Normal distributions can be used for many purposes. One purpose might be to determine warranty times on a new game system. Consider if game systems normally last for 36 months before a failure of some sort with a standard deviation of 5 months. If we wanted to have a warranty that paid off on only 5% of the machines (in other words where 95% of them will work) then we could use: =NORMINV(0.95,36,5) which would give 44.22 months. This means that we should set our warranty period at 44 months to make sure that we only have to pay off on 5% of the machines. We obviously want to keep our customers happy and fix their system if it fails after a few months. Come up with at least two examples for normal distributions (similar to the above) with numbers and the formula (Google Sheets or Excel) that you used.
Continuous Probability Distributions
Probability distributions are of two types, which are continuous probability distributions and discrete probability distributions. A continuous probability distribution contains an infinite number of values. For example, if time is infinite: you could count from 0 to a trillion seconds, billion seconds, so on indefinitely. A discrete probability distribution consists of only a countable set of possible values.
Normal Distribution
Suppose we had to design a bathroom weighing scale, how would we decide what should be the range of the weighing machine? Would we take the highest recorded human weight in history and use that as the upper limit for our weighing scale? This may not be a great idea as the sensitivity of the scale would get reduced if the range is too large. At the same time, if we keep the upper limit too low, it may not be usable for a large percentage of the population!
=NORMINV(0.95,36,5)
which would give 44.22 months. This
Come up with at least two examples for normal distributions (similar to the above) with numbers and the formula (Google Sheets or Excel) that you used.
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