1. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Continuous Probability Distributions Chapter 7

2. 7-2 Learning Objectives LO7-2 Describe the characteristics of a normal probability distribution. LO7-3 Describe the standard normal probability distribution and use it to calculate probabilities.

3. 7-3 Characteristics of a Normal Probability Distribution  It is bell-shaped and has a single peak at the center of the distribution.  It is symmetrical about the mean.  It is asymptotic: The curve gets closer and closer to the X-axis but never actually touches it. To put it another way, the tails of the curve extend indefinitely in both directions.  The location of a normal distribution is determined by the mean, . The dispersion or spread of the distribution is determined by the standard deviation, σ.  The arithmetic mean, median, and mode are equal.  As a probability distribution, the total area under the curve is defined to be 1.00.  Because the distribution is symmetrical about the mean, half the area under the normal curve is to the right of the mean, and the other half to the left of it. LO7-2 Describe the characteristics of a normal probability distribution.

4. 7-4 The Normal Distribution – Graphically LO7-2

5. 7-5 The Family of Normal Distributions Different Means and Standard Deviations Equal Means and Different Standard Deviations Different Means and Equal Standard Deviations LO7-2

6. 7-6 The Standard Normal Probability Distribution The standard normal distribution is a normal distribution with a mean of 0 and a standard deviation of 1. It is also called the z distribution. A z-value is the signed distance between a selected value, designated x, and the population mean, , divided by the population standard deviation, σ. The formula is: LO7-3 Describe the standard normal probability distribution and use it to calculate probabilities.

7. 7-7 Areas Under the Normal Curve Using a Standard Normal Table LO7-3

8. 7-8 The Empirical Rule – Verification For z=1.00, the table’s value is 0.3413; times 2 is 0.6826. For z=2.00, the table’s value is 0.4772; times 2 is 0.9544. For z=3.00, the table’s value is 0.4987; times 2 is 0.9974. LO7-3

9. 7-9 The Normal Distribution – Example The weekly incomes of shift foremen in the glass industry follow the normal probability distribution with a mean of $1,000 and a standard deviation of $100. What is the z value for the income, let’s call it x, of a foreman who earns $1,100 per week? For a foreman who earns $900 per week? 9 LO7-3

10. 7-10 Normal Distribution – Finding Probabilities (Example 1) In an earlier example we reported that the mean weekly income of a shift foreman in the glass industry is normally distributed with a mean of $1,000 and a standard deviation of $100. What is the likelihood of selecting a foreman whose weekly income is between $1,000 and $1,100? LO7-3

11. 7-11 Normal Distribution – Finding Probabilities (Example 1) LO7-3

12. 7-12 Finding Areas for z Using Excel The Excel function: =NORM.DIST(x,Mean,Standard_dev,Cumu) = NORM.DIST(1100,1000,100,true) calculates the probability (area) for z=1. LO7-3

13. 7-13 Normal Distribution – Finding Probabilities (Example 2) Refer to the information regarding the weekly income of shift foremen in the glass industry. The distribution of weekly incomes follows the normal probability distribution with a mean of $1,000 and a standard deviation of $100. What is the probability of selecting a shift foreman in the glass industry whose income is between $790 and $1,000? LO7-3

14. 7-14 Normal Distribution – Finding Probabilities (Example 3) Refer to the information regarding the weekly income of shift foremen in the glass industry. The distribution of weekly incomes follows the normal probability distribution with a mean of $1,000 and a standard deviation of $100. What is the probability of selecting a shift foreman in the glass industry whose income is less than $790? LO7-3 The probability of selecting a shift foreman with income less than $790 is 0.5 -.4821 =.0179.

15. 7-15 Normal Distribution – Finding Probabilities (Example 4) Refer to the information regarding the weekly income of shift foremen in the glass industry. The distribution of weekly incomes follows the normal probability distribution with a mean of $1,000 and a standard deviation of $100. What is the probability of selecting a shift foreman in the glass industry whose income is between $840 and $1,200? LO7-3

16. 7-16 Normal Distribution – Finding Probabilities (Example 5) Refer to the information regarding the weekly income of shift foremen in the glass industry. The distribution of weekly incomes follows the normal probability distribution with a mean of $1,000 and a standard deviation of $100. What is the probability of selecting a shift foreman in the glass industry whose income is between $1,150 and $1,250? LO7-3