Discrete Random Variables and their Probability Distributions

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1 CHAPTER 5 Discrete Random Variables and their Probability Distributions CHAPTER OUTLINE 5.1 Probability Distribution of a Discrete Random Variable 5.2 Mean and Standard Deviation of a Discrete Random Variable 5.3 Factorials, Permutations, and Combinations 5.4 The Binomial Probability Distribution 5.5 The Hypergeometric Probability Distribution 5.6 The Poisson Probability Distribution 5.1 PROBABILITY DISTRIBUTION OF A DISCRETE RANDOM VARIABLE As we explained in Chapter 4 (Section 4.1), Excel can be used to convert a frequency distribution table into a probability distribution table. Then, a graphical presentation of this distribution can easily be generated, as illustrated below. Example 5-1 The table below gives the frequency distribution of the number of vehicles owned by all 2000 families living in a small town. Number of Vehicles Owned Frequency

2 74 Chapter 5 Discrete Random Variables and their Probability Distributions Enter this into Excel as a probability distribution table (having Excel calculate relative frequencies in place of frequencies) and generate a graphical presentation of this distribution. Solution: Type the column headings Number of Vehicles Owned, x and Probability, P(x) into cells A1 and B1. (Widen the columns as necessary.) Enter the values 0-4 into cells A2-A6. Click in cell B2, and type =30/SUM(30,470,850,490,160) and then copy this to cells B3-B6. Double-click on cell B3 so that you can edit it. Replace the 30 after the = sign with 470, so that it contains the formula =470/SUM(30,470,850,490,160). Hit ENTER. Edit cells B4-B6 similarly, so that they also contain the rest of the relative frequencies. Highlight the table and click on the chart wizard icon:. In Step 1, select the Column chart type and click on Next. In Step 2, you need to click on the Series tab and remove the Number of Vehicles Owned series from the list, leaving only the Probability series. Then click in the Category (X) axis labels text box and highlight cells A2-A6. Click on Next. In Step 3, edit the chart title to read Probability Distribution of the Number of Vehicles Owned by Families, enter Number of Vehicles for the x-axis label, and Probability for the y-axis label. Click on the Legend tab and remove the legend, and then click on Finish. Double-click on the bars, click on the Options tab, and lower the Gap width to 50 (or less). Resize the chart (by clicking on it and then dragging a corner) or move it (by clicking and dragging the whole thing) as necessary. Figure 5.1 Using Excel to generate a probability distribution table and graph.

3 Excel Manual MEAN AND STANDARD DEVIATION OF A DISCRETE RANDOM VARIABLE We will use Excel to calculate the mean and standard deviation of a discrete random variable similarly to how we had it calculate the mean and standard deviation of grouped data in Section 3.3. The method we will use involves generating columns of values and using the following mathematical formulas found in your textbook: µ = xp( x) σ = x P( x) µ (Unfortunately, Excel does not have one-step built-in functions for calculating these measures.) Example 5-2 The following table lists the probability distribution of the number of breakdowns per week for a machine based on past data. Breakdowns per week x Probability P(x) Use Excel to find the mean number of breakdowns per week for this machine. Also, use it to calculate the standard deviation of the number of breakdowns. Solution: Enter the probability distribution into a blank Excel worksheet. Include column headings of x and P(x), using cells A1-B5. In cell C1, type xp(x) for the column heading for the products that will be used for calculating the mean. In cell C2, type = and click on cell A2, then type * and click on cell B2, and hit ENTER. Then copy this down to cells C3-C5. In cell C7, insert the SUM function (or type =sum( without the quotes), highlight cells C2-C5 and hit ENTER. You should see the mean value of 1.8 appear. Figure 5.2 Using Excel to find the mean of a probability distribution.

4 76 Chapter 5 Discrete Random Variables and their Probability Distributions Now, type a column label of xxp(x) or x 2 P(x) in cell D1 for the products that will be used for calculating the standard deviation. Click on cell D2, type = and click on cell A2, then type ^2* and click on cell B2. Then hit ENTER. Copy this down to cells D3-D5. Then copy cell C6 over to cell D6 to show the sum of that column, 4.3. Now, click on an empty cell nearby, say cell E6. Here we will finish calculating the standard deviation. Type =SQRT( and click on cell D6, then type - and click on cell C6, then type ^2) and hit ENTER. The standard deviation of appear. Figure 5.3 Using Excel to find the standard deviation of a probability distribution. 5.3 FACTORIALS, PERMUTATIONS AND COMBINATIONS Note: The functions used in the section are not on the list of Statistical functions in the Paste Function window. You must scroll through All functions in order to find them. Factorials The value of the factorial of a number, n! = n (n 1) 2 1, can be found with Excel s FACT function. In particular, this function can be used to find the number of arrangements of n items. Example 5-3 How many ways can 10 books be arranged on a shelf? Solution: The number of arrangements of 10 items is 10!. Click on a blank cell in an Excel worksheet and insert the FACT function. Type 10 and click on OK or hit ENTER and you should see the result of 3,628,800 appear. Figure 5.4 Excel s FACT function finds the number of arrangements of 10 books.

5 Excel Manual 77 Permutations The number of arrangements (i.e. permutations) of n items taken r at a time can be found using Excel s PERMUT function. This function requires two inputs: 1) the total number of items, n = Number 2) the number of items chosen per arrangement, r = Number_chosen. Example 5-4 How many ways are there to arrange 7 out of 10 books on a shelf? Solution: Click on a blank cell in an Excel worksheet and insert the PERMUT function. (Note: Remember that you can always just type the function name in after an = sign and followed by an open parenthesis. The two inputs then need to be separated with a comma.) For the first input, type 10, for the total number of books. For the second input, type 7, for the number of books in the arrangement. You should see the value of 604,800 appear. Figure 5.5 Excel s PERMUT function finds the number of arrangements of 7 books out of 10. Combinations Perhaps even more useful in probability and statistics is the combinations formula (where order does not matter). Excel has this formula as a built-in function called COMBIN. This function requires two inputs: 1) the total number of items, n = Number 2) the number of items chosen per combination, x = Number_chosen.

6 78 Chapter 5 Discrete Random Variables and their Probability Distributions Example 5-5 An ice cream parlor has six flavors of ice cream. Kristen wants to buy two flavors of ice cream. If she randomly selects two flavors out of six, how many possible combinations are there? Solution: Click on a blank cell in an Excel worksheet and insert the COMBIN function. (Note: Remember that you can always just type the function name in after an = sign and followed by an open parenthesis. The two inputs then need to be separated with a comma.) For the first input, type 6, for the total number of flavors of ice cream. For the second input, type 2, for the number of flavors chosen. You should see the value of 15 appear. Figure 5.6 Excel s COMBIN function finds the number of two-flavor choices out of six, where order does not matter. 5.4 THE BINOMIAL PROBABILITY DISTRIBUTION Recall that the binomial random variable X is used to generate a probabilistic model of a situation in which an experiment involving only two outcomes (success and failure) is performed n independent, identical times. The binomial probability distribution and cumulative distribution, along with its parameters are as follows: Let p = probability of a success and q= 1 p. Then, a n a 1) P(a successes) = PX ( = a) = nca pq, for any a = 0, 1, 2,, n. 2) Cumulative probability distribution is x n x PX ( a) = C pq, for any a = 0, 1, 2,, n. n x a 3) Mean µ = np Standard Deviation σ = npq x Excel has the binomial probability distribution built-in as the function BINOMDIST. This function requires four inputs: 1) the number of successes that you are interested in, x = Number_s 2) the total number of trials, n = Trials 3) the probability of success, p, as a decimal = Probability_s 4) 1 (TRUE) if you want the cumulative probability of at most ( ) x successes, or 0 (FALSE) if you want the probability of exactly (=) x successes = Cumulative.

7 Excel Manual 79 Example 5-6 At the Express House Delivery Service, providing high-quality service to customers is the top priority of the management. The company guarantees a refund of all charges if a package it is delivering does not arrive at its destination by the specified time. It is known from past data that despite all efforts, 2% of the packages mailed through this company do not arrive at their destinations within the specified time. Suppose a corporation mails 10 packages through Express House Delivery Service on a certain day. Use Excel to find a) the probability that exactly 1 of these 10 packages will not arrive at its destination within the specified time, and b) the probability that at most 1 of these 10 packages will not arrive at its destination within the specified time. Solution: Click on a blank cell in an Excel worksheet. For part a), the first input is 1, for 1 of the 10 packages, the second input is 10, the total number of packages, the third input is.02, the probability that a package does not arrive by the specified time, and the fourth is 0 (for FALSE), since we want the probability for exactly 1. Click on OK and you should see the probability of appear. See Figure 5.7 below. Figure 5.7 Go to Insert>Function in order to insert Excel s BINOMDIST function, and fill in the four inputs in order to calculate a binomial probability. For part b), the inputs are all the same except the last one, which needs to be a 1 (for TRUE), since we want the probability of at most (less than or equal to) 1. If you want to, you can just double-click on the cell and edit this input instead of reinserting the function and starting over. When you hit ENTER, you should see the probability of appear.

8 80 Chapter 5 Discrete Random Variables and their Probability Distributions Figure 5.8 Excel s BINOMDIST function can be typed in and/or edited instead of inserted. Excel s BINOMDIST function and chart wizard are also wonderful tools for viewing an entire binomial distribution. Example 5-7 According to an Allstate Survey, 56% of Baby Boomers have car loans and are making payments on these loans (USA TODAY, October 28, 2002). Assume that this result holds true for the current population of all Baby Boomers. Let x denote the number in a random sample of three Baby Boomers who are making payments on their car loans. Have Excel generate the probability distribution of x and graph it. Solution: Enter headings of x and P(x) into cells A1 and B1. Enter the possible values of x: 0, 1, 2, and 3, into cells A2-A5. Click on cell B2 and insert the BINOMDIST function. For the first input, Number_s, move the window out of the way, if necessary, and click on cell A2. For the second input, Trials, type a 3. For the third input, Probability_s, enter.56, and for the fourth input, Cumulative, type 0 (for FALSE). Hit ENTER and you should see the value of appear. Now copy this cell down to cells B3-B5, and you ll have the probabilities for the other success values as well! For the graph, click on a blank cell and then click on the chart wizard icon:. In Step 1, select the Column chart type and click on Next. In Step 2, highlight cells B2- B5 (the probabilities only) for the Data range. Then click on the Series tab, click in the Category (X) axis labels text box, and highlight cells A2-A5 (the values of x). Click on Next. In Step 3, edit the titles and click on the Legend tab and remove the legend, and then click on Finish. Double-click on the bars, click on the Options tab, and lower the Gap width to 50 (or less). Finally, resize the chart (by clicking on it and then dragging a corner) or move it (by clicking and dragging the whole thing) as necessary.

9 Excel Manual 81 Figure 5.9 Using Excel s BINOMDIST function (with the FALSE option) and chart wizard to represent a binomial distribution. Variations of the BINOMDIST function are sometimes required to answer specific probability questions. Remember that at most is the same as equal or less and at least is the same as equal or more. Example 5-8 According to a 2001 study of college students by Harvard University s School of Public Health, 19.3% of those included in the study abstained from drinking (USA TODAY, April 3, 2002). Suppose that of all current college students in the United States, 20% abstain from drinking. A random sample of six college students is selected. Use Excel to answer the following. a) Find the probability that exactly three college students in this sample abstain from drinking. b) Find the probability that at most two college students in this sample abstain from drinking. c) Find the probability that at least three college students in this sample abstain from drinking. d) Find the probability that one to three college students in this sample abstain from drinking. Solution: Using the BINOMDIST function for the various inequalities involved, with 0 (FALSE) for = and 1 (TRUE) for, the inputs and answers are as follows: a) P(x = 3) is calculated by: =BINOMDIST(3, 6,.20, 0) and the result is: b) P(x 2) is calculated by: =BINOMDIST(2, 6,.20, 1) and the result is: c) P(x 3) = 1 P(x < 3) = 1 P(x 2), so use: =1-BINOMDIST(2, 6,.20, 1) and the result is: d) P(1 x 3) = P(x 3) P(x <1) = P(x 3) P(x 0), so use: = BINOMDIST(3, 6,.20, 1)-BINOMDIST(0, 6,.20, 1), which gives

10 82 Chapter 5 Discrete Random Variables and their Probability Distributions 5.5 THE HYPERGEOMETRIC PROBABILITY DISTRIBUTION Excel has the hypergeometric probability distribution built in as the function HYPGEOMDIST. This function requires four inputs: 1) the number of successes that you are interested in, x (in n trials) = Sample_s 2) the number of trials, n = Number_sample 3) the number of successes in the population, r = Population_s 4) the total number of elements in the population, N = Number_pop. Example 5-9 Brown Manufacturing makes auto parts that are sold to auto dealers. Last week the company shipped 25 auto parts to a dealer. Later on, it discovered that five of those parts were defective. By the time the company manager contacted the dealer, four auto parts from that shipment had already been sold. What is the probability that three of those four parts were good and one was defective? Solution: Click on an empty cell in an Excel spreadsheet. Click on the f x icon and insert the function HYPGEOMDIST. Identify and enter the four required inputs: 1) The number of successes, i.e. good parts, that we are interested in, Sample_s, is 3. 2) The number of trials, Number_sample, is 4. 3) The number of successes, i.e. good parts, in the population, Population_s, is 20. 4) The total number of elements in the population, Number_pop, is 25. Hit ENTER or click on OK and you should see the probability of appear. Figure 5.10 Fill in the four inputs required for the HYPGEOMDIST function in order to calculate a hypergeometric probability.

11 Excel Manual THE POISSON PROBABILITY DISTRIBUTION Recall that the Poisson random variable X has the following probability distribution, mean, and standard deviation: 1) Let λ be the mean number of occurrences. Then, the probability distribution λ a e λ of X is given by PX ( = a) =, a= 0,1, 2,... a! a λ e λ 2) Cumulative probability distribution is PX ( a) =, a= 0, 1, 2,... a! 3) Mean µ = λ Standard Deviation σ = λ Excel has the Poisson probability distribution built in as the function POISSON. This function requires three inputs: 1) the number of occurrences that you are interested in, x = X 2) the mean number of occurrences, λ = Mean 3) 1 (TRUE) if you want the cumulative probability of at most ( ) x occurrences, or 0 (FALSE) if you want the probability of exactly (=) x occurrences = Cumulative. Example 5-10 A washing machine in a laundromat breaks down an average of three times per month. Using Excel, find the probability that during the next month this machine will have a) exactly two breakdowns b) at most one breakdown Solution: Click on an empty cell in an Excel spreadsheet. Click on the f x icon and insert the function POISSON. Identify and enter the three required inputs. For part a): 1) The number of occurrences, i.e. breakdowns, that we are interested in, X, is 2. 2) The mean number of occurrences, Mean, is 3. 3) The logical value of Cumulative is FALSE, since we want the probability of exactly 2 occurrences. Enter 0. Hit ENTER or click on OK and you should see the probability of appear. x a

12 84 Chapter 5 Discrete Random Variables and their Probability Distributions Figure 5.11 Fill in the four inputs required for the POISSON function in order to calculate a Poisson probability. For part b), you can simply double-click on the same cell and edit the three inputs: 1) The number of occurrences, i.e. breakdowns, that we are interested in, X, is 1. 2) The mean number of occurrences, Mean, is still 3. 3) The logical value of Cumulative is TRUE, since we want the cumulative probability of at most 1 occurrence. Change the 0 to a 1. Hit ENTER and you should see the probability of appear. Figure 5.12 Excel s POISSON function can be typed in and/or edited instead of inserted. Note that Excel s built-in probability distributions will allow you to be slightly more accurate in your calculations than using values from tables that have been rounded off. (Your answers may differ slightly from the answers in your textbook as a result.) Exercises 5.1 One of the most profitable items at A1 s Auto Security Shop is the remote starting system. Let x be the number of such systems installed on a given day at this shop. The following table lists the frequency distribution of x for the past 80 days. x f Use Excel to convert this frequency distribution table to a probability distribution table for the number of remote starting systems installed on a given day. Then have Excel generate a graph of the probability distribution.

13 Excel Manual The following table lists the probability distribution of the number of exercise machines sold per day at Elmo s Sporting Goods store. Machines sold per day Probability Use Excel to calculate the mean and standard deviation for this probability distribution. 5.3 Use Excel s FACT function to calculate 11!. 5.4 Use Excel s PERMUT function in order to find the number of ways 1 st, 2 nd, 3 rd place can be assigned to three of the eight women in an age group division of a triathlon. 5.5 An English department at a university has 16 faculty members. Two of the faculty members will be randomly selected to represent the department on a committee. Use Excel s COMBIN to calculate the number of ways the department can select 2 faculty members from In a poll of 12- to 18-year-old females conducted by Harris Interactive for the Gillette Company, 40% of the young females said that they expected the United States to have a female president within 10 years (USA TODAY, October 1, 2002). Assume that this result is true for the current population of all 12- to 18-year-old females. Suppose a random sample of 16 females from this age group is selected. Using Excel s BINOMDIST function, find the probability that the number of young females in this sample who expect a female president within 10 years is a) at least 9 b) at most 5 c) 6 to An Internal Revenue Service inspector is to select 3 corporations from a list of 15 for tax audit purposes. Of the 15 corporations, 6 earned profits and 9 incurred losses during the year for which the tax returns are to be audited. If the IRS inspector decides to select three corporations randomly, use Excel s HYPGEOMDIST function to find the probability that the number of corporations in these three that incurred losses during the year for which the tax returns are to be audited is a) exactly 2 b) none c) at most A large proportion of small businesses in the United States fail during the first few years of operation. On average, 1.6 businesses file for bankruptcy per day in a large city. Using Excel s POISSON function, find the probability that the number of businesses that will file for bankruptcy on a given day in this city is a) exactly 3 b) 2 to 3 c) more than 3 d) less than 3.

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