Normal Distribution
1
Before Starting Normal Distribution
P(8<x < 12) = ?
f (x )
1/10
P( < 12) = ?
5 12 15 x
P( < 8) = ? f (x )
1/10
5 12 15 x
P(8<x < 12) = .7-.3 = .4
2
The Normal Probability Distribution
Graph of the Normal Probability Density Function
f (x )
x
3
The Normal Curve
The shape of the normal curve is often illustrated as a
bell-shaped curve.
The highest point on the normal curve is at the mean
of the distribution.
The normal curve is symmetric.
The standard deviation determines the width of the
curve.
4
The Normal Curve
The total area under the curve the same as any other
probability distribution is 1.
The probability of the normal random variable
assuming a specific value the same as any other
continuous probability distribution is 0.
Probabilities for the normal random variable are
given by areas under the curve.
5
The Normal Probability Density Function
1 ( x )2 / 2 2
f ( x) e
2
where
= mean
= standard deviation
= 3.14159
e = 2.71828
6
The Standard Normal Probability Density Function
where
=0
=1
= 3.14159
e = 2.71828
7
Given any positive value for z, the table will
give us the following probability
The table will give this
probability
Given positive z
The probability that we find using the table is
the probability of having a standard normal
variable between 0 and the given positive z.
8
Given z find the probability
z .00 .01 .02 .03 .04 .05 .06 .07 .08 .09
.0 .0000 .0040 .0080 .0120 .0160 .0199 .0239 .0279 .0319 .0359
.1 .0398 .0438 .0478 .0517 .0557 .0596 .0636 .0675 .0714 .0753
.2 .0793 .0832 .0871 .0910 .0948 .0987 .1026 .1064 .1103 .1141
.3 .1179 .1217 .1255 .1293 .1331 .1368 .1406 .1443 .1480 .1517
.4 .1554 .1591 .1628 .1664 .1700 .1736 .1772 .1808 .1844 .1879
.5 .1915 .1950 .1985 .2019 .2054 .2088 .2123 .2157 .2190 .2224
.6 .2257 .2291 .2324 .2357 .2389 .2422 .2454 .2486 .2518 .2549
.7 .2580 .2612 .2642 .2673 .2704 .2734 .2764 .2794 .2823 .2852
.8 .2881 .2910 .2939 .2967 .2995 .3023 .3051 .3078 .3106 .3133
.9 .3159 .3186 .3212 .3238 .3264 .3289 .3315 .3340 .3365 .3389
9
Given any probability between 0 and .5,, the
table will give us the following positive z value
Given this probability
between 0 and .5
The table will give us
this positive z
10
Given the probability find z find
z .00 .01 .02 .03 .04 .05 .06 .07 .08 .09
.0 .0000 .0040 .0080 .0120 .0160 .0199 .0239 .0279 .0319 .0359
.1 .0398 .0438 .0478 .0517 .0557 .0596 .0636 .0675 .0714 .0753
.2 .0793 .0832 .0871 .0910 .0948 .0987 .1026 .1064 .1103 .1141
.3 .1179 .1217 .1255 .1293 .1331 .1368 .1406 .1443 .1480 .1517
.4 .1554 .1591 .1628 .1664 .1700 .1736 .1772 .1808 .1844 .1879
.5 .1915 .1950 .1985 .2019 .2054 .2088 .2123 .2157 .2190 .2224
.6 .2257 .2291 .2324 .2357 .2389 .2422 .2454 .2486 .2518 .2549
.7 .2580 .2612 .2642 .2673 .2704 .2734 .2764 .2794 .2823 .2852
.8 .2881 .2910 .2939 .2967 .2995 .3023 .3051 .3078 .3106 .3133
.9 .3159 .3186 .3212 .3238 .3264 .3289 .3315 .3340 .3365 .3389
11
What is the z value where probability of a standard
normal variable to be greater than z is .1
10%
40%
12
The End
13
Standard Normal Probability
Distribution
(Z Distribution)
14
Standard Normal Probability Distribution
A random variable that has a normal distribution
with a mean of zero and a standard deviation of one
is said to have a standard normal probability
distribution.
The letter z is commonly used to designate this
normal random variable.
The following expression convert any Normal
Distribution into the Standard Normal Distribution
x
z
15
Example: Pep Zone
Pep Zone sells auto parts and supplies including multi-
grade motor oil. When the stock of this oil drops to
20 gallons, a replenishment order is placed.
The store manager is concerned that sales are being lost
due to stockouts while waiting for an order.
It has been determined that leadtime demand is
normally distributed with a mean of 15 gallons and a
standard deviation of 6 gallons.
In Summary; we have a N (15, 6): A normal random
variable with mean of 15 and std of 6.
The manager would like to know the probability of a
stockout, P(x > 20).
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Standard Normal Distribution
z = (x - )/
= (20 - 15)/6
= .83
Area = .5
z
0 .83
17
Example: Pep Zone
z .00 .01 .02 .03 .04 .05 .06 .07 .08 .09
.0 .0000 .0040 .0080 .0120 .0160 .0199 .0239 .0279 .0319 .0359
.1 .0398 .0438 .0478 .0517 .0557 .0596 .0636 .0675 .0714 .0753
.2 .0793 .0832 .0871 .0910 .0948 .0987 .1026 .1064 .1103 .1141
.3 .1179 .1217 .1255 .1293 .1331 .1368 .1406 .1443 .1480 .1517
.4 .1554 .1591 .1628 .1664 .1700 .1736 .1772 .1808 .1844 .1879
.5 .1915 .1950 .1985 .2019 .2054 .2088 .2123 .2157 .2190 .2224
.6 .2257 .2291 .2324 .2357 .2389 .2422 .2454 .2486 .2518 .2549
.7 .2580 .2612 .2642 .2673 .2704 .2734 .2764 .2794 .2823 .2852
.8 .2881 .2910 .2939 .2967 .2995 .3023 .3051 .3078 .3106 .3133
.9 .3159 .3186 .3212 .3238 .3264 .3289 .3315 .3340 .3365 .338918
The Probability of Demand Exceeding 20
Area = .2967
Area = .2033
Area = .5
z
0 .83
The Standard Normal table shows an area of .2967 for
the region between the z = 0 line and the z = .83 line
above. The shaded tail area is .5 - .2967 = .2033. The
probability of a stockout is .2033.
19
Example: Pep Zone
If the manager of Pep Zone wants the probability of a
stockout to be no more than .05, what should the
reorder point be?
Area = .05
Area = .5 Area = .45
0 z.05
Let z.05 represent the z value cutting the tail area of .05.
20
Example: Pep Zone
Using the Standard Normal Probability Table
We now look-up the .4500 area in the Standard
Normal Probability table to find the corresponding
z.05 value. z.05 = 1.645 is a reasonable estimate.
z .00 .01 .02 .03 .04 .05 .06 .07 .08 .09
.
1.5 .4332 .4345 .4357 .4370 .4382 .4394 .4406 .4418 .4429 .4441
1.6 .4452 .4463 .4474 .4484 .4495 .4505 .4515 .4525 .4535 .4545
1.7 .4554 .4564 .4573 .4582 .4591 .4599 .4608 .4616 .4625 .4633
1.8 .4641 .4649 .4656 .4664 .4671 .4678 .4686 .4693 .4699 .4706
1.9 .4713 .4719 .4726 .4732 .4738 .4744 .4750 .4756 .4761 .4767
.
21
Example: Pep Zone
The corresponding value of x is given by
x = + z.05
= 15 + 1.645(6)
= 24.87
A reorder point of 24.87 gallons will place the
probability of a stockout during leadtime at .05.
Perhaps Pep Zone should set the reorder point at 25
gallons to keep the probability under .05.
22
Example: Aptitude Test
A firm has assumed that the distribution of the aptitude test of
people applying for a job in this firm is normal.
The following sample is available.
71 66 61 65 54 93
60 86 70 70 73 73
55 63 56 62 76 54
82 79 76 68 53 58
85 80 56 61 61 64
65 62 90 69 76 79
77 54 64 74 65 65
61 56 63 80 56 71
79 84
23
Example: Mean and Standard Deviation
We first need to estimate mean and standard deviation
x
x i
3421
68.42
n 50
s
(x x) 2
5310.04
10.41
n 1 49
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z Values
What test mark has the property of having 10% of test
marks being less than or equal to it
To answer this question, we should first answer the
following
What is the standard normal value (z value), such that
10% of z values are less than or equal to it?
10%
25
z Values
We need to use standard Normal distribution in Table 1.
10%
10%
26
z Values
10%
40%
27
z Values
40%
z = 1.28
10%
z = - 1.28
28
z Values and x Values
The standard normal value (z value), such that 10% of z values are
less than or equal to it is z = -1.28
To transform this standard normal value to a similar value in our
example, we use the following relationship
x μ
z
σ
x 68.42
1.28
10.41
x 10.41( 1.28 ) 68.42 55.1
The normal value of test marks such that 10% of random
29
variables are less than it is 55.1.
z Values and x Values
Following the same procedure, we could find z values for cases
where 20%, 30%, 40%, …of random variables are less than these
values. Following the same procedure, we could transform z
values into x values.
x
z
Lower 10% -1.28 55.1
Lower 20% -.84 59.68
Lower 30% -.52 63.01
Lower 40% -.25 65.82
Lower 50% 0 68.42
Lower 60% .25 71.02
30
Example : Victor Computers
Victor Computers manufactures and sells a
general purpose microcomputer. As part of a study
to evaluate sales personnel, management wants to
determine if the annual sales volume (number of
units sold by a salesperson) follows a normal
probability distribution.
A simple random sample of 30 of the salespeople
was taken and their numbers of units sold are below.
33 43 44 45 52 52 56 58 63 64
64 65 66 68 70 72 73 73 74 75
83 84 85 86 91 92 94 98 102 105
(mean = 71, standard deviation = 18.54)
Partition this Normal distribution into 6 equal
probability parts 31
Example : Victor Computers
Areas
= 1.00/6
= .1667
53.02 71 88.98 = 71 + .97(18.54)
63.03 78.97
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The End
33
Normal Approximation
of Binomial Probabilities
When the number of trials, n, becomes large,
evaluating the binomial probability function by hand
or with a calculator is difficult.
The normal probability distribution provides an
easy-to-use approximation of binomial probabilities
where n > 20, np > 5, and n(1 - p) > 5.
Set = np
np(1 p )
Add and subtract a continuity correction factor
because a continuous distribution is being used to
approximate a discrete distribution. For example,
P(x = 10) is approximated by P(9.5 < x < 10.5).
34
The Exponential Probability Distribution
Exponential Probability Density Function
1
f ( x) e x / for x > 0, > 0
where = mean
e = 2.71828
Cumulative Exponential Distribution Function
P( x x0 ) 1 e x0 /
where x0 = some specific value of x
35
Example: Al’s Carwash
The time between arrivals of cars at Al’s Carwash
follows an exponential probability distribution with a
mean time between arrivals of 3 minutes. Al would like
to know the probability that the time between two
successive arrivals will be 2 minutes or less.
P(x < 2) = 1 - 2.71828-2/3 = 1 - .5134 = .4866
36
Example: Al’s Carwash
Graph of the Probability Density Function
F (x )
.4
.3 P(x < 2) = area = .4866
.2
.1
x
1 2 3 4 5 6 7 8 9 10
37
The End
38
