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Discrete Probability Distributions

This document provides examples and formulas for calculating mean, variance, and standard deviation of discrete probability distributions. It gives three examples showing probability distributions for number of reported accidents, investment returns, and car dealership sales. Formulas are provided for mean, variance, and standard deviation. The examples are worked through to calculate these values and illustrate discrete probability distributions.

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Hanna Galati
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85 views10 pages

Discrete Probability Distributions

This document provides examples and formulas for calculating mean, variance, and standard deviation of discrete probability distributions. It gives three examples showing probability distributions for number of reported accidents, investment returns, and car dealership sales. Formulas are provided for mean, variance, and standard deviation. The examples are worked through to calculate these values and illustrate discrete probability distributions.

Uploaded by

Hanna Galati
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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GUIDE QUESTIONS

1. Given your Data, What is the mean, median,


mode, range, variance and standard deviation?
2. How can we describe completely the data
given?
3. What is the probability distribution of the
discrete random variable being considered?
4. What can you say about the two graphs?
Discrete Probability
Distributions
Objectives:
 Illustrate the mean and variance of a discrete
probability distribution
 Calculate and Interpret the mean and the
variance.
Discrete Probability
Distribution
Def: is a distribution that
defines probabilities that are
associated with discrete
random variables
Formulas:
Mean: μ =
Variance: σ² =
Standard Deviation: σ = ²
EXAMPLE #1
A laboratory supervisor in a type III
hospital is investigating number of
reported on-the-job training accidents
over a period of 1 month. Based on past
records, she has derived the following
probability distribution for x; where x is
the number of reported accidents per
month.
To determine the variance and standard
deviation:
X P(x) x · P(x) (x – μ)² (x – μ)² ·
P(x)

0 0.5 0 (0-.95) 0.45


1 0.25 0.25 (1 – 0.95) 0
2 0.1 0.2 (2 – 0.95) 0.11
3 0.1 0.3 (3 – 0.95) 0.42
4 0.05 0.2 (4 – 0.95) 0.47
Total 1.00 0.95 1.45
EXAMPLE #2
A rich investor was puzzled about
the two investment packages on
which he is about to put in a large
sum of money. He learned that the
two investment have the same
average return on investment (ROI).
The query is which is the best
investment package?
Investment ROI (x) in millions Probability P(x)
Packages
Package A 1 0.2
2 0.2
3 0.2
4 0.2
5 0.2
Package B 3 0.2
3 0.2
3 0.2
3 0.2
3 0.2
EXAMPLE #3
Dealer of the year!
The CEO of a certain car manufacture is
comforted with the dilemma when the criteria set
for choosing the “Best Car Dealer of the Year” is
based on the over-all selling performance for the
past 10 months. The table below shows the two
finalists on the said category.

Look for the mean, variance and standard


deviation.
Dealer A.
No, of cars sold (x) No of months (y) Probability P(x)
25 1 0.1
30 3 0.3
35 2 0.2
40 3 0.3
45 1 0.1

Dealer B
No, of cars sold (x) No, of months (y) Probability P(x)
25 3 0.3
30 1 0.1
35 1 0.1
40 1 0.1
45 4 0.4

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