Chapter 6

Introduction to Continuous
Probability Distributions

Prepared by:
Renna Magdalena

Chapter Goals
After completing this chapter, you should be able to:
Convert values from any normal distribution to a
standardized z-score
Find probabilities using a normal distribution table
Apply the normal distribution to business problems
Recognize when to apply the uniform and exponential
distributions

Continuous Probability Distributions

A continuous random variable is a variable that can
assume any value on a defined continuum (can
assume an uncountable number of values) see
Chapter 5
thickness of an item
time required to complete a task

These can potentially take on any value, depending

only on the ability to measure accurately.

Types of Continuous Distributions

Three types

Normal
Uniform
Exponential

Involves determining the probability for a RANGE

of values rather than 1 particular incident or
outcome
4

The Normal Distribution

Bell Shaped
Symmetrical
Mean=Median=Mode

f(x)

Location is determined by the

mean,
Spread is determined by the
standard deviation,
The random variable has an
infinite theoretical range:
+ to

Mean
Median
Mode

Many Normal Distributions

By varying the parameters and , we obtain different normal

distributions

The Normal Distribution Shape

f(x)

Changing shifts the

distribution left or right.

Changing increases or
decreases the spread.

Finding Normal Probabilities

Probability is measured by the area
under the curve
f(x)

P (a x b)

Probability as
Area Under the Curve
The total area under the curve is 1.0, and the curve is symmetric, so
half is above the mean, half is below

f(x)

P( x ) 0.5

0.5

P( x ) 0.5

0.5

P( x ) 1.0

The Standard Normal Distribution

Also known as the z distribution

Mean is defined to be 0
Standard Deviation is 1
f(z)

1
0

Values above the mean have positive z-values Values below the
mean have negative z-values
10

The Standard Normal

Any normal distribution (with any mean and standard

deviation combination) can be transformed into the
standard normal distribution (z)

Need to transform x units into z units

Where x is any point of interest

Can use the z value to determine probabilities

11

Translation to the Standard

Normal Distribution

Translate from x to the standard normal (the z

distribution) by subtracting the mean of x and
dividing by its standard deviation:

x
z

z is the number of standard deviations units that

x is away from the population mean
12

Example

If x is distributed normally with mean of

100 and standard deviation of 50, the z
value for x = 250 is

x 250 100
z

3.0

50

This says that x = 250 is three standard

deviations (3 increments of 50 units) above
the mean of 100.
13

Comparing x and z units

= 100
= 50

100
0

250
3.0

x
z

Note that the distribution is the same, only the scale has changed.
We can express the problem in original units (x) or in standardized
units (z)

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14

The Standard Normal Table

The Standard Normal table in the textbook
(Appendix D)
Gives the probability from the mean (zero)
up to a desired value for z
0.4772

Example:
P(0 < z < 2.00) = 0.4772

2.00

15

The Standard Normal Table

(continued)

The Standard Normal Table gives the probability

between the mean and a certain z value
The z value ALWAYS refers to the area between
some value (-z or +z) and the mean
Since the distribution is symmetrical, the Standard
Normal Table only displays probabilities for of the
full distribution

The Standard Normal Table

(continued)

z
0
.
0
0
.
0
1
0
.
0
2

.0.1
0
2

The column gives the value of z to the

second decimal point

The row shows the

value of z to the
first decimal point

.
.
.

2.0

.4772

The value within the

table gives the
probability from z = 0 up
to the desired z value

P(0 < z < 2.00) = 0.4772

2.0

17

General Procedure for Finding

Probabilities
1. Determine m and s
2. Define the event of interest
e.g., P(x > x1)

x
3. Convert to standard normal z

4. Use the table to find the probability

18

z Table Example

Suppose x is normal with mean 8.0 and

standard deviation 5.0. Find P(8 < x < 8.6)

Calculate z-values:

x 8 8
z

5
x 8.6 8
z

0.12

8 8.6

0 0.12

P(8 < x < 8.6)

= P(0 < z < 0.12)
19

z Table Example
(continued)

Suppose x is normal with mean 8.0 and

standard deviation 5.0. Find P(8 < x < 8.6)
=8
=5

8 8.6
P(8 < x < 8.6)

=0
=1

0 0.12

P(0 < z < 0.12)

20

Solution: Finding P(0 < z < 0.12)

Standard Normal Probability
Table (Portion)

.00

.01

P(8 < x < 8.6)

= P(0 < z < 0.12)

.02

0.0478

0.0 .0000 .0040 .0080

0.1 .0398 .0438 .0478

0.2 .0793 .0832 .0871
0.3 .1179 .1217 .1255

0.00

0.12
21

Finding Normal Probabilities

Suppose x is normal with mean 8.0
and standard deviation 5.0.
Now Find P(x < 8.6)
The probability of obtaining a value less than 8.6
P = 0.5

8.0
8.6

Finding Normal Probabilities

(continued)

Suppose x is normal with mean 8.0

and standard deviation 5.0.
Now Find P(x < 8.6)
P(x < 8.6)

0.0478

0.5000

= P(z < 0.12)

= P(z < 0) + P(0 < z < 0.12)
= 0.5000 + 0.0478 = 0.5478
0.00
0.12

Upper Tail Probabilities

Suppose x is normal with mean 8.0
and standard deviation 5.0.
Now Find P(x > 8.6)

8.0
8.6

Upper Tail Probabilities

(continued)

Now Find P(x > 8.6)

P(x > 8.6) = P(z > 0.12) = P(z > 0) - P(0 < z < 0.12)
= 0.5000 - 0.0478 = 0.4522

0.0478

0.5000

0.4522

0
0.12

0
0.12

Lower Tail Probabilities

Suppose x is normal with mean 8.0
and standard deviation 5.0.
Now Find P(7.4 < x < 8)

7.4

8.0

Lower Tail Probabilities

(continued)

Now Find P(7.4 < x < 8)the probability

between 7.4 and the mean of 8

The Normal distribution is symmetric,
so we use the same table even if zvalues are negative:

0.0478

P(7.4 < x < 8)

= P(-0.12 < z < 0)
= 0.0478

7.4

8.0

Normal Probabilities in PHStat

We can use Excel and PHStat to quickly
generate probabilities for any normal
distribution
We will find P(8 < x < 8.6) when x is
normally distributed with mean 8 and
standard deviation 5

28

PHStat Dialogue Box

Select desired options and

enter values
29

PHStat Output

30

Empirical Rules
What can we say about the distribution of values
around the mean if the distribution is normal?
f(x)

1 covers about
68% of xs

Recall
Tchebyshev
from Chpt. 3

68.26%
31

The Empirical Rule

(continued)

2 covers about 95% of xs

3 covers about 99.7% of xs

95.44%

99.72%

Importance of the Rule

If a value is about 2 or more standard
deviations away from the mean in a normal
distribution, then it is far from the mean
The chance that a value that far or farther
away from the mean is highly unlikely, given
that particular mean and standard deviation

The Uniform Distribution

The uniform distribution is a probability distribution that
has equal probabilities for all possible outcomes of the
random variable
Referred to as the distribution of little information
Probability is the same for ANY interval of the same
width
Useful when you have limited information about how
the data behaves (e.g., is it skewed left?)

The Uniform Distribution

(continued)
The Continuous Uniform Distribution:

f(x) =

1
ba
0

if a x b
otherwise

where
f(x) = value of the density function at any x value
a = lower limit of the interval of interest
b = upper limit of the interval of interest

The Mean and Standard Deviation

for the Uniform Distribution
The mean (expected value) is:

ab
E(x)
2
The standard deviation is

(b a)2

12
where
a = lower limit of the interval from a to b
b = upper limit of the interval from a to b

Steps for Using the

Uniform Distribution
1. Define the density function
2. Define the event of interest
3. Calculate the required probability

f(x)

Uniform Distribution
Example: Uniform Probability Distribution
Over the range 2 x 6:
1
f(x) = 6 - 2 = .25 for 2 x 6
f(x)
.25

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38

Uniform Distribution
Example: Uniform Probability Distribution
Over the range 2 x 6:

26
E(x)
4
2
(b a)
(6 2)

1.1547
12
12
2

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39

The Exponential Distribution

Used to measure the time that elapses between
two occurrences of an event (the time between
arrivals)
Examples:
Time between trucks arriving at a dock
Time between transactions at an ATM Machine
Time between phone calls to the main operator

Recall = mean for Poisson (see Chpt. 5)

The Exponential Distribution

The probability that an arrival time is equal to
or less than some specified time a is

P(0 x a) 1 e

where 1/ is the mean time between events and e = 2.7183

NOTE: If the number of occurrences per time period is
Poisson with mean , then the time between occurrences is
exponential with mean time 1/ and the standard deviation
also is 1/l

Exponential Distribution
(continued)

Shape of the exponential distribution

f(x)
= 3.0
(mean = .333)
= 1.0
(mean = 1.0)
= 0.5
(mean = 2.0)

Example
Example: Customers arrive at the claims counter at the rate of
15 per hour (Poisson distributed). What is the probability that
the arrival time between consecutive customers is less than five
minutes?

Time between arrivals is exponentially distributed with mean

time between arrivals of 4 minutes (15 per 60 minutes, on
average)

1/ = 4.0, so = .25

P(x < 5) = 1 - e-a = 1 e-(.25)(5) = 0.7135

There is a 71.35% chance that the arrival time between
consecutive customers is less than 5 minutes

Using PHStat

44

Chapter Summary
Reviewed key continuous distributions
normal
uniform
exponential

Found probabilities using formulas and tables

Recognized when to apply different distributions
Applied distributions to decision problems

End of Chapter 6

Thank You