Lecture 7.

Discrete Probability Distributions - The Binomial In our previous study we did not assume that different events had the same probabilities. For instance we might have two events A and B, where p A . 4 and p B . 6. If we have a variable x, that has only a discrete set of possible values, we can have a Discrete Probability Distribution. For instance lets suppose x represents the number of advanced degrees that members of a schools administration hold. If the only possibilities are x are 0, 1, 2, 3, 4, 5 then we can have a Discrete Probability Distribution. For instance we might have p 0 . 1, p 1 . 4, p 2 . 4, p 3 . 06, p 4 . 04, p 5  0. Note that the probabilities must sum to one since these are mutually exclusive and collectively exhaustive events! (The reason we call this discrete is to distinguish it from continuous distributions that we will study later.) If the variable is numerical (like the one above and as opposed to variables like gender, religion, etc.) then you can define concepts like mean (expected value), variance, standard deviation, etc. For instance: Mean (expected value) is   xp x . In the above example   0 . 1  1 . 4 . . . 4 . 04 5 0  1. 54. So the mean number of advanced degrees is 1. 54. (Note that the mean is a generalized version of the average where we just added all the numbers and divided by n. The average would be the same idea as saying that all the events are equally likely. The average of the events 0, 1, 2, 3, 4, 5 is x  15  2. 5 as opposed to the expected value of 1. 54 6 when we consider the different probabilities. For another example consider the demonstration problem 5.1 on Page 145 of the text. It involves the Texas lottery and gives the probability of getting various prizes if you buy a one dollar ticket. They range from p $1, 000 . 00002 to p $1 . 10479 and p $0 . 77145. Then  . 60155. So, your expected losing is $. 39845. (Sometimes you will hear an advertisement that says the chances of winning are 23 percent, but of course that means getting any money back at all!) In the same way we can calculate the variance,  2  x  2 p x . In the education example,  2  . 8084, so that the standard deviation is   . 89911. Notice that this distribution was just a bunch of probabilities that were non negative and summed to one. Some distributions apply to particular scenarios and have names. One such is the Binomial Distribution. This is an important distribution with applications to quality control, elections (important this year), etc. It is used when you have a situation that can be described as follows: a. There are n observations (maybe a sample). For instance in the quality control scenario n  1, 000 might correspond to a sample of 1, 000 parts. b. There is a simple event that can either happen or not happen (only two possibilities, which is the reason for the bi in binomial). In our example the event might be that the part is defective, perhaps p . 001. c. The probability of the simple event happening is p, where p is between zero and one. d. The simple events are independent of each other. That is, if you know that Part 423 is defective that doesnt influence your probability of any other part being defective. Then the Binomial Distribution gives you the probability that exactly x out of the n events occur, where x is an integer between zero and n. The formula is given in the book on Page 194 and it is pretty easy to derive so I will do it in class. I will base it on rolling a die three times and asking the probabilities of how many times out of the three you rolled a five. Its not important for you to memorize the formula or its derivation but only how to apply it. You can calculate it by looking the tables in the back of the book (they start on Page 775) or by using EXCEL. n! Formula: p x  x! n x ! p x 1 p n x

So, in our example, we could ask what is the probability of exactly two defective parts in a 1000! sample of 1, 000. The formula would be p 2  2!998! . 001 2 . 999 998 You wouldnt want to do this by hand and, in fact, you couldnt even find it in the tables in the book. Its easy by EXCEL and the answer is that p 2 . 184032. EXCEL will just as easily give you the cumulative probability. That is the probability of no more than two defectives. That is . 919791. Ill show you how to do it! Ill also show you how to answer other similar questions. Your tables only go up to n  20. To use those, suppose you have a sample of 20 people of a population in which . 3 plan to buy your product. What is the probability that exactly 7 out of the sample plan to buy the product? Then x is the number who plan to buy the product (x is a variable!) n  20 is the sample size (n is a parameter) p . 3 is the probability of the event happening (p is a parameter) From the Binomial table ( will verify by EXCEL) p 7 . 1643. Note that for small samples, if you want to keep the probabilities valid you should Sample with replacement!!! For the binomial distribution,   np,  2  np 1 p . (The formula for  should be intuitive. If not Ill help your intuition. The formula for  2 will undoubtedly not be intuitive but we will need it later in the semester. I will give it to you on your tests!) HW : Chapter 5, #1, 3, 5, 9, 13