Solving Poisson Distributions for Expected Values of Sales

However, the store only orders 4 newspapers, so the expected value of the number sold is actually the minimum of 3 and 4, which is 3. In summary, the expected value of the number of newspapers sold is 3.
  • #1
Hodgey8806
145
3

Homework Statement


A store selling newspapers orders n = 4 of a certain newspaper because the manager does not get many calls for that publication. If the number of requests per day follows a Poisson distribution with mean 3, what is the expected value of the number sold?

Homework Equations


Now we are approximating this with a Poisson distribution as said. So I would think to use 3 because our book explicitly states mean (mu) = sigma^2 = lambda.

The Attempt at a Solution


Thus, my thought is that lamba should be 3 which, I thought should be the expected value. However, I also know through moment-generating functions that the sum of x*P(X=x) is also my expected value. But if I use a lambda of 3, I still can't get the books answer of 2.681.

Thanks for your help!
 
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  • #2
A:The expected value of a Poisson distribution is the same as its mean, $\lambda$. In your case, $\lambda = 3$. So the expected value is 3.
 

What is a Poisson distribution?

A Poisson distribution is a statistical probability distribution that is used to model the number of events that occur in a fixed interval of time or space. It is typically used when the events occur at a constant rate and are independent of each other.

Why is a Poisson distribution commonly used in sales analysis?

A Poisson distribution is commonly used in sales analysis because it can help determine the expected number of sales in a given time period. This can be useful for businesses to make forecasts and plan for future sales.

How do you solve for the expected value of sales using a Poisson distribution?

To solve for the expected value of sales using a Poisson distribution, you will need to know the average number of sales per time period (the rate parameter) and the specific time period you are analyzing. Then, you can use the formula E(X) = λt, where λ is the rate parameter and t is the time period.

What are some limitations of using a Poisson distribution for sales analysis?

One limitation of using a Poisson distribution for sales analysis is that it assumes a constant and independent rate of sales. In reality, sales may fluctuate and be influenced by various factors such as seasonality, economic conditions, and marketing efforts. Additionally, a Poisson distribution may not accurately model rare or extreme events.

Can a Poisson distribution be used to analyze other variables besides sales?

Yes, a Poisson distribution can be used to analyze other variables besides sales, such as the number of accidents in a given time period or the number of website visits in a day. It is a versatile distribution that can be applied to any situation where events occur at a constant and independent rate.

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