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Poisson Probability Distribution
- It is a set of probabilities which is acquired for discrete events which are described as being rare. Occasions similar to binominal distribution however it have very low probabilities and large sample size.
Illustrations of such events in business are as given below:
i. Telephone congestion at midnight
ii. Traffic jams at certain roads at 9 o'clock at night
iii. Sales boom
iv. Attaining an age of 100 years or centurion
- Poisson probabilities are frequently applied in business conditions in order to find out the numerical probabilities of such events happening.
- The formula utilized to determine such probabilities is as given below:
P(x) = e-λ λx/x!
Whereas x = No. of successes
? = mean no. of the successes in the sample (? = np)
e = 2.718
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