Types of Distributions - Poisson and Exponential
Explore the Poisson distribution to model the probability of events in a fixed time and the Exponential distribution to understand time intervals between events. This lesson covers key formulas, assumptions, and practical examples to help you grasp these fundamental statistical concepts.
We'll cover the following...
5. Poisson Distribution
This distribution gives us the probability of a given number of events happening in a fixed interval of time.
Say we have the number of breads sold by a bakery every day. If the average number for seven days is 500, we can predict the probability of a certain day having more sales, e.g., more on Sundays. Another example could be the number of phone calls received by a call center per hour. Poisson distributions can be used to make forecasts about the number of customers or sales on certain days or seasons of the year.
Why are such forecasts important?
Think about it: if more items than necessary are kept in stock, it means a loss for the business. On the ...