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Density One question does remain, however: what is the probability that the wait time is exactly 2.5 minutes The answer might not come as too much of a surprise: the probability is 0! The probability of a single value in a continuous distribution is 0, since there are infinitely many possible values. Thus, 2.5 represents 1 of infinitely many values. Take and you get 0! We can only find the probability of a non-zero range of values for a continuous random variable! Continuous Random Variables A continuous random variable is a random variable that has infinitely many possible values within a range of real numbers. As a result, the probability that a continuous random variable takes on any one specific value is 0. Probability Density Function (PDF) The PDF of a continuous random variable is a continuous function such that the total area between the function and the horizontal axis is 1. The function‟s input values are the values of the random variable, while the output values are densities. Densities are individually meaningless values designed so that the total area equals 1. Reconsider the above wait-times example: 0.25 0.2 0.15 Time Spent Waiting in Line 0.1 0.05 0 0 1 2 3 4 5 Minutes Statistics for Decision-Making in Business © Milos Podmanik Page 162
Suppose we wish to find ( ), that is, the probability that the waiting time is between 2.5 and 3.5 minutes. To find this, we simply find the area under the PDF between 2.5 and 3.5 minutes: The area of the rectangular region is: Thus, ( ) We can expect to wait between 2.5 and 3.5 minutes with a 20% chance. Thus, approximately one in five visits, our wait-time will be somewhere within this interval. Similarly, suppose we wish to know: ( ) This is the probability that the wait-time is between 0.3 and 4.4 minutes. We identify this region below: Statistics for Decision-Making in Business © Milos Podmanik Page 163
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Statistics for Decision- Making in
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A Note to Students This book is far
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6.3 Confidence Interval for ̂ 202
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which has undergone no additional r
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of transporting such an animal. Not
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Although far from last, we will con
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Account Type Revenue ($) New $5,296
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For the present time, we‟ll proce
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Row Labels Average of Revenue ($) M
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(SOURCE: Essentials of Modern Busin
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1.3Statistics in Excel When conduct
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We can make it a bit more presentab
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For measures such as the range, Exc
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We get: We can do the same for Old.
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Chapter 2 Visual Representations of
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We now have to enter a formula for
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We know from the data that this val
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Alternatively, it is possible to in
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16 14 12 10 8 6 Series1 4 2 0 SD D
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Selected the copied graph. In Chart
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2. The following data represents pe
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Frequency 2.2 Visualizing Quantitat
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You can either choose to have Excel
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If we had additional variables, the
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Select PivotChart and select the fi
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Frequency To make solid black lines
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Relative Frequency Histogram of Cal
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a. Using Excel, find the mean and r
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̅ ̅ account for this discrepancy,
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2.3.2 Percentile Another useful too
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2.3.4 Rank What if, on the other ha
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Check the “Analysis ToolPak” an
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You‟ll immediately notice that a
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̅ 2.4 Descriptive Statistics - Var
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√ ∑( ̅) √ √ This is what w
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This gives us a nice measure of how
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We can immediately see the mean and
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Lastly, a normal curve is the most
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Frequency ̅ Histogram of TV's Owne
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58.3 34.6 35.5 45.4 38.6 63.8 53.9
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Chapter 3 Probability and Decision
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Proportion of Rainy Days 1.2 Propor
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This means that if samples of HFCS
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Are we confident in accusing a lung
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3.2 Joint Probability In the previo
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Company 1 Choices Y Y Y Y Y Y Y Y N
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There is less than a 1% chance that
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We can now see that the situation i
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sequence, one ball is chose at rand
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3.3 Probability of Unions Imagine t
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Physical .20 .10 .30 Mental .40 .30
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SOLUTION: We first arrange this inf
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Homework Problems - 3.3 1. A gaming
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3.4 Conditional Probability In many
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) : The Arizona Cardinals make it t
Page 111 and 112: We could just as well have written,
Page 113 and 114: That is, the probability that the c
Page 115 and 116: This can happen in one of two ways:
Page 117 and 118: f. All numerical red cards are remo
Page 119 and 120: 3.5 Combinations and Permutations R
Page 121 and 122: 1 st Bushel 2 nd Bushel U1 U1 U2 U2
Page 123 and 124: Which, in its final state gives: Th
Page 125 and 126: Combination - Order Does NOT Matter
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Page 139 and 140: Where The expected value is: , - (
Page 141 and 142: SOLUTION: We first note that there
Page 143 and 144: Probability 0.7 0.6 0.5 0.4 0.3 0.2
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Page 147 and 148: For men, we see that the most frequ
Page 149 and 150: So, we had 10 trials and wanted to
Page 151 and 152: Example 1: A fair-two sided coin is
Page 153 and 154: ( ) ( ) ( ) ( ) Example 2: A fair,
Page 155 and 156: Expected Value of a Binomial Random
Page 157 and 158: f. What is the probability that g.
Page 159 and 160: Probability For instance, we see th
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Page 169 and 170: a. What is the probability that the
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Page 173 and 174: As you can see, this is a difficult
Page 175 and 176: We wish to know the area of the sha
Page 177 and 178: We can easily find that the probabi
Page 179 and 180: In the second section, we can check
Page 181 and 182: Chapter 6 Sampling Distributions an
Page 183 and 184: Thus, the standard deviation would
Page 185 and 186: 1.7 to 1.8 1.8 to 1.9 1.9 to 2 2 to
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Page 189 and 190: The Central Limit Theorem (CLT) has
Page 191 and 192: can set this up in our applet by ha
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Page 207 and 208: Homework Problems -6.2 1. In a samp
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Hypothesis Test Conclusion Test Say
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Hypothesis Test Conclusion Since yo
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SOLUTION: d. A generic conclusion s
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9. Based on the “Structure of a H
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1.2 Descriptive VS. Inferential Sta
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Relative Frequency 35% 30% 25% 20%
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Symmetric: 35 30 25 20 15 10 5 0 10
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Repair Cost Mean 971 Standard Error
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el freq Nitrous Oxide (thous. Tons)
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Probability Pizza Size Distribution
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2. a. The long-run proportion of al
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6. This is the probability that we
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