Poisson Distributions

The Mean and Standard Deviation of Poisson Distributions

Learning Objectives

Calculate the mean and standard deviation of Poisson distributions.

Calculating the Mean

  • The mean of a Poisson distribution is the mean that is stated in the problem:
  • mean [latex]=  \lambda[/latex]

Calculating the Standard Deviation

  • We can also easily calculate the standard deviation of a Poisson distribution:
  • standard deviation [latex]= \sigma = \sqrt{\lambda}[/latex]

Example 33.1

Problem Setup: There are, on average, 28,000 bankruptcies filed in Canada per year according to the Office of the Superintendent of Bankruptcy in Canada.

Question: What are the mean and standard deviation for this problem?

Solution: Click here to download the Excel solution. Also, see the solutions below:

  • mean [latex]= \lambda = 28,000[/latex]
  • standard deviation [latex]= \sigma = \sqrt{\lambda} = \sqrt{28,000} = 167.33201[/latex]

License

Icon for the Creative Commons Attribution-NonCommercial 4.0 International License

An Introduction to Business Statistics for Analytics (1st Edition) Copyright © 2024 by Amy Goldlist; Charles Chan; Leslie Major; Michael Johnson is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License, except where otherwise noted.

Share This Book