How to use Poisson distribution in Excel

The Poisson distribution is a discrete probability distribution that describes the probability of a certain number of events occurring in a fixed interval of time or space. It is often used to model the number of events that occur in a given time period, such as the number of phone calls received by a call center in an hour.

POISSON.DIST function

Excel has a built-in function called POISSON.DIST that can be used to calculate the probability of a certain number of events occurring in a Poisson distribution. The syntax for the POISSON.DIST function is:

=POISSON.DIST(x,mean,cumulative)

where x is the number of events, mean is the average number of events, and cumulative is a Boolean value that specifies whether to return the cumulative probability or the probability mass function.

For example, the following formula would calculate the probability of 3 events occurring in a Poisson distribution with a mean of 5:

=POISSON.DIST(3,5,TRUE)

The output of the POISSON.DIST function is a number between 0 and 1. This number represents the probability of the event occurring.

Real-life example

For example, the Poisson distribution can be used to model the number of cars that pass through a toll booth in an hour, the number of phone calls received by a call center in a day, or the number of defects found on a product in a factory.

Enter the mean of the Poisson distribution in a cell.

Enter the number of events in a cell.

In a blank cell, enter the following formula:

=POISSON.DIST(x,mean,TRUE)

where x is the cell that contains the number of events and mean is the cell that contains the mean of the Poisson distribution.

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Excel will calculate the probability of the event occurring and display the result in the cell.