Glossary
- Bayes’ Theorem
A formula that is used to revise probabilities based on new information.
- Bernoulli Process
A process with two outcomes in each of a series of independent trials in which the probabilities of the outcomes do not change.
- Binomial Distribution
A discrete distribution that describes the number of successes in independent trials of a Bernoulli process.
- Classical or Logical Method
An objective way of assessing probabilities based on logic.
- Collectively Exhaustive Events
A collection of all possible outcomes of an experiment.
- Conditional Probability
The probability of one event occurring given that another has taken place.
- Continuous Probability Distribution
A probability distribution with a continuous random variable.
- Continuous Random Variable
A random variable that can assume an infinite or unlimited set of values.
- Discrete Probability Distribution
A probability distribution with a discrete random variable.
- Discrete Random Variable
A random variable that can only assume a finite or limited set of values.
- Expected Value
The (weighted) average of a probability distribution.
- F Distribution
A continuous probability distribution that is the ratio of the variances of samples from two independent normal distributions.
- Independent Events
The situation in which the occurrence of one event has no effect on the probability of occurrence of a second event.
- Intersection
The set of all outcomes that are common to both events.
- Joint Probability
The probability of events occurring together (or one after the other).
- Mutually Exclusive Events
A situation in which only one of two or more events can occur on any given trial or experiment.
- Negative Exponential Distribution
A continuous probability distribution that describes the time between customer arrivals in a queuing situation.
- Normal Distribution
A continuous bell-shaped distribution that is a function of two parameters, the mean and standard deviation of the distribution.
- Objective Approach
A method of determining probability values based on historical data or logic.
- Poisson Distribution
A discrete probability distribution used in queuing theory.
- Prior Probability
A probability value determined before new or additional information is obtained. It is sometimes called an a priori probability estimate.
- Probability
A statement about the likelihood of an event occurring. It is expressed as a numerical value between 0 and 1, inclusive.
- Probability Density Function
The mathematical function that describes a continuous probability distribution. It is represented by f(X).
- Probability Distribution
The set of all possible values of a random variable and their associated probabilities.
- Random Variable
A variable that assigns a number to every possible outcome of an experiment.
- Relative Frequency Approach
An objective way of determining probabilities based on observing frequencies over a number of trials.
- Revised or Posterior Probability
A probability value that results from new or revised information and prior probabilities.
- Standard Deviation
The square root of the variance.
- Subjective Approach
A method of determining probability values based on experience or judgment.
- Union
The set of all outcomes that are contained in either of these two events.
- Variance
A measure of dispersion or spread of the probability distribution.