QMB-03b

steamonlyOil and Offshore

Nov 8, 2013 (3 years and 9 months ago)

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1


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2013
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SLIDES BY

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John
Loucks


St.
Edward’s Univ.


2


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 3, Part B


Probability Distributions


Uniform Probability Distribution


Normal Probability Distribution


Exponential Probability Distribution

f
(
x
)


x

Uniform

x

f
(
x
)

Normal

x

f
(
x
)

Exponential


3


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.

Continuous Random Variables


Examples of continuous random variables include the
following:



The
number of ounces

of soup placed in a can
labeled “8 ounces”



The
flight time

of an airplane traveling from
Chicago to New York


The
lifetime

of the picture tube in a new television
set



The
drilling depth

required to reach oil in an
offshore drilling operation



4


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.

Continuous Probability Distributions


A
continuous random variable

can assume any value
in an interval on the real line or in a collection of
intervals.


It is not possible to talk about the probability of the
random variable assuming a particular value.


Instead, we talk about the probability of the random
variable assuming a value within a given interval.


5


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.

Continuous Probability Distributions


The probability of the random variable assuming a
value within some given interval from
x
1

to
x
2

is
defined to be the
area under the graph

of the
probability density function

between

x
1

and

x
2
.

f
(
x
)


x

Uniform


x
1


x
2

x

f
(
x
)

Normal


x
1


x
2


x
1


x
2

Exponential

x

f
(
x
)


x
1


x
2


6


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.


A random variable is
uniformly distributed

whenever
the probability
that the variable will assume a value in
any interval of equal length is the same for each
interval.


The
uniform probability density function

is:



Uniform Probability Distribution

where:
a

= smallest value the variable can assume



b

= largest value the variable can assume


f
(
x
) = 1/(
b



a
) for
a

<

x

<

b


= 0 elsewhere


7


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.

Example: Flight Time


Uniform Probability Distribution



Let
x

denote the flight time of an airplane
traveling from Chicago to New York. Assume that the
minimum time is 2 hours and that the maximum time
is 2 hours 20 minutes.



Assume that sufficient actual flight data are
available to conclude that the probability of a flight
time between 120 and 121 minutes is the same as the
probability of a flight time within any other 1
-
minute
interval up to and including 140 minutes.




8


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.


Uniform Probability Density Function



Example: Flight Time


f
(
x
) = 1/20 for 120
<

x

<

140


= 0 elsewhere

where:


x

= flight time in minutes


9


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.


Uniform Probability Distribution for Flight Time

f
(
x
)


x

120

130

140

1/20

Flight Time (mins.)

Example: Flight Time


10


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.

f
(
x
)


x

120

130

140

1/20

Flight Time (mins.)

Example: Flight Time

P(135
<

x

<

140) = 1/20(5) = .25



What is the probability that a flight will take


between 135 and 140 minutes?

135


11


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.

f
(
x
)


x

120

130

140

1/20

Flight Time (mins.)

Example: Flight Time

P(124
<

x

<

136) = 1/20(12) = .6



What is the probability that a flight will take


between 124 and 136 minutes?

136

124


12


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.

Normal Probability Distribution


The
normal probability distribution

is the most
important distribution for describing a continuous
random variable.


It is widely used in statistical inference.


13


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2013
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or duplicated, or posted to a publicly accessible website, in whole or in part.

Heights

of people

Normal Probability Distribution


It has been used in a wide variety of applications:

Scientific


measurements

Test


scores

Amounts

of rainfall


14


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.

Normal Probability Distribution


Normal Probability Density Function

2 2
( )/2
1
( )
2
x
f x e
 
 
 



= mean



= standard deviation



= 3.14159

e

= 2.71828

where:


15


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.


The distribution is
symmetric
, and is
bell
-
shaped
.

Normal Probability Distribution


Characteristics

x


16


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.


The entire family of normal probability


distributions is defined by its

mean



and its


standard deviation



.

Normal Probability Distribution


Characteristics

Standard Deviation


Mean


x


17


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2013
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or duplicated, or posted to a publicly accessible website, in whole or in part.


The
highest point

on the normal curve is at the


mean
, which is also the
median

and
mode
.

Normal Probability Distribution


Characteristics

x


18


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2013
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or duplicated, or posted to a publicly accessible website, in whole or in part.

Normal Probability Distribution


Characteristics

-
10

0

20


The mean can be any numerical value: negative,


zero, or positive.

x


19


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2013
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Normal Probability Distribution


Characteristics



= 15



= 25

The standard deviation determines the width of the

curve: larger values result in wider, flatter curves.

x


20


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2013
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Probabilities for the normal random variable are


given by
areas under the curve
. The total area


under the curve is 1 (.5 to the left of the mean and


.5 to the right).

Normal Probability Distribution


Characteristics

.5

.5

x


21


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.

Normal Probability Distribution


Characteristics


of values of a normal random variable


are within of its mean.

68.26%

+/
-

1 standard deviation


of values of a normal random variable


are within of its mean.

95.44%

+/
-

2 standard deviations


of values of a normal random variable


are within of its mean.

99.72%

+/
-

3 standard deviations


22


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2013
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or duplicated, or posted to a publicly accessible website, in whole or in part.

Normal Probability Distribution


Characteristics

x





3






1






2




+ 1




+ 2




+ 3




68.26%

95.44%

99.72%


23


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.

Standard Normal Probability Distribution



A
random variable having a normal distribution



with
a mean of 0 and a standard deviation of 1 is



said
to have a
standard normal probability



distribution
.


24


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2013
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or duplicated, or posted to a publicly accessible website, in whole or in part.


 1

0

z


The letter
z
is used to designate the standard


normal random variable.

Standard Normal Probability Distribution


25


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2013
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or duplicated, or posted to a publicly accessible website, in whole or in part.


Converting to the Standard Normal Distribution


Standard Normal Probability Distribution

z
x




We can think of
z

as a measure of the number of

standard deviations
x

is from

.


26


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2013
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or duplicated, or posted to a publicly accessible website, in whole or in part.

Example: Pep Zone


Standard Normal Probability Distribution



Pep Zone sells auto parts and supplies including


a popular multi
-
grade motor oil. When the stock of


this oil drops to 20 gallons, a replenishment order is


placed.


27


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.

Example: Pep Zone


Standard Normal Probability Distribution



The store manager is concerned that sales are
being lost due to stockouts while waiting for an
order. It has been determined that demand during
replenishment lead
-
time is normally distributed with
a mean of 15 gallons and a standard deviation of 6
gallons.



The manager would like to know the probability
of a stockout,
P
(
x

> 20).


28


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.


z

= (
x

-


)/




= (20
-

15)/6


= .83


Solving for the Stockout Probability


Example: Pep Zone


Step
1: Convert
x

to the standard normal distribution.


Step
2: Find the area under the standard normal



curve
between the mean and
z

= .83.


see next slide


29


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.


Probability Table for the


Standard Normal Distribution

z
.00
.01
.02
.03
.04
.05
.06
.07
.08
.09
.
.
.
.
.
.
.
.
.
.
.
.5
.1915
.1695
.1985
.2019
.2054
.2088
.2123
.2157
.2190
.2224
.6
.2257
.2291
.2324
.2357
.2389
.2422
.2454
.2486
.2517
.2549
.7
.2580
.2611
.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
.
.
.
.
.
.
.
.
.
.
.
Example: Pep Zone

P
(0
<

z

<

.83)


30


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.


P
(
z
> .83) = .5


P
(0
<

z

<

.83)




= 1
-

.2967



= .2033


Solving for the Stockout Probability


Example: Pep Zone


Step
3: Compute the area under the standard normal



curve
to the right of
z

= .83.

Probability


of a stockout

P
(
x

> 20)


31


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.


Solving for the Stockout Probability




Example: Pep Zone

0

.83

Area = .2967

Area = .5
-

.2967



= .2033

z


32


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.


Standard Normal Probability Distribution



If the manager of Pep Zone wants the probability
of a stockout to be no more than .05, what should the
reorder point be?

Example: Pep Zone


33


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.


Solving for the Reorder Point



0

Area = .4500

Area = .0500

z

z
.05

Example: Pep Zone


34


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.


Solving for the Reorder Point

Example: Pep Zone


Step
1: Find the
z
-
value that cuts off an area of .05




in
the right tail of the standard normal




distribution
.

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
.
.
.
.
.
.
.
.
.
.
.
We look up the area

(.5
-

.05 = .45)


35


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.


Solving for the Reorder Point

Example: Pep Zone


Step
2: Convert
z
.05

to the corresponding value of
x
.


x

=


+
z
.05





= 15 + 1.645(6)


= 24.87 or 25


A reorder point of 25 gallons will place the probability


of a stockout during leadtime at (slightly less than) .05.


36


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.


Solving for the Reorder Point

Example: Pep Zone


By raising the reorder point from 20 gallons to

25 gallons on hand, the probability of a stockout

decreases from about .20 to .05.


This is a significant decrease in the chance that Pep

Zone will be out of stock and unable to meet a

customer’s desire to make a purchase.


37


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2013
Cengage Learning. All Rights Reserved. May not be scanned, copied


or duplicated, or posted to a publicly accessible website, in whole or in part.

Exponential Probability Distribution


The exponential probability distribution is useful in
describing the time it takes to complete a task.


The exponential random variables can be used to
describe:

Time between

vehicle arrivals

at a toll booth

Time required

to
complete a

questionnaire

Distance between

major defects

in a highway


38


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2013
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or duplicated, or posted to a publicly accessible website, in whole or in part.


Density Function

Exponential Probability Distribution



where:


= mean



e

= 2.71828

f
x
e
x
(
)
/


1


for
x

>

0,


> 0


39


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2013
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or duplicated, or posted to a publicly accessible website, in whole or in part.


Cumulative Probabilities

Exponential Probability Distribution

P
x
x
e
x
(
)
/




0
1
o

where:




x
0

= some specific value of
x


40


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2013
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or duplicated, or posted to a publicly accessible website, in whole or in part.


Exponential Probability Distribution



The time between arrivals of cars

at Al’s full
-


service gas pump 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.

Example: Al’s Full
-
Service Pump


41


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2013
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or duplicated, or posted to a publicly accessible website, in whole or in part.


Exponential Probability Distribution

x

f
(
x
)

.1

.3

.4

.2


1 2 3 4 5 6 7 8 9 10

Time Between Successive Arrivals (mins.)

Example: Al’s Full
-
Service Pump


P
(
x

<

2) = 1
-

2.71828
-
2/3

= 1
-

.5134 = .4866


42


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2013
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or duplicated, or posted to a publicly accessible website, in whole or in part.

Relationship between the Poisson

and Exponential Distributions

The Poisson distribution

provides an appropriate description

of the number of occurrences

per interval

The exponential distribution

provides an appropriate description

of the length of the interval

between occurrences


43


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2013
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or duplicated, or posted to a publicly accessible website, in whole or in part.

End of Chapter 3, Part B