Continuous

Probability
Distributions
Continuous Probability
Distributions
• Uniform Probability Distribution
• Normal Probability Distribution
• Normal Approximation of Binomial
Probabilities
• Exponential Probability Distribution
Continuous Probability Distributions
• A continuous random variable can assume any value in an interval on
the real line or in a collection of intervals.
• It is not possible to talk about the probability of the random variable
assuming a particular value.
• Instead, we talk about the probability of the random variable
assuming a value within a given interval.
 Continuous Probability
Distributions…
The probability of the random variable assuming a value within some given interval
from x1 to x2 is defined to be the area under the graph of the probability density
function between x1 and x2.
Uniform Probability Distribution (1 of 5)

• A random variable is uniformly distributed whenever the probability is

proportional to the interval’s length.
• The uniform probability density function is:

where: a = smallest value the variable can assume

b = largest value the variable can assume
Uniform Probability Distribution (2 of 5)

• The expected value of x is E(x) = (a + b)/2.

• The variance of x is Var(x) = (b – a)2/12.
Uniform Probability Distribution (3 of 5)

Example: Slater's Buffet

Slater’s customers are charged for the amount of salad they take. Sampling suggests
that the amount of salad taken is uniformly distributed between 5 ounces and 15
ounces.
The uniform probability density function is

where:
x = salad plate filling weight
Uniform Probability Distribution (4 of 5)

What is the probability that a customer will take between 12 and 15 ounces of
salad?
Uniform Probability Distribution (5 of 5)

• The expected value of x is E(x) = (a + b)/2

= (5 + 15)/2
= 10
• The variance of x is Var(x) = (b – a)2/12
= (15 – 5)2/12
= 8.33
Area as a Measure of Probability
• The area under the graph of f(x) and probability are identical.
• This is valid for all continuous random variables.
• The probability that x takes on a value between some lower value x1
and some higher value x2 can be found by computing the area under
the graph of f(x) over the interval from x1 to x2.
Normal Probability Distribution (1 of 7)

• The normal probability distribution is the most important distribution

for describing a continuous random variable.
• It is widely used in statistical inference.
• It has been used in a wide variety of applications including:
• Heights of people
• Amounts of rainfall
• Test scores
• Scientific measurements
• Abraham de Moivre, a French mathematician, published The Doctrine
of Chances in 1733. He derived the normal distribution.
Normal Probability Distribution (2 of 7)

Normal Probability Density Function

where:
= mean
= standard deviation
= 3.14159
e = 2.71828
Normal Probability Distribution (3 of 7)

The entire family of normal probability distributions is defined by its mean μ and
its standard deviation σ.

The highest point on the normal curve is at the mean, which is also the median
and mode.
Normal Probability Distribution (4 of 7)

The mean can be any numerical value: negative, zero, or positive.

Normal Probability Distribution (5 of 7)

The standard deviation determines the width of the curve: larger values result
in wider, flatter curves.
Normal Probability Distribution (6 of 7)

Probabilities for the normal random variable are given by areas under the curve.
The total area under the curve is 1 (0.5 to the left of the mean and 0.5 to the
right).
Normal Probability Distribution (7 of 7)

Empirical Rule
68.26% of values of a normal
random variable are within 1
standard deviation of its mean.
95.44% of values of a normal
random variable are within 2
standard deviations of its mean.
99.72% of values of a normal
random variable are within 3
standard deviations of its mean.
Standard Normal Probability
Distribution (1 of 10)
A random variable having a normal distribution with a mean of 0 and a standard
deviation of 1 is said to have a standard normal probability distribution.

The letter z is used to designate the standard normal random variable.

Standard Normal Probability
Distribution (2 of 10)
Converting to the Standard Normal Distribution

We can think of z as a measure of the number of standard deviations x is from μ.

Standard Normal Probability
Distribution (3 of 10)

Example: Pep Zone

Pep Zone sells auto parts and supplies including a popular multi-grade motor oil.
When the stock of this oil drops to 20 gallons, a replenishment order is placed.
The store manager is concerned that sales are being lost due to stockouts while
waiting for a replenishment order.
It has been determined that demand during replenishment lead-time is normally
distributed with a mean of 15 gallons and a standard deviation of 6 gallons.
The manager would like to know the probability of a stockout during replenishment
lead-time. In other words, what is the probability that demand during lead-time
will exceed 20 gallons?
Standard Normal Probability
Distribution (4 of 10)

Solving for the Stockout Probability

Step 1: Convert x to the standard normal distribution.

Step 2: Find the area under the standard normal curve to the left of = 0.83.
Standard Normal Probability
Distribution (5 of 10)
Cumulative Probability Table for the Standard Normal Distribution

z .00 .01 .02 .03 .04 .05 .06 .07 .08 .09
. . . . . . . . . . .
.5 .6915 .6950 .6985 .7019 .7054 .7088 .7123 .7157 .7190 .7224
.6 .7257 .7291 .7324 .7357 .7389 .7422 .7454 .7486 .7517 .7549
.7 .7580 .7611 .7642 .7673 .7704 .7734 .7764 .7794 .7823 .7852
.8 .7881 .7910 .7939 .7967 .7795 .8023 .8051 .8078 .8106 .8133
.9 .8129 .8186 .8212 .8238 .8264 .8289 .8315 .8340 .8365 .8389
. . . . . . . . . . .
Standard Normal Probability
Distribution (6 of 10)
Solving for the Stockout Probability
Step 3: Compute the area under the standard normal curve to the right of z =
0.83.
Standard Normal Probability
Distribution (7 of 10)
Solving for the Stockout Probability
Standard Normal Probability
Distribution (8 of 10)
If the manager of Pep Zone wants the probability of a stockout during
replenishment lead-time to be no more than .05, what should the reorder point
be?

(Hint: Given a probability, we can use

the standard normal table in an inverse
fashion to find the corresponding z
value.)
Standard Normal Probability
Distribution (9 of 10)
Solving for the Reorder Point
Step 1: Find the z-value that cuts off an area of .05 in the right tail of the
standard normal distribution by looking up the complement of the right tail
area 1 – 0.05 = 0.95.

z .00 .01 .02 .03 .04 .05 .06 .07 .08 .09
. . . . . . . . . . .
1.5 .9332 .9345 .9357 .9370 .9382 .9394 .9406 .9418 .9429 .9441
1.6 .9452 .9463 .9474 .9484 .9495 .9505 .9515 .9525 .9535 .9545
1.7 .9554 .9564 .9573 .9582 .9591 .9599 .9608 .9616 .9625 .9633
1.8 .9641 .9649 .9656 .9664 .9671 .9678 .9686 .9693 .9699 .9706
1.9 .9713 .9719 .9726 .9732 .9738 .9744 .9750 .9756 .9761 .9767
. . . . . . . . . . .
Standard Normal Probability
Distribution (10 of 10)
Solving for the Reorder Point
Step 2: Convert z.05 to the corresponding value of x.

A reorder point of 25 gallons will place the probability of a stockout during lead
time at (slightly less than) 0.05.
Normal Probability Distribution
Solving for the Reorder Point
Standard Normal Probability
Distribution
Solving for the Reorder Point
By raising the reorder point from 20 gallons to 25 gallons on hand, the
probability of a stockout decreases from about .20 to .05.
This is a significant decrease in the chance that Pep Zone will be out of stock
and unable to meet a customer’s desire to make a purchase.
Using Excel to Compute Normal
Probabilities
Excel has two functions for computing cumulative probabilities and x
values for any normal distribution:
• NORM.DIST is used to compute the cumulative probability given an x value.
• NORM.INV is used to compute the x value given a cumulative probability.
Exponential Probability Distribution (1
of 4)

• The exponential probability distribution is useful in describing the

time it takes to complete a task.
• The exponential random variables can be used to describe:
• Time between vehicle arrivals at a toll booth
• Time required to complete a questionnaire
• Distance between major defects in a highway
• In waiting line applications, the exponential distribution is often used
for service time.
Exponential
distribution
 Exponential Distribution
• The exponential distribution models the time between randomly
occurring events, such as the time to or between failures of
mechanical or electrical components.
• It used extensively in reliability models.
• For example, if the average time between failures of a machine is
exponential with a mean of 500 hours, then the average number of
failures per hour is Poisson with a mean of 1/500 failures/hour.

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 Example

08/20/2025 35
Exponential Probability Distribution (2
of 4)

• A property of the exponential distribution is that the mean and standard

deviation are equal.
• The exponential distribution is skewed to the right. Its skewness measure is 2.
• Density Function

where = expected value or mean and e = 2.71828

Exponential Probability Distribution (3
of 4)

Cumulative Probabilities
Exponential Probability Distribution (4
of 4)

Example: Al’s Full-Service Pump

The time between arrivals of cars at Al’s full-service gas pump follows an
exponential probability distribution with a mean time between arrivals of 3
minutes. Al would like to know the probability that the time between two
successive arrivals will be 2 minutes or less.
Relationship between the Poisson
and Exponential Distributions