CHAPTER TWO

PROBABILITY AND PROBABILITY DISTRIBUTION

4.1 INTRODUCTION
Probability distribution is listing all possible values of the random variable with corresponding probabilities.
The outcome of the experiment is either a success or failure. The number of ways to get certain number of
successes will determine the value that the random variable will assume.
4.2 RANDOM VARIABLE
Random variable is a variable whose value is determined by the outcome of an experiment. That is random
variable represents an uncertain outcome or it can be defined as a quantity resulting from a random
experiment that by chance, can assume different values.
A random variable may be either discrete or continuous
Discrete Random Variable
Is a variable that can assume only certain clearly separated values resulting from account of some item of
interest?
Example:
- The No. of employees absent in a given day
- Toss two coins and count the number of heads
- Number of defective products produced in a factory at a given shift or day or month.
- Number of customers entering to a bank in an hour time.
Is should be noted that a discrete random variable can in some cases assume fractional or decimal values.
These values must be separated i.e have distance between them eg. The score of a student in a given test can
be 8.5 or 7.5 such values are discrete b/se there is a distance b/n scores. There is a fixed gap between scores.
You can easily list all possible values clearly and separately. If the number of students in a classroom is 35,
you know the next succeeding value will be 36 there is no another value in between.
Continuous Random Variable
A variable that can assume any value in an interval it can assume one of an infinitely large number of
values. Mostly results of measurement
Example - The distance b/n two cities
- The weight of a person.
- The rate of return on investment
- The time that a customer must wait to receive his changes.
The values are not clearly separated. It is not possible to exhaustively list possible values of the random
variable. If the distance between two cities is 300 km You cannot estimate or identify the next higher
distance There are infinitely very large number of values.

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Discrete Probability Distributions : The value assumed by a discrete random variable depends upon the
outcome of an experiment. Since the outcome of the experiment will be uncertain the value assumed by the
random variable will also be uncertain.
The probability distribution of a discrete random variable is listing of all the outcomes of an experiment and
the probabilities associated with each out come The probability distribution of a discrete random variable is
a table, graph or formula that gives the probability associated with each possible value that a random
variable can assume or if we organize the value of a discrete random variable in a probability distribution the
distribution is called a Discrete Probability distribution. In this unit we will discuss three types of discrete
probability distribution.
Binomial, Poisson and normal
We denote probability distribution of a random variable x as p(x). We can sometimes use the sample space
of an experiment and probability rules.
Example: Consider a test consisting of three true or false questions
The sample space consists
CCC CC| C|C |CC
C| | |C| | |C |||
We assume;
- The student blindly guesses the answer to each question. Then each out come will be equally tickly
i.e each having a probability 1/8.
- Since the student guesses blindly then the probability of answering each question correctly is ½ and
the probability of answering incorrectly is also ½
- Since each question will be answered independently it follows that we can obtain the probability of
each sample space out come by multiplying together the probabilities of correctly ( or incorrectly)
answering individual questions.
- Therefore, by independence, the probability of the samples space outcome.
CCC, answering all the three questions correctly,
Value of X = The No. of Sample space out comes Probabilityof sample P(X) = probability of
correct Answers corresponding to X space out come the value of X
X=0(no correct answer) ||| ½ x ½ x ½=1/8 P(0) = 1/8
X=1(one correct answer) C| | ½ x ½ x ½=1/8
|C| ½ x ½ x ½=1/8 P(1)= 1/8 + 1/8 +1/8
=3/8
| |C ½ x ½ x ½=1/8
X=2(twocorrect answers) CC1 ½ x ½ x ½=1/8
C1C ½ x ½ x ½=1/8 P(2)= 1/8 + 1/8 +1/8

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 =3/8
1CC ½ x ½ x ½=1/8
X=3(three correct answers) CCC ½ x ½ x ½=1/8 P(3) = 1/8
P(CCC) = p(c) p(c) p(c) = (½) (½) (½) = 1/8
Similarly the probability of the sample space outcome CCI is
P(CCI) = (1/2 ) (1/2 ) (1/2 )= 1/8
We define the random variable X to be the number of questions that the student answers correctly. X can
assume the values 0 , 1 , 2 , or 3 . Then if x = 1 one question will be answered
Correctly if and only if we obtain one of the sample space outcomes C| | |C| | |C then
P(X=1) = P(C| |) + P(|C|) + P(| |C)
=1/8 + 1/8 + 1/8 = 3/8
Finding the probability distribution
Summary: probability distribution of x
X, number of question P(X) , probability of X
Answered correctly
0 P(0) = P( X=0) 1/8
1 P(1) = P(X=1) 1/8
2 P(2) = P(X=2) 1/8
3 P(3)= P(X=3) 1/8
Sum I
Example: 2 Suppose that the student taking the test has studied hard and does not have to guess at the
answer, suppose that there is now a 90% chance that the student will answer each of the questions correctly.
The probability distribution will be:
X Sample space Probability of sample P(X)
space
X=0 111 0.1 X 0.1 X 0.1 = 0.001 P(0) =0.001
X=1 C11 0.9 X0.1 X 0.1 =0.009
1C1 0.1 X 0.9 X 0.1 = 0.009 P(1)=0.009+0.009+0.009 = 0.027
11C 0.1 X 0.1 X0.9 =0.009
X=2 CC1 0.9 X 0.9 X0.1 =0.081 P(2)=0.081 +0.081 +0.081= 0.243
C1C 0.9 x0.1 x0.9=0.081
1CC 0.1 x0.9 x0.9=0.081
X=3 CCC 0.9 x 0.9x 0.9 = 0.729 P(3)=0.729
Similarly the distribution can be summarized Sum 1
X P(X)

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 0 P (0) = P (X=0) 0.001
1 P (1) = P (X=1) 0.027
2 P (2) = P (X=2) 0.243
3 P (3) = P (X=3) 0.729
Sum 1
Properties of discrete probability distribution
1. P (X)  0 for each value of X
2.  P (X)=1
The Mean, Variance, and Standard Deviation of a Discrete Probability Distribution
Mean
If the values of the random variable X are observed on the repetition and recorded, we would obtain the
population of all possible observed values of the random variable X. This population has a mean or expected
value of X.
x denotes the mean of the random variable X. It is also called the expected Value of X as denoted by E(x)
x = Multiply each value of X by its probability P(X) and then sum the resulting products over all possible
value of X.
That is

x =

Example. A car dealer has established the following probability distribution for the number of cars he
expects to sell on a particular Saturday.
Number of cars sold (X) Probability P(x)
0 0.10
1 0.20
2 0.30
3 0.30
4 0.10
Sum .1
On a typical Saturday ,how many cars should the dealer expect to sell?
 = E(x) = [xp(x)]
= 0.(0.1) + 1(0.2) + 2(0.3) +3(0.3) + 4(0.1) = 2.1 cars.
In the long run the dealer expects to sell 2.1 cars. On a large number of Saturdays.
Example 2:
Monthly sales of a certain product are believed to follow the following probability distribution. Suppose that
the company has fixed monthly production cost $8,000 and that each item brings $2. Find the expected
monthly profit from product sales

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 No. of items x p(x)
5000 0.2
6000 0.3
7000 0.2
8000 0.2
9000 0.1
1
E/h(x) =
Solution:
h(x) = 2x – 8000
x h(x) p(x) h(x)p(x)
5000 2000 0.2 400
6000 4000 0.3 1200
7000 6000 0.2 1200
8000 8000 0.2 1600
9000 10000 0.1 1000
1E[h(x)] = 5400
The expected value of a linear function of a random variable
E(ax + b) = aE(x) + b
Where a and b are fixed numbers once we know the expected value of x, the expected value of ax + b is just
aE(x) + b.
In the above example we could have obtained the expected profit by finding the mean of x first and then
multiplying the mean of x by 2 and subtracting from this the fixed cost of 8000.
The mean  is 6, 700 and the expected profit is therefore E[h(x)] =
E(2x – 8000) = 2E(x) – 8000 = 2(67,000) – 8000 = 5400
Variance and Standard Deviation of the Discrete Probability Distribution
The mean does not describe the amount of spread or variation of a distribution. The variance and standard
deviation allows us to compare the variation in two distributions having the same mean but different spread.
The formula for the variance of a discrete probability distribution is
2 = [(x - )2 p(x)] =
or
E(x2) – [E(x)]2 where
Ex2 = the expected value of x2 i.e., x2 p(x)
E(x) = the expected value of x
Example. For the car dealer find the variance and standard deviation
X p(x) (x - ) (x - )2 (x - )2 p(x)
0 0.1 0 – 2.10 4.41 0.441
1 0.2 1 – 2-10 1.21 0.224
2 0.3 2 – 2.10 0.01 0.003
3 0.3 3 – 2.10 0.81 0.243
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 4 0.1 4 – 2.1 3.61 0.361
1 2 = 1.29
2 = 1.29
=
= 1.136 cars
Using the other formula we will have the same variance and standard deviation
X p(x) x2 x p(x) x2 p(x)
0 0.10 0 0 0
1 0.20 1 0.2 0.2
2 0.30 4 0.6 1.20
3 0.30 9 0.9 1.70
4 0.10 16 0.4 1.60
 = 2.1 Ex2 = 5.7
2 = E(x2) – [E(x)]2
= 5.7 – (2.1)2
= 5.7 – 4.41
= 1.29
= = 1.136
3.3.3 The Binomial Distribution
The binomial distribution is a discrete probability distribution
The binomial distribution has the following characteristics.
1. The experiment consists of N identical trials and the data collected are the results of counts.
2. An outcome of an experiment is classified into one of two mutually exclucle categories a success
or failure. i.e each trial results in a success or failure.
3. The probability of success remains the same for each trial. So does the probability of a failure.
This implies that the probability of failure of any trial is 1- (probability of success). Probability of
success is denoted by p and probability of failure by q of then q = 1 - p
4. The trials are independent i.e the outcome of one trial does not affect the outcome of any other
trial.
Example1. Suppose that 40% of all customers who enter a department store make a purchase.
What is the probability that 2 of the next 3 customers will make a purchase?
Note that this problem qualifies all the characteristics of the binomial distribution
- The trials are three and each of the three customers will either purchase or not purchase so the three
trials are identical
- The outcome of each trial will result in either a purchase (success) or not purchase (failure)

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 - The probability of purchase is the same 0.4 for each of the three customers. And probability of failure
(not purchase) will be 1 – 0.4 = 0.6 for each.
- The decision of one customer will not affect the decision of others. I.e., decision to purchase or not to
purchase by each customer is independent.
The sample space of this trial consist of eight-sample space out comes.
SSS SSF SFS FSS
FFS FSF SFF FFF
S is a success (purchase)
F is a failure (not purchase)
Two out of three customers make a purchase if one of the sample space out come SSF, SFS, FSS occurs. By
independent
P(SSF)= P(S) P (S) P(F) = (4) (4) (.6) = (0.4)2 (0.6)
P(SFS)= P(S) P(F) P(S) = (0.4) (0.6) (0.4) = (0.4)2 (0.6)
P(SSF)= P(F) P (S) P(S) = (0.6) (0.4) (0.4) = (0.4)2 (0.6)
Then the probability that two out of the three customers make a purchase is
P(SSF) + P (SFS) + P (FSS)
= (0.4)2 (0.6) + (0.4)2(0.6) +(0.4)2(0.6)
= 3(0.4)2(0.6)
Note that:
1. The 3 is the number of sample space out come (SSF, SFS and FSS) that correspond to the
event i.e., two out of the three customers make a purchase. This equals the number of ways we
can arrange two successes among three trials.
2. 0.4 is P, the probability that a customer makes a purchase
3. 0.6 is q = 1 – P , the probability that a customer does not make a purchase.
Therefore, the probability that two of the next three customers make a purchase is
= (the number of ways to arrange 2 success among 3 trials) P2q1
Notice that SSF, SFS, FSS each of these sample space out comes consists of two successes and one failure.
The probability of each of these sample space out comes equals (0.4 ) 2(0.6)1= p2q1
P is raised to a power that equals the number of successes (2) in the three trials and q is raised to a power of
failures (1) in the three trials.
In general, each of the sample space out comes describing the occurrence of X successes (purchase) in n
trials represents a different arrangements of X success in n trials. However each of these sample space
outcomes consist of X successes and n – X failures. There fore, the probability of each sample space
outcome is
Pxqn-x it follows by analogy that the probability that X of the next n trials are successes (purchase) is
(The number of ways to arrange X successes among n trials) (Pxq n-x)
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The number of ways to arrange X successes among n trials equals.

n! is read n factorial

n! = n(n – 1) (n – 2) … (n – n)!
(n – n) = 0; 0! = 1 by definition
Then we call x a binomial random variable and the probability of obtaining X success in n trials is

P (X) =  The Binomial formula

For the above example we can solve for p(x = 2) as follows

n=3
p = 0.4
q = 0.6

p(x = 2) = 0.42 0.61

= 0.288
Example 2: An examination consists of four true or false question and student has no knowledge of the
subject matter. The chance that the student will guess the correct answer to the first question is 0.5. a) What
is the probability of getting exactly none out of four correct?
N=4 p = 0.5 q = 0.5 x=0
P(X)= n! Px qn-x
x! ( n –x ) !
4!
P(X =0) = 0!(4-0)! 0.50 0.54 = 0.0625
b) What is the probability of getting exactly one out of four correct
P(1) = 4! (0.51) (1-0.5)4-1 = 0.2500
1!(4-1)!
The probability of getting exactly 0, 1 , 2 , 3 or 4 correct out of a total of four questions is shown in the table
for the Binomial probability distribution.
Number of correct guess (x) Probability (x)
0 1/6 = 0.625
1 4/16=0.2500
2 6/16=0.3750
3 4/16 = 0.2500
4 1/16= 0.0625
Total 16/16 = 1
3.3.5 The Poison Probability Distribution

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The third important discrete probability distribution is the Poisson. The Poisson distribution counts the
number of successes in a fixed interval of time or with in specified regions.
Eg. The number of machine failure in a week
- the number of traffic accidents per month in town
- the number of emergency patients arriving at a hospital in an hour
- the number of orders received per day
- the number of defects in a square metere metal sheet.
To apply the Poisson distribution the following condition are required
1. The probability of success in a short interval of time (or space) is proportional to the size
of the interval. If we count 6 patients arriving in an hour then we expect 3 in half an hour and 2
in 20 minutes.
2. In a very small interval, the probability of successes is close to zero. If 6 patients arrive in
an hour we expect none in 10 seconds.
3. The probability of success in a given interval is independent of where the interval begins.
4. The probability of success over a given interval is independent of the number of the events that
occurred prior to the interval.
The Poisson distribution is described mathematically by the formula.
P ( x) = xe-
X!
Where;
 is the mean number of success /average rate/
e is the base of natural logarithm or mathematical constant with value 2.7183
X is the number of success in the interval
P (X) is the probability of X successes in an interval
The Poisson distribution can be used to approximate the binomial distribution when the probability of a
success is small and the number of trial is very large.
Usually the probability of success become quite small after few occurrences as the random variable X for a
Poisson distribution assume an infinite number of values.
Example1. Assume that billing clerks rarely make errors in data entry on the billing statements of a co.
Many statements have no mistakes; some have one, a very few have tow mistakes; rarely will a statement
have three mistakes; and soon. A random sample of 1000 statements revealed 300 errors. What is the
probability of no mistakes appearing in a statement  = 300/1000=0.3
P(0) = 0.30(2.7183)-0.3 = 0.7408
0!
Example 2. A bank manger wants to provided prompt service for customers at the banks drive up window.
The bank currently can serve up to10 customers per 15-minute period without significant delay. The average
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arrival rate is 7 customers per 15minute period. Assuming X has a Poisson distribution find the probability
that 10 customers Will arrive in a particular 15-minute period.
=7
X= 10
P(10) = 710 2.7183-7 = 0.710
10!
Variance and standard deviation of the passion probability distribution
The variance of the poison distribution is equal to the mean of the distribution.
2 =  then
=
4.4 THE NORMAL / CONTINIOUS / PROBABILITY DISTRIBUTION
As noted earlier in this unit a continuous random variable is one that can assume an infinite number of
possible values within a specified range. It usually results from measuring something.
It is not possible to list every possible value of the continuous random variable along with a corresponding
probability.
The most convenient approach is to construct a probability curve. The proportion of area included between
any two points under the probability curve identified the probability that a randomly selected continuous
variable has a value between those points.
Characteristics of a normal probability distribution and its accompanying normal curve
1. The normal curve is bell – shaped and has a single peak at the exact center of the
distribution. The arithmetic mean median and the mode are equal and are located at peak. Thus half
the area under the curve is above this center point, and the other half is below it.
2. The normal probability distribution is symmetrical about its mean. If we cut the normal
curve vertically at this central value, the two halves will be mirror images.
3. The normal curve falls of smoothly in either direction from the central value. It is
asymptotic, meaning that the curve gets closer and closer to the X – axis but never actually touches
it. In real world problems, however, this is somewhat unrealistic. The

f(x)

X
10
 The Normal Curve
The normal probability distribution is important in statistical inference for three distinct reasons:
1. The measurements produced in many random processes are known to follow this distribution.
2. Normal probability can often be used to approximate other probability distribution, such as the
binomial and Poisson distributions.
3. Distribution of such statistics as the sample mean and sample proportion often follow the normal
distribution regardless of the distribution of the population.
Constructing the Probability Curve
There is not just one normal probability distribution. There is a family of them we might have one of the
following:
a. Equal means and different standard deviations eg. Average age of
students in three sections S1, S2, S3 is equal 24 years. But the standard deviation for S1 =2.5, S2 =
3.1 and S3 = 4.

The shape of the curves is determined by the standard deviation. The smaller the standard deviation
the more packed the curve will be and the larger the standard deviation the more flat and wider the
curve will be
b. different means but equal standard deviation. Both sections have equal standard deviation 3.1
but different means S1=23 S2=26 S3=28

c. Different means and different standard deviations

For S1  = 22 and  =2.8
S2  =24 and  =2.1
S3  =27 and  =3.1

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The number of normal distributions is unlimited. It would be practically impossible to provide a table of
probabilities (as the binomial and Poisson) for each combination of  and  or using a formula.
One member of the families of normal distributions can be used for all problems where the normal
distribution is applicable.
It has a mean of 0 and a standard deviation of 1 and is called Standard Normal Distribution.
First it is necessary to convert or standardize the actual distribution to a standard normal distribution using Z
value. Z is called the normal deviate.
Z value is the distance between a selected value and the population mean in units of the standard deviation.
Transformation of the Normal Random Variable
Since there are infinitely many possible normal random variables one of them is selected to serve as our
standard.
We want to transform X in to the standard normal random variable Z.
Example. We have a normal random variable X with  =50 and  =10 we want to convert this random
variable with  =0 and  =1.
We move the distribution from its center of 50 to a center of 0. This is done by subtracting 50 from all the
values of X. Thus we shift the distribution 50 units back so that its new center is 0. If we subtract the mean
from all values of X, the new distribution (X-) will have a mean of zero.
The second thing we need to do is to make the width of the distribution, standard deviation equal to 1. This
is done by squeezing the width of the distribution down from 10 to 1. Because the total probability under the
curve must remain 1. the distribution must grow up ward to maintain the same area.
Mathematically, squeezing the curve to make the width 1 is equivalent to dividing the random variable by its
standard deviation. The area under the curve adjusted so that the total remains the same.
The mathematical transformation from X to Z is thus achieved by first subtracting  from X and then
dividing the result by .
Z=X–


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Example – The weekly incomes of a large group of middle managers are normally distributed with a mean
of 1000 Br. and standard deviation of Br. 100. What is the Z value for an income of
a) Br. 1100? Z=X-  = 1000
  = 100
Z = 1100 – 1000 = 1
100
This means an income of 1100 is one standard deviation above the mean.
b) Br 900?
Z = 900 – 1000 = -1
100
This implies that an income of Br. 900 is one standard deviation (Br. 100) below the mean.
c) Br. 1250?
Z = 1250 – 1000 = 2.5
100
This implies that an income of Br. 1250 is 2.5 standard deviations above the mean
d) Br. 850?
Z = 850 – 1000 = -1.5
100
This means an income of Br. 850 is 1.5 standard deviations below the mean
Finding probabilities using the normal probability table
For any value of Z calculated the corresponding probability can be easily found from the Z table.
Example 1: The lifetime of an electrical component is known to follow normal distribution with mean 2000
hr and standard deviation 200 hr
(a) What is the probability that a randomly selected component will last between 2000 and 2400 hr?

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 X hrs
1400 1600 1800 2200 2400 2600

Z (Standard
-3 -2 -1 +1 +2 +3 Normal Unit)
The lower boundary of the interval is at the mean of the distribution and therefore at Z = 0. The upper
boundary of the interval in terms of Z is

Z=

By reference to the probability table

p(0  Z  + 2) = 0.4772
p(2000  x  2400) = 0.4772
This means a randomly selected component will have a probability of 0.4772 to last between 2000 to 2400
hr. Or we can say 47.72% of all components will last between 2000 to 2400 hr.
(b) What is the probability that a randomly selected component will last more than 2200 hrs?
Note that the total area to the right of the mean 2000 is 0.5. Therefore if we determine the proportion
between the mean and 2200, we can subtract this value from 0.50 to obtain the probability of the hrs x being
greater than 2200.
Z = 2200 – 2000 = 1
200
p(0  Z  +1.0) = 0.3413
p(Z > +1) = 0.5000 – 0.3413
= 0.1587
This means 15.87% of the components will last more than 2200 hrs.

P= 0.90

45 X X min
Example 2: The amount of time required for a certain type of car repair at a service guarage is normally
distributed with the  = 45 min. And the standard deviation  = 8 min. The service manage plans to have
work begin on a customers car 10 min after the car is dropped off and he tells the customer that the car will
be ready with in 1 hrs total time.

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a) What is the probability that he will be wrong?
P(error) = p ( x > 50 min) , since actually work is to begin in 10 min, the actual repair must be completed
in the remaining 50 min. And the manager will be wrong if the repair takes more than 50 minutes.
Z = X –  = 50-40= + 0.62 p(Z = 0.62) = 0.2324 then,
 8
P( x > 50) = P (Z > + 0.62 )= 0.5000 –0.2324 = 0.2676
b) What is the required working time allotment such that there is a 90%chance that the repain will be
completed with in that time?
If the proportion of the area is 0.90, then because a proportion of 0.5 is to the left of the mean, it follows
that a proportion of 0.4 is between the mean and the unknown value of X.
By looking the table the closest we can come to a proportion of 0.40 is 0.3997 and the Z value associated
with this proportion is Z = + 1.28
Now convert Z value to a value of X
Z=X– , Z () = x - , x =  + Z

X = 45 + (+1.28) (8.00)= 45 +10.24=55.24 min

2000 2200 X
0 1 Z
This means if the service manager allots 55.24 minutes for the repair he will have a 90% chance to complete
the repair with in 55.24 minutes.
C) What is the working time allotment such that there is a probability of just 30% that the repair can be
completed with in that time?
Since a proportion of area of 0.3 is to the left of the unknown value of X it follows that a portion of 0.20 is
between the unknown value and the mean. By reference to the table the proportion of area closest to this is
0.1985 and the Z value corresponding to this probability is 0.52. The Z value is negative because the
unknown value is to the left of the mean.
X =  + 2
X = 45 + (-0.52)(8) = 40.84 min. The service manager will have a 30% chance to complete the repair with in
40.84 min.
Example 3. Returning again to the weekly incomes illustration,  = 1000 and  =100
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 (a) What percent of the executive earn weekly incomes of 1245 or more?
X  1245
Z= 1245 – 1000 = 2.45
100
The area associated with Z = 2.4 is 0.4929. This is the probability between 1000 and 1245. The probability
for 1245 and beyond is found by subtracting 0.4929 from 0.5. This is equal to = 0.0075. That only 0.71% of
the executives earn weekly incomes of 1245 or more.
(b) What is the probability of selecting an income between 840 and 1200
This problem is divided in to two parts
1) for the probability between 840 and the mean
Z = 840 – 1000 = -1.60
100
2) for the probability between the mean 1000 and 1200
Z = 1200 – 1000 = 2
100
The probability of Z = -1.60 is 0.4452
The probability of Z = 2 is 0.4772
0.4452 + 0.4772 = 0.9224 or 92.24% i.e.,
92.24% of the managers have weekly incomes between 840 and 1200.

0.4452 0.4772

840 1000 1200 X Birr

0.9224
a) What is the probability that a randomly selected middle manager will have an income between 1150
and 1250
This problem is separated in two parts. First find the Z value associated with 1250
Z = 1250 –100 = 2.5
100
Next find the Z value for 1150
Z = 1150 – 1000 = 1.5
100
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p(Z = 2.5) = 0.4935
Similarly p(Z = 1.5) = 0.4332
So the probability between 1150 and 1250 equals
0.4938 – 0.4332 = 0.0606

0.0606

1000 1500 1250

Computing unknown Mean and unknown Standard deviation
Sometimes the mean and the standard deviation of normal probability distribution may not be given or
known. In such situations the probability of two unknown variables (x 1 and x2) is used to compute the mean
and standard deviation.
Example 1: The construction time for a certain building is normally distributed with an unknown mean and
unknown variance. We do know, however, that
75% of the time construction takes less than 12 months and 45% of the time construction takes less than 12
months and 45% of the time construction takes less than deviation of the construction time.
We have p(x < 12) = 0.75 and
p(x < 10) = 0.45, this follows that

p = 0.75 and

p = 0.45

0.75
0.45

10 12 X
Z1 Z2 Z

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From the table we find that Z 1 = -0.12 and Z2 = 0.67 substituting these two values for  and  we get:

= -0.12 and

= 0.67

by cross multiplication,
-0.12 = 10 - 
0.67 = 12 - 
 = 10 + 0.1
 = 12 – 0.67
We have two equations with two unknown and it follows that
10 + 0.12 = 12 – 0.67
0.79 = 2
 = 279 = 2.53
 = 10 + 0.12 (2.53)
= 10.30

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