Probability Distribution of

Discrete Random Variable

Chapter (5)

Master of Business Administration

( MBA )

Dr. Hosni Elwakeel

A discrete random variable:
➢ Is a variable that can take on distinct, separate values.
➢ A discrete random variable is a variable whose value can only take on a finite number of
values or a countably infinite number of values.
Example
➢ Think of things you can count, like the number of heads when you flip a coin a few times,
the number of defective items in a batch or the number of customers who enter a store in
an hour.
The probability distribution of a discrete random variable:
➢ Describes the probability of each possible value that the variable can take. It's often
represented in a table, a graph, or a formula.

Here are the key characteristics of a probability distribution for a discrete random variable:

• Each probability is between 0 and 1 (inclusive): For any possible value x of the random
variable X, the probability P(X=x) must satisfy 0 ≤ P(X=x) ≤ 1. You can't have a negative
probability or a probability greater than 1.

• The sum of all probabilities is equal to 1: If you consider all the possible values that the
discrete random variable can take, the sum of their probabilities must equal 1.
Mathematically, if the possible values of X are x1,x2,x3,…, then: ∑ P(X=xi) =1
Let's look at a simple example:

Example [ Flipping a fair coin twice ]

Consider flipping a fair coin twice. The possible outcomes are: HH, HT, TH, TT. Let X be the
discrete random variable representing the number of heads obtained. The possible values
for X are 0, 1, and 2.

The probability distribution of X is as follows:

H
Number of Heads (x) Possible Outcomes Probability P(X=x) H
T
0 TT 1/4
H
1 TH,HT 2/4=1/2
T
2 HH 1/4 T

We can see that:

➢ Each probability is between 0 and 1.

➢ The sum of the probabilities is 1/4+1/2+1/4 =1.

This table represents the probability distribution of the discrete random variable X. It tells us
the likelihood of getting 0, 1, or 2 heads in two coin flips.
Summary :

1) Probability conditions: 0 ≤ p(x) ≤ 1 , 𝚺 p(x) = 1

2) Probability distribution:
x P(x)
--- ---
--- ---
𝚺 p(x) = 1

3) Mean (Expected Value):

The mean or expected value of a discrete random variable X, denoted by E(X) or μ, is a measure
of the central tendency of the distribution. It's the weighted average of all possible values that X
can take, where the weights are the corresponding probabilities.

The formula for the mean of a discrete random variable is:

Mean = Average = Expected value = E(X)=μ=∑xp(x)

4) Variance:

The variance of a discrete random variable X, denoted by Var(X) or 𝝈𝟐 , measures the spread or
dispersion of the distribution around its mean. It quantifies how much the values of X tend to
deviate from the expected value.

The formula for the variance of a discrete random variable is:

Variance = Var(X)= 𝝈𝟐 =[ ∑𝒙𝟐 * P(x) ] − 𝝁𝟐

5) Standard Deviation:

Standard deviation = 𝝈 = 𝝈𝟐

6) Coefficient of Variation :

𝝈
C.V = * 100 %
𝝁
True/False
1) Variables which take on values only at certain points over a given interval are called
continuous random variable . False ( continuous discrete)
2) The number of automobiles sold by a dealership in a day is an example of a discrete random
variable. True
3) The mean or the expected value of a discrete distribution is the long run average of the
occurrences. True
4) To compute the variance of a discrete distribution it is not necessary to know the mean of the
distribution. False (not necessary must be calculated)

Multiple choice
The following represents the probability distribution for the daily demand of microcomputers at a
local store:
1) The value of K equal
(a) 0.3 (b) 1.7 (c) 0.9 (d) 0.2 Demand(x) 0 1 2 3 4
2) The expected daily demand is : Probability 0.1 0.2 K 0.2 0.2
(a) 1.0 (b) 2.2 (c) 2.0 (d) 4.0 P(x)
3) The variance of daily demand is:
(a) 6.4 (b) 4.84 (c) 1.56 (d) 2.2
4) The probability of having a demand for at least two microcomputer:
(a) 0.7 (b) 0.3 (c) 0.4 (d) 1.0
Solution

1) 𝚺 p(x) = 1 1 = 0.1+ 0.2 + K + 0.2 + 0.2

K = 1- 0.7 = 0.3
x P(x) x*p(x) 𝒙𝟐 *p(x)
2) μ=∑xp(x) = 2.2 0 0.1 0 0
1 0.2 0.2 0.2
2 0.3 0.6 1.2
3) 𝝈𝟐 =∑[𝒙𝟐 * P(x)] − 𝝁𝟐 = 6.4 - 𝟐. 𝟐𝟐 = 1.56
3 0.2 0.6 1.8
4 0.2 0.8 3.2
total 2.2 6.4
4) P ( at least 2) = p(x=2) + p(x=3) + p(x=4) = 0.7
Example (chapter 4)
1) What is the probability of selecting an individual who is majoring in marketing?
(a) 0.15 (b) 0.25 (c) 0.50 (d) 0.40
2) What is the probability of selecting an individual who is majoring in management given
that the person is female?
(a) 0.15 (b) 0.25 (c) 0.50 (d) 0.40
3) Given that a person is male, what is the probability that he is majoring in management?
(a) 0.15 (b) 0.25 (c) 0.50 (d) 0.40
4) What is the probability of selecting a male individual?
(a) 0.15 (b) 0.25 (c) 0.50 (d) 0.40

Gender Management Marketing others Total

Male 40 10 30 80
Female 30 20 70 120
Solution
1) P(marketing) = 30/200 = 0.15 (a) Total 70 30 100 200
2) P(management/female) = 30/120 = 0.25 (b)
3) P(management/male) 40/80 = 0.5 (c)
4) P(male) = 80/200 = 0.4 (d)
Example (chapter 5)
The probability distribution for the number of goals the soccer team makes per game is given
below:

Number of goals(x) 0 1 2 3 4
Probability p(x) 0.05 0.15 0.35 0.30 K

Use the above distribution to answer (Q1 To Q6)

1) The value of K equal? (a) 1 (b) 0.15 (c) 0.30 (d) 0.85
2) The expected number of goals per game is (a) 0 (b) 1 (c) 2 (d) 2.35
3) The variance of number of goals per game is (a) 0 (b) 1 (c) 1.13 (d) 6.65
4) What is the probability that in a given game the team will score at least 1 goal
(a) 0.95 (b) 0.20 (c) 1.0 (d) 0.55
5) What is the probability that in a given game the team will score less than 3 goals
(a) 0.85 (b) 0.8 (c) 0.55 (d) 0.45
6) What is the probability that in a given game the team will score no goals
(a) 0.95 (b) 0.75 (c) 0.60 (d) 0.05
Solution

1) K = 1-( 0.05+0.15+0.35+ 0.3) = 0.15 (b)

2) μ=∑xp(x) = 2.35 (d) x P(x) x*p(x) 𝒙𝟐 *p(x)

3) 𝝈𝟐 =[∑𝒙𝟐 * P(x)] − 𝝁𝟐 = 6.65 - 𝟐. 𝟑𝟓𝟐 = 1.13 (c ) 0 0.05 0 0

1 0.15 0.15 0.15
4) P(x≥ 1) = 0.15+ 0.35+ 0.30+ 0.6 = 0.95 (a) 2 0.35 0.7 1.4
3 0.30 0.9 2.7
5) P(x< 3) = 0.35+ 0.15+0.05= 0.55 (c) 4 0.15 0.6 2.4
total 2.35 6.65
6) P(x=0) = 0.05 (d)
Binomial probability distribution
What is a Binomial Probability Distribution?

➢ In probability theory and statistics, the binomial distribution is a discrete probability

distribution that describes the probability of obtaining a certain number of "successes" in a
fixed number of independent "yes/no" or "success/failure" experiments (also known as
Bernoulli trials). Each trial must have the same probability of success.

➢ Think of it as a way to model scenarios where you have a repeated process, and each
time there are only two possible outcomes.
Key Characteristics and Conditions for Using a Binomial Distribution:
For a situation to be modeled by a binomial distribution, the following conditions must be met:
1) Fixed Number of Trials (n): The experiment consists of a fixed number of repetitions or
trials.
2) Two Mutually Exclusive Outcomes: Each trial has only two possible outcomes, often
labeled as "success" or "failure".
3) Constant Probability of Success (p): The probability of "success" (denoted by p) remains
the same for each trial. The probability of "failure" (denoted by q) is therefore (1 - p).
4) Independent Trials: Each trial must be independent of the others. The outcome of one trial
does not affect the outcome of subsequent trials.
When to Use the Binomial Distribution:
➢ The binomial distribution is used in situations where you want to find the probability of a
specific number of successes in a set number of trials, given that each trial:
• Has only two possible outcomes.
• Is independent of the others.
• Has the same probability of success.
➢ Examples of Binomial Distribution:
• Coin Tossing: The probability of getting exactly 7 heads in 10 coin tosses (where p = 0.5 for
a fair coin).
• Quality Control: The probability that exactly 3 items out of a sample of 20 are defective,
given a known defect rate.
• Medical Trials: The probability that a certain number of patients out of a trial group respond
positively to a new drug.
• Surveys: The probability that a specific number of people in a random sample will answer
"yes" to a question.
• Sports: Estimating the chances of a basketball player making a certain number of free
throws in a given number of attempts.
The Binomial Probability Formula:

➢ The probability of getting exactly x successes in n trials is given by the probability mass
function (PMF):

P(X=x) = n 𝒄𝒙 𝒑𝒙 (𝟏 − 𝒑)𝒏−𝒙
Where:

• P(X=x) is the probability of exactly x successes in n trials.

• n is the total number of trials.

• x is the number of successes (can be 0, 1, 2, ..., n)

• p is the probability of success on a single trial.

• (1-p) = q is the probability of failure on a single trial.

• [ n 𝒄𝒙 ] (read as "n combination x") is the binomial coefficient, which calculates the number
n!
of ways to choose x successes from n trials. It's calculated as: (n 𝒄𝒙 )= (where "!"
x! (n−x)!
denotes the factorial, e.g., 4!=4×3×2×1)
Parameters of the Binomial Distribution:

The binomial distribution is defined by two parameters:

• n: The number of trials.

• p: The probability of success for each trial. Bin(n,p)

Properties of the Binomial Distribution:

Mean (Expected Value): The average number of successes you would expect. μ=np
Variance: A measure of how spread out the distribution is 𝝈𝟐 = np(1-p)
Standard Deviation: The square root of the variance, also indicating the spread 𝝈 = 𝑛𝑝(𝟏 − 𝐩)

Shape:

• If p = 0.5, the Binomial distribution is symmetric.

• If p < 0.5, the Binomial distribution is skewed to the right.

• If p > 0.5, the Binomial distribution is skewed to the left.

Applications:

The binomial distribution has wide applications in various fields, including:

• Statistics and Probability: It's a fundamental concept for understanding discrete probability.
• Finance: Used in models for dichotomous outcomes, such as predicting whether a borrower will default or
not, or whether an asset price will go up or down. Banks might use it to estimate the likelihood of loan
defaults and determine reserve amounts.

• Quality Control: To determine the probability of finding a certain number of defective items in a
production batch.

• Medicine: In clinical trials to assess the effectiveness of a treatment.

• Machine Learning:
– Binary Classification: Forms the underlying probabilistic model for tasks like spam detection (spam or
not spam).
– Predicting Defects: Modeling the number of defective items in a batch.
– Medical Diagnosis: Predicting the presence or absence of a disease.
– Fraud Detection: Modeling the occurrence of fraudulent transactions.
– Customer Churn Prediction: Predicting whether a customer will stay or leave.

• Social Sciences: Modeling outcomes like whether a person will vote for a particular candidate.
• In summary, the binomial probability distribution is a powerful tool for analyzing experiments with a
fixed number of independent trials, each having only two possible outcomes and a constant
probability of success.
Example

In san Francisco 30% of workers take public transportation daily. In a sample of 10 workers ,

➢ what is the probability that exactly 3 workers take public transportation daily .

➢ what is the probability that at least 3 workers takes a public transportation.

➢ Calculate the expected number of workers.

➢ Calculate the standard deviation.

➢ Describe the shape of distribution.

Solution
P(success) = 0.3 p(failure) = 0.7 n=10 x= 3
➢ P(X=3)= 10 𝒄𝟑 𝟎. 𝟑𝟑 (𝟎. 𝟕)𝟕 = 0.2669 = 26.7%
➢ P(at least 3) = p(x≥ 3) = 1- p(x< 3)
= 1-[10 𝒄𝟎 𝟎. 𝟑𝟎 (𝟎. 𝟕)𝟏𝟎 + 10 𝒄𝟏 𝟎. 𝟑𝟏 (𝟎. 𝟕)𝟗 + 10 𝒄𝟐 𝟎. 𝟑𝟐 (𝟎. 𝟕)𝟖 ]
= 1-[ 0.0283+0.1212+0.2337]= 0.6168 =61.68%
➢ μ = np = 10*0.3= 3 workers

➢ 𝝈= 𝑛𝑝(𝟏 − 𝐩) = 𝟏𝟎 ∗ 𝟎. 𝟑 ∗ (𝟎. 𝟕) = 1.449 workers

➢ P = 0.3 the binomial distribution shape is skewed to the right since p< 0.5
End of chapter 5