Binomial Distribution

Posted in Operations and Supply Chain Terms, Total Reads: 2106
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Definition: Binomial Distribution

A Bernoulli experiment is one in which the result can be either a success or a failure with a definite probability of success. Binomial distribution is a plot of the discrete probability distribution of the successes in n independent Bernoulli experiments.

The most important point to note here is that the n trials should be independent.

It is extensively used to model the number of successes in n independent draws with replacement and also has a lot of utility in the field of finance.

The distribution can be uniquely defined by the mean and the standard deviation.

A typical graph looks like as shown in the figure below


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