WEEK 7 - Discrete Probability Distribution (Poisson)
WEEK 7 - Discrete Probability Distribution (Poisson)
BUSINESS STATISTICS
LE C TURE 6-2
D I S C R ET E P R O B A B I L I T Y
D I S T R I B UT I O N S
L E C T U R ER : D R G R A C E M U SA
C L A SS: M B A 2 0 2 5
Discrete II:
Poisson Distribution
Learning Objectives
Appreciate the concept of the Poisson
distribution
Recognize an experiment whose outcomes
follow a Poisson probability distribution
Demonstrate and understanding of how to
calculate Poisson probabilities
Determine the expectation (mean) and
variance of a Poisson distribution
Demonstrate and understanding of how to
use Excel to find Poisson probabilities
3
Basic Concepts
The Poisson distribution is used to model the number of events occurring within a given
time interval. The formula for the Poisson probability density (mass) function is
p ( X k )
k
e
k!
is the shape parameter which indicates the average number of events in the given
time interval.
Some events are rather rare - they don't happen that often. For instance, car accidents
are the exception rather than the rule. Still, over a period of time, we can say
something about the nature of rare events.
The distribution was derived by the French mathematician Siméon Poisson in 1837,
and the first application was the description of the number of deaths by horse kicking in
the Prussian army.
Example:
5
Illustrative Example
7
Poisson Distribution
If events happen at a constant rate over time,
the Poisson Distribution gives The Probability
of X Numberof Events Occurring in a time T.
This distribution tells us the Probability of All
Possible Numbers of Counts, from 0 to
Infinity.
If X= # of counts per second, then the Poisson
probability that X =k k (a
particular count) is:
e
p ( X k )
k!
5!
0.1008
e 3 30
P ( X 0)
0!
0.0498
10
c. What is the probability that there will be
less than 2 particles of agent A in a cubic
meter of air emitted from the factory?
P ( X 2) P ( X 0) P ( X 1)
e 3 31
0.0498
1!
0.0498 0.1494
0.1992
11
Poisson Tables
An alternative to calculating Poisson
probabilities using the formula is to use
Passion Tables
The probabilities given in this table are
cumulative probabilities.
P ( X k ) P ( X 0 ) P ( X 1) ... P ( X k )
k
P ( X x)
x 0
12
Example 4
13
Let X = the number of accidents per week
Lambda = 3.5 accidents per week
a) The probability that there less than three accidents in
a week is
P ( X 3) P ( X 2 )
0 .3 2 1
b) The probability that there are five or more accidents in
a week is P ( X 5 ) 1 P ( X 4 )
1 0 . 7 2 5
0 .2 7 5
14
Mean and Variance for the
Poisson Distribution
The Mean distribution, The Mean is:
The Variance of this distribution is also given by
2
The Standard deviation is therefore