Microsoft Office Tutorials and References

In Depth Information

**Using NORM. DIST and POISSON. DIST to Determine Probabilities**

The Poisson distribution is a discrete distribution and is used only with data

that takes on discrete (integer) values, such as counting items.

A Poisson distribution is not always symmetrical, as is the one shown in

Figure 11-9. Negative X values make no sense in a Poisson distribution. After

all, you can’t have fewer than zero people calling in sick! If the mean is a small

value, the distribution will be skewed, as shown in Figure 11-10 for a Poisson

distribution with a mean of 4.

Figure 11-10:

A Poisson

distribution

with a

mean of 4.

Excel’s POISSON.DIST function lets you calculate the probability that a

specified number of events will occur. All you need to know is the mean of the

distribution. This function can calculate the probability two ways:

✓
Cumulative:
The probability that between 0 and X events will occur.

✓
Noncumulative:
The probability that exactly X events will occur.

The two Poisson graphs shown earlier were for noncumulative probabilities.

Figure 11-11 shows the cumulative Poisson distribution corresponding to

Figure 11-9. You can see from this chart that the cumulative probability of 15

events — the probability of 15 or fewer events occurring — is about 0.15.

What if you want to calculate the probability that more than X events will

occur? Simple! Just calculate the cumulative probability for X and subtract the

result from 1.

The POISSON.DIST function takes three arguments:

✓
The first argument is the number of events that you want to calculate

the probability for. This must be an integer value greater than 0.