Question 1: Validating a Discrete Probability Distribution
This analysis verifies that the given purchase probabilities for the four popular snack types form
a valid discrete probability distribution, which is a fundamental requirement for applying further
statistical analysis.
Question 1: Validating a Discrete Probability Distribution
A set of probabilities forms a valid discrete probability distribution if and only if two conditions
are met (Illowsky et al., 2023):
Individual Probabilities: Each probability value P(x) must be between zero and one, inclusive
(0 ≤ P(x) ≤ 1).
Sum of Probabilities: The sum of all probabilities for all possible outcomes must equal one
( Σ P(x) = 1).
Verification
The probabilities for the four snack types are:
Snack Type (x) Probability (P(x)) Condition 1: 0 ≤ P(x) ≤1
Chips 0.35 0 ≤ 0.35 ≤ 1 (Valid)
Cookies 0.30 0 ≤ 0.30 ≤ 1 (Valid)
Nuts 0.20 0 ≤ 0.20 ≤ 1 (Valid)
Crackers 0.15 0 ≤ 0.15 ≤ 1 (Valid)
Total Sum ( Σ P(x)) 1.00 Condition 2 : Σ P(x) = 1 (Valid)
(Illowsky et al., 2023)
Calculation:
Σ P(x) = 0.35 + 0.30 + 0.20 + 0.15 = 1.00
Conclusion:
Since all individual probabilities are between 0 and 1, and the sum of all probabilities is exactly
1.00, the given data forms a valid discrete probability distribution for the purchase of these four
snack types.
Explanation of a Sum Not Equal to 1
The sum of probabilities for all possible outcomes must equal 1 because it represents 100%
certainty that one of the outcomes in the entire sample space will occur (Gauthmath, 2023).
If the sum of probabilities for the listed outcomes does not equal 1, it indicates a flaw in the
model:
If Σ P(x) < 1 (The sum is less than 1):
This suggests the list of outcomes is incomplete. There is at least one other possible, unlisted
outcome (an event or a different snack type) with a non-zero probability that has not been
accounted for. The model fails to represent the entire set of possibilities, meaning there's a
chance a customer will purchase a snack not on the list (Math StackExchange, 2014).
If Σ P(x) > 1$ (The sum is greater than 1):
This is often a result of calculation errors or an indication that the events (the snack purchases)
are not mutually exclusive. For a distribution of mutually exclusive outcomes (where purchasing
one snack prevents purchasing another in the same transaction count), a sum greater than 1 is
impossible (Illowsky et al., 2023).
Question 2: Computing Expected Values
This calculation determines the average revenue FreshMart can expect from a single juice
purchase and the variability (standard deviation) in that revenue.
Let X be the random variable representing the revenue from a single juice purchase.
1. Calculate the Expected Value (Average Revenue)
The expected value (E[X] or µ) of a discrete random variable is the long-term average value,
calculated by summing the product of each possible value (price, x) and its corresponding
probability (P(x)) (Illowsky et al., 2023).
E[X] = µ = Σ [x • P(x)]
Price Probability
Size X • P(x)
(x) (P(x))
Small $3.50 0.40 3.50 • 0.40 = 1.400
Price Probability
Size X • P(x)
(x) (P(x))
Medium $5.00 0.35 5.00 • 0.35 = 1.750
Large $7.00 0.25 7.00 • 0.25 = 1.750
Total 1.00 Σ [x • P(x)] = 4.900
Expected Value:
E [X] = $4.90
The average revenue (expected value) per juice purchase is $4.90.
2. Calculate the Standard Deviation
The standard deviation (σ) measures the spread or variability of the distribution around the
2
expected value. It is the square root of the variance (σ ) (StarMast, 2024; Illowsky et al., 2023).
2
Step 2a: Calculate the Variance (σ )
The variance is calculated using the formula:
σ2 = Σ [(x - µ)2 • P(x)] or σ2 = Σ [x2 • P(x)] - µ2
Price 2 2
Size P(x) (x − μ) (x − μ) (x−μ) • P(x)
(x)
Small $3.50 0.40 3.50 - 4.90 = -1.40 2 1.96 • 0.40 = 0.784
(-1.40) = 1.96
Medium $5.00 0.35 5.00 - 4.90 = 0.10 2 0.01 • 0.35 = 0.0035$
(0.10) = 0.01
Large $7.00 0.25 7.00 - 4.90 = 2.10 2 4.41 • 0.25 = 1.1025$
(2.10) = 4.41
Price 2 2
Size P(x) (x − μ) (x − μ) (x−μ) • P(x)
(x)
Total Σ = 1.890
(Illowsky et al., 2023)
2
Variance (σ ) :
σ2 = 0.784 + 0.0035 + 1.1025 = 1.89
Step 2b: Calculate the Standard Deviation (σ)
The standard deviation is the square root of the variance:
σ = √σ2 = √(1.89) ≈ 1.3748
Standard Deviation :
σ ≈ $1.37
Question 3: Applying the Binomial Distribution
The probability calculations are based on the binomial distribution, which is appropriate since
the scenario involves a fixed number of independent trials (loaves tested), each having only two
outcomes (meets standard or fails standard), and a constant probability of success (p = 0.90)
(Illowsky et al., 2023; Statisticshowto, n.d.).
The binomial probability mass function (PMF) is:
k n-k
P(X = k) = C(n, k) • p • (1 - p)
1. Probability that exactly 10 out of the 12 tested loaves meet the quality standard
For this calculation:
Number of trials, n = 12
Number of successful outcomes (loaves meeting standard), k = 10
Probability of success, p = 0.90
Probability of failure, 1 - p = 0.10
10 12 - 10
P(X = 10) = C(12, 10) • (0.90) • (0.10)
P(X = 10) = 66 • (0.348678) • (0.01)
P(X = 10) ≈ 0.230128
The probability that exactly 10 out of the 12 tested loaves meet the quality standard is
approximately 0.2301 (or 23.01%).
2. Probability that at least 8 out of 10 loaves meet the quality standard
For this calculation:
Number of trials, n = 10
Number of successful outcomes, k ≥ 8 (i.e., k = 8, k = 9, or k = 10)
Probability of success, p = 0.90
We calculate P(X ≥ 8) = P(X = 8) + P(X = 9) + P(X =10)$:
P(X = 8): C(10, 8) • (0.90)8 • (0.10)^2 ≈ 45 • (0.430467) • (0.01) ≈ 0.193708
9 1
P(X = 9): C(10, 9) • (0.90) • (0.10) ≈ 10 • (0.387420) • (0.10) ≈ 0.387420
0
P(X = 10): C(10, 10) • (0.90)10 • (0.10) ≈ 1 • (0.348678) • (1) ≈ 0.348678
P(X ≥ 8) = 0.193708 + 0.387420 + 0.348678 ≈ 0.929806$$
The probability that at least 8 out of the 10 loaves meet the quality standard is approximately
0.9298 (or 92.98%).
References
Gauthmath. (2023). Why is the sum of probabilities always 1?
[Link]
7389754441086500877
Illowsky, B., Dean, S., Birmajer, D., Blount, B., Boyd, S., Einsohn, M., Helmreich, J.,
Kenyon, L., Lee, S., & Taub, J. (2023). Introductory statistics 2e. openstax.
[Link]
Math StackExchange. (2014, October 23). Why does the probability function must add up
to 1? [Link]
function-must-add-up-to-1
StarMast. (2024). Expected value and variance.
[Link]
Statisticshowto. (n.d.). Binomial distribution formula: How to use it.
[Link]
distribution-formula/