Reference: Mr.
Richard Li
DLSU Gokongwei College of Engineering
It is an item used to define or denote the
outcomes in the sample space known as the
sample points.
It assigns a numerical value to each outcome
in the sample space.
It is an item whose numerical value is of a
random nature, and therefore cannot be
known with certainty.
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
Example: If we toss a coin three times, we can use
the random variable x to define the sample points
of this experiment as the number of heads that
occur.
Sample Points X Probability or
f(x)
HHH 3 1/8
HHT 2 1/8
HTH 2 1/8
HTT 1 1/8
THH 2 1/8
TTH 1 1/8
THT 1 1/8
TTT 0 1/8
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
In tabular form, the probability distribution
function (p.d.f.) of the random variable x is
given as follows:
x f(x)
0 1/8
1 3/8
2 3/8
3 1/8
Total = f(x) = 1
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
In formula form:
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
1. Discrete - this type of random variable can
only assume a finite or countably infinite
number of possible values.
◦ Ex. no. of heads in a coin experiment, no. of
defectives produced, demand or sales of a product
in units per day, quiz average of students in
Quameth rounded off to the nearest unit, no. of
customer arrivals in a bank per hour, no. of
customer complaints received per day by customer
service, weight of a can of corned beef to the
nearest gram, etc.
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
2. Continuous - this type of random variable
can take on any value within a given range
◦ Ex. temperature, volume, weight, diameter, time,
quiz average of a student, etc.
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
Ways by which a continuous variable can be converted into a
discrete variable
1. Specifying the level of accuracy of measurement
Ex. Continuous variable: diameter of a ball bearing in inches
Discrete variable: diameter of a ball bearing to the nearest tenth of
an inch
2. Introducing categories to describe the diff. levels of values of the
random variable
Ex. Continuous variable: Final grades (raw scores) of students in
Quameth
Discrete variable: Final grades (course card grades)
Grade Range Final Grade
below 60 0.0
60 - 65 1.0
66 - 71 1.5
72 - 77 2.0
78 - 83 2.5
84 - 89 3.0
90 - 95 3.5
96 - 100 4.0
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
Probability Distribution is a table or a
function which helps us determine or
compute the probability associated to each
value of the random variable.
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
1. Discrete probability distribution - one that
involves a discrete random variable.
◦ Example: Poisson Distribution (x is the no. of
arrivals per time period)
2. Continuous probability distribution - one
that involves a continuous random variable.
◦ Example: Exponential Distribution (t is the inter-
arrival time of customers)
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
Characteristics of a discrete probability
distribution
1. f(x) 0 x (for all x)
2. f(x) = 1
3. P(X = x) = f(x) refers to the value of the
function when the random variable X is
equal to a specific value x.
◦ Ex. In the experiment of tossing a coin three times:
P(X = 2) = f(2) = 3/8
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
Cumulative Distribution Function
◦ a table or a function that determines the probability
that the random variable X takes on values that are
less than or equal to a specific value x
denoted by:
◦ where: L = lower limit of possible x values
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
x f(x) F(x)
0 1/8 1/8
1 3/8 4/8
2 3/8 7/8
3 1/8 1
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
Methods of Graphing Discrete Probability
Distributions
1. Bar Chart
2. Probability Histogram
Note: Area of histogram = Width x Height = Probability
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
The probability distribution of a continuous
random variable is referred to as the continuous
density function.
Note: Unlike in the discrete case, f(x) does not
specify the probability that the random variable X
takes on a specific value x, i.e., P(X = x) f(x).
Probabilities in continuous distributions are
evaluated for a given range. This time, the
probability (that the random variable x takes on
values within a given range x1 to x2) is
represented by the area under the curve.
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
Derivation of the Continuous Curve
1. Construct histograms (as in the discrete case)
2. As x 0, the curve f(x) is obtained by
connecting the points with a smooth curve.
Most Common Curves
1. Normal Curve - symmetric
2. Skewed to the right - positively skewed
3. Skewed to the left - negatively skewed
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
Characteristics of a continuous probability
distribution
1)
2) , since
Consequence:
3)
4)
5)
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
Cumulative Density Function
◦ To derive the cumulative density function, just
change x to t in the original probability formula.
F(x) is obtained by integrating the function and
then substituting t by x.
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
The random variable x has a density function
given by:
f(x) = k (x+1) ; 0x2
=0 ; elsewhere
a) Find P(0.5 x 2)
b) Find P(x 1.5)
c) Find F(x)
d) Use F(x) to evaluate P(x 2) and P(1 x 2.5)
e) Find and 2
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
The expected value of the random variable x
is the average of all possible values of x or
the mean of the x values. It is one of the
properties of a probability distribution.
Notation: E(x) or x
Note: The expectation of x is a weighted
average wherein the given probabilities
represent the weight.
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
Example:
x 1 2 3 4
f(x) 0.5 0.3 0.1 0.1
E(x) = 1(.5) + 2(.3) + 3(.1) + 4(.1) = 1.8
For discrete probability distributions:
◦ E(x) = x f(x)
For continuous probability distributions:
◦ E(x) = x f(x) dx
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
Let g(x) = pure function of the random
variable x
If x is a discrete random variable,
If x is a continuous random variable,
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
Let x = demand in units per day
x 1 2 3 4
f(x) 0.1 0.3 0.2 0.4
Given: Selling Price (SP)=P10/unit; Variable Cost
(VC)=P5/unit; Fixed Cost (FC)=P10
Find: Expected Profit
Solution:
◦ Profit = g(x) = 10x - 5x - 10 = 5x - 10
x 1 2 3 4
g(x) -5 0 5 10
◦ Eg(x) =g(x)f(x)=(-5)(0.1) + (0)(0.3) + (5)(0.2) + (10)(0.4) = P4.5
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
Decision Making Process
◦ Decision to be made Alternatives States of
Nature
◦ States of Nature - pertains to what actually happens
after a decision has been made
Note: When faced with a decision, compute
the expected profit or expected cost of all the
alternatives and compare. Choose the
alternative that gives the greatest expected
profit or least expected cost.
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
measures the dispersion or “spread” of the
values of x
the average of the squares of the deviations
of all the x values from the mean
just like x, 2x is a property of the probability
distribution of x
Basic Formula: 2x = E(x - x)2
Working Formula: 2x = E(x2) - (x)2
= Σ(x2f(x)) - E(x)2
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
Note: x and 2x are measures that provide
description to a population.
Standard Deviation (x) - converts the
variance into the same units as the random
var. x
x = (2x)1/2
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
Given:
x 1 2 3 4
f(x) 0.2 0.3 0.4 0.1
Req’d: 2x
E(x2)=x2f(x)
= (1)2(0.2) + (2)2(0.3) + (3)2(0.4) + (4)2(0.1) = 6.6
E(x) = (1)(0.2) + (2)(0.3) + (3)(0.4) + (4)(0.1) = 2.4
2x = 6.6 - (2.4)2 = 0.84 sq. units
x = 0.92 units
Dispersion or spread of x values:
2.4 - 0.92 < x < 2.4 + 0.92 = 1.48 < x < 3.32
Reference: Mr. Richard Li
DLSU Gokongwei College of Engineering
