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Business Statistics
Probability Distributions
Poisson Distribution
1
Objectives
3
Poisson Experiment
A Poisson experiment possesses the following
properties:
1. The experiment consists of counting the number
of times a certain event occurs during a given
unit of time or over a unit of space.
2. The probability that an event occurs in an interval
is the same for all intervals of equal size, and is
proportional to the size of the interval.
3. The number of events that occur in any interval is
independent of the number of events that occur
in any other interval.
4. The probability of more than one occurrence in a
very small interval is close to zero.
4
Example 1
A study was carried out to examine the number of
emails received by employees of a large company.
The study found that on average an employee
receives 110 emails per week.
6
Examples of Poisson Random Variables
The number of telephone calls received at a
switchboard in a minute.
7
Poisson Distribution
If X is a Poisson random variable, the probability
distribution is given by
e x
P( X x)
x!
8
Hence the probability of observing exactly x
occurrences per unit of time or space is given by
e x
P( X x)
x!
9
Example 2
A paint factory uses Agent A in the paint
manufacturing process. There is an average of 3
particles of Agent A in a cubic meter of air emitted
during the production process.
11
b. What is the probability that there will be no Agent A
particles in a cubic meter of air emission?
e 3 30
P ( X 0)
0!
0.0498
12
c. What is the probability that there will be less than 2
particles of agent A in a cubic meter of air emitted
from the factory?
P ( X 2) P ( X 0) P ( X 1)
e 3 31
0.0498
1!
0.0498 0.1494
0.1992
13
Example 3
15
a. What is the probability of exactly 5 cars arrivals
during a 5 minute period?
4 5
e 4
P ( X 5)
5!
0.1563
16
b. What is the probability of 5 arrivals during a 10
minute period?
P( X k ) P( X 0) P( X 1) ... P( X k )
k
P( X x)
x 0
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Example 4
19
Let X = the number of accidents per week
P( X 3) P( X 2)
0.321
20
b. The probability that there are five or more accidents
in a week is
P( X 5) 1 P( X 4)
1 0.725
0.275
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c. We want to find the probability that there are no
accidents today.
E( X )
V (X )
23
Example 4 revisited
24
The expected number of accidents per week:
E ( X ) 3.5
V ( X ) 3.5
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Calculating Binomial and Poisson
Probabilities in Excel
26
Reading for next lecture
Exercises
5.38
5.45
5.75
27