (theoretically)
3. Describes the distribution of infrequent (rare) events
4. Each event is independent of the other events
5. Describes discrete events over an interval
6. Expected number of occurrences E(X) are assumed to be constant
throughout the experiment.
Applications of Poisson Distribution
✔To count the number of defects of a finished product
✔To count the number of deaths in a country by any disease
or natural calamity
✔To count the number of infected plants in the field
✔To count the number of bacteria in the organisms or the
radioactive decay in atoms
✔To calculate the waiting time between the events.
Example
1. As only 3 students came to attend the class today, find the
probability for exactly 4 students to attend the classes tomorrow.
2. The average number of accidents at a level-crossing every year is 5.
Calculate the probability that there are exactly 3 accidents there this
year.
3. The number of industrial injuries per working week in a particular
factory is known to follow a poison distribution with mean 0.5.
Find the probability that
(a) In a particular week, there will be
I. Less than two accidents
II. More than two accidents
(b) In a three week period, there will be no accident
Example
1. In a cafe, the customer arrives at a mean rate of 2 per min. Find the
probability of arrival of 5 customers in 1 minute using the Poisson
distribution formula.
2. If 3% of electronic units manufactured by a company are defective.
Find the probability that in a sample of 200 units, less than 2 bulbs
are defective.
Example
A life insurance salesman sells on the average 3 life insurance policies
per week. Use Poisson's law to calculate the probability that in a given
week he will sell
I. Some policies
II. 2 or more policies but less than 5 policies.
III. Assuming that there are 5 working days per week, what is the
probability that in a given day he will sell one policy?

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