Quantitative Analysis for Management, 13/e

2.6 The Binomial Distribution

Many business experiments can be characterized by the Bernoulli process. The probability of obtaining specific outcomes in a Bernoulli process is described by the binomial probability distribution. In order to be a Bernoulli process, an experiment must have the following characteristics:

1. Each trial in a Bernoulli process has only two possible outcomes. These are typically called a success and a failure, although examples might be yes or no, heads or tails, pass or fail, defective or good, and so on.

2. The probability stays the same from one trial to the next.

3. The trials are statistically independent.

4. The number of trials is a positive integer.

A common example of this process is tossing a coin.

The binomial distribution ...