1. PROBABILITY AND STATISTICS WEEK 7 Onur Doğan

2. Normal Distributions Onur Doğan

3. Normal Probability Distributions The normal probability distribution is the most important distribution in all of statistics Many continuous random variables have normal or approximately normal distributions Need to learn how to describe a normal probability distribution

4. Normal Distributions Onur Doğan

5. Normal Distributions Onur Doğan

6. Standardization Standart Normal Distribution The standard normal random variable (denoted as Z) is a normal random variable with mean µ= 0 and variance Var(X) = 1. Onur Doğan

7. Standard Normal Distribution Properties: The total area under the normal curve is equal to 1 The distribution is mounded and symmetric; it extends indefinitely in both directions, approaching but never touching the horizontal axis The distribution has a mean of 0 and a standard deviation of 1 The mean divides the area in half, 0.50 on each side Nearly all the area is between z = -3.00 and z = 3.00

8. Standardization Standart Normal Distributions Onur Doğan

9. Example Example:Find the area under the standard normal curve between z = 0 and z = 1.45 z0.000.010.020.030.040.050.06 1.40.4265............

10. Example (Reading the Z Table) P(0 ≤ Z ≤ 1,24) = P(-1,5 ≤ Z ≤ 0) = P(Z > 0,35)= P(Z ≤ 2,15)= P(0,73 ≤ Z ≤ 1,64)= P(-0,5 ≤ Z ≤ 0,75) = Find a value of Z, say, z, such that P(Z ≤ z)=0,99 Onur Doğan

11. Example Onur Doğan

12. Example A debitor pays back his debt with the avarage 45 days and variance is 100 days. Find the probability of a person’s paying back his debt; a)Between 43 and 47 days b)Less then 42 days. c)More then 49 days. Onur Doğan

13. Example The sick-leave time of employees in a firm in a month is normally distributed with a mean of 100 hours and a standard deviation of 20 hours. Find the probability that the sick-leave time of an employee in a month exceeds 130 hours. Onur Doğan

15. Approximation to Normal Distribution Onur Doğan

16. Normal Approximation to the Binomial Distributions n=20 and p=0.6 Onur Doğan

17. Normal Approximation to the Binomial Distributions The binomial distribution B(n,p) approximates to the normal distribution with; E(X)= np and Var(X)= np(1 - p) if np > 5 and n(l -p) > 5 Onur Doğan

18. Example Suppose that X is a binomial random variable with n = 100 and p = 0.1. Find the probability P(X≤15) based on the corresponding binomial distribution and approximate normal distribution. Is the normal approximation reasonable? Onur Doğan

19. Normal Approximation to the Poisson Distributions The normal approximation is applicable to a Poisson if λ > 5 Accordingly, when normal approximation is applicable, the probability of a Poisson random variable X with µ=λ and Var(X)= λ can be determined by using the standard normal random variable Onur Doğan

20. Example Suppose that X has a Poisson distribution with λ= 10. Find the probability P(X≤15) based on the corresponding Poisson distribution and approximate normal distribution. Is the normal approximation reasonable? Onur Doğan

21. Normal Approximation to the Hypergeometric Distributions Recall that the binomial approximation is applicable to a hypergeometric if the sample size n is relatively small to the population size N, i.e., to n/N < 0.1. Consequently, the normal approximation can be applied to the hypergeometric distribution with p =K/N (K: number of successes in N) if n/N 5. and n(1 - p) > 5. Onur Doğan

22. Example Suppose that X has a hypergeometric distribution with N = 1,000, K = 100, and n = 100. Find the probability P(X≤15) based on the corresponding hypergeometric distribution and approximate normal distribution. Is the normal approximation reasonable? (δ=2,85) Onur Doğan

23. Examples Onur Doğan

24. Example For a product daily avarege sales are 36 and standard deviation is 9. (The sales have normal distribution) a)Whats the probability of the sales will be less then 12 for a day? b)The probability of non carrying cost (stoksuzluk maliyeti) to be maximum 10%, How many products should be stocked? Onur Doğan

25. Example Onur Doğan

26. Example Onur Doğan

27. Example Onur Doğan