EM 1203

Continuous Probability Distribution

 Continuous Probability
Distribution
■ In the previous chapter, we developed discrete random
variables and their probability distributions. Now, we extend
the probability concepts to continuous random variables and
their probability distributions. Many economic and business
measures such as sales, investments, consumptions, costs,
and revenues can be represented by continuous random
variables.
 Continuous Probability
Distribution
■ Definition - A random variable is a continuous random variable if
it can take any value in an interval.

■ Example. Consider the experiment of filling 12 ounce cans with

coffee and let X be the amount of coffee in a randomly chosen
can. Find the values of the random variable X.

■ Solution. X can take any value between 0 and 12, that is

0 £ x £ 12
■ Hence, X is a continuous random variable.
 Continuous Probability
Distribution
■ Some examples of continuous random variables are:

– The yearly income for a family.

– The amount of oil imported into Turkey in a particular
month.
– The change in the price of a store of IBM common stock
in a month.
– The time that elapses between the installation of a new
component and its failure.
– The percentage of impurity in a batch of chemicals.
 Continuous Probability
Distribution
■ There are three basic differences between a continuous and a discrete
probability distribution:

i) The probability that a continuous variable will take a specific value is equal
to zero.

ii) Because of this, we can never express continuous probability distribution

in a tabular form.

iii) Thus we require an equation or a formula to describe such kind of

distribution. Such equation is termed as probability density function or PDF.
 The Uniform Distribution
Uniform model: states that every interval of a fixed length
has the same probability

Random variable x is uniformly distributed over the interval from a to

b if it has the following probability density function :

ì 0 , x < a
ï 1
ï
f ( x) = í , a £ x £ b
ïb - a
ïî 0 , x > b
The mean of a uniformly distributed random variable is :

x
dx = a + b
b
µ=ò
a b-a 2

The variance is given by :

2
bæ a+bö 1 (b - a ) 2
s2 = ò çx- ÷ dx =
aè 2 ø b-a 12
 Example :

A quality control engineer knows that the amounts of fill that a

machine puts into 12-ounce bottles are actually uniformly
distributed between 11.90 and 12.40 ounces. Find the mean
and the percentage of bottles containing more than 12.0
ounces.

The average fill per container is

then : a+b
µ=
2
= (11.9 + 12.4) / 2
= 12.15 oz
The percent of containers with more than 12.0 ounces is :

12.4 1
P( X > 12.0) = ò12.0 12.4 - 11.9 dx
12.4
=ò 2 dx
12.0

= 0.8 , or 80 %

The standard deviation of fills is

(b - a) 2 (12.4 - 11.9) 2
s = = = 0.14 oz
12 12
 NORMAL DISTRIBUTION

Ø A normal distribution is a continuous, symmetric,

bell-shaped distribution of a variable.
 NORMAL DISTRIBUTION
Summary of the Properties of the
Theoretical Normal Distribution
1. Bell-shaped
2. Mean, median, and mode are
equal and at the center
3. Unimodal

4. Symmetric
5. Continuous
6. Asymptotic
7. The total area under a normal
distribution curve is equal to 1.00,
or 100%
 NORMAL DISTRIBUTION

Ø A normal distribution curve

can be used as a
probability distribution
curve for normally
distributed variables

Ø The area under the

standard normal
distribution curve can also
be thought of as a
probability.
 NORMAL DISTRIBUTION

Finding the Area Under the Standard Normal Distribution Curve

Ø To the left of any z value Ø To the right of any z value

Ø Between any two z values

 NORMAL DISTRIBUTION

Finding the Area Under the Standard Normal Distribution Curve

2
æ 1 öæ x - µ ö
1 x2 -ç ÷ç ÷
f ( x) =
s 2p òx1
e è 2 øè s ø
dx

where,
σ = standard deviation
µ = mean
x = limits
 NORMAL DISTRIBUTION

Example (Using the equation)

Each month, an American household generates an average of 28

pounds of newspaper for garbage or recycling. Assume the standard
deviation is 2 pounds. If a household is selected at random, find the
probability of it generating
a) Between 27 and 31 pounds per month
b) More than 30.2 pounds per month
Assume the variable is approximately normally distributed.
 NORMAL DISTRIBUTION
Application of the normal distribution
Example
2
æ 1 öæ x - µ ö
1 x2 -ç ÷ç ÷
ò
Given: è 2 øè s ø
standard deviation (σ) = 2
f ( x) = e dx
mean (µ) = 28
s 2p x1

a) Between 27 and 31 pounds per month æ 1 öæ x - 28 ö

2

1 31 -ç ÷ç ÷
f ( x) =
2 2p ò 27
è 2 øè 2 ø
e dx

f ( x) = 0.625
 NORMAL DISTRIBUTION
Application of the normal distribution
Sample 1 2
æ 1 öæ x - µ ö
1 x2 -ç ÷ç ÷
Given:
standard deviation (σ) = 2
f ( x) =
s 2p ò x1
e è 2 øè s ø
dx
mean (µ) = 28 æ 1 öæ x - 28 ö
2

1 30.2 -ç ÷ç ÷
b. More than 30.2 pounds per month f ( x) =
2 2p ò
0
e è 2 øè 2 ø
dx

f ( x) = 0.864

f ( x) = 1 - 0.864 = 0.136

f ( x) = 0.136
 Standard Normal Distribution

The standard normal distribution is a normal distribution with a mean

of 0 and a standard deviation of 1.
Standard Normal Distribution
 Standard Normal Distribution

The z value is actually the number of standard deviations

that a particular X value is away from the mean.
 Standard Normal Distribution

X -µ
z=
s
where,
X = value
µ = mean
σ = standard deviation
Standard Normal Distribution

FINDING THE AREA USING THE Z-TABLE

 Standard Normal Distribution
Example

1.) Find the area to the left of z = 1.99

 Standard Normal Distribution
Example

2.) Find the area to the right of z = - 1.16.

 Standard Normal Distribution
Example

3.) Find the area between z = 1.68 and z = - 1.37

 Standard Normal Distribution
Example (Solve using the z-table)

Each month, an American household generates an average of 28

pounds of newspaper for garbage or recycling. Assume the standard
deviation is 2 pounds. If a household is selected at random, find the
probability of it generating

a. Between 27 and 31 pounds per month

b. More than 30.2 pounds per month

Assume the variable is approximately normally distributed.

 Solution a
Step 1 Draw the figure and represent the area. See Figure 6–20.

Figure 6–20
Area Under a Normal
Curve for Part a of
Example 6–7

Historical Note 27 28 31
Astronomers in the
late 1700s and the
Step 2 Find the two z values.
1800s used the
principles underlying X ! m 27 ! 28 1
z1 " " " ! " !0.5
the normal distribution s 2 2
to correct X ! m 31 ! 28 3
measurement errors z2 " " " " 1.5
s 2 2
that occurred in
charting the positions Step 3 Find the appropriate area, using Table E. The area to the left of z2 is 0.9332,
of the planets. and the area to the left of z1 is 0.3085. Hence the area between z1 and z2 is
0.9332 ! 0.3085 " 0.6247. See Figure 6–21.

Figure 6–21
Area and z Values for
Part a of Example 6–7

27 28 31
–0.5 0 1.5

Hence, the probability that a randomly selected household generates between 27 and
31 pounds of newspapers per month is 62.47%.
 Solution b
Step 1 Draw the figure and represent the area, as shown in Figure 6–22.

re 6–22
Under a Normal
for Part b of
ple 6–7

54.qxd 9/8/10 12:07 PM Page 319

28 30.2

Step 2 Find the z value for 30.2.

X ! m 30.2 ! 28 2.2
z" " " " 1.1
s 2 2
Section 6–2 Applications of the Normal Distribution 319

Step 3 Find the appropriate area. The area to the left of z ! 1.1 is 0.8643. Hence the
area to the right of z ! 1.1 is 1.0000 " 0.8643 ! 0.1357.
Hence, the probability that a randomly selected household will
accumulate more than 30.2 pounds of newspapers is 0.1357, or 13.57%.

A normal distribution can also be used to answer questions of “How many?” This
application is shown in Example 6–8.
Exponential Distribution

Background……
■ Poisson
– No. of events that occur in an interval of time

■ Exponential
– Time taken between 2 events occurring
 Actual Probability Equations
for an Exponential Distribution
P( X > x) = e-l x , and
P ( X £ x ) = 1 - e -l x
Where:
λ = the average number of events in 1 unit of time.
X = time between two events.
x = particular time
By differentiating F(X), the probability density function of X is calculated to be,

f ( x ) = l e -l x , 0 £ x < ¥
Mean and Variance

1 1
µ= s =
2

l l2
 The Exponential Distribution

The probability density function of an

exponential distribution is :
λ

f ( x ) = l e -l x , 0 £ x < ¥
f ( x ) = l e -l x

with parameter λ > 0 .

The area under the graph of the

exponential density function is equal to 1.

Exponential random variables are commonly used to represent:

the life span of electronic components,
the duration of telephone calls,
the waiting time in a doctor’s office,
and the time between successive flight arrivals and departures in an airport
Example

■ A checkout counter at a supermarket completes the process

according to an exponential distribution with a service rate of
6 per hour. A customer arrives at a checkout counter. Find the
probability of the following events,
a) The service is completed fewer than 5 minutes.
b) The customer leaves the checkout counter more than 10
minutes after arriving.
c) The service is completed in a time between 5 and 8 minutes.